Aras changes position and defends amending the State-owned Law on the eve of the STF judgment – 03/09/2023 – Market

The Attorney General of the Republic, Augusto Aras, changed his understanding of the State-Owned Companies Law and began to position himself against banning politicians in charge of public companies.

The position was sent to the STF (Supreme Federal Court), which judges from this Friday (10) whether the restriction provided for by law is valid or not. The action of unconstitutionality was filed by the PC do B, a historic ally of the PT, and votes can be collected through the court’s virtual system until March 17.

Aras had taken a position in February that the action was unfounded, but in a document sent to the court on March 5, he went on to state that he had not analyzed in his previous manifestation an essential aspect not mentioned by the PC do B. According to the attorney general, the prohibition represents a restriction of fundamental rights.

According to the manifestation of the PGR, the prohibitions “cannot disregard the fundamental right of the individual to participate in political party life and in the public sphere of the State (status civitatis and status activus), especially when there is no constitutional authorization to do so”.

Sanctioned in 2016 by then-interim president Michel Temer (MDB), the State-Owned Companies Responsibility Law (13.303/2016) aims to strengthen the governance of state-owned companies, shielding them from political interference.

It was approved in response to a series of investigations that pointed to political use of companies in previous administrations. For governance experts, weakening the law can make fighting corruption more difficult.

The law prohibits the appointment to the board of directors and to the positions of director, including president, director-general and director-president, of people who have acted, in the last 36 months, as a participant in the decision-making structure of a political party or in work linked to the organization, structuring and carrying out of an electoral campaign.

It also does not allow a representative of the body to which the public company is subject, nor ministers, secretaries, party leaders and representatives of the Legislative Power, among others.

The government of Luiz Inácio Lula da Silva (PT) sent a critical statement to the STF. In the message forwarded by Lula, the AGU (Advocacy-General of the Union) argues that Brazil has institutions capable of controlling and preventing irregularities, such as the TCU (Tribunal de Contas da União), and of investigating and punishing those who committed them – such as the Federal Police, the Public Prosecutor’s Office and the Judiciary.

According to the message, the anticipated fear that any individual who falls under the prohibitions “will act in an improper manner and outside the expected ethical-functional standard” treats political activities as transgressors and sanctions in advance those who carry them out “with prohibitions and limitations to the exercise of rights that should be equally guaranteed to all”.

“On the contrary, party-political activity should be encouraged for all citizens and valued by the constituted Powers, because only through it can effective participation of the people in public matters be achieved, which is the basis of democracy”, he states.

The government’s message disregarded arguments from the PGFN (Attorney General of the National Treasury) in favor of the law.

In a technical note, the PGFN stated that the prohibitions provided for in the law are “legally legitimate, reasonable and proportionate” and aim to avoid conflicts of interest, in addition to preventing “partisan or classist interests of the holder of a managerial position from prevailing over the interest public”.

The action in the STF, reported by Minister Ricardo Lewandowski, is seen as one of the government’s alternatives to open the way for the appointment of politicians to the posts. Another is changes via Congress.

Such as Sheet showed, members of the government defend that the current rules are premised on the criminalization of politics, having been born in response to Lava Jato. Governance specialists, on the other hand, say that weakening the norm can make the fight against corruption more difficult.

UNDERSTAND THE DISCUSSION

State-owned law and law on the management of regulatory agencies today:

• Person who acted in the last 36 monthsas a participant in the decision-making structure of a political party or in work linked to the organization, structuring and carrying out of an electoral campaign cannot occupy the board of directors or the board of directors of state-owned companies nor the board of directors or the collegiate board of regulatory agencies.

What foresees the bill being discussed in the Senate after approval in the House:

• Text would now allow these cases, provided that the person who has acted in these situations proves his/her withdrawal from the activity at least 30 days to tenure in office.

What is discussed internally in the government to insert in the bill:

• Establish criteria for evaluating the resumes of candidates for positions, as well as reaching a compromise within the quarantine period required in these cases.