Brazil’s Congress Wants to Investigate Its Biggest Banking Scandal — But the People in Charge Keep Stalling
Key Facts
— Key Points This is part of The Rio Times’ daily coverage of Brazil politics and Latin American financial news.
Fifty-six of Brazil’s 81 senators want an inquiry into the country’s largest banking fraud. So do more than half the deputies in the lower house.
On paper, the numbers are overwhelming. In practice, the investigation has gone nowhere — bottled up by the very congressional leaders who would need to authorize it.
The impasse over a formal parliamentary inquiry, known as a CPI, into the collapse of Banco Master has become one of the most revealing political standoffs in Brasília.
A survey by the newspaper O Estado de S. Paulo found that 69% of senators and roughly 55% of deputies publicly support some form of investigation into the fraud scheme — estimated at up to R$17 billion ($2.9 billion) — that led to the bank’s liquidation by the Central Bank in November.
Yet House Speaker Hugo Motta has said the request must wait behind some 15 older CPI petitions, and Senate President Davi Alcolumbre, who also presides over joint sessions of Congress, has not scheduled a reading of the most advanced proposal.
The battle over the CPI is really two battles in one. The first is procedural: at least four separate requests are now circulating, and the government coalition and the Bolsonarista opposition are fighting for control of the narrative.
The opposition’s mixed inquiry, filed by deputy Carlos Jordy of Jair Bolsonaro‘s Liberal Party with 281 signatures from both chambers, aims at the broadest possible scope — including the conduct of two Supreme Court justices.
Banco Master probe exposes institutional conflict
A narrower government-aligned CPI, led by deputy Rodrigo Rollemberg, focuses specifically on the attempted purchase of Banco Master by the state-owned Banco de Brasília.
The second battle is institutional and far more explosive. Justice Dias Toffoli, who serves as the case’s rapporteur at the Supreme Court, traveled on a private jet with one of the bank’s lawyers before imposing maximum secrecy on the investigation.
A resort formerly owned by his relatives received investment from a fund linked to Banco Master. Meanwhile, the law firm of Justice Alexandre de Moraes’s wife signed a R$129 million contract with the bank — roughly $22 million — covering monthly payments of R$3.6 million, though no government agency has confirmed receiving actual legal services under the deal. Both justices deny any wrongdoing and are reportedly lobbying senators against installing the mixed inquiry.
While Congress stalls, the Senate has taken one step forward. Senator Renan Calheiros installed a 13-member commission under the Economic Affairs Committee — a body with subpoena powers but without the full investigative authority of a CPI — calling the Master affair the worst banking fraud in Brazilian history.
The commission can request the breaking of banking and phone secrecy through a full Senate vote and has already signaled it will question President Lula about a reported meeting with Banco Master founder Daniel Vorcaro in December 2024.
The standoff carries an uncomfortable truth about Brazilian politics in an election year: everyone wants the investigation, but nobody wants to lose control of what it finds.
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