Left fought against inspection of pensioners' discounts

The Lula government has tried to hold Jair Bolsonaro's (PL) administration responsible for the billion-dollar scandal involving undue discounts on INSS retirement and pensions. But documents and records of the legislative process on the subject contradict the narrative.

Measures proposed by the Executive in 2019 to reinforce oversight of transfers to unions and associations were harshly opposed by the opposition, led by left-wing parties, which now form the government's base.

In his first month in office, Bolsonaro issued provisional measure (MP) 871/2019 which, among other controls, determined that permissions for automatic discounts in retirees' accounts would have to be revalidated every year from 2020 onwards, by the beneficiaries themselves.

At the time, there were already reports of fraud by representative associations, mentioned 16 times in the justification for the MP, according to a survey by the newspaper O Globo .

The reaction was immediate. Dozens of amendments were presented to extend the deadlines for registering entities and maintain discounts without oversight. Some eliminated the need for revalidation or extended the deadline for its start until 2028; others replaced annual revalidation with a verification every five years.

The argument was the difficulty in obtaining proof of authorizations from the unions, which claimed to have more than 7.2 million members. In at least 12 amendments from left-wing parties — eight from the PT, one from the PCdoB, one from the MDB, one from the PSB and one from the PSDB — the justification was the same: “Revalidating each authorization annually makes the discount on the social fee practically unfeasible.”

Left spoke out against Bolsonaro's MP that tightened INSS controls

There were three weeks of heated legislative debates that included obstruction of votes by the opposition bench, which accused the measure of taking away workers' rights, limiting the granting of benefits and retirements.

In one of the debates, Congressman Zeca Dirceu (PT-PR) dismissed the justification of fighting corruption: “It is important to clarify to the population that this provisional measure is not intended to combat fraud. The government has all the necessary mechanisms to combat fraud, the major tax evaders, in short, to fight against those who commit wrongdoing,” said the congressman.

“Therefore, we will maintain the obstruction in whatever is necessary so that this provisional measure does not prosper, because it is bad for Brazil."

In another session, Senator Jaques Wagner (PT-BA) used the same argument: “Fighting corruption or calling for undue retirement is welcome. But let’s not throw the baby out with the bathwater. In all institutions, whether in a workers’ union or a business union, you will find good people and bad people. Now, I think that simply annihilating the participation of unions is extremely harmful.”

Some of the amendments were approved and incorporated by the MP's rapporteur, Congressman Paulo Eduardo Martins (PL-PR). The Chamber of Deputies approved the text on May 29, 2019, and the Federal Senate approved it on June 3, 2019, within the MP's validity period.

PT members celebrated flexibility and tried to increase rural support

The approval of the amendments that made the discount more flexible was celebrated by Congressman Carlos Veras (PT-SP): “The result of several days of hard work, especially from Contag and its federations, the Workers' Party, rural parties, and the left, in order to create an amendment that could, in this MP 871/19, save workers.” He concluded: “This party will fight tirelessly to save workers wherever possible.”

Carlos Veras is the brother of Aristides Veras, former president of the National Confederation of Agricultural Workers (Contag), an entity that, according to a report by the Comptroller General of the Union (CGU), is the one that receives the most money from discounts . It was R$426 million in 2023 alone.

Together with the resources transferred to the National Confederation of Rural Family Farmers (Conafer), the two rural entities received 27% of the total collected by the 19 main associations investigated by Operation Sem Desconto .

The PT congressman also worked to remove the provision of the provisional measure that ended the possibility of unions attesting to rural activity. The attestation is an essential tool for rural workers to obtain social security benefits. Unions generally offer proof of this together with membership in the organization.

Senator Paulo Paim (PT-RS) even appealed in the plenary to extend the deadline for unions to issue declarations proving rural activity until 2028. “Let's think mainly about the Northeast. It will be much more difficult. I have great hope that this plenary will vote on the amendment that will guarantee that at least by 2028 there will be a space for registration.”

Despite the pressure, the MP converted into Law No. 13,846/2019 eliminated this prerogative, replaced by self-declarations validated by the INSS via cross-referencing of official data.

The government and PT's strategy is to insist on the "coup" narrative

Under pressure from the repercussions of the case, the government's strategy is to insist that the scheme of undue transfers began in 2019, during the Bolsonaro administration, and to attribute the current government's initiative, via the CGU and the Federal Police, to tackling the scandal.

During a visit to Russia over the weekend, Lula blamed the Bolsonaro government for creating a “gang” responsible for the scandal and promised an investigation “without haste and without pyrotechnics” to recover the embezzled funds.

In a press release, the PT bench in the Chamber reinforced the narrative: “There is only one truth: the legislative changes that occurred during the Bolsonaro government on the subject of associative discounts within the scope of the INSS are the responsibility of the former president and his allies in Congress."

The idea is also to win the war on social media. After the video of congressman Nikolas Ferreira (PL-MG) accusing the PT of a billion-dollar fraud — which went viral and set off alarm bells for the government — the party published the following on its X profile:

“If the coup had been successful, the theft at INSS would have continued and you would have found out more. Share the truth! Lula saved INSS.” X users corrected the post through community notes. After checking, the post displayed the following comment: “Theft has increased 253% since Lula took office.”

Opposition focuses on the explosion of INSS transfers under the Lula government

The explosion of irregularities during Lula's administration has been the opposition's main argument. Discounts on tuition fees jumped from R$706 million in 2022 to R$1.2 billion in 2023 and R$2.8 billion in 2024, according to the CGU.

The deputies from the Bolsonaro base also highlight that the CGU identified that undue discounts on INSS benefits began at least since 2016, totaling R$8 billion until 2024. They also criticize the exclusion of entities such as the National Union of Retirees, Pensioners and the Elderly (Sindnapi) — linked to José Ferreira da Silva ( Frei Chico ), Lula's brother — from the freezing of the entities' assets, determined by the Court.

Congressman Nikolas Ferreira (PL-MG) questioned the resistance of the PT and other left-wing parties in supporting the request to open a Joint Parliamentary Commission of Inquiry ( CPMI ) to investigate the crimes, which ended up being filed on Monday (12), with the support of 36 senators and 223 deputies.

The installation still depends on a joint session of the Chamber of Deputies and the Senate. The President of Congress, Davi Alcolumbre (União-AP), who accompanied President Lula on a visit to China, did not contribute to the advancement of the process.