Brazil

There is speculation about corruption in asset disposals. The findings of the GI 2013 assessment of Brazil remain valid: the Brazilian defence community does not disclose information regarding asset transactions. According to the referenced journalist piece (apublica.org) provided by the previous assessment, the army does not disclose any information regarding asset disposals. Also newer reports confirm this (oglobo.globo.com) on general asset management, in spite of the Information Access Law recently passed into law.

Currently, no reports on disposal of assets, land proprieties, or financial assets are provided on the internet in all defence references above. Justifications for the necessity of transactions were also not found. The available data on 2012´s Brazilian White book of defence appear to be limited, a view confirmed by interviewed scholars.

Additionally, the methods and rules concerning asset disposals were not found. There are some related (old) rules partially available on the internet (see for example 1987´s dom.eb.mil.br/legislacao found only through Google). However, it is difficult for a layman or citizen to assess whether they are still valid.

While some records of transactions could be found they are scattered and are only limited in detail on the Transparency portal, it is not clear to the reader whether this information is complete or verifiable in its current form.

No specific evidence of information concerning asset disposals (concerning either weaponry or real estate properties) is available either in defence-related internet pages nor in official internal or external audit institutions.

A good example is the selling of real estate properties for civilian civil servants, transactions on which no information is provided to the public, neither previously nor after the transaction was done, as Weekly Magazin &quoute;Revista Isto É&quoute; has revealed (terra.com.br/istoe-temp/edicoes/2062/imprime135052.htm). The Navy, for example, owns c. 7.000 properties according to the media and is said to be one of the &quoute;biggest real estate agents of the country&quoute;, says the Portal Diário do Poder (diariodopoder.com).

The lack of scrutiny on asset management in general can be indirectly found through other sources. For example the lack of transparency concerning the occupation of real estate administered by the Ministry of defence and its branches (defesa.gov.br): very little information is displayed there (just in Brasilia city, the Army has over 5.000 plots of land, the Navy has in total 7.000 plots, and so on). T he fines derived from irregular use of real estate properties or lack of payment that should be applied to military and that should come to public treasury are often forgiven (see www2.camara.leg.br). According to Revista Época (no.826/ 2014). This reflects the privileges granted to the Armed Forces allowing a lack of transparency in public asset management and disposal.

The percentage is not available to the public, for secret expenses values are almost impossible to find on the Planning Ministry Site and in the Orçamento Federal site and the Transparency Portal. Searching also for defence reports in Portal da Transparência's thematic reports.

Some superficial details of the 2013 budget could be found at www.planejamento.gov.br, a report containing general amounts for secret items divided in 4 (Ministry, Navy, Army and Air Force).

Secret expenditure (and consequently percentage) has been reported by the media (Revista Isto É) to be hidden by means of credit card expenses in order to make oversight difficult. Most of them were reported to be common expenses (such as gasoline) for which no secrecy justification would be necessary, suggesting private use of the public money. According to Contas Abertas' research, in 2013 the defence Ministry spent R$ 25,4 million reais on secret items, c. 0,2% of 2013 total defence expenditure (14 billion according to oglobo.

In the 2014 Planning Ministry Report called &quoute;Budgets for Easy Comprehension&quoute; [orçamento deferal ao alcance de todos]&quoute; at www.planejamento.gov, pages 49 and 50, no references to secret items are mentioned. As a result, it seems reasonable to agree with the media that the defence Ministry avoids exposing the details on secret budgets. The percentage of defence and security expenditure in the budget year dedicated to spending on secret items relating to national security and the intelligence services is not available.

There is no information on legal provisions for the legislative oversight of spending of secret items relating to national security and military intelligence.

Until November 2013 (date of the CCAI's creation) and the submission of this report (April 2014), there is no public evidence in the media or governmental sites that the legislature (including the Committee of Foreign Affairs and National Security) was provided with any information about secret items from the defence departments. Also in the few available reports found on the Senate´s website (camara.leg.br) no reference is made to any discussion of secret items.

Given the autonomy and political influence that the Armed Forces still have, some secret data is not disclosed in spite of a Law that obliges the disclosure.

There is no public evidence that legislators are provided with audit reports related to the security sector and other secret programs. Nor has an adapted citizen-version been ever issued to show any compliance with external audit aims.

Until this year, when the creation of the previously cited CCAI occurred, they were not in fact provided with audit reports of secret items, as the lack of evidence also points out. Nothing about the CCAI committee´s history of actions (senado.gov.br) shows any different direction. Also nothing was found in the reports of the Committee of Foreign Affairs and National Security of the Chamber of Deputies.

Media evidence shows that such an audit, if it ever existed, was not efficient, see secret expenses carried out with corporate cards incident (circa 95% of the total, according to Contas Abertas). See for example the link Contasabertas.org, where just one Navy employee spent R$ 57,7 thousand with the credit card to pay for tourism agencies in Amazonia and another Army officer alone was reported to have spent over R$ 100 thousand with the same card.

