July 4, 2017 / 7:21 PM / 4 months ago

Brazil's Temer boosts infrastructure spending as graft scandal deepens

BRASILIA (Reuters) - Brazil’s government has sharply increased spending in local infrastructure projects proposed by lawmakers, according to budget data reviewed by Reuters on Tuesday, as a graft scandal threatens to topple President Michel Temer.

FILE PHOTO: Brazilian President Michel Temer looks on during a credentials presentation ceremony for several new top diplomats at Planalto Palace in Brasilia, Brazil June 26, 2017. REUTERS/Ueslei Marcelino/File Picture

Federal spending on infrastructure works and other projects this year sponsored by congressman for their constituencies jumped to 1.49 billion reais ($451 million) in June, up from 959 million reais the month before, the data showed.

As Brazil grapples with record-high budget deficits, the recent splurge illustrates Temer’s efforts to keep his fragmented coalition united despite growing calls for his resignation more than one year before general elections.

Temer’s office declined to comment on the increase in spending in the past month.

Brazilian legislators can earmark the federal budget for local works, but the federal government must authorize that spending.

Brazil’s budget deficit before interest payments soared to 30.736 billion reais ($9.30 billion) in May, the largest-ever for the month. The gap in the 12 months through May reached 157.7 billion reais, above the official target for a deficit of 143.1 billion reais for this year.

The increase in spending comes at a time when Temer is facing charges with taking millions of dollars in bribes in connection with a graft scheme involving the world’s largest meatpacker, JBS SA. Company executives said in plea-bargain testimony that the president took bribes for resolving tax matters, freeing up loans from state-run banks and other matters. According to the testimony, Temer also allegedly arranged to receive a total of 38 million reais from JBS.

The president has repeatedly denied any wrongdoing.

VOTE ON TEMER‘S FATE

Under Brazilian law, it is now up to the lower house of Congress to decide if the president will be tried by the Supreme Court. Two-thirds of the lower house must vote to approve the charge for that to happen.

Temer’s charge will first be voted on by the 66-member Constitution and Justice Committee, which on Tuesday evening chose deputy Sergio Zveiter, from the president’s own Brazilian Social Democracy Party, to be the rapporteur for the case.

Zveiter vowed to be independent and beholden “only to the country.” The commission’s vote is expected by July 13.

Regardless of the commission’s decision, the full house must still vote on the charge against Temer. That full vote is expected to take place on July 14.

Prosecutor-General Rodrigo Janot last week said he would likely level new charges of racketeering and obstruction of justice against Temer in the coming weeks. Each charge would require lawmakers to vote on whether to defend the deeply unpopular president from being tried.

Lawmakers within Temer’s coalition are confident they have the votes to block the two-third majority required to proceed with a trial. But they also acknowledge that if forced to vote on repeated charges against the president, support for the leader could unravel as lawmakers worry about their own re-election next year.

($1 = 3.3035 reais)

Reporting by Ricardo Brito in Brasilia; Writing by Silvio Cascione; Editing by Brad Brooks, Diane Craft and Lisa Shumaker

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