New corruption scandal roils Temer Cabinet in Brazil

BRASILIA (Reuters) - Brazilian President Michel Temer sought on Monday to contain a new corruption scandal involving allegations a minister pressured another Cabinet member to allow construction of a luxury high-rise in a historic preservation area of his hometown.

A presidential ethics panel decided on Monday to open an investigation into Geddel Vieira Lima, who as Temer’s point man in negotiations with Congress is a key member of an administration striving to enact unpopular austerity measures to restore fiscal discipline to government finances.

The panel will review whether the minister, by asking about the proposed building in the northeastern city of Salvador, used his public office to serve his private interests. Temer spokesman Alexandre Parola told reporters Vieira Lima would continue in his post pending the panel’s probe.

Temer, who vowed to clean up corruption in Brazil’s government when he took over from leftist Dilma Rousseff in May, has already lost three ministers to graft allegations.

The new scandal broke on Friday when Culture Minister Marcelo Calero resigned, accusing Vieira Lima of pressuring him to allow the construction of a 30-story, oceanfront building in which Viera Lima had purchased an apartment.

The building had been denied a permit because it was in a historical preservation area of Salvador, once Brazil’s colonial capital. The country’s historic preservation institute reports to the Culture Ministry.

Vieira Lima told reporters on Saturday that he discussed the matter with Calero, but denied exacting pressure.

Previous Temer Cabinet members accused of corruption include even the minister who briefly headed the newly created, but short-lived Transparency Ministry. That official, Fabiano Silveira, stepped down in May when leaked recordings suggested he had tried to derail a kickback probe around state-run energy company Petrobras.

The same recordings led to the resignation a day earlier of Planning Minister Romero Jucá, a senator who is now government whip in the Senate. In June, former Tourism Minister Henrique Alves resigned after a former Petrobras executive accused him in plea bargain testimony of taking bribes.

The resignations have undermined Temer’s efforts to build a stable government after the traumatic ouster of Rousseff, who was impeached because of budget irregularities.

Corruption scandals affecting his Cabinet and PMDB party have prolonged political uncertainty, hindering confidence and investments needed to spur growth in an economy mired in its worst recession since the 1930s.

Writing by Anthony Boadle; Editing by Peter Cooney