Minister Dias Toffoli filed for formal reasons this Friday (8) two criminal news presented to the Supreme Court with a request for the opening of an investigation by the Minister of Economy, Paulo Guedes, and the President of the Central Bank, Roberto Campos Neto, due to the revelation that both maintain offshore companies in tax havens.
One of the petitions is authored by senator Randolfe Rodrigues (Rede-AP) and targets Guedes and Campos Neto. The other, from the Brazilian Association of Economists for Democracy, concerns only Guedes. There is another request, from the PDT, which had not yet been analyzed by the minister until the publication of this report.
In the cases of the two petitions filed, the minister understood that this type of request must be addressed to the Attorney General’s Office (PGR) and not to the Supreme Court.
“In cases like the present one, therefore, with respect to the accusatory system, there is no way for the Judiciary to replace the ministerial activity exercising value judgment on allegedly criminal facts, exclusive attribution of Parquet [procurador-geral], nor is it up to the Judiciary to ‘request the opening of an investigation’ as stated in the initial statement”, argued the minister.
According to Toffoli, “the applicant may submit the criminal notice directly to the Attorney General’s Office, and the Judiciary shall not interfere in the performance of that body or replace the citizen in this referral. Considering these premises, there is no action to be taken in the judicial area”.
For the lawyers of Guedes and Campos Neto, Ticiano Figueiredo and Pedro Ivo Velloso, the filing “is another unequivocal demonstration that there is no illegality in maintaining an investment vehicle abroad, declared to the Revenue and other competent bodies, long before Paulo Guedes and Roberto Campos Neto join the government.”
“The documents presented by the defense to the PGR clearly demonstrate that the Minister walked away from the company’s management and that he never benefited, in any way, from the position he holds, always following the determinations of the Public Ethics Commission, of the Code of Conduct of the High Federal Administration and of the Law of Conflict of Interest”, wrote the lawyers in a note.
Last Wednesday (6), by 310 votes to 142, the Chamber of Deputies approved a request to summon Guedes to explain to the House plenary about financial transactions abroad through an offshore company in the British Virgin Islands, a tax haven (video below).
Chamber summons Guedes to explain to the plenary about offshore in a tax haven
Guedes’ summons by the plenary is the third approved by the Chamber since this Tuesday (5). The Labor and Inspection and Control committees approved applications for the same purpose. There is still no set date for the minister and the president of the BC to attend the Chamber. The Senate Economic Affairs Committee approved invitations to Guedes and Campos Neto.
The existence of companies belonging to the minister and the president of the Central Bank abroad was revealed last weekend by an investigation called “Pandora Papers”, by the International Consortium of Investigative Journalists.
The maintenance of companies abroad, even in tax havens, is not illegal, as long as it is declared to the Internal Revenue Service. The opposition’s question concerns a possible conflict of interest in the fact that the minister of economy may benefit from government policies by keeping a company abroad.
This Friday, during a live internet broadcast, promoted by a financial institution, Guedes stated that he did not commit illegality (video below).
Paulo Guedes spoke today for the first time about a company in a tax haven
“On ‘offshore’, they are legal. It was declared, there was no movement across borders, bringing in money from abroad or sending money abroad. Since I put money there, in 2014/2015, I have declared it legally,” said the minister.
Offshore is a word that freely translates to ‘beyond the coast’ – something that is outside the territory of a country. In the case of companies, it is a company opened by people or other companies in a country other than the one in which they reside.
Guedes also stated that there is no conflict of interest in relation to his activities as minister because he left the company before joining the government.
According to him, the funds deposited abroad are under the responsibility of independent administrators “in jurisdictions in which my actions have no influence at all”.
“I left the company days before I came here [ao governo], I gave all the documents,” he added.