Brazil's Social Security Minister, Carlos Lupi, has resigned from his position just nine days after authorities exposed a major corruption scheme that has reportedly defrauded pensioners out of $1.1 billion (£829 million). The Federal police allege that the National Social Security Institute (INSS) has been making unauthorized deductions from payments to millions of pensioners over the past decade. The money from these deductions was allegedly funneled to various associations and unions that, in turn, shared the profits with corrupt government officials.
Despite his resignation, Lupi maintains that he has not been implicated in any wrongdoing and criticized the fraudulent activities, stating, "I am making this decision with the certainty that my name has not been mentioned at any time in the ongoing investigations." He emphasized his hope that the ongoing investigations will appropriately identify and punish those responsible for misusing their positions.
The investigation, dubbed Operation No Discount (Sem Desconto in Portuguese), has mobilized 700 federal agents who have issued 211 search warrants throughout Brazil. Authorities have seized assets valued at more than $177 million, including luxury cars, expensive jewelry, and over $200,000 in cash. The scheme reportedly involved enrolling pensioners in retirees' associations without their consent, leading to regular deductions from their benefits for the erroneous memberships.
Targeting some of the most economically disadvantaged areas in Brazil, this fraud took advantage of pensioners who were likely unaware of the deceit or hesitant to lodge complaints. This scandal has already resulted in the resignation of the head of the INSS and the removal of six public servants linked to the investigation.
While investigators are probing how much money may have been misappropriated between 2019 and 2024—focusing on over 6 billion reais—authorities remain unclear on the precise amount lost through illegal activities. INSS's director of budgets and finance, Débora Floriano, stated that a task force will be established to recover the stolen funds, but further evaluations are still needed to assess the full extent of the fraud.
Carlos Lupi is the second minister in President Luiz Inacio Lula da Silva's cabinet to resign amidst corruption allegations in less than a month. Earlier, Communications Minister Juscelino Filho stepped down after being charged with bribery in 2022. Lula himself has a complicated history with corruption, having spent 1.5 years in prison on charges that were later overturned, allowing him to successfully run for a third presidential term.
