FCPAméricas Blog

Will Brazil Slide Backwards in Its Anti-Corruption Efforts?

Author: Carlos Ayres

CGUBy Carlos Ayres and Bruno Maeda

The Office of the Comptroller General (CGU) is one of the essential bodies of the Brazilian government to fighting corruption. It is the body of the federal government responsible for auditing federal expenditures, promoting transparency, representing Brazil on international anti-corruption forums (i.e., OECD, OEA and UN), and sanctioning public employees involved in wrongdoing.  Moreover, under Brazil’s Clean Companies Act, the CGU has authority to investigate and apply administrative sanctions for the illegal acts committed against foreign public administrations. In the case of bribery of local officials at the Federal Executive branch level, the CGU has concurrent authority to initiate administrative proceedings against legal entities and to examine and correct proceedings handled by other authorities. In both cases, CGU is the competent body to sign leniency agreements. The CGU currently has a few dozen enforcement actions related to the Clean Companies Act.

According to local media sources, President Dilma Roussef is considering reducing the number of ministries in an effort to reduce costs, as the country is facing a serious economic crisis. Currently, CGU has the status of ministry, which gives it the necessary teeth to fight corruption. Such media sources have been reporting that, as early as this week, the CGU may loose its ministerial status or even its functions may be split between other ministries. If Brazil goes in that direction, it may take a significant step back in its efforts to fight corruption. There are several reasons why the Brazilian government should not go in that direction. We highlight three of them.

Expertise accumulated over the years may be lost. The CGU has a qualified technical team specialized in anti-corruption matters. The team has acquired expertise over the years conducting audits and evaluating compliance programs with the Cadastro Empresa Pró-Ética, educating the CGU’s team in top level courses in Brazil and abroad, interacting with its peers in other countries, and participating in public events. The agency has also been involved in discussions about the Clean Companies Act and its Regulations since the early stages. It is familiar with their key features. Without continuity, the expertise accumulated over the years may be lost.

Difficulties to enforcing the law. As mentioned above, the CGU has authority to investigate and apply administrative sanctions for the illegal acts committed at the Federal Executive branch level. If the body looses its ministerial status, it will be very difficult for the CGU to investigate and apply sanctions for wrongdoing committed on higher-ranking entities. Likewise, under the Freedom of Information Act (Lei de Acesso à Informação), the CGU is the competent body to decide whether or not a request for information denied by a Ministry should be provided. Being in an inferior position would negatively impact the CGU’s ability to enforce the laws. Moreover, there is a debate on whether or not certain sanctions could still be imposed by the CGU if it looses its ministerial status.

Negative message with respect to international commitments. According to media sources, Jorge Hage, the head of CGU from 2006 to 2015, classified the possible change of the CGU’s status as “a big mistake, a step back that it is not acceptable for Brazil” and mentioned that “the repercussion would be terrible, including in international forums”. Negative international effects may arise, among other ways, because the OECD Working Group on Bribery considers that the investigation and prosecution of foreign bribery should be centralized and handled by a specialized team with appropriate resources.

CGU officials have publicly expressed concerns about a change in the entity’s ministerial status. Likewise, important entities from civil society have echoed the concerns in an open letter to President Dilma Roussef.

CGU has made significant progress in Brazil’s fight against corruption. In this critical time in Brazil’s fight against corruption, the country should take actions to strengthen and consolidate its anti-corruption and law enforcement institutions, not do the opposite. For the reasons described above, the country will move in a wrong direction if CGU loose its ministerial status or its functions are split between other ministries.

The opinions expressed in this post are those of the author in his or her individual capacity, and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas, or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.

© 2015 FCPAméricas, LLC

Carlos Henrique da Silva Ayres

Post authored by Carlos Henrique da Silva Ayres, FCPAméricas Contributor

Categories: Brazil, Enforcement, English, FCPA

CommentsComments | Print This Post Print This Post |

2 Comments

Comments

2 Responses to “Will Brazil Slide Backwards in Its Anti-Corruption Efforts?”

  1. Rosângela Casini Says:

    Manter a Pesca com status de ministério e mais importante do que manter a CGU independente para atuar no combate a corrupção. Por que não fundir a Pesca com a Agricultura?

  2. Carlos Ayres Says:

    On October 02, 2015 President Dilma announced the ministerial reform. No change was made to the CGU structured.

Leave a Reply


Subscribe to our mailing list

* indicates required

View previous campaigns.

Close