Corruption Claim Engulfs New Brazil Government

Brazil's interim government was rocked Monday by a new corruption scandal in which a key minister allegedly discusses using impeachment of president Dilma Rousseff to halt a massive probe into embezzlement.

Folha newspaper published what it said were excerpts of secretly taped conversations in March between Planning Minister Romero Juca and Sergio Machado, an ex-president of Transpetro oil company, both of whom have been caught up in the corruption probe.

In the conversations, Juca allegedly calls for a "national pact" to stop the probe, known as Operation Car Wash, in which dozens of top ranking politicians and business executives have been charged or already convicted for participation in a giant bribery and embezzlement scheme centered on state oil company Petrobras.

Transcripts of the conversations show him urging impeachment of Rousseff, saying "we need to change the government to stop this bleeding."

In comments immediately taken up by Rousseff supporters as evidence for her claim that the impeachment process is a coup in disguise, Juca says: "I am talking to the generals, the military commanders. They are fine with this, they said they will guarantee it."

According to the transcripts, he also says that he has been clearing his plans with justices on the Supreme Court, which oversees impeachment proceedings.

- Minister denies allegation -

But Juca -- a key figure in the new cabinet set up by acting president Michel Temer after the suspension May 12 of Rousseff -- denied that his comments referred to halting Operation Car Wash.

He did not deny the authenticity of the recording but said his comments had been in reference to stopping the "bleeding" of Brazil's recession-struck economy.

In a hastily called press conference, Juca said he backed the Car Wash probe and said that Folha had taken "isolated phrases" out of context.

"I consider Car Wash as bringing positive change to Brazilian politics," he said.

"There is nothing wrong in being investigated -- there's something wrong in being convicted," he said. "I have never done anything that could complicate an investigation."

The report meant fresh scandal for Temer, who took power 10 days ago after the Senate voted to suspend Rousseff for six months pending her impeachment trial on charges of breaking government accounting rules. Temer, a vice president who had already broken ranks and turned rival, automatically took over.

In his first reaction, Temer told a columnist at O Globo newspaper that Juca "has a right to defend himself."

- Troubled start for Temer -

The Petrobras probe has seen prosecutors go after many of Brazil's most powerful figures. Rousseff herself is suspected of obstruction of justice, although she has not been accused of corruption for personal gain.

Temer has promised a fresh start for Brazil after growing economic and political paralysis under Rousseff. However, he has suffered a series of setbacks already, also including an uproar over his naming a cabinet composed entirely of white men.

He has rowed back on an initial decision to ax the culture ministry, reinstating the post after outcry from several of Brazil's best known actors and singers.

Juca is the point man in the Temer government's plans to whip Brazil's bloated and underfunded budget into shape. The government faces potentially bitter resistance to suggestions that cuts may be necessary to social programs, pensions and health spending.

It was not clear how Folha obtained the recording, where the recording was made or why it was leaked more than a month later.