Minister at center of Brazil’s latest scandal resigns

BRASILIA:

Brazilian President Michel Temer’s minister in charge of relations with Congress, Geddel Vieira Lima, resigned yesterday following an accusation that he had pressured another minister to approve a property investment. His resignation, along with accusations by another minister that Temer also discussed the investment with him, rattled investors yesterday, pushing Brazil’s currency and stock prices lower as traders worried the turmoil would affect efforts to overhaul government finances and restore economic growth.

Vieira Lima is the fourth Cabinet minister to quit over corruption allegations since Temer replaced impeached leftist Dilma Rousseff earlier this year and vowed to clean up government. His departure deprives Temer of his point man in negotiations with Congress, a key post for an administration striving to enact unpopular austerity measures to reduce a widening budget deficit and spur a recovery for an economy in its worst recession since the 1930s.

The crisis came to a head following news reports late on Thursday that Marcelo Calero, who resigned last week as culture minister, told federal police that Temer himself pressured him to resolve a dispute with Vieira Lima. The dispute involved a permit for construction of a luxury oceanfront building in which Vieira Lima had purchased an apartment and that needed approval by a culture ministry agency because it would be built in a historical preservation district in Vieira Lima’s hometown of Salvador. After Brazil’s public prosecutor’s office said it was studying a possible investigation into the case, a presidential aide told Reuters early yesterday that Vieira Lima’s situation had become untenable. The Brazilian real slumped as much as 2.2 percent to 3.4679 reais to the dollar, the biggest intraday drop since a day after US President-elect Donald Trump’s unexpected victory. It later pared losses to trade 0.92 percent lower on the day. — Reuters