The Federal Police arrested two people on Friday during an operation related to what the Brazilian press has dubbed the “secret budget” — a system of opaque budgetary grants that gives lawmakers influence over the federal purse in exchange for legislative support. This is the first time activities linked to the secret budget have led to arrests.
According to the Federal Police, a criminal group operating in the northeastern states of Maranhão and Piauí provided fake data to the Health Ministry to receive funds by way of the secret budget. The small city of Igarapé Grande, for example, allegedly performed over 12,000 finger x-rays in a year, despite having a population of only 11,500 people.
One single company investigated by the Federal Police received almost BRL 52 million (USD 9.8 million) in public funds between 2019 and 2022.
The secret budget was designed by the Bolsonaro administration in late 2019 and provides lawmakers close to the government with unprecedented power over the distribution of funds.
During his time as President Bolsonaro’s government secretary, retired Army General Luiz Eduardo Ramos signed the proposal for a bill outlining how these parliamentary grants would work, placing them under the responsibility of a single lawmaker who gathers suggestions from politicians, including state governors and people without public office.
The Brazilian press has uncovered several instances of small cities declaring a disproportionately large number of medical procedures to obtain large amounts of public funds. In the Maranhão city of Pedreiras, for instance, health services supposedly extracted an average of 19 teeth per resident in a span of 16 months. In a crucial difference to previous large-scale corruption scandals, revelations are coming to light as a result of the work of reporters, and not of police or prosecutors.
In a TV interview earlier this month, House Speaker Arthur Lira suggested a president can only deal with Congress with some level of institutionalized corruption, either allowing lawmakers to run the budget, or via vote-buying.
Mr. Lira was re-elected congressman earlier this month and is likely to run for another two-year stint as speaker in February 2023.
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