June 6, 2017 / 7:32 PM / a year ago

Brazil's brittle governing coalition endangered by key party's young lawmakers

BRASILIA, June 6 (Reuters) - Younger lawmakers keeping beleaguered Brazilian President Michel Temer’s brittle coalition from disintegrating are engaged in bitter internal debates with their own party elders, calling for them to abandon the scandal-plagued leader.

With Temer’s future on the line because of an ongoing corruption investigation and an electoral fraud trial that begins later Tuesday, the Brazilian Social Democracy Party (PSDB) is considering leaving the cabinet and quitting the coalition whatever the outcome.

The breakaway movement is led by a group of young PSDB lawmakers in the lower house, known as “the black heads” for the color of their hair, not yet gray from age. They fear corruption accusations against Temer and his Brazilian Democratic Movement Party (PMDB) could further tarnish their own party that is already beset by scandals involving its own leaders.

Temer, who is accused of receiving millions in bribes from giant meatpacker JBS SA, has won time from PSDB elders in the Senate, as they have not found a consensus figure to replace Temer should he be pushed from office and with Brazil’s long-suffering economy showing signs of life.

Both younger and older PSDB members, however, agree the party must support Temer’s labor and pension reforms to consolidate an economic recovery crucial for their ambitions of returning to the presidency after a 16-year dry spell.

According to PSDB Senator Ricardo Ferraco, an influential politician in charge of drafting the labor reform, some of the party elders are changing their minds and considering a breakup.

“Temer put a good government plan in place, but we cannot ignore the corruption allegations,” said Ferraco, 53, from his Senate office overlooking the futuristic capital. “We are convinced the reforms need to continue whoever is the president.”

The party is split on whether it should wait to leave Temer’s coalition until the electoral court decides whether or not to unseat him for alleged use of illegal funds to finance his 2014 election campaign when he ran as Dilma Rousseff’s running mate.

Ferraco said the party should break away this week even before the court reaches a decision, which could take weeks or months.

Another party leader and member of its executive board, Jose Anibal, called for caution and said the party should not leave the coalition without a final decision from the court.

“A big majority doesn’t want to backtrack on what we have gained so far. We cannot lose those economic gains,” Anibal said.

With three ministers in the cabinet and the third largest representation in Congress, a PSDB break could precipitate the fall of Temer, just one year after the impeachment of Rousseff, whose leftist Workers Party ruled the country for 13 years.

Temer’s demise could put an end to his reform agenda to cap surging pension expenditures and close a widening fiscal deficit that cost Brazil its investment grade credit rating.

The PSDB, created by breakaway leftist dissidents from Temer’s PMDB after the end of Brazil’s 21-year dictatorship, was credited with defeating years-long hyperinflation and recession during its rule between 1995-2002.

For the first time in years, the PSDB has a clear shot at winning the presidency in 2018 after grave corruption allegations have weakened its arch rival the Workers’ Party.

Lawmakers said that Geraldo Alckmin, the governor of the country’s most populous state, Sao Paulo, could be the PSDB candidate for 2018. Alckmin’s main ally and mayor of the city of Sao Paulo, Joao Doria, is also a possible contender.

The PSDB, however, is also reeling from corruption accusations against its leaders, including 2014 presidential candidate Aecio Neves.

For first-time PSDB congressman Betinho Gomes, the party should renew itself by distancing itself from corruption allegations now.

“We don’t want to boycott Brazil or the government, but our electorate is demanding answers,” Gomes said. “We should go our separate way, but remain committed with the reforms.” (Reporting by Alonso Soto; Editing by Phil Berlowitz)

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