RACHEL MARTIN, HOST:
There's a political crisis unfolding in Brazil. President Michel Temer is facing new accusations of corruption less than a year after the impeachment of his predecessor. The newspaper Globo reported that Temer was caught on tape endorsing payments to a former legislative leader who's been convicted on corruption charges. The paper actually posted the tape online. We've got sound of that.
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT MICHEL TEMER: (Speaking Portuguese).
MARTIN: NPR's Philip Reeves joins us now on the line from Rio de Janeiro to help us understand what's going on there. Hi, Phil.
PHILIP REEVES, BYLINE: Hi.
MARTIN: What is going on there? What are the allegations against Temer?
REEVES: Well, that recording, as you said, is purportedly a conversation between Temer and a business magnate called Joesley Batista. And the allegation is that, in that recording, Temer can be heard endorsing the payment of hush money to a jailed politician. That jailed politician is Eduardo Cunha, who used to be a highly influential figure here. He was the former speaker of the Lower House who played a big role in impeaching President Dilma Rousseff last year, who Temer replaced.
This has all got to be seen, though, in the much larger context of the huge investigation into a multi-layered corruption scandal - or series of corruption scandals really - in which Brazil's politicians have basically routinely been handing out favors to the country's biggest industrial enterprises in return for kickbacks, for example, to fund their political campaigns. Everyone's been wondering for a long time whether President Temer would be caught up and eventually brought down by that scandal. And they're wondering whether that tape, that recording, is the smoking gun.
MARTIN: So is it? I mean, how is Temer responding?
REEVES: Well, Temer has gone on TV to say that he won't resign. He says he never authorized payments to buy the silence of anyone. And many people are pointing out that the tape is kind of - the recording is crackly. It's inaudible in parts and doesn't, so far - as far as we know - so far can contain any explosively explicit evidence of corruption. And the point's been made by his staff that, you know, that's not enough to prove his guilt.
MARTIN: So he's not going to resign. What are the chances that he could be impeached? And if that happens, who would assume office?
REEVES: If that happens, there is a procedure. It would be an indirect election. The speaker of the House would take over for 30 days while Congress chooses the next person. And we don't know, actually, who that might be. Part of the problem here is that an awful lot of politicians have been caught up in this corruption investigation, and so choices are being narrowed by that.
MARTIN: The economy in Brazil has been in a long and deep recession. How does this political crisis - how is it affecting the economy?
REEVES: Well, you know, when the markets heard about this scandal - it was seen - we haven't seen since 2008. The currency lost 8 percent of its value against the dollar. Brazilian stocks crashed. And that's because they're worried that Temer will no longer have the political muscle to carry through his program of overhauling the system to bring about an end to a very long and the deepest-ever recession in Brazil, which includes pension reform - that's one of his plans - and reforming and overhauling the labor laws.
MARTIN: NPR's Philip Reeves reporting from Rio de Janeiro - thanks so much, Phil.
REEVES: You're welcome. Transcript provided by NPR, Copyright NPR.
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