President Temer Refuses to Resign in Face of Investigation

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(AP Photo/Andre Penner). A woman reads a newspaper with a front page headline that reads in Portuguese: "It's the End: Resignation, Removal or Impeachment?" with regards to corruption allegations against Brazil's President Michel Temer, in Sao Paulo, B.

A report in Globo on Wednesday said that Temer had been secretly recorded agreeing to paying money to former house speaker Eduardo Cunha, who is in prison after being convicted of taking millions of dollars in bribes.

A newspaper reported that Temer was caught on tape discussing hush money for jailed former speaker of the house Eduardo Cunha.

Temer delivered a brief speech Thursday afternoon, declaring, "I will not resign, I repeat I will not resign".

Temer has denied any wrongdoing and on Thursday refused to resign.

In a nationally televised address, Temer, who ascended to the top job only previous year after the impeachment of Dilma Rousseff, was defiant.

Piling on the pressure, the Supreme Court greenlighted a formal investigation into Temer's alleged involvement with the hush money.

Late Wednesday, Globo reported that Neves had been recorded asking JBS meat-packing company executive Joesley Batista for $700,000 to pay for his "Car Wash" defense.

Temer said he would not resign.

That leaves impeachment proceedings as the most likely avenue to remove Temer from power, just like a year ago when Rousseff was stripped of her office and Temer, her vice president, automatically got the top job.

Cunha is in the same ruling Brazilian Democratic Movement party as Temer and initiated the impeachment of Dilma Rousseff that allowed him to take over the presidency.

Also on Thursday, federal prosecutor Rodrigo Janot asked the Supreme Court's permission to arrest Senator Aecio Neves on allegations he asked Batista for bribes.

Despite these increasingly desperate conditions for the masses of Brazilian workers, the corporate and financial media and big business politicians have hailed a supposed turnaround in the country's economy, based in large measure on the enthusiastic response of the stock markets and worldwide finance capital to the apparent progress made by Temer in pushing through his attacks on pensions and labor laws. "The optimism returned and reforms were advancing in Congress", he said.

The recordings also implicate senator and former presidential candidate Aecio Neves, who reportedly asked Batista for almost $600,000 to pay for his defense in the Car Wash Corruption Probe.

The Bovespa index crashed more than 10 percent after opening, triggering an automatic suspension of trading for 30 minutes.

Instead, Temer said he plans to fight the charges.

The JBS executives' plea bargain agreement is being overseen by Supreme Court Justice Edson Fachin, who is responsible for the bribery investigation known as Operation Car Wash.

Investigators have uncovered a massive scheme in which politicians took bribes in exchange for getting big businesses overinflated contracts with state oil company Petrobras.

Batista's tape has earned him and his brother Wesley, JBS's CEO, immunity from prosecution.

But with so many lawmakers under investigation for corruption, there are widespread calls for the constitution to be changed to allow for direct elections immediately.