Brazil govt's accounting illegal – court

  • 09/10/2015
Brazil's President Dilma Rousseff (Reuters)
Brazil's President Dilma Rousseff (Reuters)

Brazil's President Dilma Rousseff has suffered a new setback when a court declared her government's accounting practices were illegal, handing ammunition to opponents threatening impeachment proceedings.

The Federal Accounts Court or TCU's ruling was the latest blow for Rousseff, who is less than a year into her second term.

The court said that her government's accounting practices in 2014, including taking what amounted to unauthorised loans from state-owned banks to make up for budget shortfalls, broke the law.

"The accounts are not in a condition where they can be approved. We recommend their rejection," the lead judge, Augusto Nardes, said after the court's panel voted unanimously.

After the ruling, Rousseff's office issued a statement defending the accounting.

"The federal government's technical and judicial offices are fully convinced that there are no legal motives to reject the accounts," it read.

The government says it did nothing illegal and that it was merely juggling funds in line with previous practice.

The ruling, which next goes to Congress, is likely to be used as ammunition by Rousseff's congressional opponents, led by the scandal-plagued speaker of the lower house, Eduardo Cunha, who has repeatedly threatened to push for impeachment.

Another judicial body, the electoral court, or TSE, ruled in favour of probing alleged illegalities in Rousseff's 2014 re-election campaign.

That ruling will not immediately lead to sanctions, but will open the door to a messy legal and political battle that in theory could result in Rousseff's narrow 2014 victory being declared invalid - and new elections being held.