Brazil president taped discussing payoff for witness in graft probe: O Globo

Brazil's President Michel Temer at the Planalto Palace in Brasilia, Brazil May 12, 2017. (Reuters)

BRASILIA – Brazilian President Michel Temer gave his blessing to an attempt to pay a potential witness to remain silent in the country's biggest-ever graft probe, according to plea bargain testimony by a powerful businessman, newspaper O Globo reported on Wednesday.

Temer's office on Wednesday acknowledged he had met in March with the businessman, Chairman Joesley Batista of meat giant JBS SA, but denied any part in alleged efforts to keep jailed former House Speaker Eduardo Cunha from testifying.Brazilian President Michel Temer gave his blessing to an attempt to pay a potential witness to remain silent in the country's biggest-ever graft probe, according to plea bargain testimony by a powerful businessman, newspaper O Globo reported on Wednesday.

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Temer's office on Wednesday acknowledged he had met in March with the businessman, Chairman Joesley Batista of meat giant JBS SA, but denied any part in alleged efforts to keep jailed former House Speaker Eduardo Cunha from testifying.

O Globo's report, which three sources familiar with the matter said was accurate, threatened to pull Temer into a corruption scandal that has already entangled several of his closest allies and advisors.

Leading lawmakers and a third of Temer's cabinet have already been caught up in an investigation of systematic bribery in return for political favors and contracts with state-run enterprises. But news that the president himself may have been party to a cover-up shook the scandal-weary nation.

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Investors dumped Brazilian assets in foreign markets after the news broke late in Brazil, as the prospect of Temer becoming enmeshed in a fresh political crisis clouded the prospects for his unpopular reform agenda, considered key to ending a deep recession.

Scattered protests sprang up in front of the presidential palace and along Sao Paulo's main avenue as opposition lawmakers and even a high-profile ally called for Temer to step down.

"Given the gravity of the situation and the responsibility to keep Brazil from plunging into the imponderable, the only option is for President Michel Temer to resign," said Senator Ronaldo Caiado, leader of the government-allied Democratas party in the Senate.

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JBS, the world's biggest meatpacker, declined to comment. A senior JBS executive said there had been no formal communication about the matter within the company.

While the O Globo report described an unprecedented sting operation mounted by Brazil's federal police in conjunction with senior JBS executives to snare several politicians, Temer was the one target that towered over the rest.

Batista used a hidden device to record an alleged discussion with Temer about hush money the executive was paying to Cunha, according to the newspaper. The report did not say what Cunha was asked to keep quiet about.

When Batista told Temer he was paying Cunha to remain silent, the president was recorded saying, "You need to keep that up, okay?" according to the newspaper, which did not say how it had obtained the information.

Cunha, once a powerful member of Temer's ruling party, has previously said he had compromising information about several senior politicians linked to a vast political bribery scandal at state oil firm Petroleo Brasileiro SA, or Petrobras.

O Globo reported that Batista and his brother, JBS Chief Executive Wesley Batista, presented the recording to prosecutors as part of plea bargain negotiations underway since March.

Temer's office said in a prepared statement that he "did not participate in or authorize any activity with the aim of avoiding a plea bargain or collaboration" by Cunha, adding that the president supported a full investigation of the allegations.