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Brazil Supreme Court removes lower house speaker Cunha

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The removal of Eduardo Cunha, a bitter rival of Ms Rousseff and one of Brazil's most divisive public figures, was the latest in a series of political earthquakes in South America's largest country as it struggles with a sweeping corruption scandal and the worst recession in decades.

[BRASILIA] Brazil's Supreme Court removed the speaker of the lower house of Congress on Thursday on charges of obstructing a corruption investigation, days before an impeachment process that he engineered was expected to oust President Dilma Rousseff.

The removal of Eduardo Cunha, a bitter rival of Ms Rousseff and one of Brazil's most divisive public figures, was the latest in a series of political earthquakes in South America's largest country as it struggles with a sweeping corruption scandal and the worst recession in decades.

The Supreme Court voted unanimously to approve a request by Brazil's top prosecutor to strip Mr Cunha of his influential post for allegedly intimidating lawmakers and obstructing an investigation into accusations that he held undeclared bank accounts in Switzerland. Mr Cunha said he would appeal.

An evangelical Christian with strong support from the religious right in Congress, Mr Cunha has for months fended off ethics committee hearings in the lower house about whether he lied about the accounts, using every trick in the procedural book.

The bespectacled speaker with slicked-back hair has remained unflappable, calmly denying prosecutors' accusations he had used the Swiss accounts to stash millions of dollars in bribe money.

Mr Cunha is the only sitting lawmaker so far officially charged by the Supreme Court with corruption in the sweeping kickbacks scandal focused on state oil company Petroleo Brasileiro SA, commonly known as Petrobras.

Deputy speaker Waldir Maranhao, a member of the Progressive Party who is also being investigated in the Petrobras scandal, became acting head of the lower chamber with Mr Cunha's suspension.

As speaker, Mr Cunha stood third in the line of presidential succession and would have become second if the Senate decides next week, as expected, to try Ms Rousseff for alleged budget irregularities.

If the Senate puts her on trial, as expected in a vote next Wednesday, she would be immediately suspended from office for up to six months during the trial and replaced by Michel Temer, her 75-year-old vice-president. Mr Temer is already forming his cabinet.

Mr Cunha launched impeachment proceedings against Ms Rousseff in December on charges she broke budget laws. His suspension could have helped Ms Rousseff had it come earlier.

Now, it could work against Ms Rousseff by weakening her argument that she is being impeached by corrupt politicians. It may instead help Mr Temer by eliminating a tainted ally with whom the new president would have had to negotiate legislation.

A Temer government would desperately need to pass reforms to revive confidence in Brazil's ailing economy and plug a budget deficit that exceeded 10 per cent of gross domestic product last year.

Fitch Ratings downgraded Brazil's sovereign debt further into junk territory on Thursday, to BB with a negative outlook, citing a very challenging political environment.

"Temer could inherit the presidency because of a process started by Cunha," said Rafael Cortez, a political analyst with Tendencias, a consultancy in Sao Paulo. "Any agreements they would have made could have looked like payback for enabling him to become president."

'FRANK UNDERWOOD'

A wily backroom dealmaker, Mr Cunha has been dubbed the Frank Underwood of Brazilian politics by the country's media, a reference to the ruthless president in The House Of Cards television series.

A familiar voice to many Brazilians as an evangelical radio commentator, Mr Cunha has sparked protests with his plans to tighten abortion rules.

More recently, details of lavish spending on foreign trips with his young wife, including classes at a top Miami tennis academy, stirred outrage in the midst of the deep recession.

Mr Cunha is accused of taking US$5 million in bribes on contracts for two drill-ships in the corruption scheme that engulfed Petrobras two years ago.

Though Ms Rousseff herself has not been accused of any wrongdoing directly related to the scandal, it has ensnared her allies and raised pressure for her ouster.

The leftist president has been fighting for her political survival since the lower house commanded by Mr Cunha voted on April 17 to charge her with manipulating government accounts. Her opponents say this allowed her to boost public spending before her 2014 re-election.

Ms Rousseff denies any wrongdoing and has accused Mr Temer of orchestrating a 'coup' to end 13 years of Workers Party rule. She has accused Mr Cunha of starting the impeachment proceedings against her because the Workers Party did not help him avoid the ethics probe. "It's a clear abuse of power. He used his position for revenge," Ms Rousseff said.

Mr Cunha said he hoped she will be convicted by the Senate. "On Wednesday we will be able to say, better late than never, that Brazil will be free of the Workers Party," he told reporters.

Should Mr Temer become president, Senate leader Renan Calheiros, another politician who is under investigation for corruption, would become the next in line to lead the nation.

Mr Temer would serve out the remainder of Ms Rousseff's term through 2018, and would not be able to run for president.

The Sao Paulo state electoral court ruled this week that he exceeded the limits of campaign donations in 2014 and cannot run for elected office for eight years.

REUTERS