After Ciro Gomes’ speech, BC says that banks had 3% of court orders

Brazilian banks received 3.4% of the outstanding court orders that the government of Luiz Inácio Lula da Silva (PT) paid off in one go at the end of last year, according to the Central Bank. Of a total bill of R$93 billion, R$3.18 billion were paid to institutions in the National Financial System (SFN).

Of the amount transferred to banks, R$1.5 billion refers to court orders that belonged to the financial institutions themselves, and R$1.68 billion relates to rights that they purchased from the original creditors, according to the monetary authority.

The BC does not prepare periodic reports nor maintain a database on the payment of court orders to banks, but collected the numbers at the request of the Attorney General’s Office (AGU) after complaints made by former minister Ciro Gomes (PDT). The values, originally published by “Folha de S.Paulo”, were confirmed to People’s Gazette by BC.

Precatório are debts – recognized by the Court of last resort – that the government owes to companies and individuals. They are generally paid in the year following the Judiciary’s final decision, but a constitutional amendment approved by the government of Jair Bolsonaro (PL) allowed the Union to pay only part of the court orders due each year, pushing the remainder to subsequent years.

In interviews and in a video posted on his YouTube channel, Ciro stated that a good part – “at least half” – of the R$93 billion in court orders ended up in the hands of banks, which he classified as “the biggest scandal in Brazilian history ” and “perhaps the biggest scam in history”.

“He [o dinheiro] It left the government vault and ended up in the bank vaults,” Ciro said in a video on March 11. “Mensalão, Petrolão, doesn’t give twenty, thirty billion reais. Here we are talking about at least half of the 93 billion”, stated the former candidate for President of the Republic.

He blamed the government for the case: “The country, once again, is seeing the widespread assault on public coffers that the endemic corruption in Brazil, by Lula, by the PT, has produced.”

According to the Pedestrian, the banks would have purchased the court orders from the original creditors at half the price, and received the full amount shortly afterwards, when the government paid off the R$93 billion held back from previous years.

Ciro says he decided to investigate the matter when the government announced the payment of all arrears. He does not say where he obtained the information that the majority of the amount remained with the banks, and states that it is up to the Public Ministry to act.

“Who resolves this? Public Prosecutor’s Office. How do you resolve this? Make a letter, a simple letter to the Federal Court, to the National Council of Justice, saying who are the people who arrived with powers of attorney, in the name of creditors, to receive the court orders “, he stated.

The full payment of court orders due – made outside of fiscal rules, with authorization from the Federal Supreme Court (STF) – increased the deficit in federal accounts in 2023, which exceeded R$230 billion and was the second largest in history.

Precatório returned to put pressure on public accounts in February, when the Union recorded the worst deficit in history for the month. In this case, however, what occurred was an anticipation of the calendar, and not the payment of late debts.

The government usually pays the year’s court orders in the months of June and July, but this year it decided to advance payment as a way of stimulating the economy. The amount paid in February was approximately R$30 billion.