Brazil’s President could be brought down by a massive accounting scandal

Alonso Soto – Reuters, 8/11/2015 

The biggest threat to Brazilian President Dilma Rousseff’s hold on office may come not from a corruption scandal that has ensnared the country’s business and political elite but from a less-heralded probe into accounting practices led by a computer science graduate turned lawyer.

Julio Marcelo de Oliveira, a prosecutor at Brazil’s Federal Accounts Court, known as the TCU, says Rousseff broke the nation’s fiscal responsibility law by systematically delaying repayments to Brazilian lenders for advancing money to pay for social programs such as unemployment insurance. The delay in repayments resulted in the nation’s fiscal account appearing to be healthier than it was.

The practice, known as “backpedaling,” was intended to show spending wasn’t as high as it was and bolster Rousseff’s re-election bid. The TCU is Brazil’s highest fiscal accounting court, in charge of reviewing public finances. The Brazilian constitution calls for the impeachment and removal from office of a president who breaches the fiscal responsibility law.

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