(Bloomberg) -- Violent protests rocked Brazil’s capital on Wednesday as President Michel Temer sought to suppress a revolt within his own party after last week’s damaging graft allegations.
Protesters set fire to the ministry of agriculture, prompting the government to send in federal troops. Tens of thousands of demonstrators demanding the president’s removal clashed with police amid clouds of tear gas. Protesters mobilized by labor unions broke into several ministry buildings shattering windows and causing widespread damage. Helicopters circled a thick plume of black smoke in the most violent scenes Brasilia has witnessed in years.
Meanwhile, inside the presidential palace, government allies debated whether to stick with the embattled president. The best solution to remove Temer, who is being investigated by the prosecutor-general on corruption and cover-up charges, is for the top electoral court to annul the 2014 election result in which he shared a ticket with ousted President Dilma Rousseff, according to half a dozen legislators from his ruling PMDB party who spoke to Bloomberg News. The court will retake the case on alleged illegal campaign financing on June 6.
The violent scenes helped reverse gains by the real and cut advances of the S
Paulo stock exchange. The currency retreated 0.16 percent to 3.2752 per dollar
at of 4:56 p.m. in Sao Paulo.
Temer met with PMDB Senators on Wednesday morning in an effort to tackle the dissidents. After the meeting, one Temer aide said the rebels account for no more than a handful of the party’s Senators.
But some legislators from other allied parties share concerns. The largest member in the government’s allied base, the PSDB, is holding its own meeting to discuss its future in the coalition.
"The mood in the PSDB caucus is one of concern," said Carlos Sampaio, the leader of the party in the lower house. "That’s why we are going to listen to the president of the party today."
The nation was rocked last week by news of a Supreme Court-authorized probe into Temer on allegations of passive corruption and obstruction of justice, only days before Congress had planned to vote on a pension bill considered central to the administration’s efforts to fix the country’s depleted public coffers and pull its economy out of recession.
Some of the dissident lawmakers told Bloomberg News that they favor a negotiated resignation in which Temer agrees to not stall possible court decisions against him with appeals. Senator Renan Calheiros, the current leader of Temer’s PMDB party in the upper house, has become the most outspoken advocate of a "negotiated exit" for Temer.
Yet Temer, a 76 year-old career politician, refuses to budge, saying charges against him were trumped up and the evidence doctored.
Also he told a group of lower house legislators Tuesday night that Brazil’s economic recovery was at stake if lawmakers abandoned him now, according to people present at the meeting. Two of the government’s main proposals are deregulating the labor market and capping pension spending.
Opposition legislators have filed numerous impeachment requests against the president. The OAB, Brazil’s influential bar association, intends to file its own petition on Thursday. For any of the requests to proceed, they would to be accepted by house speaker Rodrigo Maia. In comments to reporters on Wednesday, he urged patience. "I cannot evaluate such a serious matter in a ’drive-thru’," he said. "It’s not a decision that you make overnight.
Another factor that buys Temer time is the lack of consensus on a possible substitute. Under the current law, Congress would elect an interim leader until the October 2018 general elections, should Temer leave office.
Some of the names discussed in the halls and elevators of Congress’s modernist building in Brasilia include Senator Tasso Jereissati of the PSDB party, former Supreme Court Chief Justice Nelson Jobim, ex-President Fernando Henrique Cardoso, and current Supreme Court Chief Justice Carmen Lucia Rocha. Also the current head of the lower house, Rodrigo Maia, was suggested by senior legislators as an alternative.
In order to help rebuild support among legislators and their constituents, Temer is pushing a series of pork barrel projects, such as wage increases for public tax collectors, debt refinancing for small and mid-size companies, as well as land ordinance regulations sought by farmers, according to a person with direct access to the president who asked not to be named.