Brazil Auditors Delay Ruling on Alleged Breach of Fiscal Law

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Brazil’s audit tribunal summoned President Dilma Rousseff to explain signs of irregularities in the 2014 fiscal accounts that prevented the court from approving the country’s financial statements.

The government ran out of money in 2014 and overdrew from its accounts in public banks to pay for expenses, in a maneuver that is equivalent to a loan, the tribunal said Wednesday in a report. Brazil’s fiscal law forbids public banks from financing the government, it said. Known as the TCU, the tribunal is responsible for auditing federal spending and accounts.

The tribunal’s move is seen as a setback for Rousseff, who is trying to rebuild support in Congress and approve tax increases to shore up public accounts. The debate over the 2014 accounts may also add fuel to allegations that she mismanaged the economy and rekindle talks of impeachment.

“Nobody should be above law,” Augusto Nardes, a voting member of the tribunal who wrote the report, told reporters in Brasilia. “That includes President Dilma Rousseff.”

The TCU, which unanimously supported the report, said irregularities found in the statements prevented it from assessing the results. Rousseff now has 30 days to present her testimony.

Not Illegal

Justice Minister Jose Cardozo said in an interview Wednesday he’s confident the TCU will accept government arguments and sign off on its accounts. Even if that doesn’t occur and Congress approves the report, the government can appeal to the Supreme Court, he said.

He said late payments aren’t a loan and such practices were carried out in previous governments.

“Technically, the fiscal-responsibility law was respected,” he said.

Cardozo said in April that political rivals were desperate to find a reason to try and impeach the president.

The following month, opposition lawmakers asked public prosecutors to investigate Rousseff for allegedly breaking public-finance laws in 2013, 2014 and possibly 2015.

The TCU is made up of six members chosen by Congress plus three selected by the president, upon approval by the Senate.

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