Brazil Elite Codifies Budget Practice Used to Impeach Rousseff
Brazil’s newly-installed President Michel Temer has signed legislation that essentially authorizes the identical financial accounting maneuver that was used to justify the impeachment bid against ousted President Dilma Rousseff’s just days after she was removed from office.
The law, announced Friday in the official gazette, expands the government’s ability to seek additional credits without securing authorization from Congress. As described by Brasil de Fato, the rule broadly opens the door for the budgetary maneuver known in Brazil as “pedaling,” in which the government borrows money from state banks to make the budget appear in a better position than it is.
This longstanding practice was used to propel the impeachment process that finally ousted Rousseff from office last Wednesday in a move widely condemned as a parliamentary coup.
Rousseff’s supporters repeatedly pointed out that the accounting trick had been used by many of her predecessors without scrutiny. Independent auditors also found her not guilty of breaking budgetary rules — a fact that did not stop the ill-footed impeachment process from going ahead.
According to Brazil’s Senate news agency Agencia Senado, the unelected Temer government gave pedaling a green-light, claiming that the rule change will make government budget management “more flexible,” including shuffling of expenditures associated with the federal infrastructure Growth Acceleration Program, better known as PAC.
The act allows the government to boost by as much as 20 percent the value of an expenditure by writing down by the value of another by a corresponding 20 percent, which, in fact, doubles the level allowed by previous administrative rules.
Rousseff was ousted Wednesday in a 61-20 Senate vote in favor of her impeachment, though she retained her so-called political rights to hold public office in a second vote.
The day after the impeachment ballot, Rousseff’s defense appealed to the Supreme Court to compel a second Senate impeachment vote, arguing that the process was unconstitutional on the grounds that the budgetary crime she is accused of is not an impeachable offense according to Brazilian law.
Rousseff’s rivals long attempted to paint the impeachment process as a campaign to root out government corruption. But aside from the fact that multiple other leaders have used the pedaling procedure, damning recordings released weeks after her suspension in May revealed that top opposition figures schemed with the Supreme Court and military command to ensure Rousseff’s ouster as part of a bid to stop corruption investigations against their allies.
Like many of his top allies and cabinet members, Temer — installed as president despite being banned from running for public office for eight years — is embroiled in multi-million dollar fraud scandals.