Photo via Clarin

Argentine government officials are reportedly concerned after news broke on the O Globo Network last night that the owners of meat processing company JBS handed over evidence to the country’s highest court directly implicating President Michel Temer in multiple charges of corruption.

Argentine government representatives are questioning whether the turmoil engulfing Brazilian politics will translate into a new setback for the Brazilian economy that just had started recovering this quarter — which would almost inevitably hurt the Argentine economy in the short and medium term too.

This morning the Brazilian Real’s value dropped by 8.85 percent, São Paulo’s stock exchange dropped 10.54 percent and had to suspend its operations, while the US Dollar’s value in Argentina rose by more than 15 cents as a result of the news.

“The Temer scandal will undoubtedly have a strong impact in our economy and that’s not good,” a government official told Infobae. “It will bring about uncertainty and political instability for our main trading partner and sooner or later that will affect our economy,” the official added.

The crisis is set to worsen a trading relationship that has already taken several hits over the last few years. In fact, the Argentine Chamber of Commerce (CAC) released a report informing that Brazilian participation in Argentina’s international trade in 2016 was the lowest in 24 years, and not because Argentina exponentially increased its trade with other countries.”

According to the report, 20 percent of Argentine exports in 2016 were destined to Brazil. The number is significantly lower than the average of 23.6 percent during the past 24 years.

O Globo outlet revealed yesterday that the owners of meat processing company JBS, the largest company of its kind in the world, provided audio and video evidence to a Brazilian Court as a part of a plea deal that could severely compromise Temer’s position in power.

Secretly recorded by JBS heads Joesley and Wesley Batista, the audios allegedly contain Temer condoning and acknowledging bribe payments to the disgraced former president of the Brazilian Chamber of Deputies, Eduardo Cunha (currently serving a 15 year prison sentence on corruption charges), in order to prevent him from revealing his party’s (PMDB) involvement in multiple corruption charges.

In the 40-minute recording, Batista admitted to Temer that he was giving money to Cuhna, who spearheaded the impeachment process that ousted Temer’s predecessor President Dilma Rousseff. When told that Cunha was being paid hush money, current president Temer is allegedly heard on the recording saying “you need to continue that [the payments], you see?”

According to the report, JBS would pay roughly US$ 160,000 a week throughout 20 years to guarantee Cunha’s silence.

The Batista brothers recorded Temer as a result of an agreement reached with the prosecutor’s office investigating the Lava Jato. They also provided help so police could film a moment in which a suitcase with a bribe was handed over to PMDB Deputy Rodrigo Rocha Lourdes, in charge of receiving the weekly payments. Lourdes was dismissed from his post today morning.

And the scandal is not limited to just the president’s party though. There’s also an audio registering a bribe request from PSDB Senator Aecio Neves, a main representative of the coalition supporting Temer and the man who lost 2014’s election to Temor’s predissors Dilma Rousseff. Neves was recorded requesting about US$ 640,000 to JBS to face the legal expenses in the different cases investigating him for, ironically, taking bribes from Odebrecht, another large Brazilian company involved in corruption scandals.

Brazilian Prosecutor General Rodrigo Janot today requested Neves be arrested. Minutes Before, the country’s Supreme Tribunal ordered he be removed from his post. The business leaders also revealed that they bribed government officials during the 13 years in which the Workers’ Party (PT) — led by former Presidents Luiz Inácio “Lula” da Silva and Dilma Rousseff — ruled the executive branch. During that time, the person in charge of receiving the money was Guido Mantega, who was the Economy minister during both presidents’ administrations.

At the time this article was being written, Temer cancelled the 17 meetings that he had scheduled for the day and is getting ready to address the Brazilian people. According to a report by Reuters, Temer told his aids that “he’s not going down.”