Rousseff's Most Powerful Foe Suffers Blow in Kickback Scandal

  • Cunha allegedly used secret Swiss accounts to recieve kickback
  • Opposition urges him to step down, he denies any wrongdoing

Eduardo Cunha,  President Dilma Rousseff’s most powerful adversary, said he won’t resign as head of Brazil’s lower house even as some of his supporters in Congress urged him to leave following news reports that he received kickbacks. He denies any wrongdoing.

The political blow, which Cunha blames on the federal prosecutor’s office, reduces his ability to spearhead attacks against the government. As head of the lower house, Cunha has the power to accept requests to initiate impeachment proceedings against Rousseff.

Reports of a corruption scandal involving Cunha were on the front pages of the country’s three largest newspapers Saturday. He allegedly used accounts in Switzerland to receive kickbacks from a Petroleo Brasileiro SA contract in Africa, the newspapers Folha de S. Paulo, Estadao and O Globo reported.

“This is almost a deadly blow on Dilma’s main rival,” Andre Cesar, founder of political consultancy firm Hold, said in a phone interview. “But he still has legal means to attack the president by leaving the door open to impeachment proceedings.”

News of the scandal comes as media reports say Cunha was working with members of the opposition to kick-start impeachment proceedings. It also follows a decision by the country’s audit court that may have provided legal grounds to request Rousseff’s ouster, by recommending Congress reject her 2014 accounts on charges she broke fiscal law.

Leaders of the country’s largest opposition parties urged Cunha to resign in a joint statement sent by e-mail. Cunha, who is in the first year of a two-year term, was elected with the support of Rousseff’s rivals.

Cunha’s Power

Cunha has denied he is maneuvering with the opposition to impeach Rousseff. He said Thursday that he may start assessing pending impeachment requests on Tuesday. If he rejects them, the opposition can try to overrule his decision on the floor.

Cunha allegedly received money that was funneled from a $34.5 million contract signed by the state-controlled Petrobras to buy an oil field in Benin, Folha said, citing documents held by Brazil’s public prosecutor and based on information handed over by Swiss authorities.

Cunha’s attorneys will ask the Supreme Court to ensure them access to the investigation, which they say they learned about through media reports, according to a statement e-mailed Saturday. Cunha said Brazil’s chief prosecutor has leaked information protected by secrecy laws in Brazil to embarrass him politically and denied him the right to defend himself.

Cunha broke ties with the government in July and said he was joining the opposition, despite being a member of the Brazilian Democratic Movement, a party in Rousseff’s ruling coalition. The government has sustained defeats in Congress since the start of the year and last week was unable to ensure a quorum to uphold presidential vetoes on spending increases.

Rousseff ordered her main political aides to appoint allies to posts in the lower echelons of the government and state companies as part of a plan to rebuild her support in Congress, Estadao reported, citing a person with access to the president. She said members of her own Workers’ Party can be removed from posts to give room to allies that have been dissatisfied with the government, the Sao Paulo-based newspaper reported.

The president’s press office declined to comment on whether Rousseff is distributing posts to allies as part of plan to rebuild her coalition.

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