Brazilian President Michel Temer says he won't be resigning over allegations that he endorsed hush money payments to a former ally, denying the charges in an address on TV.
Around 24 hours after a report in O Globo newspaper revealed that Temer had been caught on tape allegedly agreeing to bribe former speaker of the lower house Eduardo Cunha, he already faced eight formal requests for his impeachment.
"All signs point to the end of the government: the opening of inquiry in the Supreme Court, allies abandoning the president, and critical media coverage", said Mauricio Santoro, a political scientist and professor of external relations at Rio de Janeiro State University. "There are just too many people against him now".
The Sao Paulo stock market reacted in panic Thursday to the specter of Brazil losing its second president in just over 12 months, with trading suspended briefly after the Bovespa index crashed more than 10 percent. Analysts predicted the Brazilian real would fall sharply against the USA dollar.
The ongoing scandal deepened at dawn on Thursday as police searched the Rio de Janeiro home and Brasilia office of Senator Aecio Neves, who almost won the presidency in 2014 and planned to run again next year.
Temer's office immediately denied the report, adding that the president supported a full investigation of the allegations.
Late Wednesday, Globo reported that Neves had been recorded asking JBS meat-packing company executive Joesley Batista for $700,000 to pay for his "Car Wash" defense.
In a 39-minute-long recording, Batista told Temer in informal language that he has paid money to Eduardo Cunha, formerly head of the House of Representatives, who is in jail. Instead, the veteran center-right politician - who took over a year ago with a promise to restore Brazil's stability after the impeachment of leftist president Dilma Rousseff - came out swinging. Bills making their way through Congress that would loosen labor laws and shore up the pension system - two measures Temer has said are vital to restoring investor confidence in Brazil - have now stalled.
SAO PAULO Brazil's securities regulator has launched a probe into currency and stock trades made by executives at meatpacker JBS SA (JBSS3.SA) after they made plea bargain testimony that suggested Brazil's president had condoned bribery, Valor Econômico newspaper reported on Thursday, citing unnamed sources. Cunha was later imprisoned on a 15-year sentence for corruption. Aecio Neves, who almost won the presidency in 2014 and planned to run again next year.
"Michel Temer is like that boyfriend who doesn't know it's over", one Twitter user said.
Temer had managed to avoid being tainted by the scandal, going so far as to fire ministers who tried to interfere in the investigation. According to the Globo report, Batista secretly recorded the conversation with Temer and gave it to justice officials as part of plea bargain negotiations.
"This climate isn't one in which to work", Rodrigo Maia, president of the lower chamber, told Globo News.
Brazilian equities suffered a 10% fall yesterday as a scandal emerged involving new President Michel Temer and "hush money", wiping out the market's gains for the year.
"There are parties leaving his base, ministers leaving the Cabinet".
Temer is also a subject of other investigations, including one into how his joint party ticket with Rousseff (he first came to power as vice-president) was funded, which could void the results of the 2014 election.