Senator Jean Paul Prates (PT-RN) and former minister Aloizio Mercadante (PT-SP) face obstacles that could make it difficult for both to take over the leadership of Petrobras and BNDES (National Bank for Economic and Social Development) respectively.
Despite the situation, there is no consensus among pundits whether obstacles could prevent the duo from taking office.
The controversy arises from the interpretations of the state property law. Lawyers listened Power360 they differ on whether the two will take over the presidency of the oil company and the bank.
Prates and Mercandante were chosen by the president to command Petrobras and BNDES Luiz Inácio Lula da Silva (PT) again in December, before the CEO took office.
In the case of Prates, the Ministry of Mines and Energy confirmed the appointment on Tuesday (January 3, 2023).
The state law came into force in 2016, during the government of President Michel Temer (MDB). The rule was created to prevent party leaders from being nominated for certain public offices. In practice, the idea is to protect state-owned companies from possible political interference.
Here are some professions that the law prohibits from taking on the board of directors and board of directors of public companies, state-owned companies and their subsidiaries:
- legal leader of a political party;
- holder of a mandate in the Legislative Power, even if authorized by the office;
- person who has acted, in the last 36 months, as a participant in the decision-making structure of a political party or in activities related to the organisation, structuring and carrying out of an electoral campaign;
- person holding office in a trade union organization;
- person who has entered into a contract or partnership, as a supplier or buyer, of goods or services with the company or company within a period of less than 3 years prior to the date of appointment;
- person who has or may have any form of conflict of interest with the political-administrative entity that controls the public or investee company or with the company/institution itself.
According to the lawyers consulted by the Power360, the formulation that the law gives to prohibit the appointment of state-owned companies is generic and broad, which leaves room for different interpretations. Borderline situations are left without a clear picture. The nominations may be challenged in court, but there’s also no consensus on whether the stock will thrive.
Senate President Rodrigo Pacheco (PSD-MG) will not prioritize making changes to the law in 2023, according to the report. Power360. The assessment is that tinkering with the issue would bring instability to the country and shake up the market.
The bill amending the State Act and reducing the quarantine for politicians to take public-company jobs passed the House in December 2022.
Resumes
Senator Jean Paul Prates ends his term on January 31, 2023. He would have taken over Petrobras in February. However, owning companies in the oil, gas and petroleum industry can be a hindrance. He denies that there is a conflict of interest and has already started the process of dissociating companies operating in the sector.
On Wednesday afternoon (January 4), for example, the consulting firm Expetro had already changed hands. In a note to Power360the senator said he will only keep the Jack Singleton, to manage the properties it owns. Read the full note at the end of this report.
THE Power360 found that the trend is for Petrobras’ compliance area to request the sale of the companies. The Senator must opt out of the company during the process of reviewing his resume by the state company’s government area.
Aloizio Mercadante has 2 possible obstacles. He is president of the Perseu Abramo Foundation, a theoretical branch linked to the PT. He also assisted in the preparation of Lula’s 2022 campaign government agenda and coordinated the technical groups of the transition team.
The former minister said the foundation is not part of the PT’s decision-making structure and that it did not play a paid role in Lula’s campaign. “having not been connected to any activity of organisation, structuring or implementation of the campaign”. Read the full note at the end of this report.
differences
For the lawyer Eduardo Ubaldo, a master in constitutional law, the situation is complex and the problem is exacerbated by the way in which the constraints have been listed in the state property law.
“Different interpretations are possible in the case of Mercadante”, he has declared. Ubaldo said he does not consider the fact of chairing the Perseu Abramo Foundation as a function that means participation in the decision-making structure of the PT.
In the case of Jean Paul Prates, Ubaldo stated that there are even fewer elements linking the senator to participation in Lula’s campaign. He also said that, in principle, previous industry experience is not an impediment.
“In the oil and gas market, you can’t hire someone who doesn’t understand the subject. You can hardly catch these people who have not participated in the industry.”
Ubaldo sees no problem for either of them to take on the jobs and said he doesn’t believe the lawsuits against the candidates are thriving.
The lawyer Caio Morau, who teaches at the Catholic University of Brasilia, understands that Mercadante’s case falls within the prohibitions of the law.
According to the specialist, the Perseu Abraham Foundation has a “effective in party life”, to discuss “positions, relevant issues on which the party will have to express itself”.
