Nationalize the Banks!: Brazilian Communist Party

The Master Bank Scandal: FOR THE NATIONALIZATION OF BANKS UNDER POPULAR CONTROL!

Political Statement from the Brazilian Communist Party (PCB)

This Tuesday, November 18, the Brazilian people learned of a police operation against a criminal organization that embezzled billions of reais from the Bank of Brasília and compromised additional billions in resources from pension funds of municipalities and the State of Rio de Janeiro. Since the headquarters of this criminal organization is located on Avenida Faria Lima, one of the most luxurious addresses in the country, the Federal Police operation arrested several white-collar criminals without firing a single shot.

At the center of the financial criminal scheme is Banco Master and its owner and president, Daniel Vorcaro. In 2018, Vorcaro acquired what was then called Banco Máxima (originating from the Máxima brokerage firm founded in the 1970s and transformed into a bank in the 1990s), which was already experiencing financial difficulties at that time.

Vorcaro catapulted Master's growth, which multiplied its net equity 25 times in just five years. This exponential growth was based on two strategies: offering above-market returns and political contacts, especially with the "Centrão" and the Bolsonaro far-right. These contacts facilitated Master's participation in payroll-deductible loan offerings and were decisive for the truly incestuous relationship of authentic "financial Siamese twins" between Master and the Regional Bank of Brasília, BRB.

Since 2022, the financial market had known that Master was on shaky ground. In 2024, the allegation exploded that managers from the financial area of the Caixa Econômica Federal had lost their positions after blocking an "atypical and risky" operation that intended to inject R$500 million from Caixa Participações into Banco Master.

In this current investigation, the Central Bank and the Federal Police detected that BRB transferred R$16 billion to Master, as payment for a fraudulent credit portfolio that was allegedly originally issued by a front company – Tirreno, owned by a former Master employee – with Master not paying a single cent for this portfolio. As Master was negotiating its acquisition by BRB in March of this year, the suspicion is that this bizarre transfer was a way of surreptitiously selling part of the bank.

On the eve of the liquidation, Vorcaro announced he was negotiating with the financial holding company Fictor and a consortium of investors from the United Arab Emirates for the acquisition of Master with an injection of R$3 billion. Vorcaro was arrested at the airport while preparing to board a private jet to the island of Malta; his defense claims his final destination was Dubai, to meet with the Arab investors.

The saga of shady deals has another sordid chapter: the Cláudio Castro government injected R$ 960 million from RioPrevidência – the pension fund for retired state employees of Rio de Janeiro – into three Banco Master investment funds, even after several official letters from the State Audit Office advising against the operations. The state-owned company CEDAE also invested over R$250 million in a single CDB (Bank Deposit Certificate); before Master's liquidation, CEDAE attempted a partial withdrawal of this investment, without success. It is certainly no coincidence that Vorcaro's network of political connections in the Brazilian right had extended its arms to the money managed by the Rio de Janeiro state government.

In response to the incestuous relationship between the white-collar criminal from Banco Master and the political right wing on the Board of Directors of the Regional Bank of Brasília, financial analysts report that the Central Bank is considering the federalization of BRB, a kind of "white intervention." The PCB considers such a measure positive, but extremely insufficient.

For the Brazilian Communist Party, shady dealings in the private financial system are neither surprising nor new. Since the scandal broke about the connections between the PCC organized crime and the bankers from São Paulo's Faria Lima, it has become increasingly evident that every private bank is, in essence, a white-collar criminal organization.

Therefore, the PCB understands that we must reclaim a historical banner that was long defended by the Brazilian left but was abandoned in this century by a large part of the progressive sectors: the nationalization of the financial system under popular control! The criminal case of the BRB demonstrates that nationalizing banks is not enough: it is necessary to establish social and popular control over the financial system.

PUNISHMENT FOR FINANCIAL CRIMINALS!

NATIONALIZATION OF THE FINANCIAL SYSTEM UNDER POPULAR CONTROL!

Brazilian Communist Party – Central Committee