Bras?lia, BrazilBrazil's interim President Michel Temer dismissed graft allegations against him as dishonest and reckless, pledging in a national address on Thursday that his government would not be distracted from fiscal reforms aimed at reviving the economy.

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Temer said it was "irresponsible, ridiculous, mendacious and criminal" to suggest, as former Petrobras executive Sergio Machado did in plea bargain testimony, that he had sought campaign funds for his party from a graft scheme at the state-run oil company.

The testimony, made public by the Supreme Court on Wednesday, was the first direct link between Temer and the sweeping corruption probe that has thrown Brazil's politics into chaos and deepened its worst recession in decades.

"I say it again, when an idea as flippant as this comes out, it embarrasses or can embarrass the government's activity. But I want to say here, to register, loud and clear, nothing will embarrass our intentions, our mission, our task during the period in which I am in front of the presidency of the republic, with an extraordinary economic team, with a foreign affairs team which is equally as extraordinary, and a very adequate ministry. Nothing will impede us from continuing to work for the good of Brazil and the Brazilian people," said Temer in Brasilia on Thursday.

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The highly charged plea bargain implicating Temer and two dozen other elected officials, many of them senior members of his ruling coalition, stole the thunder from a landmark fiscal reform revealed the same day.

Machado's plea deal included allegations that Temer had sought campaign funds for his party's 2012 Sao Paulo mayoral candidate from the graft scheme at Petrobras, the biggest ever uncovered in Brazil.

The accusations provide more fodder for suspended President Dilma Rousseff and her allies, who accuse Temer and his party of  mounting the impeachment process against her in order to distract from their own roles in the corruption scandal. Rousseff faces a trial in the Senate on unrelated charges of breaking budget rules.

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(Reuters)