“I think it’s even more relevant that he played a major role during the campaign, but also in the transition period”he has declared.
Morau said there are no issues with whether Prates has worked as a consultant in the oil industry or is the owner of the companies.
“Having assumed office, he should necessarily take leave”, declared. “That doesn’t mean he has to close the company, but he can no longer perform the function, to avoid any kind of problem.”
“It could not, if it de facto takes over from Petrobras, continue to exercise consultancy activities, if the object of the company’s deed of incorporation could generate a conflict of interest with the function it will perform”, completed.
Attorney Valdir Simão, former minister of the CGU (Controladoria Geral da União) in the government of Dilma Rousseff (PT), said he sees no problems with the establishment of Mercadante and Prates.
“I don’t see Mercadante as the leader of a political party because he is part of a foundation”She said. “And, on the other hand, I don’t see its role in the campaign, both in terms of organization, structuring and execution.”
Simão did not comment specifically on Prates’ companies, but said that, in principle, the fact that someone has worked in the private sector in a particular sector does not necessarily cause a conflict of interest that prevents him from taking a position.
“The conflict arises if, by chance, there are decisions in the exercise of the function, in violation of the rules of transparency and governance”he has declared. “If the law states that you need an industry qualification, obviously choose someone who has worked in the oil and gas industry before with qualifications in the private sector.”
“We can’t have a very literal and restrictive analysis,” declared. “Today, within the process of state-owned companies, an individual analysis of the situation of each is carried out by an eligibility committee, which is statutory, and which is submitted to the Board of Directors of the company and, therefore, any situations of conflict will be analyzed ”, said the ex-minister.
Attorney Vera Chemim, specialist in constitutional law and master’s degree in public administrative law at the FGV (Fundação Getúlio Vargas), said that in both cases there are elements that may preclude appointments to positions.
He stated that Mercadante is directly and indirectly linked to a political party, “as well as having coordinated the government program of the current President of the Republic”.
“It should also be remembered that Mercadante has a relevant role in the Perseu Abramo Foundation, as president, whose main purpose is of an intellectual nature, which would be an exception if it were not linked to the ideology of the Workers’ Party, of which he is an affiliate member ”, declared.
Regarding Jean Paul Prates, the lawyer said that there is a possible conflict of interest due to the nature of their companies.
“He should leave the companies, albeit temporarily, although, in the event that he leaves Petrobras in the future, he should also comply with the ‘quarantine’ time required for any public servant who comes to exercise a private activity following his retirement, dismissal by a public function.
Other side
Read the full advisory note by Aloizio Mercadante, published at 17:27 on Wednesday (4.Jan.2023):
“Regarding the appointment of former minister Aloizio Mercadante to the presidency of the BNDES, by President Luiz Inácio Lula da Silva, we clarify that:
“- Chapter II of §2 of the art. 17 of the Law on State Companies prohibits the indication “of a person who has acted, in the last 36 (thirty-six) months, as a participant in the decision-making structure of a political party or in activities related to the organisation, structuring and execution of an electoral campaign”;
“- In this sense, we inform you that Aloizio Mercadante is president of the Perseu Abramo Foundation, a foundation that is not part of the decision-making structure of the PT;
“- The Party Foundations are governed by special laws and supervised by the Public Prosecutor’s Office and the TSE with an explicit prohibition to participate in electoral campaigns, but with the freedom to participate in the elaboration of government programs, precisely because it is an intellectual contribution .
“- Mercadante did not exercise any remunerated function in the victorious electoral campaign of President Lula, having not been linked to any activity of organization, structuring or execution of the campaign;
“- During the electoral campaign, the former minister limited himself to collaborating in the elaboration of the government programme, a function not covered by the limits of the Law on State Companies; And
“- Finally, as is public knowledge, Aloizio Mercadante has a doctorate in economics and is well known in the area of operation of the BNDES.
“CONSULTATORY OF THE FORMER MINISTER ALOIZIO MERCADANTE”.
Read the full note from Senator Jean Paul Prates’ advice:
“Regarding Jean Paul Prates’ shareholding in companies that have been dormant for some years, it should be clarified that there is no legal or compliance need for him to remain or not as a partner in these ventures.
“However, since transparency has always been a principle defended throughout Jean Paul Prates’ public life, he has decided to untie the corporate structure of these companies, keeping only the Singleton holding active with the aim of managing properties owned by him.“
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