State of Rio is investigated for illegalities of oil royalties

The Public Ministry of Rio de Janeiro has filed a public civil action against the government of Rio de Janeiro for alleged illegalities arising from the use of oil royalties. According to the MP-RJ, several irregular and questionable conducts were detected in the capture of domestic and international resources through the securitization of revenues from oil and gas exploration in the state.

The Office of the Prosecutor says it believes that these government procedures have resulted in damages to the State's Social Security Single Fund (RioPrevidência) and the State Treasury as a whole.

Among the irregularities that would have been committed by the government of Rio are the lack of transparency with which these operations are made and the differences with respect to the figures presented for the calculation of its economy. In the petition, the prosecutor's office points out that governor Luiz Fernando Pezão (MDB) acted irresponsibly and contributed to "the current bankruptcy of the state."

"Under the argument of raising extraordinary revenues for the 2018 budget, the government will undermine the budget of the next 12 years, paying interest to the market and 15% of the tax to the Union, in addition to being exposed to exchange rate variation. It is not hard to remember that it was precisely because of the funding made in 2013 and 2014 that we are bleeding our 2018 budget by more than R $ 4 billion, "says MP-RJ.

Thus, prosecutors request that the state of Rio de Janeiro cease operations of this nature until financial and budgetary data are presented that describe the actual costs of all the operations already carried out. In a statement, the Rio government said it had no knowledge of the public civil action so far.

"It is important to clarify that the securitization operation is part of the fiscal recovery regime (RRF), to which the state government signed the adhesion in September 2017. The operation seeks to bring liquidity to this moment of overcoming the financial crisis of the state, as happened with the loan operation held in October 2017, also provided for in the RRF, "the note said. Source: Legal Adviser

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