Waiting for payment

On the 12th floor of a Sao Paulo high-rise, state judges oversee 42,000 cases in which courts have ordered the state and city governments to pay citizens. The governments are, illegally, years behind in paying. A constitutional amendment currently before the Brazilian congress would legalize lengthy delays in payments. (Seth Kugel/GlobalPost)

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SAO PAULO — Sixteen-year-old Andre Oliveira da Paz worked in a mechanic’s shop and was the main breadwinner in his family when he and three friends were shot and killed by Sao Paulo police at a traffic stop. That was 1992. His mother, Vera Alice de Oliveira, sued the state for damages and won. But justice in Brazil is painfully slow: Her case wasn’t heard until 1997, and the money she eventually won is still, 17 years after Andre’s death, nowhere to be seen. With interest and adjustments for inflation, Oliveira is owed about $50,000.

And she is not alone. In fact, she is very, very far from alone. Across Brazil, state and local governments owe their citizens about $50 billion in what are called “precatorios alimentares,” court-issued IOUs that the state or municipality is supposed to make good on by the end of the following calendar year. Some governments are up to date, but Sao Paulo state is among the worst debtors, owing an estimated $8 billion. It is currently paying off precatorios that came due in 1998.

As a comparison, New York City typically pays within 60 days of a court ruling, according to a spokesperson for the city’s law department.

There are several kinds of precatorios: Precatorios alimentares are issued in specific kinds of cases, including wrongful imprisonment, injury or death suits (like the Oliveira case), or, more commonly, orders of compensation for unpaid or underpaid pensions. Evaristo Marques Pinto, a retired public prosecutor from the city of Sao Jose do Rio Preto, is typical of the latter kind of case: In 2001, his pension was erroneously lowered by $1,500 a month. He won in 2004, and is now owed about $42,000 with interest. “I worked for a boss that is now robbing me,” he said in a telephone interview.

Although cases like Oliveira's are more dramatic than pension disputes, in one poignant way, the retirees’ cases are more troubling. “We end up dying without seeing the money,” Marques said.

Ricardo Luiz Marcal Ferreira is an attorney and president of MADECA, an association of Sao Paulo lawyers that seeks a resolution of the precatorio problem. Brazil “has pretensions of being a part of the developed world,” he said. “It’s inconceivable that we would have a situation where judicial decisions are not complied with, where the injured citizen has no recourse.”

But inconceivable things happen all the time in Brazil, and when they do, ever more inconceivable things tend to follow. A proposed constitutional amendment known as PEC-12 would allow states and municipalities to cap the amount they pay out each year for precatorios. For states, it’s a maximum of 2 percent of their budget. The Order of Brazilian Attorneys has estimated that at that rate some states would take decades to pay off their debts and that the state of Espirito Santo, one of the worst debtors, would take over a century.

http://www.globalpost.com/dispatch/brazil/090622/precatorios