Off-budget expenditures as financial transactions (plus or minus) are not accounted for in the budget. In Brazil, &quoute;minus&quoute; off-budget transactions are exceptionally allowed by Federal Procurement Law. They include government responses to major or minor disasters concerning health urgency and provably unplanned construction needs. There is no evidence that &quoute;Plus&quoute; military off-budget expenditure are permitted (IADB, 2006).

(a) There is evidence of the existence of the &quoute;plus&quoute; variant related to:

1) US contributions to Brazilian government from 2009 until 2016 (see Securityassistance). It´s unclear how much goes to military institutions, for the title is &quoute;Military and Police Aid by Country&quoute; is not broken in more values or institutions.

2) Interviewees reported the existence of donations from private or public people who would receive official medals from military corporations for their &quoute;good service to the country&quoute;. Such medals are given in weekly ceremonies where donors and other benefactors are presented and complimented by staff. No register and no oversight of such eventual financial/material receipts and corresponding expenses claimed are made, making local barracks a possible channel for the interests of such donors according to the reports of interviewed military staff. Medal receivers' registers can be only accessed by internal staff in military publications. For example, I could not find decorated names on the Navy's site. Also, a name is only available in the Army if you can reference it. See also the &quoute;Medal for Navy Friends in www.mar.mil.br

(b) There is evidence of &quoute;Minus&quoute; off-budget variant related to:

1) the reaction to &quoute;minor disasters&quoute; concerning health and building. In this sense, &quoute;minus&quoute; Off-budget expenditure is only seldom allowed by the government, which acknowledges a few exceptions based on urgency or public calamity situations which cannot be planned (Law 8666/93, art. 24). There is no mention on if these expenditures could or could not be classified as secrecy. Although the media reports provide no evidence that this type of expenditure takes place in Brazilian defence, military interviewees stated that these &quoute;minus&quoute; off budget expenditures can be made at least in two different ways:

(1) First, by the unrecorded use of (also unrecorded) donations mentioned above.

(2) By the &quoute;a posteriori&quoute; legalization of off-budget expenses done without legal authorization or legal support. It would occur when procurement staff wants to use a firm as a single source. Staff would then simply hire them without documentation and, after some months, produce a back-dated contract to justify the firm´s existence, adopting some justification such as urgency or high specialization of the firm. Sample research in one Brazilian military region found contracts on elevator maintenance, common medical services and also common bank services in the conditions described, for which it would not be possible to allege any urgency (TCU´s manual states that lack of procurement planning is not the same as urgency) nor for any unique skills of the firms to do the job on a off-budget basis. No audit report was found with evidence of punishment of the responsible staff.

As a result, although some off-budget expenses are permitted, and although all other defence-related expenditure should be recorded, exceptions to the rules seem to eventually exist within the Armed Forces. In the first reported case, the lack of accountability on private and public supporters or donors, on decorated personalities, their work or their donations and motives for having worked or given, as well as the justification from Armed Forces for having accepted such help or gifts helps to enforce this doubt. In the second case, the freedom that military procurement staff seem to be internally granted by using the excuses of &quoute;urgency&quoute; or &quoute;specialism&quoute; outside the legal frame, and the lack of public evidence that military auditors are intervening to fight procurement fraud (see O Globo's report stating that military auditors call such crimes as &quoute;improprieties&quoute;).

As per the comments for Question 27, all defence-related expenditure should be recorded in the official defence budget, but military interviewees referred to the existence of some that are not. It is unclear if they are related to illicit economic activity. Because of the lack of tools for control, disclosure of punishments and protective policies in defence-related sites which could avoid the fraudulent inclusion of off-budget expenses, score 2 has been awarded.

The entry of the Access to Information Act (“Lei 12.527 de Acesso à Informação”) into Brazilian Law in 2011 has reinforced the Brazilian defence Ministry´s obligation to reveal important information to the national citizens and to improve its level of transparency, including the mechanisms of information classification on the grounds of national security. There is no evidence that legal requirements are upheld in practice, nor of provisions for the oversight of such regulations (Klaus, 2014)

Classification is the basis of legal terms and is explained at www.acessoainformacao.gov.br. However, there is no evidence that its attribution was scrutinized.

The Brazilian Air Force (BAF) owns various civilian airports which income (or revenue) is part of the BAF budget. The capital of those airports is opening to private investors. The BAF is involved with the aero-spatial sector, which is private. There is little transparency surrounding these operations. There is no additional information on other military forces' business and transparency on their property and assets.

All three forces are known for example to have real estate (many are located in very expensive and desirable areas (or in natural paradises such as beaches or in the Amazon region) where part of their staff could live, but very little information on the use and occupation of such properties are disclosed by the defence Ministry.

