Gilmar Mendes Blames Regulatory Deficit for Banco Master Scandal
LISBON – Justice Gilmar Mendes of the Brazilian Supreme Court has dismissed allegations that the Banco Master corruption scandal signals a crisis of judicial independence, instead attributing the controversy to a “regulatory deficit” in Brazil’s financial oversight.
Speaking to the Lusa news agency ahead of the 14th Lisbon Forum, Mendes addressed the growing firestorm involving Banco Master, which has recently implicated top-tier political figures and his own colleagues on the Supreme Federal Court (STF). While admitting the case has had significant “repercussions,” Mendes argued that the focus on the judiciary is misplaced.
A Shield for the Judiciary
The scandal centers on Daniel Vorcaro, president of Banco Master, whose ties to high-ranking officials have come under intense scrutiny. Investigations previously forced Justice José Antonio Dias Toffoli to recuse himself from the case after it was revealed that Vorcaro purchased a hotel complex from Toffoli’s family. Additionally, Toffoli reportedly traveled on Vorcaro’s private jet to attend a major soccer final in Lima.
Further complicating the matter, Federal Police are investigating a million-dollar contract between Banco Master and the wife of Justice Alexandre de Moraes. Messages also surfaced showing Moraes in contact with Vorcaro prior to a series of arrests in November. Moraes has denied any wrongdoing.
Despite these links, Mendes insisted the issue is systemic rather than ethical. “When they tried to turn the Master case into a Supreme Federal Court case, I said: Master does not reside in the Three Powers Plaza,” Mendes stated, referring to the seat of Brazil’s government. “Turning this into a Judiciary problem seems like a mistake to me.”
Regulatory Gaps and ‘Hidden Assets’
Mendes pointed to Brazil’s massive financial fund industry—one of the largest in the world with over 30,000 active funds—as the true source of the problem. He argued these funds are often used to “segregate” or “hide” assets, while the agencies responsible for monitoring them are toothless.
“There needs to be oversight,” Mendes said, noting that until recently, three of the five director positions at the Securities and Exchange Commission (CVM) were vacant. “It is an agency with a regulatory deficit and a budget deficit.”
Political Fallout
The scandal has also reached the highest levels of political power. Recent reports by The Intercept Brasil suggest Vorcaro helped finance a biopic of former President Jair Bolsonaro. Audio recordings reportedly show Senator Flávio Bolsonaro, a candidate in the upcoming October presidential election, demanding payments from Vorcaro totaling 64 million reais (approximately €10.9 million).
The “Second Brazilian Capital”
Mendes’ comments come as he prepares to host the Lisbon Forum at the University of Lisbon School of Law from June 1-3. The event, which has faced criticism in the past for the close proximity it fosters between judges, lobbyists, and politicians, will feature over 470 speakers and 70 panels.
Attendees will include ministers from the Lula da Silva administration, international figures like New York Times columnist Thomas Friedman, and former heads of state from Colombia and Cape Verde. Addressing concerns of potential conflicts of interest at such gatherings, Mendes downplayed the criticism but acknowledged that “care” is necessary to avoid fueling public suspicion.
Image: Pexels – FILIPE COELHO
