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Auditoria Cidadã da Dívida

The Parliament set up a Commission to audit the Brazilian public debt

August 19, 2009 : A Historic day for Brazil

by Auditoria Cidadã da Dívida

3 September 2009

August 19, 2009, was a historic day in the struggle for official auditing of public debt in Brazil, a process already drafted in the Federal Constitution of 1988, and demanded for many years by the Brazilian social movements, especially Auditoria Cidadã da Dívida ("Citizens’ Auditing the Debt"), a campaign that begun after the National Plebiscite about the Debt in 2000, in which more than 6 million Brazilians participated.
At 3 p.m. on that day the 16th Plenary meeting of the House of Representatives formally set up the Parliamentary Commission for the auditing of the Public Debt (“Debt`s CPI”), proposed by Deputy Ivan Valente (PSOL/SP), who had collected signatures for its proposal, had it approved by the Board in late 2008, and eventually had led an arduous campaign to get the various parties to designate their members.
Click here to access the Bulletin of Deputy Ivan Valente about the installation of the “Debt`s CPI”.
The CPI will investigate the public debt of the Union, states and municipalities, interest payments, the beneficiaries of these payments and its dramatic impact on social policies and sustainable development in the country.

Several major newspapers reported the start of the CPI (see the websites below), which shows that the CPI is already fulfilling the role of placing the debt issue on the national agenda.
Several important associations participated in the meeting: ANDES (National Union of Teachers of Federal Universities), ANFIP (National Association of Tax Auditors of the Federal Revenues), Sinait (National Association of Labor Tax Auditors), IFC (Institute of Inspection and Control of the Court of Audit), ASISEFE (Association of Retired members and Pensioners of the Senate), SINASEFE (National Syndicate of the Federal Employees in Education), Feminist Center for Studies and Asessment (CFEMEA), Citizen Debt Audit and Jubilee South Network.

The members of the Commission - the composition of which mirrors the proportionality of the Plenary, where the government has a majority - voted for Mr Virgilio Guimaraes (PT/MG) as president. He recalled that he had participated in the 1988 Constituent Assembly, which established the principle of debt auditing, and that the CPI is a step toward its implementation. He invited the associations represented to get involved in the CPI’s inquiry work, which is an important signal that the Commission intends to work hand in hand with the civil society.

The First Vice-President, Mr Márcio Reinaldo (PP-MG), who had participated in the organization of a seminar on "Citizen Debt Audit" in the auditorium Nereu Ramos in 2002, in Brasilia, emphasized the importance of the CPI, and mentioned examples of debts to be investigated. He also told that the debt audit in Ecuador is a historical precedent and an example for the work of the CPI.

The Second Vice-President, and proponent of the CPI, Mr Ivan Valente (PSOL / SP) stressed the historical importance of this Commission, and that the Parliament cannot continue talking about small scandals, but has to discuss major national issues, among which the allocation of more than 30% of the federal budget for the payment of interest and repayments of debt. He congratulated all deputies who had contributed to the installation of the CPI and thanked the movements that supported debt auditing for their commitment and persistence. Ivan Valente noted that the Commission should be above partisan interests, and must fulfill its role, no matter what government happens to be in power.

The Third Vice-President, Mr Hugo Leal (PSC / RJ), and the other deputies present at the meeting highlighted information contained in the documents about the Citizen Debt Audit distributed at the meeting, especially the graph of the federal budget, prepared by volunteer economist of the Citizen Debt Audit, Rodrigo Avila. The graph shows clearly the privilege of the debt at the expense of social spending, warning about the perverse impact of the debt on municipalities, which suffer without resources to attend to the needs of the population, while revenues are concentrated at the federal level for the debt payment.

According to Maria Lucia Fattorelli, who has coordinated the work of Citizen Debt Audit since its creation, and was a member of the Ecuador`s Audit Commission of Public Debt, the CPI is a historical opportunity to investigate the questionable process of the Brazilian debt. The responsibility of parliamentarians is immense. She considers that the involvement of Brazilian and international civil society in the CPI will be important to provide subsidies, also contributing to the publicity and transparency of proceedings. She informs that, immediately after the CPI’s first meeting, she received support messages from all over the country and abroad, from Ecuador, Argentina, Peru, Uruguay, Colombia, Mexico, Bolivia, Honduras, Belgium, containing commitments of support and confidence in success.

The importance of the CPI was reported in major newspapers, such as Valor Econômico, which attempted to convey a message of reassurance to debt investors about the investigations of the CPI. The Valor tried to compare the debt data provided by Mr Ivan Valente (based on information from the Citizen Debt Audit) with the criteria used by the government that comply with the concept of "net debt", which excludes from the gross amount of debt the value of international reserves that are currently represented mostly by USA Bonds. But the newspaper did not make it clear that the interests received by international reserves are negligible and even negative, because the dollar is depreciating against the Real (Brazilian currency). Moreover, interests paid by Brazil in the domestic and external debt are very high.

The Jornal do Brasil includes an article by Ivan Valente about the CPI. The Agencia Câmara and the Congresso em Foco also reported about the installation of the Commission, with an interview of the initiator of the CPI.

The next CPI meeting was scheduled for Wednesday, Aug. 26, when the rapporteur of the committee will be elected and the script for the CPI’s work will be discussed, a task that is huge and complex given the size of Brazilian external and internal debts at the level of the Federal Government, the States and the municipalities, and considering their impact on the lives of Brazilian people.

Translated by Rodrigo Avila in collaboration with Christine Pagnoulle

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