On Wednesday, May 7, 2025, the Brazilian newspaper O Estado de S. Paulo published a scathing editorial criticizing the government of Luiz Inácio Lula da Silva for its response to "Operation Sem Desconto," which revealed a scandal involving undue discounts on the benefits of retirees from the National Institute of Social Security (INSS). The editorial described the government's reaction as "stunned and unable to react to the height of the scandal," particularly for failing to dismiss Carlos Lupi, the then Minister of Social Security, whose continued presence in office was deemed "unsustainable from the first day of the crisis."
The criticism did not stop there; it extended to Wolney Queiroz, Lupi's right-hand man, who was appointed to lead the ministry despite his involvement in measures that facilitated the fraudulent scheme. As a congressman, Queiroz co-authored an amendment that "postponed the need to annually revalidate debts in payroll," effectively opening the door to the very frauds that have now come to light.
In the wake of the scandal, it was revealed that Lupi had been alerted back in June 2023 about the rising number of complaints but "maneuvered so that the matter would not be debated until April of the following year." The editorial pointed out that both Lupi and Queiroz were equally culpable, emphasizing that placing blame solely on one or the other would be naive. The approval of measures by Congress highlighted a broader agreement among political parties to facilitate revenue generation for entities at the expense of retirees.
The editorial concluded that the only acceptable response from the government would have been the immediate dismissal of the entire leadership of Social Security on the day the operation was launched, April 23, 2025. It stated, "The government still owes many answers to retirees and pensioners," noting that simply suspending discounts or promising refunds was insufficient. "It is necessary to explain when and if the payment will come in one or more installments, to prevent scammers from trying to extract more resources from a public naturally exposed to fraud through false advertisements on social media," the editorial warned.
Moreover, Lula's actions appeared to be politically motivated, particularly in relation to his allies in labor unions and maintaining support from the Democratic Labor Party (PDT). The editorial suggested that the attention given to retirees was only in direct proportion to their electoral needs, with no additional effort made on the government’s part.
On Tuesday, May 6, 2025, the situation escalated further when the PDT officially announced its departure from Lula's government in retaliation for Lupi's dismissal. This political fallout coincided with the announcement that the Comptroller General of the Union (CGU) would take over the investigation into the frauds within the INSS, indicating a shift in how the government was handling the scandal.
In another significant development, Congressman Danilo Forte (União-CE) introduced a bill aimed at prohibiting automatic discounts from associations and unions on the benefits of retirees and pensioners. This legislative move directly targets the core of the INSS scandal, which has already led to the resignation of Carlos Lupi, who was succeeded by his executive secretary, Wolney Queiroz. Forte stated, "Where there is public money, from taxpayers, there must be transparency. The INSS is not a revenue-generating agency and was being run as such, and worse: in the form of an indirect union tax."
The proposed bill seeks to eliminate the possibility of automatic deductions and mandates that entities can only charge monthly fees via bank slips, which must be paid voluntarily by the beneficiaries. "Thousands of retirees were having parts of their payments automatically deducted for entities and associations to which, in many cases, they never requested to join," Forte explained.
As the investigation into the INSS scandal unfolded, the Federal Police discovered contracts and invoices linking the former leadership of the INSS to Antônio Carlos Camilo Antunes, a figure identified as the "epicenter of active corruption" in the ongoing investigation. Antunes, known as "Careca do INSS," allegedly received R$ 53.58 million from associative entities and intermediaries, utilizing companies to provide consulting services to retiree associations.
Additionally, the Federal Police seized notebooks containing annotations that suggest alleged payments made by Antunes to Alessandro Stefanutto, the president of the INSS who was dismissed following the operation. Investigators found that Antunes had transferred R$ 9.32 million to servers and companies linked to former INSS leaders.
One significant contract was discovered during a police raid on April 24, 2025, at the office of Eric Fidelis in Recife, Pernambuco. This contract was signed with one of Antunes' companies, Prospect Consultoria. Eric is the son of André Paulo Felix Fidelis, who served as the director of Benefits and Relationship with the Citizen of the INSS until July 2024. The investigation revealed that Prospect allegedly received R$ 11 million from an association with formal agreements with the INSS, which is now under scrutiny for making undue discounts on benefits.
Furthermore, eight invoices were found at an address linked to Maria Paula Xavier da Fonseca Oliveira, who is associated with the INSS's Attorney General, Virgílio Antônio Ribeiro de Oliveira Filho, who was also removed from his position. The invoices dated from July 31, 2023, to February 9, 2024, indicated a troubling pattern of financial misconduct involving high-ranking officials within the INSS.
Between 2019 and 2024, the total amount deducted from INSS benefits by various associations reached R$ 6.3 billion, although it remains to be determined how much of this was done illegally. According to the CGU and the Federal Police, an overwhelming 97.6% of the insured individuals interviewed during the investigation reported that they had not authorized the discounts. The INSS Ombudsman received nearly 5,000 complaints and over 700 denunciations related to undue discounts between January 2024 and February 2025, further highlighting the scale of the issue.
As the investigation continues and political repercussions unfold, the Lula administration faces mounting pressure to address the concerns of retirees and ensure accountability within the INSS. The public is left wondering how deep the corruption runs and what steps will be taken to prevent such abuses in the future.
