April 4, 2017 / 12:39 PM / in 4 months

Brazil court delays ruling in case that could unseat President Temer

Brazil's President Michel Temer talks to the journalists during an impromptu news conference in Sao Paulo, Brazil, April 4, 2017.Nacho Doce

BRASILIA (Reuters) - Brazil's top electoral court on Tuesday decided to hear new witnesses in an illegal campaign financing case that could remove President Michel Temer from office, delaying any verdict in the trial until at least May.

The Supreme Electoral Tribunal (TSE) voted to reopen the landmark case to allow former Finance Minister Guido Mantega to respond to allegations he solicited an illegal donation of 50 million reais ($16 million) from engineering conglomerate Odebrecht in return for favorable tax legislation.

The delay plays into what Temer's aides have outlined as a defense strategy that centers on dragging the case out through 2018. If successful, that would allow Temer to complete the term of impeached leftist Dilma Rousseff and spare Brazil the turmoil of having two presidents ousted in a year.

The center-right president served as Rousseff's vice president, before he replaced her in 2016.

If the seven-justice tribunal decides that Rousseff and Temer, her running mate, used illegal money to fund their 2014 campaign, it could annul the election result and force Temer from office.

Congress would then have 30 days to elect a successor, plunging Latin America's largest nation deeper into the political turbulence that has prolonged its worst recession on record.

The court on Tuesday also granted a prosecutor's request to call Rousseff campaign strategist João Santana as a witness, following allegations that 20 million reais of his fees were paid offshore by Odebrecht.

The three political parties involved - Rousseff's Workers Party, Temer's PMDB and the PSDB that lost the 2014 election - were also given another five days to present their arguments.

"With the new proceedings, there is no way of knowing when this trial will be over," said Temer lawyer Gustavo Guedes.

General view of Brazil's Supreme Electoral Court (TSE) plenary is seen during a meeting at the Supreme Electoral Court (TSE) to debate whether to annul the Rousseff-Temer ticket in the 2014 election for receiving illegal campaign donations, in Brasilia, Brazil April 4, 2017.Ueslei Marcelino

'An Endless Trial'

The TSE judge given the task of studying the case, Herman Benjamin, criticized the calling of new witnesses in a case that opened 2-1/2 years ago.

"We can't turn this into an endless trial. We can't hear everybody. We can't hear Adam and Eve and the serpent," Benjamin told the court.

Slideshow (3 Images)

Brazil's currency and stock market were among the best performing in the world after Temer assumed office in May and pledged to cut a gaping deficit and overhaul pension laws. Investors welcomed the shift toward a more business-friendly agenda after 13 years of Workers Party government.

But the prospect of removing a second president in the space of a year could be devastating.

"It would create more confusion," former President Fernando Henrique Cardoso warned in a radio interview on Monday, urging the court not to make a decision that would scare off investors.

Cardoso's PSDB party filed the complaint about illegal campaign funding in 2014 after narrowly losing the elections. However, since Rousseff's impeachment, it is an ally in Temer's coalition and its lawyers are arguing that he was not responsible for the illegal money.

Among possible outcomes, the court could decide to close the case because Rousseff is no longer president or declare her election victory void, but not punish Temer with a ban from politics.

Temer is currently serving the third year of Rousseff's second four-year term. If a president is removed in the last two years of a four-year term, Congress would get to pick the successor rather than via a popular vote.

Since Temer's coalition holds a majority in Congress, that could potentially enable him to stay in office.

Additional reporting by Ricardo Brito; Editing by Daniel Flynn and Jeffrey Benkoe

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