Guedes’ plan to sell public real estate is facilitated by TCU decision

The plenary session of the TCU (Union Court of Accounts) authorized the federal government to transfer public properties owned by the Union to a private fund without this operation having to be recorded in the Budget.

The decision, taken unanimously by the ministers, facilitates Minister Paulo Guedes’s (Economy) plan to boost the sale of these properties without major constraints.

The release opened up internal disagreements between technicians from the court itself. The defense of one of the TCU secretariats was that the operations be included in the Budget, including for the contributions to pass through the sieve of the Legislative. Another area argued that registration was not necessary — a position that eventually prevailed.

The decision took place after a consultation by the Ministry of Economy on how to register the operation, which consists of the use of properties to pay in shares of an FII (Real Estate Investment Fund) — in practice, transfer the assets to the fund.

One of the fears among supporters of the measure was that the payment of quotas would need to compete for space within the spending ceiling (a rule that limits the advance of federal expenditures to inflation). Without going through the Budget, there will be no such risk.

The creation of the fund is provided for in Law 13,240 of 2015, but to date it has not been carried out amid doubts about the procedure.

The Special Secretariat for Privatization, Divestment and Markets, linked to the Ministry of Economy and in favor of the initiative, estimates that R$ 20 billion in real estate may be contributed to the fund in the coming years. These assets would be available for sale or rent.

The idea is that this is done gradually, to test the new model. The inclination of the folder is to create different backgrounds, each with properties of specific profiles.

Eligible properties are those that do not have a specific purpose, whether land, sheds or vacant buildings. Possible destinations range from logistics, development of residential and commercial projects.

The TCU process report cites that this universe totals almost R$ 90 billion – far from the R$ 1 trillion in properties already mentioned by Guedes at the beginning of the government as potential for sale.

The catalog of assets to be remitted to the fund, however, is not yet public. According to government sources, technicians are working to regularize the documentation of eligible properties and make them available for the operation. There is a request for the task to be completed by the end of this month.

The process at the TCU was reported by Minister Jorge Oliveira, who was once Chief Minister of the General Secretariat of the government of Jair Bolsonaro (PL). He was close to the president, who nominated him for a court seat.

Although the consultation came from the Ministry of Economy, part of the representatives of the fiscal area of ​​the government were against the authorization to circumvent the Budget.

The government even claimed this exemption in sending the PEC (proposed amendment to the Constitution) of the Precatórios, but the device ended up being removed from the text by parliamentarians.

Technicians who closely followed the fiscal maneuvers carried out in the Dilma Rousseff (PT) government, which served as the basis for the former president’s impeachment process, consider the decision to exclude the Budget record a kind of “creative accounting”.

During the Dilma government, the Union used public bank shares to make contributions to funds without the operations going through the Budget, including the FGeduc (Educational Credit Operations Guarantee Fund), the FGO (Operations Guarantee Fund) and the FGE (Export Guarantee Fund).

The TCU has already criticized these operations and warned that they need to go through the Budget, which gives transparency to what is done with public resources.

Despite this precedent, there is an understanding in the court that the concrete cases are different, since the new operations involve real estate, not company shares.

In addition, the ministers stated in the judgment that the obligation to register the budget remains whenever there is a contribution of financial resources, or even when the Union receives the income paid by the fund or the salaries related to the participation quotas. In practice, only at that moment will the revenues appear in the Budget.

Semag (Governmental Macro-Evaluation Department), which gives its opinion on fiscal and budgetary issues, recognized that the payment is a “sui generis” transaction, that is, it is unique. However, the agency argued that the most appropriate thing would be to record it in the Budget.

Semag stressed that the Constitution prohibits the initiation of programs or projects not included in the LOA (Annual Budget Law). According to Semag, the exclusion of the operation from the Budget means “loss of decision-making power over public assets”, since the FIIs are privately managed.

SecexAdmin (Secretariat for External Control of State Administration), another technical area of ​​the TCU, expressed itself in a different way. For this wing, the payment of quotas with real estate should not be recorded in the Budget.

“There is a simple equity change, an exchange of non-financial assets that must be recorded in the accounts, however, without reflection in the budget piece”, he said.

Guedes continues with his plan to sell federal properties. At the end of last year, he even suggested the creation of a ministry to manage and sell federal assets. He reiterated at the time his proposal for state assets to be turned into resources for an anti-poverty fund.

“I have already spoken with the president. I am proposing that, for the new government, there must be a Ministry of Heritage of the Union”, he said at the time. “The State has R$ 4 trillion [em ativos]an incalculable fortune, and the people poor and miserable,” he said.