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New Government Likely to Try and Minimize Fallout from Lava Jato Investigations

05/13/2016 - 12h34



Either Brazil's new interim president Michel Temer will have to bury Operation Lava Jato, or Operation Lava Jato will bury his government.

This is the silent tug-of-war that awaits Temer. It is one of history's little ironies that his rise to the presidency comes at precisely the moment when the leadership of his Brazilian Democratic Movement Party (PMDB) has become one of the main targets of the Lava Jato investigations.

Temer's problem is not merely the number of senior PMDB members suspected of involvement with the corruption scheme at Petrobras, but their proximity to him. Accusations have been made against some of those who helped him to orchestrate the impeachment proceedings against President Rousseff.

Aside from Eduardo Cunha, currently suspended from the presidency of the Lower house of Congress by the Supreme Court, the ministers Romero Jucá (Planning, Development and Management), Eliseu Padilha (Chief-of-Staff), Henrique Alves (Tourism) and Geddel Vieira Lima (Government Secretary) are all under investigation in Lava Jato, as well as the Rondônia senator Valdir Raupp and former minister Moreira Franco.

Jucá, Temer's chief political negotiator, has been mentioned in testimonies by executives from the construction firms Camargo Corrêa and Andrade Gutierrez, having allegedly received bribes relating to big projects in the energy sector, such as the Angra 3 nuclear power plant and the Belo Monte hydroelectric dam.

He is also accused of arranging measures to illegally favor the construction firm OAS in messages sent by Léo Pinheiro, former president of the company. Jucá strongly denies all the allegations.

Alves is accused of receiving bribes from OAS, which were transferred to him at the request of Eduardo Cunha, according to messages found on Pinheiro's cellular phone. Alves claims that the payments were legal contributions to his election campaign.

Padilha and Franco were mentioned in the testimony of former Mato Grosso do Sul senator Delcídio do Amaral, who said they supported his appointment as director of Petrobras in 1999, during the Fernando Henrique Cardoso administration.

Amaral has confessed to receiving bribes in the position. Franco admitted supporting his appointment, but denies receiving bribes, while Padilha denies ever supporting Amaral's appointment. Amaral had his mandate annulled by the Senate on Tuesday (10).

Just as has occurred with Cunha, the ongoing Lava Jato revelations may force all of these men to step down if investigations continue at the same pace as when they began in March 2014.

The obvious conclusion is that the PMDB will have to attempt to neutralize the Lava Jato investigations or somehow reduce the fallout from them - something that Rousseff, Lula and the Workers' Party (PT) were unable to do.

It might sound like mission impossible, but Lava Jato prosecutors in Curitiba and Brasília are already working under the assumption that the PMDB will try and implement some strategy in order to save the party leaders.

Temer has been extremely vague when talking about Lava Jato. Since the Lower House approved the opening of impeachment proceedings against President Rousseff on April 17, he has spoken about the investigations at least three times in public.

However, he has never uttered the five magic words that the Lava Jato investigators would like to hear: "I support the investigations unconditionally."

In the first speech he gave Temer said he supported Lava Jato, but he was so vague that the Brazilian Social Democracy Party (PSDB) forced him to include a pledge of support in his manifesto for a future government.

Prosecutors interpreted the speech as a sign of disdain for what has become Brazil's largest ever corruption investigation.

And even Temer's lukewarm support for the investigations could change rapidly. He has been mentioned himself in two strands of the investigation that are currently ongoing, relating to the construction firms Odebrecht and OAS.

Temer admits receiving R$5 million from OAS (US $1.4 million), but he claims that he was a legal campaign donation rather than a bribe.

Translated by TOM GATEHOUSE

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