Brazil’s Top Prosecutor Paulo Gonet Faces MPF Decision Over Banco Master Ties

Brazil’s Prosecutor-General, Paulo Gonet, is the subject of an extraordinary session of the Federal Public Ministry (MPF) Council today as the body determines whether to formally investigate his conduct and potentially force his removal from the ongoing Banco Master financial scandal probe. The decision revolves around evidence suggesting an improper relationship between Gonet and the bank's former controlling shareholder, Daniel Vorcaro.

The extraordinary session, which began this morning in Brasília, will assess the sufficiency of evidence to open a preliminary inquiry against Gonet. Because the procedure involves his own conduct, Gonet is recused, and the session is being chaired by Sub-Prosecutor General Nicolao Dino. The council can decide to either dismiss the petition for lack of evidence or vote to designate an independent Sub-Prosecutor-General to conduct a formal investigation.

The core of the matter is a petition filed by parliamentarians from the Novo party, which argues that Gonet's alleged ties to Vorcaro compromise the integrity of the prosecution service. Gonet is the head of the federal prosecution service (PGR), a critical oversight figure whose office handles major corruption and financial investigations, including the massive Banco Master case. The bank was liquidated last year following Vorcaro’s arrest and an investigation into what has been described as a multibillion-dollar financial fraud.

Evidence released in a Federal Police report includes messages extracted from Vorcaro's seized phone and a photograph of Gonet and Vorcaro together. The photo, taken at a 2024 legal event in London sponsored by Banco Master, shows Gonet holding a cigar and sitting with the now-imprisoned banker. Further messages allegedly show Vorcaro referencing Gonet and Federal Police Director-General Andrei Rodrigues, saying at one point, "We can't reverse this with Paulo and Andrei," in a context suggesting an attempt to influence the investigation.

Gonet has strongly denied any impropriety or close relationship, stating in his defense that he only met Vorcaro once in a brief, public, and institutional setting alongside other authorities in London. The Prosecutor-General has maintained that he is fully capable of conducting the investigation impartially. The allegations, however, have created an institutional governance crisis, as this is the first time the MPF Council has examined a case of this nature involving the sitting Prosecutor-General.

The council's decision today will determine not only Gonet’s role in the Banco Master probe but also the immediate perception of institutional independence within Brazil's top legal oversight body. Should the Council vote to open a formal investigation, the findings would ultimately be submitted to the Supreme Federal Court (STF), which holds the jurisdiction to open criminal inquiries against the Prosecutor-General.

What it touches

The ongoing institutional crisis at the apex of Brazil’s justice system, triggered by the massive Banco Master financial fraud scandal, exposes the financial sector to increased judicial risk uncertainty. While the stock market has not seen an immediate reaction, this high-stakes internal governance proceeding within the MPF is a direct indicator of the political and judicial turbulence surrounding one of the country's most significant recent banking failures.