September 14, 2017 / 7:42 PM / in 2 months

New charges against Brazil's Temer to be filed Thursday -sources

BRASILIA, Sept 14 (Reuters) - Brazil’s top federal prosecutor will charge President Michel Temer before the Supreme Court with obstruction of justice and racketeering later on Thursday in a corruption case, two sources with direct knowledge of the matter told Reuters.

It is the second set of criminal charges filed against the president based on the plea-bargain testimony of the owners of the world’s largest meatpacker, JBS SA. They accused Temer of taking bribes in return for political favors and of conspiring to buy the silence of a witness who could implicate the leader.

The earlier corruption charge, that he took bribes from JBS officials, was blocked in early August by Temer’s allies in the lower house of Congress, which has the power to decide whether a president should stand trial by the Supreme Court. Temer has repeatedly denied any wrongdoing.

Despite the lower house’s blocking the charges, they remain valid and can be pursued by prosecutors once Temer leaves office. His term ends on Jan. 1, 2019.

Brazil’s top public prosecutor, Prosecutor General Rodrigo Janot, will also bring charges against Joesley Batista, the billionaire former chairman of JBS who implicated Temer but who was arrested on Sunday for concealing other crimes in his plea bargain deal, one of the sources said.

On Wednesday, Batista’s brother Wesley, the chief executive officer of JBS SA, was also arrested for alleged insider trading to avoid hefty losses related to the May plea deal.

The charges are part of Brazil’s sprawling corruption probes that have resulted in ex-President Luiz Inacio Lula da Silva convicted and facing four more trials; three former presidents and dozens of members of Congress either under investigation or charged; and well over 100 powerful business and political figures found guilty.

Most of the schemes involve political kickbacks in return for winning contracts at government-run enterprises or for cheap and massive loans from Brazil’s state development bank.

The arrest of the Batista brothers has improved Temer’s prospects of surviving the new charges and serving out his term through 2018.

Temer and his allies expect the new charges to be voted out in the lower house next month with a wider margin of support than he obtained in the 263-227 vote on Aug. 2.

The racketeering charge against Temer was based on the plea bargain testimony of Lúcio Funaro, a businessman who accused the president and his closest aides in the ruling PMDB party of operating a criminal organization to collect bribes in exchange for political influence.

The obstruction of justice charge was based on testimony by Joesley Batista that Temer endorsed payments of hush money to try to keep Funaro from talking. (Reporting by Ricardo Brito; Writing by Anthony Boadle; Editing by Leslie Adler)

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