Brazil Interim President Implicated in Petrobras Corruption Scandal

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A key witness in Brazil’s wide-ranging Petrobras corruption scandal has accused the country’s interim president of soliciting illegal campaign contributions for a fellow politician, adding to allegations of corruption already swirling around the acting leader. 

Brazilian media outlets reported on June 15 that Sergio Machado, the former director of Transpetro — a subsidiary of state-run oil company Petróleo Brasileiro SA (Petrobras) — had accused interim President Michel Temer of negotiating an illicit campaign contribution of 1.5 million reais (about $430,000) for a candidate in the 2012 São Paulo mayoral election.

The candidate, Gabriel Chalita, belonged to the Brazilian Democratic Movement Party (Partido do Movimento Democrático Brasileiro – PMDB) — the same party as Temer, who was then serving as Brazil’s vice president. Chalita’s mayoral campaign was ultimately unsuccessful.

Machado made the accusations as part of a plea agreement related to investigations into corruption at Petrobras, known as “Operation Car Wash,” whereby energy executives used inflated public works contracts to pay bribes that were often funneled into political campaigns. (The plea bargain documents are available in PDF format here and here, courtesy of O Globo.)

Machado said the campaign contribution for Chalita was made legally through engineering group Queiroz Galvao, but resulted from kickbacks on contracts with Petrobras.

Temer has denied any wrongdoing, describing Machado’s allegations as “mendacious and criminal.” Chalita has also repudiated the charges.

Machado also implicated more than 20 other politicians in corrupt acts, including Senate President Renan Calheiros, who Machado claimed to have paid millions of dollars worth of bribes over the past decade. Calheiros has denied breaking the law.

InSight Crime Analysis

The newly revealed accusations add weight to previous claims of corruption against Temer, who became Brazil’s interim president in May after congress voted to suspend former President Dilma Rousseff and subject her to impeachment proceedings related to alleged budgetary rule-breaking.

Before Rousseff’s suspension, the Associated Press pointed out that both Temer and Calheiros — who was second in line to replace Rousseff — had been implicated in Petrobras investigations. Nonetheless, Machado’s allegations are the first to directly link Temer to corruption at Petrobras, and could spur investigators to open more serious probes into both politicians’ past activities.

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However, even if the allegations laid out in Machado’s testimony have merit, some legal experts say prosecuting Temer would be difficult due to his status as interim president. Yet the accusations are sure to further roil Temer’s administration, which was recently destabilized after leaked recordings seemed to show newly appointed cabinet members were actively seeking to subvert investigations into government corruption.

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