WorldCongress challenges STF and maintains secrecy on secret budget

Congress challenges STF and maintains secrecy on secret budget

The National Congress challenged the Supreme Court (STF) on Monday. Senators and deputies voted on a bill that dictates the rules for the so-called amendments by the rapporteur, with which the Jair Bolsonaro government manages the so-called “secret budget”. Contrary to what the STF instructed, however, lawmakers maintained the secrecy of who has already benefited from the amendments — the transfer of this type of amendment is also suspended by order of the court. The expectation, now, is that the vote this Monday will also be questioned in the Supreme.

The “secret budget” guaranteed the Government support to approve important projects, according to suspicions raised by reports published by the newspaper State of São Paulo. On November 9, while the Government was working to approve the Precatório PEC, the STF imposed a brake on this mechanism, as it understood that it was necessary to give more transparency to this modality. It was with this in mind that Congress began voting this Monday on the bill that establishes an annual ceiling for the rapporteur’s amendments, but which does not determine that the name of the congressman who requested the amendment be made public — nor does it reveal the identity of those who have already were benefited. Secrecy, one of the main problems of the mechanism, will be maintained.

The bill was approved by the Chamber with 268 votes in favor and 31 against. In the Senate, the victory was tighter: 34 votes to 32. The rules in force until the presidential promulgation of the project approved this Monday did not set a limit for these amendments, nor did it make it possible to identify which congressman requested these expenses. Now, according to the approved bill, the rapporteur’s amendments should not exceed the sum of the so-called individual and bench amendments — according to this year’s Budget, the two add up to more than 16 billion reais. In addition, the measures should be valid from now on, keeping secret the parliamentarians who requested the amendments in 2020 and 2021. The bill also does not alter the power of the Government and the top of Congress to privilege certain parliamentarians at the expense of others.

What are the rapporteur’s amendments

The rapporteur’s amendments gained prominence during the discussions of the PEC dos Precatórios, which, if approved by the Senate, will allow the federal government to postpone the payment of judicial debts and break the spending ceiling. According to a survey by the NGO Contas Abertas, Planalto released 909.7 million reais to federal deputies, on October 28 and 29, a few days before the first vote of the PEC dos Precatórios, using the rapporteur’s amendment instrument. On November 3, voting day, another 52 million reais were released, totaling 961.7 million.

The question is very technical and with details that escape common sense. Every year, the federal government sends the National Congress a proposed Budget for the following year. A general rapporteur is then appointed to analyze the document, bridge the gap between the demands of the Executive and the Legislative and reach a final opinion, which must be voted on in Congress and become the Budget Guidelines Law (LDO). For the 2020 Budget, the general rapporteur was Congressman Domingos Neto (PSD-CE). In 2021, the role went to senator Márcio Bittar (PSL-AC).

In addition, there is the option of, during the execution of the Budget, the parliamentarians present amendments. They are “proposals through which parliamentarians can give their opinion or influence the allocation of public resources based on political commitments they made during their term, both with states and municipalities and with institutions”, according to the definition of the Federal Senate. According to the Constitution, amendments to the Budget are authorized in specific contexts, such as in cases of “correction of errors and omissions” or when “they indicate the necessary resources, admitting only those arising from the cancellation of expenditure”. There are four types of amendments: individual, bench, commission and rapporteur.

The first two, despite being historically used in political bargaining, are impositional, regulated by the Constitution. “They’ve been made for a long time. In them, the parliamentarians and the benches [dos partidos] tell where they will be destined and the function of the expenses”, explains economist Felipe Salto, executive director of the Independent Fiscal Institution (IFI), linked to the Federal Senate. Each congressman has a quota, usually used to allocate federal money for works or projects in their respective constituencies. Before being regulated in the Constitution in 2015, the federal government had greater power to contingency (freeze) these amendments, increasing its bargaining space with parliamentarians.

Reporter amendments, on the other hand, started to be used more frequently from 2019, when it received the technical code RP-9. As the name implies, they are made by the General Rapporteur for the Budget. “The rapporteur’s amendments exist only to correct errors and omissions, but for some years now they have been used for other purposes”, explains Salto. In 2021, mandatory expenditures were revised so that the LDO could accommodate a budget of around 17 billion reais in rapporteur amendments. In practice, this means that the reporter will have this amount already available, under the stamp RP-9, and will be able to apply this money later.

The rapporteur’s amendments are defined based on negotiations between the general rapporteur and deputies and senators, but transparency is scarce: unlike individual and bench amendments, details are not known about the negotiations to direct the resources of the rapporteur’s amendments, who are their political sponsors and where the money goes. In short, there are no criteria for sharing resources, nor are the parliamentarians who allocate this money to their electoral bases identified. “The problem with RP9 is that the rapporteur ends up bringing together a series of demands that were held back, including those from the Executive. He simply puts something generic and then the sharing will be done by the Union”, explains Salto.

The suspicion is that the Bolsonaro government has pledged parts of this amount in exchange for supporting the Planalto in votes. According to a series of reports from the state, Bolsonaro —who considered vetoing the RP-9 in 2020— created a billionaire parallel budget at the end of last year —or secret— managed from the rapporteur’s amendments. It would be up to the ministries to define the allocation of these resources, but, in practice, they are deputies and senators from the Centrão who, in exchange for support in voting, have quotas, dictate the application of this money and demand authorization for these amendments. All this in a hidden way, without their names being revealed.

In the first of the reports, it was discovered that 3 billion reais were distributed by the Government to parliamentarians through amendments by the rapporteur. Part of that money was earmarked for the purchase of supposedly overpriced tractors. In addition, the money irrigated state-owned companies equipped by the Centrão, such as the São Francisco and Parnaíba Valleys Development Company (Codevasf), linked to the Ministry of Regional Development,

Supreme brake

Of the 17 billion reais reserved for the rapporteur’s amendments, the Government has already pledged 9.3 billion, according to the Chamber of Deputies. The Supreme Court then decided on November 9, by 8 votes to 2, that the rapporteur’s amendments should be suspended until mechanisms were created to give more transparency to this modality — which also became a target of the Federal Court of Accounts (TCU). ).

The Chamber’s Budget Consultancy released a technical note defending the constitutionality of the rapporteur’s amendments. In it, he argues that almost half of the committed amount was destined to the Health area and that the suspension of payments under the RP-9 stamp can paralyze works and services in progress. One option is for the Government and National Congress to circumvent the Supreme Court’s decision and start using the so-called committee amendments, defined by the Chamber of Deputies committees, according to the state. This modality is little used, but it is known that, according to current rules, deputies and senators do not need to identify themselves either.

The Senate Budget, Inspection and Control Consultancy also issued a technical note this Monday, but affirming that it is possible to maintain transparency and disclose the list of parliamentarians who indicated the rapporteur’s amendments. “If there were ‘thousands of demands’ and the general rapporteurs sent them in the form of nominations, some kind of organizational procedure had to do so, and some documentary or informational record kept for their own control; otherwise, they would have acted without knowing what they were doing (which is obviously not the case)”, he says.

The president of the Senate, Rodrigo Pacheco, came out in defense of the rapporteur’s amendments this Monday, during an event promoted by the Federal do Comércio do Paraná. He argued that the mechanism will “save a lot of people in Brazil”. “Bad deeds can exist in rapporteur’s amendment, individual amendment, bench amendment, commission amendment, in ministry budget and these wrongdoings need to be tackled and there are mechanisms to combat these wrongdoings, these deviations, these crimes, but it is not the existence of the rapporteur’s amendment, which is by its nature something illicit, because it is definitely not”, he explained.

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