New scandal engulfs JBS
19/05/2017
JBS revealed that part of the agreement is a fine of around $65 million but said ongoing co-operation with prosecutors, which suggests the fine may not be the end of the matter. JBS remains the largest producer of meat and of leather in the world.
The main new allegation that has emerged is that J&F Investimentos has been paying hush money to a senior politician, Eduardo Cunha, who is already in jail for corruption. Mr Cunha was the president of Brazil’s chamber of deputies, equivalent to the speaker in the lower house of parliament, until his arrest in 2016. Political commentators in Brazil have speculated that Mr Cunha may have information about a number of alleged corruption scandals that have not yet been made public.
This new scandal, however, goes all the way to the top because it also involves Brazil’s current president, Michel Temer. Mainstream media have made public a recorded conversation in which two men have a discussion about these payments. One voice mentions the alleged payments to Mr Cunha. A second voice says: “That has to continue, understand?” The allegation is that the first voice is that of Joesley Batista, president of J&F Investimentos, and the second that of President Temer.
Since the recordings were made public on May 17, there have been widespread calls for President Temer to step down and public protests. Share prices across Brazil have fallen and trading at the Ibovespa stock exchange was suspended for a short time. The country’s currency, the real, lost 8% of its value against the dollar in one day. At least one federal government minister has resigned.
JBS has refused to comment on these allegations. As reported above, has confirmed the plea-bargain agreement but this likely to relate to earlier allegations of corruption. JBS was also one of the companies implicated in the Carne Fraca (‘Weak Flesh’) scandal in March this year, in which the federal authorities found meat companies had bribed food safety inspectors; this led to temporary bans in several countries on imports of Brazilian meat.
For his part, President Temer has made a public address on May 18 insisting he had never authorised payments to Eduardo Cunha and refusing to step down.
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