Brazil's political crisis deepened Friday as the powerful
speaker of the house announced that he is withdrawing his support
for the government of President Dilma Rousseff amid a spiraling
corruption scandal at Petró leo Brasileiro SA.
Eduardo Cunha, a member of Brazil's largest political party, the
PMDB, accused the administration of pressuring prosecutors to
implicate him in the vast bid-rigging-and-bribery scheme. Late
Thursday, the federal judge leading the investigation broadcast
testimony from a defendant who turned state's evidence alleging
that Mr. Cunha took $5 million in bribes. Mr. Cunha has denied the
allegations.
"The government hates me," Mr. Cunha said. "Starting today, I
consider myself in a personal breakup with the government."
The split worsens a toxic political environment that is proving
damaging to Latin America's largest economy and holds huge
political risks for Ms. Rousseff. The president has seen her
approval ratings sink to record lows and she is facing rising calls
for her impeachment at the hands of a rebellious Congress.
A spokeswoman for Ms. Rousseff's office declined to comment.
At the large boulevard in front of Congress in the country's
capital, signs called for "military intervention."
"We have a real crisis in Brazil," said Carlos Melo, political
analyst at Insper, a Sã o Paulo business school. "We do not know
where this process will lead us."
Brazil's currency, the real, weakened sharply on Friday and the
Ibovespa stock index was down more than 1% in early trading.
A longtime critic of the administration, Mr. Cunha has led a
backlash against austerity measures pushed by Ms. Rousseff's
government, which is trying to stave off a threatened downgrade of
Brazil's sovereign credit rating. He has also indicated that he
will open the door for a possible impeachment process against Ms.
Rousseff related to alleged irregularities in the government's
accounting. Ms. Rousseff has denied any wrongdoing.
Mr. Cunha is an influential member of the Brazilian Democratic
Movement Party, or PMDB, and a longtime ally to Ms. Rousseff's
Workers' Party, or PT. It is unclear whether PMDB will break up the
ruling coalition or if Mr. Cunha's decision will instead cause an
internal split in the party.
Rogerio Jelmayer contributed to this article.
Write to Paulo Trevisani at paulo.trevisani@wsj.com and Luciana
Magalhaes at Luciana.Magalhaes@dowjones.com
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