Former Brazilian President Michel Temer arrested

. Mar 21, 2019
michel temer moreira franco Former President Michel Temer (L) and ally Moreira Franco.

On Thursday morning, agents of the Operation Car Wash task force in Rio de Janeiro arrested former President Michel Temer at his home in São Paulo. The Federal Police confirmed that the arrests are part of Operation Decontamination, which itself is an offshoot of three prior probes into corruption allegations at Eletronuclear, the state-owned Eletrobras subsidiary which operates nuclear power plants in the country.

Former Minister of Mines and Energy, Moreira Franco, has also been arrested, while a detention warrant has been issued for Colonel João Baptista Lima Filho, a close friend of Michel Temer and accused of being the broker of the corruption scheme in question.

</p> <p>According to <em></em>, the operation is based on the testimony of José Antunes Sobrinho from construction company Engevix, responsible for works on the Angra 3 nuclear plant in Rio de Janeiro state. Mr. Sobrinho told the Federal Police he had paid a BRL 1.1 million bribe to Michel Temer, by way of Colonel Lima, in 2014.</p> <p>The Federal Police stated that further investigation into Mr. Sobrinho&#8217;s testimony uncovered a vast corruption scheme in place within the nuclear power sector. Among the crimes cited by the investigators are corruption, money laundering, embezzlement, and obstruction of justice.</p> <p>In his sentence ordering the arrest of Michel Temer, Moreira Franco, Colonel&nbsp;Lima, and five others, judge Marcelo Bretas alleges that Mr. Temer &#8220;is the leader of the criminal organization&#8221; referred to in the investigation, suspected to have profited over BRL 1.8 billion resulting from crimes committed within government agencies and state-owned companies.</p> <h2>Markets react</h2> <p>News of the former president&#8217;s arrest caused the <a href="">São Paulo stock exchange</a> to lose 700 points in the first hour following the police operation. State-owned companies have also taken a major hit.</p> <figure class="wp-block-image"><img src="" alt="stock market brazil michel temer arrest" class="wp-image-14982" srcset=" 1024w, 300w, 768w, 610w, 1141w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Ibovespa index</figcaption></figure> <ul><li>Ibovespa: -1,1% &#8211; 96.951</li><li>PETR4: -1,2%: BRL 28.62</li><li>BBAS3: -1,9%: BRL 50.47</li><li>ELET6: -1,4%: BRL 28.56</li><li>USD/BRL: +0,7%: BRL 3.80</li></ul> <h2>Michel Temer has a laundry list of corruption accusations</h2> <p>Mr. Temer is subject to ten <a href="">criminal inquiries</a>, all of which are now processing in trial courts after the former president lost his parliamentary immunity in January of this year. Allegations against Mr. Temer include <a href="">corruption</a>, money laundering, and criminal organization.</p> <p>While in office, Michel Temer faced three separate indictment requests from the Federal Prosecutor Office. In June 2017, the PGR accused him of passive corruption based on plea-bargain testimony of executives from meat-packing company JBS. Later that year, a different indictment cited crimes of criminal association and obstruction of justice, stating that Mr. Temer was the head of a corruption scheme within Congress. Both requests were rejected by the House of Representatives.</p> <p>At the end of Mr. Temer&#8217;s term, Prosecutor General Raquel Dodge accused the president of corruption and money laundering in an inquiry connected to the Port of Santos. Ms. Dodge claimed Mr. Temer issued a decree to benefit certain companies.</p> <p>Michel Temer served as Brazil&#8217;s president between August 2016 and December 2018, taking office after the impeachment of Dilma Rousseff.</p> <p>After Luiz Inácio Lula da Silva, Michel Temer is the second former president to be arrested within the space of one year. Meanwhile, with the arrest of Moreira Franco, five former governors of Rio de Janeiro state have been arrested in just three years.</p> <h2>The impact on the Bolsonaro government</h2> <p>In previous years, whenever Operation Car Wash officials knocked on a high-profile politician&#8217;s door, the very sustainability of the government could be at stake. That won&#8217;t be the case this time. President Jair Bolsonaro—who built his political career outside of the mainstream—will be shielded by his lack of a proper coalition. Even if Mr. Temer decides to collaborate with investigators, it is unlikely that any members of the sitting government will be implicated.<br>However, Mr. Temer&#8217;s arrest could come as a blow where it hurts the government most: its pension reform bill.</p> <p>According to political scientist Leandro Gabiati, director at consultancy firm Dominium, Mr. Temer&#8217;s arrest creates an environment of political turmoil that will certainly harm the government&#8217;s effort to pass austerity measures in Congress. Not to mention the fact that House Speaker Rodrigo Maia—the government&#8217;s most valuable ally on the side of the reform—is the son-in-law of Mr. Moreira Franco.</p> <p>“Considering recent efforts to corner Operation Car Wash, one may think investigators could try to extend Mr. Temer&#8217;s time in jail to force a plea-bargain agreement. If that eventually happens, centrist parties will be engulfed by scandal—and they are the ones Mr. Bolsonaro needs to approve the bill,” says Mr. Gabiati.</p> <h2>Car Wash takes revenge</h2> <p>This high-profile arrest comes one week after the Operation Car Wash task force suffered its toughest blow in its five years of investigations. The Supreme Court ruled that cases of electoral crimes which are connected to criminal crimes (such as corruption or money laundering) must be trialed by the electoral court system. Brazil&#8217;s electoral courts are understaffed and typically dish out much more lenient penalties than criminal courts.</p> <p>Members of the opposition to Jair Bolsonaro&#8217;s government have also suggested the arrest may be an act of retaliation of Operation Car Wash and Justice Minister Sérgio Moro, after a recent spat with lower house speaker Rodrigo Maia concerning Mr. Moro&#8217;s anti-crime bill—currently stalled in Congress.</p> <p><em>The article was updated on Thursday, March 21, 2019, at 15:52, to include information from judge Marcelo Bretas&#8217; arrest warrant.</em>

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