Army foundation has strong signs of nepotism – 08/21/2023 – Power

An analysis by the TCU (Tribunal de Contas da União) identified “strong evidence” of nepotism, accumulation of functions and lack of bidding at FHE (Fundação Habitacional do Império), a body linked to the military and responsible for managing Poupex, a private association that operates with real estate loans.

The analysis crossed the CPFs of those hired by the association with those of members of the three Armed Forces, the Army Command and the Ministry of Defense. 221 cases of kinship between institutions were found.

The court identified nine cases of kinship between the leadership of the Army foundation and employees of the association subordinate to it.

The information is contained in a ruling by the TCU in May of this year, in the process of analyzing the foundation’s 2017 accounts.

A Sheet contacted the Defense and the Army, who did not respond. Poupex stated that it does not receive public money, that it is a private company.

“Since its inception, around 10,000 housing units have been built throughout Brazil. The Institution has already granted more than 150,000 real estate loans to civilians and the military,” he said, in a note sent by his press office.

“Poupex currently has a balance of R$ 6 billion in savings, distributed across 1.6 million accounts”, he added.

FHE and Poupex were created in the early 1980s, in a unique arrangement within the Brazilian civil service.

The first is a public institution under private law, which means that it has its own CNPJ, but is accountable to public bodies —such as the TCU. Its purpose is to finance real estate credit for military personnel.

Poupex is a private company, but it was created exclusively to serve the foundation and is managed by it.

In its defense in the TCU lawsuit, Poupex alleges that it does not need to comply with government rules, as it is private, and that FHE does not receive public funds.

In his vote, the rapporteur Marcos Bemquerer Costa questions this separation, since the staff of the FHE is composed only of its management and its board of directors and all credit activity is operated by Poupex.

Therefore, he understands that, in the end, the private company ends up providing the public service, but without a bidding process or public tender for hiring personnel.

“The numbers involved authorize the assertion that Poupex is the body that embodies the existence of the FHE, and that there is in fact no distinction between the legal personality of the two entities, making the supervision that the second should exercise over the first unfeasible”, he says, in your vote.

“The symbiosis between the two entities has been practiced for decades based on arguments of convenience and opportunity, without the law having conferred such discretionary power on that entity, which evades the legal duties of selecting personnel, through public competition, and acquisition, through a bidding process […] and violates the constitutional principles of impersonality and administrative morality”, he adds.

The court’s survey shows that 50% of the 221 family relationships between Poupex employees and members of the Armed Forces and Defense are with high-ranking military personnel — from colonel upwards.

It also points to almost 100 cases of people hired by Poupex and who were on the payroll of the Armed Forces or the Defense – considering the 2020 personnel list.

The court calculates that, therefore, 316, “or 24.2% of the 1,306 employees of Poupex, have a direct or indirect link with the Forces”.

The TCU also points out that the most common kinship is that of the father, which corresponds to 28% of the cases, followed by that of the uncle, 22%. Of the 9 cases of Poupex employees who are family members of FHE members, 3 are children, three are nephews, one is a brother and another is a brother-nephew.

The control body also questions the fact that the boards and directorates of the two institutions are composed mostly of military personnel, since they are not military organizations.

The court also points out that the same names occupy the management of both Poupex and the foundation, but while the foundation’s salary is around R$ 17 thousand, that of the private association, in 2019, was more than R$ 19 thousand, in addition to almost R$ 1,500 thousand in aid.

The TCU also points out that the FHE only has positions of presidency and management, and hires the entire body of employees of the savings association. Thus, in 2017, almost R$ 210 million were paid by the foundation to the company for personnel employment and almost R$ 35 million in IT expenses, in values ​​at the time.

The court questions that, “although [a FHE] is not maintained with financial resources from the Union’s General Budget”, it received the equivalent of R$ 37 million in exchanges with the Army Command and “enjoys, in its relationship with the Union, privileges not available to private entities that carry out activities of the same nature”.

Therefore, the court questions the fact that neither FHE, much less Poupex, carry out public tenders or tenders.

In the rapporteur’s opinion, the investigation points to facts “contrary to the legislation, but which do not give rise to censorship of the performance of FHE managers, because they are supported by the text of the entity’s statute”, which provides for a structured relationship in this way.

Therefore, the court recommends a series of adjustments to points in the statute that contravene a series of laws.

Yohann Sade, from Sade & Gritz Advogados and a specialist in administrative and regulatory law, considers that, “even if there is an evident ‘mixture’ of public and private regimes”, the case may demonstrate an exception to the rule, due to the fact that the relationship between entities is unique within functionalism.

Raphael De Matos Cardoso, master in administrative law, professor and partner at Marzagão e Balaró Advogados, also says that it is precisely in this sense that the TCU “determined that it is up to FHE to make Poupex’s statute compatible” to adapt to the principle of segregation of functions .

Sade points out, however, that “as the structure of Poupex is what justifies, today, the functional existence of the FHE, it is evident that, in this aspect, legal duties of selection of personnel are not being fulfilled, through public competition”.

“FHE’s body of employees is confused with that of Poupex, so that, obviously, there is an obligation to observe the norms related to nepotism”, he assesses.

Cardoso also says that the problem with framing the case as nepotism is that there is no provision in private law for this, only in public law.

“Therefore, from this perspective, what can happen is the conflict of interests. In the private sphere, there must be an evaluation of integrity, compliance. It is necessary to analyze it on a case-by-case basis, of course, but it can be configured”, he completes.