BRASILIA, Brazil _ A former Brazilian Cabinet minister and close aide of President Michel Temer was arrested by federal police on Monday, in yet another sign of the country's political volatility.
Geddel Vieira Lima was detained on claims that he has tried to obstruct investigations into the deviation of funds from the state-run bank, Caixa Economica Federal, according to a statement by the public prosecutor's office. Vieira Lima's attorney didn't immediately respond to a request for comment.
The arrest of the ex-minister, who resigned in November last year following allegations of influence trafficking, adds to the turbulence in Brasilia. It comes just hours after Temer decided to attend the G-20 summit in Germany this week, reversing plans to stay in Brazil to deal with the political crisis, including his own defense against corruption charges. Over the next few days, the Senate is also due to vote on labor reform, one of the government's flagship bills. The latest scandal may increase the cost of support for the Temer administration in Congress.
"The opposition will try to exploit the case to create more economic and political instability," said Andre Moura, from the government-allied Social Christian Party. "For them, the worse things get, the better."
The real pared gains after news of the arrest, given the prospect of further complications for the government's market-friendly policies. Earlier on Monday, Moody's Investors Service warned that the government's social security reform was at risk and that a failure to pass the bill could have a negative impact on Brazil's credit rating.
Prosecutors also claim that Vieira Lima was attempting to stop others, including the jailed former speaker of the lower house, Eduardo Cunha, from signing a plea bargain deal with investigators. Cunha was the driving force behind last year's impeachment of Dilma Rousseff.
