The president of the Federal Court of Auditors (TCU), minister Vital do Rêgo, will meet this Monday with the president of the Central Bank, Gabriel Galípolo, after the Court of Auditors retreated from the monetary authority’s inspection of the case of the liquidation of Banco Master.
The meeting is scheduled for 2pm this Monday. In addition to Galípolo, the directors of the monetary authority Ailton de Aquino (Supervision), Gilneu Vivan (Regulation), Izabela Correa (Citizenship and Conduct Supervision) and Rogério Lucca (Executive Secretary) will participate.
The meeting takes place in the midst of an imbroglio involving Banco Master. TCU minister Jonathan de Jesus ordered an in-person inspection at the BC to investigate the procedures adopted in the extrajudicial liquidation of Master, which took place in November.
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On Thursday, however, faced with negative repercussions, the minister backed down, suspended the inspection, and submitted the case to the Court’s plenary. On Wednesday, President Vital do Rêgo had already confirmed that the TCU could not reverse the liquidation of Master, and that such action could only take place within the scope of the Federal Supreme Court (STF).
The decision came after the Central Bank filed an appeal called a declaration embargo challenging the minister’s competence to authorize, in a monocratic manner, an inspection of this size.
In this appeal, the BC claims that the inspection should be approved by a collegiate body of the TCU. Despite referring the case to the plenary, Minister Jonathan de Jesus argued in his decision that “the public dimension assumed by the case, with disproportionate contours for routine investigative measures in this Court”.
The case originated at the TCU after representation from the Public Ministry at the Court of Auditors. The Court’s technical body justifies that the inspection would be necessary to obtain direct access to primary documents and “reconstitute the decision-making flow and assess motivation, internal coherence, proportionality and documented consideration of alternatives”.
‘Acute crisis’
The BC’s role in supervising and liquidating the Master entered the TCU’s radar at the end of last year. In December, the case’s rapporteur at the TCU, minister Jonathan de Jesus, ordered the BC to provide clarification on the motivation for Master’s liquidation, and whether there was no other alternative.
In a document sent to the TCU, the BC points out a series of reasons that led it to decide to liquidate Banco Master, after the Court requested justifications for the decision.
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The BC states that the conglomerate led by banker Daniel Vorcaro was in an “acute liquidity crisis” that prevented it from meeting, on time, the commitments assumed.
In other words: the institution did not have enough money to honor all its financial obligations, including paying investors and account holders. Among other points, the BC points out that negotiations to resolve the problem had no effect.
There are controversies regarding the TCU’s attribution to act in the case of the liquidation of Daniel Vorcaro’s bank, known for its extensive network of political relations in Brasília. The independence of the Central Bank to make technical decisions to protect the national financial system was defended in demonstrations of support from economists and financial institutions. In recent weeks, these expressions of support have expanded, and a letter defending the agency’s technical decisions was released.
