Brazilian tourist Minister resigns over accusation

Brazilian President Michel Temer’s minister in charge of relations with Congress, Geddel Vieira Lima, resigned on Friday 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 on Friday, 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 said on Friday that Vieira Lima’s situation had become untenable.

Brazil’s main stock market index, the Bovespa, fell 1.3 percent before cutting losses to trade 0.1 percent lower.

Adding fuel to the crisis, the Estado de S. Paulo newspaper reported on Friday that Calero secretly recorded his conversations with Temer and Vieira Lima to back his case.

A presidential ethics panel decided on Monday to investigate whether Vieira Lima pressured Calero over the building.

The 30-story building project had already been denied a permit on historical preservation grounds.

A federal police source with knowledge of the statements said Calero told police Temer last week that the permit refusal had created “operational difficulties for his government” and told him to find a solution with government lawyers.

Temer has already lost three Cabinet Ministers to graft allegations related to the sprawling bribery and kickback scandal surrounding state-controlled oil company Petrobras.

More accusations involving leaders of his PMDB party and other allies are expected to emerge in an imminent leniency deal with Brazilian engineering conglomerate Odebrecht SA that could incriminate as many as 200 lawmakers.

Reuters/Hauwa M.