The Brazilian Minister of Social Security, Carlos Lupi, submitted his resignation amid a corruption scandal involving the diversion of $1.1 billion from pension funds, affecting about four million retirees. Although Lupi was not directly implicated in the fraud, the magnitude of the scandal made his continued presence in office unsustainable.
The Brazilian government has been in discussions to address the return of the money to retirees, although a definitive decision has not yet been made regarding this. Lupi's resignation, a member of the Democratic Labor Party (PDT) allied with Lula's Workers' Party (PT), is seen as a severe blow to the government, marking the second corruption case the Executive has faced within a few weeks.
The scandal also affects the political image of Lula da Silva, who is seeking re-election in 2026. Lupi expressed in a public letter that his name has not been mentioned in ongoing investigations, although the scheme has triggered the detection of unauthorized deductions from pension and retirement receipts, carried out by unions and associations in possible collusion with officials from the National Institute of Social Security (INSS).
President Luiz Inácio Lula da Silva accepted Lupi's resignation, according to an official statement. The opposition in Congress, predominantly conservative, is demanding a thorough investigation into the irregularities in the social security system, stating that between 2019 and 2024, up to 6.3 billion reais have been illegally deducted from retirees' accounts.
The Federal Police have initiated an investigation following 130,000 complaints from affected retirees, although it is suspected that the number of victims could be even higher than the estimated four million.
