Brazil's Temer accused of diverting funds to campaigns

AP News
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Posted: Jun 21, 2017 11:45 PM
Brazil's Temer accused of diverting funds to campaigns

SAO PAULO (AP) — President Michel Temer is being accused of organizing the distribution of about $6 million of public funds into Brazil's election campaigns.

The latest corruption allegations against Temer came from fundraiser Lucio Bolonha Funaro in testimony made public by Brazil's top court late Tuesday.

Funaro is a stockbroker who is known among politicians as a key fundraiser for Temer's centrist Brazilian Democratic Movement Party.

Funaro said Temer's re-election campaign for vice president in 2014 was one of the recipients of the funds from a state-run bank, Caixa Economica Federal.

Temer became president in May 2016 after his predecessor Dilma Rousseff was impeached and later removed.

The embattled president, who was on a trip to Russia and Norway on Wednesday, has denied any involvement with corruption and pledged not to resign.

Funaro said in his testimony dated June 14 that the funds were obtained from Caixa in two credit operations that generated a $6 million commission. He said two companies benefited from the transactions: BR Vias, which is the owner of airline Gol, and LLX, a company that has tycoon Eike Batista as one of its partners.

The two companies did not comment the accusations.

Funaro, who is negotiating a plea bargain with Brazilian authorities, also said he paid a key Temer aide, Secretary-General Wellington Moreira Franco to help a business get credit from the state-bank at the time Franco was a vice president at the bank.

Franco denied any wrongdoing.

The accusations from the former fundraiser complicate Temer's situation just a day after a report from Brazil's federal police said there is evidence that the president received bribes to help businesses.

If Brazil's top prosecutor agrees with the police findings, Congress will decide whether Temer should be investigated by the Supreme Court, which is the only body that can formally investigate the president. If two-thirds of Congress voted to allow the investigation, Temer would be suspended from office pending trial.