Moreover, application of received rents or selling price (for they can be sold to civilians) is not publicized.

There is a lack of information on military owned business (no information is available on defence-related sites), and on the existence of any sort of associated scrutiny. Further, according to military testimonies, military-owned businesses are not subject to transparent independent scrutiny.

The government outlaws unauthorised private enterprise within the military (who are forbidden to contract with the federal administration) by means of Federal Procurement Law (art. 9, III). There is some evidence of unauthorised private enterprise belonging to military staff or their relatives. There is evidence that the sanctions for breaking these laws are weak or often not enforced.

Interviewees representing different Brazilian states, as well as media evidence, suggest that there is a high probability that military officers possess business that are illegally active inside the military forces. Interviewed officials indicated that many military officers possess businesses that are active inside the military forces (which is strictly forbidden by the procurement law) and supposedly use figureheads (known as &quoute;laranjas&quoute;) to benefit from government acquisitions. Revista Veja including readers´ testimonies describing reasons why many high qualified officers have been leaving the forces seems to confirm the existence of high levels of corruption inside the military institutions. A number of these say they were subsequently threatened for speaking out.

In military hospitals, some officers are alleged to possess medical services firms which illegally work for the military forces in the form of accreditation contracts (a single-sourcing gap military administrators found in the procurement law).

According to interviews, also no legal or administrative measures are taken to prevent conflicts of interest which exist when recent ex-military staff own firms which are contracted by the forces immediately after their leaving the same forces.

After military scandals, no follow-up reports showing the continuity of the investigations and the results of punishments appear, remaining secret. Moreover, according to already referenced media reports, military auditors tend to consider such and other crimes as mere &quoute;improprieties&quoute;, minimizing the seriousness of such crimes, and therefore also avoiding punishment.

There is no public evidence that civil servants and military leaders publicly commit to anti-corruption and integrity measures in the defence sector.
While President Dilma in 2012 did participate in the opening ceremony of an anti - corruption academic conference, at Transparency International´s invitation, this was not defence related.
This holds true even after recent protests.

There is no evidence in defence-related or other governmental web sites that punishments on the ground of corruption are being carried out in relation to unethical defence staff (who, in theory, would face dismissal and prosecution). There is no evidence that corrective measures are applied consistently/effectively within the Ministry of defence. Although the CGU has been dismissing public servants for corruption, there is no evidence that these actions are systematic or proportional to corruption cases reported by the media, nor that they involve staff pertaining to the public defence sector.

Media articles report a number of incidents that went without punishment or investigation.

Response to Peer Reviewer who mentioned a punishment list: 1) this indicates few expulsions for a whole year, (b) referring to a very low level of 4 punitive expulsions in 2014 related to defence, which is strange if one considers all three forces together and the corruption patterns of this country. Score increased to 2 to reflect availability of formal punishments.

There is no mechanism specific to defence sector personnel. A general mechanisms for whistleblowing was recently created by the CGU. It requires personal identification though. There is no evidence of effective institutionalized mechanisms are in place to protect whistleblowers, nor that whistleblowing in relation to defence-related corruption is encouraged or taken seriously by the government. No cases are known of defence-sector whistle-blowers.

Inside the military forces' systems, the whistle blower must write an official document (&quoute;ofício&quoute;) and sign his name in order to make the denouncement. Interviewed military officials say that denunciations normally do not work (they mostly gave examples of cases of conflict of interests and procurement fraud being reported) and the whistle blower is in the end the one who would be punished by his/her superiors for &quoute;not working well with the group&quoute;.

There is no public evidence that personnel cited are selected according to specific and clear requirements, nor that there are rules of conduct associated with such positions. There is also no evidence that they are subject to rotation in post after a certain period of time nor that there are any specific post-retirement restrictions.

The number of civilian and military personnel is stated in the Federal Civil Servant Statistical Bulletin (Boletim Estatístico de Pessoal) edited by the Ministry of Planning and updated on a monthy basis. However, this number is not stated on the internet sites of the Ministry of defence or of the Military Forces.

Civilian personnel salaries are provided by the Federal Service Wage Table updated by the Ministry of Planning. However, military wage scales are not displayed there. Also in the governmental Transparency Portal, where marketing is done for the existence of military salaries data, nothing could be found by the date of the submission of this report. Scattered details of military wages is made only partially available by rank and function in specific information displayed in the Armed Forces´s personnel administration pages (for example, the Army´s ICFEX).

Basic pay is non-discretionary. Although for the 3 Armed Forces, and defence Ministry employees as well, there is no evidence that payment is done other than routinely and on time, the media has been reporting delays in payment for the Military Police though.

The payment system seems to be clear to military forces by means of specific military regulations and internal publication.

