STF decision opens space for interference in state-owned companies, says Millenium

STF decision opens space for interference in state-owned companies, says Millenium

The suspension of a section of the State-owned Law that restricts the appointment of politicians to positions on the Board of Directors and directors of state-owned companies, decided by an injunction by Minister Ricardo Lewandowski, of the Federal Supreme Court (STF), may open space for interference and decision-making based on partisan interests in companies, according to an analysis by the Millenium Institute released this Friday (17).

Lewandowski considered the device related to the restriction unconstitutional, and also the one that determines a three-year quarantine for party or election campaign leaders to assume these positions. The decision meets a particular interest of President Luiz Inácio Lula da Silva (PT) who seeks to compensate parties interested in supporting the government in exchange for positions in state-owned companies with millionaire budgets.

For Diogo Costa, CEO of Instituto Millenium, the minister’s injunction could lead to a deterioration in the quality of management of state-owned companies. In a context of fiscal crisis and the need to adjust public finances, he says, it is essential to guarantee good governance and the efficiency of public companies.

“Political appointments, by opening up space for interference and decision-making based on partisan interests, can negatively affect the ability of these companies to contribute to the country’s fiscal balance,” he said.

The discussion about making the State-Owned Law more flexible has been dragging on since the government transition period, in which Lula nominated former minister Aloizio Mercadante for the presidency of the National Bank for Economic and Social Development (BNDES) — which coordinated the the president’s government plan during the 2022 election campaign — and then-senator Jean Paul Prates for Petrobras.

Indications revive fear of corruption of the PT era

Experts heard by People’s Gazette reinforce the risks that these indications bring, such as the market’s fear of new cases of corruption involving state-owned companies. In December, the Chamber of Deputies even approved, on the spur of the moment, a bill to reduce the quarantine for party leaders or campaign members from three years to 30 days.

Due to the bad repercussion of the maneuver in the market, the proposal stalled in the Senate. An eventual overthrow of the rule by the STF would save the government from political negotiations to make the change via Congress, which, in turn, would get rid of the wear and tear of loosening the law.

The Special Secretariat for Legal Affairs of the Civil House argued that the restrictions in force until then violated proportionality and reasonableness by presuming the bad faith of ministers, secretaries or party leaders.

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