Corruption scandal throws Brazil`s interim government into disarray

Brasília: Acting Brazilian President Michel Temer`s government faced its first major crisis on Monday when a key minister stepped aside following a leaked recording in which he appears to discuss using Dilma Rousseff`s impeachment to derail a huge corruption probe.

Planning Minister Romero Juca said in a hurried appearance before television cameras that he would step aside from Tuesday. Although he did not resign, he was not expected to return, the Globo news site reported, quoting sources close to Temer.

The scandal threatened Temer just 11 days after taking power from Rousseff, whom the Senate suspended from the presidency on May 12 at the start of an impeachment trial on charges of breaking government accounting rules.

Juca, who is Temer`s right-hand man, had been due to help lead the team asking Congress to approve urgent -- and potentially controversial -- measures aimed at pulling Brazil out of recession. He said he would return to his seat in the Senate instead.

The Folha newspaper released what it said were recordings of conversations in March between Juca and Sergio Machado, a former oil executive. The recordings were allegedly made secretly by Machado who, like Juca, is the target of a probe into massive embezzlement centered on state oil company Petrobras.

In the conversations, Juca is heard calling for a "national pact" that he appears to suggest would stop the probe, known as Operation Car Wash, in which dozens of top-ranking politicians from a variety of parties, as well as business executives, have been charged or already convicted for involvement in the Petrobras scheme.

In comments immediately taken up by Rousseff and her supporters as evidence for her claim that the impeachment process is a coup in disguise, Juca says: "We need to change the government to stop this bleeding."

"I am talking to the generals, the military commanders. They are fine with this, they said they will guarantee it," he says.

He also says that he has been clearing his plans with justices on the Supreme Court, which oversees impeachment proceedings. Although Temer came under pressure from opponents and Brazilian media to fire Juca, he made no comment after brief discussions on the matter with allies at the Senate building.

He took over from Rousseff automatically on May 12 because he was vice president, but suffers rock-bottom approval ratings and faces major challenges to his authority and legitimacy as his center-right government seeks to roll back her leftist policies.

Hecklers greeted Temer at the Senate by repeatedly shouting "putschist!" Protesters were also out in the Argentine capital Buenos Aires, where the new Brazilian Foreign Minister Jose Serra was visiting.

"Out with Temer, out with Serra," they chanted.

Rousseff said the scandal supports her claim that her impeachment is part of a strategy to bury the Petrobras investigation.

"If anyone was still uncertain that a coup is in progress, based on a change of power and fraud, Juca`s strongly incriminating statements about the real objectives of impeachment, about who is behind him, remove any doubt."

The senior member of Rousseff`s Workers` Party in the lower house of Congress, Afonso Florence, said the scandal could "lead to the cancellation" of the impeachment process.

Juca did not deny the authenticity of the secret recording, but said his comments had been in reference to stopping the "bleeding" of Brazil`s recession-struck economy, not the Car Wash probe.The Petrobras probe has seen prosecutors go after many of Brazil`s most powerful figures. Rousseff herself is suspected of obstruction of justice, although she has not been accused of corruption for personal gain.

Temer has promised a fresh start for Brazil after growing economic and political paralysis under Rousseff.

Despite the disarray caused by Juca, the new government may hope to portray his departure as proof that corruption will not be tolerated.

However, news that Juca`s replacement in the planning ministry, Dyogo Henrique Oliveira, has been the target of a separate corruption inquiry is likely to cause fresh embarrassment.

Temer has suffered a series of other setbacks, including an uproar over his naming of a cabinet composed entirely of white men.

He has rowed back on an initial decision to ax the culture ministry, reinstating the post after an outcry from several of Brazil`s best known actors and singers.

Juca was seen as the point man in the Temer government`s plans to whip Brazil`s bloated and underfunded budget into shape. The government faces potentially bitter resistance to suggestions that cuts may be necessary to social programs, pensions and health spending.

It was not clear how Folha obtained the recording, where it was made or why it was leaked more than a month later.