According to interviewed officials, the lowest-ranked and less experienced officials are usually required to do the (complex and time-consuming) revision of a salary sample, and mistakes can be made on a systematic basis because they do not usually have the necessary expertise or supervision to accomplish the task, or are more easily convinced not to report encountered misconduct. This reflects on the quality of internal control of the payment system.

Response to Peer Reviewer: comments not relevant to this criteria

In defence-related internet sites (all accessible through defence Ministry Web Site), there is no public evidence of an established system for the appointment of military personnel nor for the use of objective job descriptions. Also, there is no public evidence of assessment processes nor of oversight of the appointment process by independent personnel. According to the interviews performed, this does not take place in practice.

In the military system higher ranks are reached by increasing time served, evidence indicates there is a level where politics comes into play. Above the rank of colonel promotion appears to be more based on the political abilities and family connections (an intangible influence called “military asset”) than on pure merit. Also, appointments throughout all ranks are mostly done on a discretionary basis, even the ones with established fixed rules. For example, a search of temporary lieutenants working in military forces between 2010 and 2013 confirmed that many of them were relatives of high military officers, which could be reflective of nepotism.

Another example according to interview material suggests that people who are 'mentored' by influential officials and generals are more likely to be sent on international missions and be given a more convenient or a leadership position. As a result, although promotion and appointment allocation should follow basic objective procedures, a very high amount of political influence usually seems to be involved.

As stated in question 41, promotions to higher ranks should follow standard procedures (which are not made public), but interviewees have reported cases where personnel rules were not respected and promotion processes are not as objective as they should be. Officers said that, when they knew that somebody was chosen for a job because of influence, or family connections, there was no effective way for whistleblowing, for the military system of hierarchy of discipline obliges staff to accept decisions from their superiors and forbids anonymous whistleblowing. Additional interviews with 2 other ex-military officials have confirmed such a tendency. They outlined the Colonel's and General's choices as being highly political procedures, as another reflection of the extreme autonomy which military forces are alleged to be granted (Revista Época). In the same vein, formal appraisal processes cannot be easily disagreed with or contested when done on a biased basis.

It should be remembered that many of the current commanders who began their careers in the peak of the Dictatorship period.

Therefore, there is no evidence of formal appraisal processes for personnel promotions and they are not publicly declared. There is as well no publicly made evidence of promotions boards for personnel promotions or of independent oversight of such processes. It is likely that such structures are in place but this cannot be publicly verified.

There is no evidence of specific policies, rules or mechanisms against bribery for avoiding compulsory conscription. The measures to address corruption and bribery committed by personnel which have been discussed in Question 35 would be applicable here.

The media has not reported any cases of bribery to avoid conscription. A possible reason for this is that high poverty and low employment opportunities make the Army an attractive employer. Though the income is low, it is fixed and a certain amount of competition exists to enter the Army.

Response to Peer Reviewer: Agree, but there are no known policies, rules or mechanisms against bribery for avoiding compulsory conscription. Score maintained.

No such policy of refusing bribes is in place within the public defence staff or military, for the Federal Code of conduct is only applicable to public authorities (art.2), a category in which the mass of defence public servants cannot be included for they do not have decision-making powers. Although Generals can be implicitly considered as public authorities and in addition must obey their own military law, the mass of military officers (who are not public authorities but public agents) will be obliged only to follow (and be judged upon) their own generic military ethical rules, remaining untouched by bribery-specific rules that can be applied to public authorities (military or civilians). The Comptroller General does, however, carry out punishment for personnel involved in bribery and corruption. See, for example,

Response to Peer Reviewer: Agreed. However, there are no specific rules against bribery for soliciting preferred postings although overarching legislation and controls would apply. Score 2 fits best.

No public evidence exists that a specific audit was done to check for ghost employees, yet the last assessment is still correct: although the phenomenon of ghost employees is a very common problem inside the legislative state assemblies of Brazil, within the defence sector it is not frequent, as the SIAPEnet (Sistema Integrado de Administração de Recursos Humanos) system which manages the military personnel seems to have been improved the strength of payment systems.

Response to peer reviewer: Score selected corresponds to criteria, &quoute;There is no firm evidence of ghost soldiers; however, some laxity of enforced accountability in payment systems suggests that the phenomenon could occur.&quoute;

Officially, chains of command are separated from chains of payment which is done by using the SIAFI (tool used for register and control of budget, financial, and patrimonial execution - SIAPE controls HR resources registers and payments only). However, according to military interviewees, on a daily basis the chains can be mixed for some kinds of payment which usually require the simple signature of generals in charge. This is reported to happen for example in military hospitals where discretionary (claimed to be urgent) expenses to external medical staff and services are paid outside the normal payment schedules. It´s not about the salary of the local medical staff, but the expenses generated by the temporary hiring of external people/firm which can satisfy a necessity which provably cannot be satisfied by the current military system and staff. For example, a patient needs a heart transplant and there is no such specialty inside the military hospital. Then, as urgent service, an external supplier is acquired.

