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Brazil Corruption Scandal Threatens Split in Rousseff Coalition

Brazil’s President Dilma Rousseff attends a meeting with rectors of public universities, at the Planalto Presidential palace, in Brasilia, Brazil, March 11, 2016.

A widening corruption probe has turned key lawmakers from Brazil's largest party against leftist President Dilma Rousseff, threatening to split her coalition and increasing chances of her impeachment in Congress this year.

The Brazilian Democratic Movement Party, known as the PMDB, is the main ally of the ruling Workers' Party. Its leader, Michel Temer, is Rousseff's vice president.

But a growing number of legislators from the fractious party, which accommodates centrist and center-right politicians, say it is time to abandon a president they see as paralyzed by political gridlock and unable to lead Brazil out of an intense economic recession.

"This is a very delicate moment," said the party's vice president, Senator Valdir Raupp, who no longer wants to support Rousseff's coalition. "The country needs a change of course now."

What little patience some PMDB lawmakers still had for the coalition has frayed amid an investigation into the ruling party's founder, former president Luiz Inácio Lula da Silva, and new allegations money from a far-reaching corruption scandal helped fund Rousseff's 2014 re-election.

At its biennial convention Saturday, the PMDB will loosen its alliance with the administration, which has been roiled by the ongoing kickback scandal around state-run oil company Petroleo Brasileiro SA.

While avoiding an outright break with Rousseff, PMDB officials say they will vote on measures intended to give individual party lawmakers more freedom to rebel against Rousseff initiatives and ultimately vote in favor of ousting the president, who faces impeachment proceedings because of accounting irregularities in the government budget.

Raupp said the party's more anti-Rousseff factions will table a motion to leave the coalition outright, but a second motion to declare independence from the government will most likely prevail.

If PMDB legislators do end up voting to impeach Rousseff, one benefit for the party, which plans to field its own candidate in the 2018 presidential election, is that Temer would become president.

Many within the party believe the impeachment drive could come to a vote in both chambers of Congress after it passes a committee in the lower house next month.

Rousseff has denied any wrongdoing and dismissed the impeachment efforts as baseless.

PMDB Congressman Darcisio Perondi, a staunch opponent of the Workers' Party, said the desire to bolt from the Rousseff coalition has spread to colleagues in the Senate, previously a chamber considered more favorable for Rousseff.

"The economy is in a meltdown," he said.

Lawmakers are being pressured by failing businesses and the loss of jobs in their states. They say constituents want new policies to restore growth to an economy that shrank 3.8 percent in 2015.

The graft investigation surrounding Petrobras has deepened Brazil's political crisis in recent weeks and boosted the country's stock market and currency as investors bet on the prospects of a change of government and more business-friendly policies.

At the convention, the PMDB is expected to reconfirm Temer as its leader, a sign it is not ready, despite its rebelliousness, to relinquish its share of power in Rousseff's government. In addition to the vice presidency, it holds six cabinet posts.

"It is going to be a noisy convention," said PMDB whip in the lower house of Congress, Leonardo Picciani, who represents a Rio de Janeiro faction that came out in support of Rousseff last year in return for two cabinet ministries.

"But in practical terms, a far as staying in the government or leaving, nothing will be decided yet," he told Reuters.

PMDB support for an immediate departure from Rousseff's coalition could gather more force if there is a massive turnout in a nationwide protest for Rousseff's impeachment called for Sunday by opposition parties.

"The streets of Brazil will be decisive," said Perondi, the PMDB Congressman.