The Bolsonaro Administration is Quietly Reducing Transparency in Brazil

Right-wing populist Jair Bolsonaro was inaugurated President of Brazil on January 1, 2019. As a candidate, Bolsonaro promised that his regime would break with the large-scale graft of Brazil’s former leaders and would ruthlessly pursue the corrupt and bring them to justice. At the end of January, Justice Minister Sergio Moro released, with much fanfare and press attention, a sweeping anti-crime legislation package that addresses both white collar crime and violent organized crime, and that incorporates some, though not all, of the anticorruption measures proposed by Transparency International. So does this mean that the Bolsonaro Administration is following through on its promise to make the fight against corruption a major priority, and to end the culture of impunity that has shielded Brazilian political elites?

Alas, no. While the anti-crime package (and other high-profile pieces of legislation, like tax reform) have been highlighted by the administration and attracted most of the media attention, less prominent yet equally consequential pieces of legislation related to corruption are being passed with little to no warning or public debate. Here are two examples of major events that have occurred within the first month of the regime that should give anticorruption scholars and the international community pause in their evaluation of the Bolsonaro government’s fight against corruption:

  • First, the Vice President signed a decree changing the Access to Information Law (LAI), Brazil’s transparency law akin to the United States’ Freedom of Information Act. This decree nearly doubled the number of public servants who can declare information “top secret” or “secret”; top secret documents are classified for 25 years, and secret for 15 years. Furthermore, the officials who can make these designations now include certain politically appointed positions in the executive branch. This change is antithetical to anticorruption and government transparency, as it makes it much easier for pro-regime appointed officials to shield key government documents from public view—a power that could easily be abused to cover the tracks of those in charge. Restricting public access to government documents is certainly not a promising omen for future transparency, and it says something that Moro barely weighed in on this issue, given his history, in his prior role as a judge in the so-called Car Wash corruption investigations, of using public evidence in the prosecution of government officials.
  • Second, the Central Bank has proposed relaxing the rules for monitoring the finances of public officials. Currently, the Central Bank monitors the bank accounts of public servants and their relatives, scrutinizing transactions over 10,000 reais (about US$2,600). The Central Bank’s proposal would raise the minimum transaction threshold to 50,000 reais (about US$13,200), and would no longer monitor the financial transactions of public servants’ relatives. Relaxing and narrowing these monitoring requirements at a time when Brazil is still dealing with its largest corruption investigation in history seems like a curious decision, especially given the large number of politicians already in trouble for laundering their money through their spouses or other relatives (often in the form of purchases of jewels, vacation homes, and other luxury items). This proposal is still being debated, but it has quietly slid under the radar, overshadowed by higher-profile legislative initiatives (and, perhaps ironically, by allegations of money laundering in Bolsonaro’s eldest son’s cabinet during his stint as state legislator for the state of Rio de Janeiro).

Though the Brazilian media has provided some coverage of these troubling developments, that coverage has been dwarfed by reporting on tax reform, the anti-crime package, and the scandal-du-jour involving the President’s son. But it would be a mistake to ignore these developments, for two reasons. First, though the effects of these policies on corruption and anticorruption are not easily observable in the short or even medium term, they will have consequences for anticorruption in Brazil further down the road, as both changes make it easier for public officials to conceal possible acts of corruption, making it more difficult and time-consuming for investigators to find it. Second, these behind-the-scenes changes send a troubling signal about the new regime’s priorities and whether its commitment to anticorruption and transparency is genuine. It also sends a worrying message about whether Sergio Moro will prove willing and able to leverage his experience as a corruption fighter and judge to set appropriate restraints on power and steer the Bolsonaro administration in a positive direction on this issue.

Despite the hype around the anti-crime bill, and some of the genuinely laudable anticorruption reforms it contains, the legislation that has been going on behind the scenes suggests—unfortunately but not surprisingly—that the prospects of the Bolsonaro Administration ushering in a new era of public integrity in Brazil are low, and diminishing as the days go on. In fact, the sorts of things that the administration has been doing to reduce transparency of government and monitoring of public officials are exactly the sorts of incremental steps that, little by little, help to construct corrupt regimes that threaten transparency, democracy, and weaken protections for the independent press, activists, and corruption fighters.

6 thoughts on “The Bolsonaro Administration is Quietly Reducing Transparency in Brazil

  1. Congratulations for drawing our attention to two potentially very threatening moves undertaken by the Bolsonaro administration.

    Scary as those moves were, though, it is important to note that there has also been some welcome pushback: 1) Congress overrode the transparency legislation (https://goo.gl/774DYL) and 2) the Central Bank appears to have retreated after criticism from both the COAF financial intelligence body and Justice Minister Moro (https://goo.gl/74xqBq). It is worth being vigilant, of course, but the fact that these moves seem unlikely to prosper is a a hopeful sign, especially since some of the pushback comes from within the Bolsonaro administration.

    • Thats a great point — I think its important to recognize both. I hope that the Brazilian institutions continue to stay strong and defenders of them continue to do the right thing as the administration carries on.

  2. Jessie, thanks, this is fascinating. Do you have any idea why the Central Bank proposed the relaxed financial monitoring rules for public officials? They must have had some policy justification for the proposal. Is it that the current regime is too onerous as it covers many small transactions that need not be monitored? Additionally, should our evaluation of those policy justifications turn on how independent Brazil’s Central Bank is? I don’t know enough about Brazilian government to know, but how much control does Bolsonaro have over the Bank? Thanks!

    • Hi Jason, thanks! They didn’t give lengthy reasons, but some that are cited in the article above are a) there is an excess of notifications to the AML monitoring agency, and b) this will encourage banks to create their own internal rules for monitoring. So you’re right in the typical rationale about small transactions, but for their second reason it seems like they were just looking to pass the buck to the banks. The policy was ultimately walked back as even Sergio Moro (Justice Minister, whom you may have read about on other posts on this blog) criticized it, but it raises questions why it was even proposed. The president of Brazil’s Central Bank is appointed by Bolsonaro, but at face value, most of the actions (including these, one could argue) seem pretty consistent with orthodox market liberalism and deregulation that was present in Bolsonaro’s campaign and that is the main talking point of his Chicago school Economic Minister, Paulo Guedes. I think it’s at the “we’re just collecting information” stage right now, not yet time to sound the alarms.

  3. Great post. Although both of these proposals seem to have stalled, I appreciated you pointing out that the Bolsonaro Administration may try to sneakily undercut its public efforts to combat anticorruption. Your first point has me wondering about the existing LAI framework. Despite the failure of the Vice President’s amendment, is there any significant risk that the existing LAI framework is being abused to obscure corruption? Who currently makes decisions to declare information secret or top secret? Are those decisions subjected to guidance policies or oversight?

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