In this case, there is no publicly disclosed policy that requires the mentioned separation and it is very likely that the same person (the General or Colonel in charge) will make the decision about the payment and will order it to be paid - while the internal audit will just operationalize orders, explained the interviewed officers.

No such code is in place within the public defence staff or military, nor is there sign of robust oversight mechanisms in relation to the Federal Code, which does not comprehensively and sufficiently cover guidance with respect to bribery, gifts and hospitality, conflicts of interest, and post-separation activities.

The Federal Code of Conduct - which approaches the mentioned issues very leniently and superficially (4 months is the standard timely interdiction for avoiding post employment conflicts of interest in art. 15, and punishments from art. 17 are nothing but a &quoute;warning&quoute; or an &quoute;ethical censorship&quoute;) is only applicable to public authorities (art.2), a category in which the mass of defence public servants cannot be included for they do not have decision-making powers. Although Generals can be implicitly considered as public authorities and must obey additionally their own military law, the mass of military officers (who are not public authorities but public agents) will be obliged only to follow their own (too generic) military ethical rules (displayed in Military Statute, art. 29 to 31), remaining untouched by the few, lenient bribery-specific rules that can be applied to public authorities. Accordingly, in governmental sites there is no publicly available evidence that effective guidance or training on bribery, conflicts of interest, gifts and hospitality and post separation issues is provided or followed by civilian and military personnel working in the defence departments.

The media reports high bribery and corruption levels in the country and interviewees alleged that conflicts of interest happen very often in the defence sector.

As stated in the previous answers, although the Federal Administration's Code of Ethical Conduct in theory exists, there is no evidence that it is being enforced by public authorities in the public defence sector. Nor is there evidence that any other code specific to corruption mitigation for military staff exists, nor that anti-corruption training is being performed. The available Military Statute is not specific on corruption, although some articles (art. 27 to art. 31) on general military ethics and duties could be called upon.

Accordingly, on the defence Ministry and Armed Forces websites, I found no evidence that breaches of ordinary military codes are being fully addressed, nor that punishments are being enforced or publicized. Incipient cases can be found scattered, superficially described, and very discretely located within the Supreme Military Court's website. As a matter of fact, military crimes are still judged by special military courts, which means that the accused are judged by their own peers and on their own terms rather than the terms used for civilian citizens, which academics argue undermines the legitimacy of the process (Kyle and Reiter, 2011). No reports of dismissal for corruption were encountered in defence-related sites.

Interviewees spoke of &quoute;chemistry&quoute;, an internal practice reported by 7 interviewed military officers to exist inside the Armed Forces, in which the original quantities and qualities would be transformed while preserving the acquisition value. Example provided was: you buy 1000 pencils described in the bid terms, but in practice the firm is asked to deliver 1 computer instead of the pencils, both being worth the same money). Such procedures were said to be encouraged inside the barracks, as an easy way out to avoid bureaucracy, and would be not internally audited or punished. Existing legal processes revealing the existence of such kind of misconduct reinforce the provided allegations. Such procedure is a clear breach in the military estatute (Law 6880/80) but is alleged to be accepted by military staff of every hierarchy as a valid way to order materials.

There is no evidence that any specific code of conduct for military staff exists and also no evidence that training is being performed or that principles are being enforced in the public defence sector.

As explained in question 48, there is no clear evidence that there is a policy for publication or that there have been effective and systematic prosecutions of defence service personnel for corrupt activities recently. Legal prosecutions of military or civilian personnel working in the public defence sector (when prosecutions happen) are not systematically publicized or made easily available to citizens or the media. Information about the perpetrator, the fraud committed, other people involved, motives, justifications and jail time are also not made available on defence-related websites.

There is no evidence that there are effective measures in place to discourage facilitation payments, which are only indirectly held illegal according to the Federal Code of Conduct (art. 9 and 15). As the evidence for the previous questions indicates, facilitation payments are likely to be widespread.

There is no evidence for the existence of any special doctrine addressing corruption in military operations (either during peace-time or conflict) within the defence-related websites or general media. The very general military statute which governs military behaviour does not describe corrupt acts and punishments in detail and is also not applicable to civilians working in the forces. There is also no evidence that would show that Armed Forces are somehow aware of corruption as a strategic issue for operations or as an aspect of governance.

Response to Peer Reviewer: no sources found to support score increase

There is no evidence that such training may exist or that commanders apply such knowledge in the field. However, the media and interviewees allege that corrupt activities have been common inside the forces since the Dictatorship period, suggesting that commanders may turn a blind eye or even engage in corrupt activities themselves.

