Accounts Court begins probe into false guarantees revealed by The Brazilian Report

Federal Accounts Court meeting in Brasília. Photo: Valter Campanato/ABr
Federal Accounts Court meeting in Brasília. Photo: Valter Campanato/ABr

Brazil’s Federal Accounts Court (TCU) will investigate shady dealings involving FIB Bank, a company at the center of the Covaxin scandal. The firm issued a guarantee for a USD 300 million contract for the Health Ministry to purchase 20 million doses of the Indian-made coronavirus vaccine Covaxin. The deal was laden with irregularities

Senators believe that FIB Bank was part of a scheme to launder the money involved in the Covaxin contract.

Earlier this week, The Brazilian Report revealed that FIB Bank actually issued 70 guarantees to the federal government on behalf of private companies. Together, those bonds amounted to BRL 858 million (USD 163 million). The report sparked the investigation by TCU auditors.

Most of FIB Bank’s bonds issued to the government are related to outstanding debts from private companies. 

Economy Minister Paulo Guedes reached out to senators to explain that the Federal Revenue Service firmly rejects said guarantees, blaming the courts for accepting them. 

The Senate’s Covid inquiry demanded the government suspend all contracts guaranteed by FIB. 

Sources from the accounts court tell The Brazilian Report that investigations could be lengthy. The urgent matter is identifying procurement contracts with fraudulent guarantees, which is against the law and could result in the embezzlement of public funds.