beyondbrics

In Brazil, corruption scandals seem to never be far from the headlines but now a case has come along that truly pushes the limits.

The government is investigating allegations that the head of the national mint – that’s right, the man in charge of printing the country’s money – was taking kickbacks from the institution’s suppliers. The official, Luiz Felipe Denucci Martins, who was dismissed last week, has rejected the charges.

While he remains innocent until proven guilty, this is a case that strikes at the heart of issues of governance. The people who print your money must be above suspicion otherwise you will have a currency that is, well, not worth the paper it is printed on.

David Fleischer, a political analyst at the University of Brasília, describes the case thus:

On 29th January, lighting struck at the second echelon of the Finance Ministry – the Dilma government dismissed … the Head of Brazil’s Mint [Casa da Moeda] – Luiz Felipe Denucci Martins. He had been appointed by Lula (indicated by the PTB) in 2008. The government practiced “damage control” because when it learned that the press was ready to publish an exposé regarding the [alleged] corrupt practices by Denucci – who was another “holdover” from Lula’s second term.

Brazilian newspapers reported that Denucci was being investigated by the Federal Police for transferring $25m to offshore entities in the British Virgin Islands that were controlled by him and his daughter. The money was allegedly the result of kickbacks he charged to two suppliers.

Further reports said Finance Minister Guido Mantega was alerted to the claims in 2010 but ignored them. Mantega said on Friday that he had viewed the claims at the time to be without substance and had advised investigators to bring them to court if they had any real evidence.

Whether this is just mud-slinging by the government’s enemies will remain to be seen. But Denucci’s dismissal and the investigation suggest Brasília is taking it seriously.

It comes as the minister for cities Mario Negromonte quit on Thursday after long-running allegations of corruption against him. The government dressed his removal as being part of a cabinet reshuffle. But it seemed only a matter of time before he would be forced to step down, becoming the seventh minister to leave the present government following a corruption or ethics scandal and the latest senior official to be fired amid numerous dismissals last year of bureaucrats at several ministries under similar clouds.

With this much blood being shed on the cabinet floor and the bureaucracy, one wonders whether officials will start to get the message – being in government is not meant to be a licence to print money.

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