There is no evidence that trained professionals are regularly deployed to monitor corruption risk in the field. Although there appears to be personnel capacity (the audit department) to monitor corruption risk in the field, there is no evidence of their deployment nor evidence of the results of this kind of work (if it is undertaken).

It may be that there is internal guidance, but there is no public evidence of the existence of guidelines or training on this matter.

Private Security Companies (PSCs) are only partially used in Brazil. The private personnel is, however, not used as security officers in the field, but only as material suppliers. Brazil has in fact some large companies that provide physical equipment for the army. They are Embraer, Taurus and others. There is, however, no evidence of regulations forbidding the use of Private Military Contractors (either as security officers or as suppliers) and no sign that PSCs are being subject to legislative scrutiny. There is no additional evidence of scrutiny available on the government's websites.

Although there are special rules within Procurement Law 8666/93 explicitly applying to defence procurement, these contain many exceptions whereby the ordinary rules and procedures can be legally bypassed in practice (Klaus, 2013). For example, military material (but not administrative material or material for personal use) can be exempted from the competitive process in case standardization is needed and is stated in a special kind of official document. However, not every by-pass is authorized if noncompliant with the procurement law (for example, if standardization document is missing). Still, military corruption concerning exceptions are allegedly common specially when taking the lack of independence of internal military auditors into account (Klaus, 2015a and 2015b).

There is no evidence that the defence procurement cycle process (from assessment of needs, through contract implementation and sign-off), all the way to asset disposal, are disclosed to the public by the Ministry of defence. The level of detail is very poor and provides no transparency of the whole procurement process. For example, the item &quoute;bid&quoute; comprises 3 items: invitation to the bid, daily invitation to the bid, and results of the bid. By choosing the sub-item results, and trying to find defence Ministry, the system obliges the citizen to be specific in the search, having to insert the specific sub-institutional code, the acquiring state and the date of the contract. Without that, no data will come. Many Brazilian states (which are bigger than some countries) do not present any acquisition results report (Acre, Alagoas, Amazonas, Amapá, Maranhão, Paraná, among many others). There is no general data bank issued by the system.

Additionally, the government website link where acquisition system is to be listed appears not to work completely and only the number of defence contracts is made available. The total amount of contracts is finally said to be R$ 0,00 by the system.

Oversight mechanisms of public procurement such as the Comptroller General (CGU) exist, but there is no evidence that they are active within public defence sector, for no transparency reports or audit data can be proven. For example, by searching in their auditing report data by using Ministry of defence key words (http://www.cgu.gov.br/ControleInterno/), under “Pesquisa de Relatórios”, no report on any defence audit was found until this assessment was finished. There were reports on other areas (such as Environment) but nothing on defence, or on international relations. As a result, although there may be reports on defence issues and procurement, these are not publicly disclosed which puts in doubt the quality of oversight mechanisms.

There is no evidence of a policy to disclose potential defence purchases. Actual purchases should be made public according to the transparency principle given by the Brazilian Constitution and by the Federal Procurement Law. There is no evidence that appropriate disclosure is being verified through government audits. The level of detail of the disclosed data is not enough to allow this.

For potential defence purchases, there is no evidence of publication. For actual defence purchases, it is done but it is incomplete (for example, etails on the purchase of the expensive submarines are not publicly available and irregularities could only be verified by the police when this was researching another big fraud case.

As explained in question 58, for example, by searching in the governmental portal Comprasnet and Portal da Transparência for Ministry of defence data, only incomplete and scattered information was found and no search allowed me to find the complete details of the procurement cycle nor allowed the visualization of important details such as the procurement type or the winner´s data (such as ownership, validity, legal terms). On the site of the Ministry of defence, only little and superficial information could be found and reveal that much is still missing.

Companies are not required to show that they have a formal and publicly declared compliance programme. Companies with prosecutions for corrupt activities may be partially or totally barred from bidding, but this is not carried out in every case. It can happens that firms caught for corrupt tenders still contract with the government. No-corruption clauses are also not obligatory in tendering documents. There is no evidence that discrimination is made between companies on the grounds of integrity.

Federal Law 8.666, which governs procurement processes for all areas of the Brazilian federal government (including the Ministry of defence and armed forces), requires three basic topics: protection of the public interest and government resources, respect of the principles of isonomy and respect of the principles of administrative probity as per Federal Constitution's articles 37. In order to win bids emitted by the federal government, companies have to prove judicial, technical, and economic habilitation, as well as compliance with fiscal norms, as per article 27 of Federal Law 8.666. However, no anti-corruption program or code of conduct is required.

Procurement requirements are currently all derived from Federal Law 8.666 and the Federal Constitution. There is no evidence that a defence and security strategy has influence on procurement requirements.

There is a formal procedure in place for defining purchase requirements, but there is no evidence that Ministry of Defence and Armed Forces systematically base their purchases on clearly identified requirements, nor that work is undertaken to define and quantify the need for all significant purchases before the purchase procedure commences.

