Allies consider using case at TCU to impeach Campos Neto – 06/26/2023 – Panel SA

Allies of President Lula in Congress are considering using a lawsuit against the Central Bank at the TCU (Tribunal de Contas da União) to force the departure of Roberto Campos Neto, president of the autarchy, if he continues to resist the reduction of the basic rate (Selic).

TCU is the arm of Congress responsible for external control of the federal government. Its mission is the accounting, financial, budgetary, operational and property inspection of public bodies and entities in the country.

The process in question dates back to 2019, the first year of the Jair Bolsonaro government, and investigates alleged accounting inconsistencies of R$ 1 trillion pointed out by the CGU (Controladoria-Geral da União) in the BC’s balance sheet that year.

After their due diligence, TCU auditors concluded that “such statements do not adequately reflect, in all material respects, the equity situation, financial result and cash flows of the BC”. That’s what the report to which the column had access says.

The auditors of the Central Bank explained to the rapporteur of the process, Minister Jonathan de Jesus, that there is nothing wrong with the accounting presented. They even said that the balance sheets for later years were approved without reservations by the TCU itself.

Jhonatan is a federal deputy for the Republicans and was appointed minister in March of this year, taking the vacancy of Ana Arraes, who presided over the court and retired.

The minister inherited the BC accounts process from Bruno Dantas. Currently, Dantas chairs the TCU and, therefore, does not report any more court cases.

Upon receiving it, Jhonatan requested a series of documents and balance sheets from the BC that are again being evaluated by the technical staff of the TCU.

The strategy, according to parliamentarians involved in these discussions with some advisers of President Lula, would be to obtain the condemnation of the Central Bank, and of Campos Neto, by the TCU plenary.

This would be fuel for the Senate to open a process to revoke the BC president’s mandate.

However, the summit of government-allied party leaders, TCU ministers and Planalto chiefs assess that this process still leaves room for the defense of Campos Neto —which has been undermining interest in the case.

President Lula and several members of the government have been harshly criticizing the head of the Central Bank for keeping the Selic rate at 13.75% a year, even with falling inflation.

Campos Neto presides over the Copom (Monetary Policy Committee) of the Central Bank, which sets the basic rate for the economy and does not give in to pressure from the government.

When consulted, the BC informs that the case refers to “the mere divergence of interpretation between the BC and the CGU on how to disclose information in the financial statements, such as the disclosure of cash flows in local currency or the segregation between current and non-current current”.

The body also says that the 2019 BC accounts were audited and approved without reservations by the independent auditing firm KPMG.

“It is important to point out that these interpretative divergences do not have the power to change the result of the Central Bank or its shareholders’ equity”, he said through his advisory.

With Diego Felix

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