The first scenario would be impeachment. The President is already battling a separate impeachment hearing tied to allegations of manipulating public accounts. The Supreme Court rejected the way in which the House impeachment committee was formed. But Teneo suggests that the latest developments will revive political pressure to restart the proceedings. The second course of action could come in the form of mpugnation, if the Superior Electoral Court (TSE) has sufficient evidence that campaign funding came from contractors implicated in the Petrobras scandal. That would effectively nullify the 2014 election results and throw Rousseff out along with her Vice-President Michel Temer. Finally, the Supreme Court could remove the President if they have evidence that Rousseff directly committed obstruction of justice.
Senator Do Amaral's testimony reportedly includes charges that the President tried to influence judges to release prominent contractors held in the Car Wash investigation.
Of the three scenarios, Teneo says impeachment is the most likely and quickest outcome. "There is a perception that at least through the impeachment process, the country would be less at a loss since Temer could take the reins of power." The note suggests impeachment could take up to four months, but other analysts forecast a longer timeline. Handing the reins to Temer, however, assumes that the PT is cleared of any wrongdoing in the investigation.
If the party is found guilty, the baton passes to opposition leader Aecio Neves, who may be reluctant to take up the task in the current economic climate. It is still early days following Lula's detention and without formal charges on the table, there is a real possibility that Rousseff stays in power if no incriminating evidence comes to light. Meanwhile, as investors wait on further developments from Operation Car Wash, the escalating investigation is already showing signs of stirring political unrest, with weekend protests pitting Lula loyalists against opposition supporters. The next test for Rousseff and the PT will come on March 13 with a major demonstration planned across the country.