In the procurement processes made publicly available, there are clearly identified and quantified requirements published in the letter (called &quoute;edital&quoute;) that calls for bidding and which is required by Law 8.666/93. There is, however, no guarantee that the rule is followed effectively or outside the paper, considering:

(1) the lack of transparency most military contracts

(2) media reports reiterating the failures of established original clauses

(3) internal practices reported by 7 interviewed military officers exist inside the Armed Forces called chemistry (“química”), in which the original quantities and qualities would be transformed while preserving the acquisition value. The example provided was the following: you buy 1000 pencils described in the bid terms, but in practice the firm is asked to deliver 1 computer instead of pencils, both being worth the same money). Such procedures were said to be encouraged inside the barracks, as an easy way out to avoid bureaucracy, and would be not internally audited or punished. Existing legal processes revealing the existence of such kind of misconduct reinforce the provided allegations.

Defence procurement is in principle conducted as open competition, but in practice a majority of defence contract value is purchased single-source.

Higher value acquisitions are usually single-source, by accessing Portal da Transparência: when data is given, the type of procurement is not shown, so that percentage of single source procurement cannot reliably be calculated.

However, (1) considering the single-sourcing exceptions granted to some military materials established in Law 8666/93 (2) considering the alleged military excuses for urgency and secrecy (ex.:
O globo), (3) considering available data from the media on the kind of single sourcing that is usually made (Contasabertas) and (4) taking into account the ineffective internal audit system that the military forces still use (Canha, 2004), there is a significant probability that the defence sector uses single sourcing rather than other options when they are available.

Also, it´s important to note the interviewees (academic and military) observations that hospital materials and services, as well as larger equipment and arms are more prone to be bought with a single sourcing system than with competitive procedures. These exemptions are made easier given the lack of transparency and resulting lack of citizen oversight.

Tender boards are required by Federal Law 8.666 (article 38 among others) for procurement procedures and should be renewed annually (article 51, § 4o). In spite of that, no public evidence from the defence ministry, armed forces or auditing institutions could be found to indicate that this requirement is regularly and effectively followed. In practice, inside military barracks, these commissions are normally the bid organizers themselves, as explained by the military interviewees. Their decisions will not be subject to any regular independent auditing, but only to the eventual audit of military staff (subordinated to the same General as the bid organizers) who will probably not serve as a regulator but as a facilitator instead.

Some bidding terms (the ones related to hospital single sourcing, for example) will need the authorization from the CGU before being launched. Also, as explained by some of the military interviewees who dealt with the CGU's involvement in military procurement, their staff has normally no expertise in daily military matters and is not familiar with military fraud (which can be complex even for insiders) in order to be able to identify the corruption gaps left open by such documents. After analyzing a 2011-2012 sample of some hospital bid documents (bid public notices) which were previously controlled by the CGU, I found some of the pointed gaps (for example, situations concerning privileged information, conflicts of interest and military owners were not approached).

No code of conduct on the matter seems to exist for tender boards related to Brazilian defence procurement. Media evidence shows that the practical conduct of tender board and decision makers on military procurement is often not enforced. The manner in which Congress, defence and Military departments are alleged to spend public money (see question 14 references for example) indicate the lack of effectiveness of these boards, if they do exist. For they would have to justify, for example, the need and quantity for the Egyptian carpets, caviar meals or Russian tea services (cited in item 14) in a convincing manner or, accordingly, how many, at what cost and why military planes and related assets seem to be bought and used for private purposes by public servants, military officials and politicians according to media reports.

Federal Law 8.666, especially article 15, is explicit in encouraging competition between bidders, thus discouraging collusion. The media provided some reports alleging the existence of cartels within the public defence sector, suggesting that enforcement of measures to punish colluding companies is probably being only weakly enforced. Such evidence of weak enforcement match with the the alleged lack of independence of military auditors reported by all interviewed military officers. Additional interviews with two ex-officers confirmed this.

There is no evidence to suggest that procurement staff are specifically trained in this area. In the military in Brazil, evidence indicates that it is not professional expertise, but rank and political influence which determine the job an officer does. As the bidding department is known for its high workload, it´s not a preferred workplace for the few skilled people that would have the expertise to make a difference in this area. Moreover, some of these skilled people (technical lieutenants who have a slower pace of career than the officials formed in military academies) are not chosen to act like procurement section leaders because of their lower ranks.

There is no evidence that the military academies (which teach those capable of achieving the General rank) teach practical administrative matters other than managerial excellence (quality and indexes) in their 4 year term. They focus mostly on military-technical issues which leave higher officials very unprepared for business administration problems such as procurement. There is no public evidence that reports contrary to this exist and that obligations are being correctly fulfilled by procurement staff (including the ethical ones).

