After listening to tape Temer says probe should be shelved

Brazil crisis deepens with probe of president, top senator

Brazil crisis deepens with probe of president, top senator

In a statement late Wednesday, the president's office denied the allegation.

Even in this country tired from the constant drip of revelations of a wide-ranging corruption investigation, the incendiary accusation set off a firestorm and Brazil's highest court opened an investigation.

Shares of the exchange-traded fund that tracks Brazilian stocks was down by about 16.6% in premarket trade on Thursday.

SHAPIRO: What kicked all this off?

O Globo newspaper reported that Joesley Batista, chairman of meatpacking giant JBS SA, recorded a conversation with Mr. Temer in which the president indicated Mr. Batista should continue to pay the former legislator, Eduardo Cunha.

Even as he denied plotting against Rousseff, his fellow PMDB member and consummate political operator Eduardo Cunha was busily building momentum for her impeachment in his role as speaker of the lower house of Congress.

Brazil's Petrobras corruption and embezzlement scandal has enveloped the country's political elite - across party lines.

A man believed to be Temer can be heard in the recording saying, "You have to keep that up, see?", apparently in reference to payments made to buy the silence of a potential witness. "I know what I have done", he said, according to a BBC translation.

The center-right president insisted on Brazilian television Thursday that he "will not step down" and "did not buy the silence of anyone".

Temer said he would not resign.

SHAPIRO: And what happens now. The culture minister, Roberto Freire, resigned and there were indications that the urban affairs minister would follow. And remember, a third of his cabinet before this were already under investigation from those auto wash investigators that I mentioned. And now it looks of it's - it's pretty unlikely.

Temer has already survived a series of scandals and plummeting popularity, but this allegation is different. He wants to pass labor law reforms and to overhaul the pension system. The Supreme Court suspended Neves from the Senate. "We cannot throw into the garbage can of history so much work done for the country", he said.

Federal police, meanwhile, closed in on President Temer allies as they intensified their three-year corruption probe.

Since he became president a year ago following the controversial impeachment of Rousseff - who was removed from office accused of manipulating federal budgets, his government has been plagued by scandal and several ministers have been forced to resign. So there are those who feel that he just doesn't have a mandate anyway.

The scandal comes at a crucial time for Brazil, which is mired in its worst recession in decades, the economy having shrunk almost 8 percent in the last two years with more than 14 million people unemployed.

Around 5,000 people marched in Rio de Janeiro, chanting "direct elections, now" and carrying banners reading "out with Temer".

Well, the President can assure that he'll stay in office. But the big question facing Brazil right now is when they do come to choose their next political leaders, who will that be?

But the newest scandal around Temer appears to be more destabilising, raising the possibility of even greater turmoil.

SHAPIRO: That's NPR's Philip Reeves speaking with us from Rio de Janeiro.