There are two mechanisms in place which seem to work well: administrative acts (&quoute;recursos administrativos&quoute;, referred in Law 8666/93) and judicial injunctions (&quoute;mandados de segurança&quoute;, referred in Federal Law 12.016/09). Usage of the second option is limited to some cases (see links for more details). There is no evidence found in the media that these instruments do not work or would bring future prejudice to complainants, but it´s very likely to occur given the lack of controls and external oversight on public activity. The excessive amount of time the Brazilian justice takes to assess a judicial complaint is an important obstacle which prevent firms from complaining more.

There is no evidence of companies that have attempted to complain being unfairly disadvantaged or debarred from future procurements. Judicial processes are also very slow.

According to legislation, the main sanctions imposed on corrupt suppliers include listing on a government black list of corrupt companies. However, to what extent and the frequency of this use is questionable, given the enormous autonomy granted to the defence system and its military auditors. Interviewees reported that many firms which are already suspended get to be in fact contracted by means of circumventing the laws around single-sourcing.

Although there is evidence that they are applied in practice, the general lack of data on the contracts and documents involved on public procurement does not help to prove that sanctions are being applied consistently, extensively and sufficiently.

Details on offset contracts could not be found in governmental portals (see question 71), there is also no public evidence that the government addresses corruption risk in offset contractors. There are no signs of due diligence requirements in offset agreements carried out by the Ministry of defence nor were requirements in this sense found beyond what procurement legislation already says. Law 8.666 requires participating companies to prove they are able to carry out contracts in due time and with the sufficient expertise, but there are no requirements regarding corruption.

There is no evidence of the details of offsets programmes on the Transparency portals or in the Comprasnet site. Information on the issue seems not to come actively, easily or systematically from the governmental side. By searching in the governmental portal Comprasnet and Portal da Transparência, no data was found and no search revealed offset contract details.

Some references which acknowledge the existence of offset contracts are usually found in external links (See above) such as but details on contracts, programs and performance could not be found in governmental portals or even through Google, with the exception of a document from the Senate dated 2009. As affirmative data on the absence of such contracts was also not available, I find it reasonable to assume the existence of such contracts and on the lack of transparency surrounding them.


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According to defence Administrative Act 764 (Portaria Administrativa 764/MD) and the Presidential Administrative Act 7.546 (Decreto 7546/2011), which regulates offset agreements for the Brazilian Ministry of defence, these agreements are subject to the same rules regarding competition as other contracts, governed by Federal Law 8.666.

However, a lack of transparency is revealed when the legislation in the Ministry of defence´s internet site is accessed: many links are unavailable and the law's content or explanations can only be found in indirect sources from the internet. There is, however, no indication in media reports that competition has not taken place in offset contracts to date, but there is also no evidence to the contrary. The score has been selected accordingly.

Agents and intermediaries in the procurement cycle are forbidden by Federal Law 8.666. There is no evidence in recent media reports that agents have been used. However, there are no governmental (including legal) evidence that confirms the existence of controls to ensure that the law is not circumvented. The level of associated scrutiny is unclear. The score has been awarded accordingly.

Although articles 3 and 40 (among others) from Federal Law 8666 ensure that information on public procurement should be made publicly available to all competitors prior to the signing of procurement contracts, and that the conditions of acquisition should be made public to citizens, there is no evidence that the defence Sector is doing so: the acquisition site is confusing.

There is no hint where the public information can be found, many links require an ID number and password. Acquisition Information is not delivered to public in a complete, intelligible and organized way, making it difficult even for experts to navigate and search for data. By searching in the governmental portal Comprasnet for procurement results for defence Ministry and Armed Forces, citizens will have to know something specific on a process, place or department in order to generate a partial report. Also the section &quoute;cidadão/dados abertos' will not lead to procurement data. Accordingly, in the aforementioned governmental transparency sites, there is no evidence that details of the financing package surrounding major arms deals are being publicly made available prior to the signing of contracts.

There is no evidence in legislation and the media that the government has formally required the adoption of such programmes either by contractors themselves, or by the sub-contrators or subsidiaries of these main contractors. Although there is a formal black list of corrupt suppliers displayed in the Transparency Portal, it is unclear if these relate to subsidiaries or sub-contractors.

The most frequent reason for inclusion on this list seems to be that main contractor firms did not appear to sign the contract or did not deliver what they should have had. It is worth noting that subcontracting is only partially permitted (so that there can be no subcontracting for the totality of service) and it can only be done if contractually agreed according to TCU considerations available on their internet site.

The media reported that in 2014 Brazil bought 4 submarines from France, 2044 armored cars from Italy and 36 jets from Sweden. Although local media do not comment on political influences coming from selling nations in Brazilian armament acquisition, academic research shows that it cannot be ruled out (Dias Junior e Porto, 2010).