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SAO PAULO – President Dilma Rousseff's ability to govern Brazil has been dealt a serious blow by a federal audit court ruling that her government violated accounting practices and financial laws last year, a decision that could fuel efforts to impeach her, analysts said Thursday.
The court on Wednesday approved a report that said Rousseff's government illegally used money from state banks to fill budget holes. It sent its recommendation to Congress, which is to vote on whether to reject or accept the government accounts.
"It was a historical decision," said Carlos Pereira, a professor at the Fundacao Getulio Vargas, a top Brazilian university. He said the ruling set the stage for a "perfect storm for impeachment."
The president's office said in a statement that there were no legal grounds for rejecting the government accounts, but analysts said that denial was unlikely to ease looming problems for Rousseff, whose popularity has plunged amid economic struggles and corruption scandals.
"I think she is in trouble," Pereira said. "If I were able to bet, I would bet that the president would probably face a hard time staying in power."
According to the report, Rousseff broke Brazil's fiscal responsibility law by delaying repayments to state-owned banks that advanced funds to pay for social programs such as unemployment insurance and low cost housing projects.
The court's finding is not judicially binding, but may help Congress decide whether Rousseff violated fiscal rules.
Thiago de Aragao, an analyst at the Brasilia-based Arko Advice political consulting firm, said the court's decision and other recent setbacks for Rousseff's government have made it easier for pro-impeachment forces to succeed.
He pointed out how Congress on Wednesday failed to vote on whether to approve or reject Rousseff's vetoes of two spending bills. Her government was unable to muster a quorum despite a Cabinet reshuffle last week aimed at bolstering her support,
One day earlier, Brazil's top electoral authority ruled there are grounds to investigate allegations of irregularities in Rousseff's re-election campaign last year. Officials at the Supreme Electoral Court said the court will investigate Rousseff's election campaign to see if it was financed by illegal money, including donations originating from the huge kickback scandal that has engulfed state-run oil company Petrobras.
If the court found illegal funds in her campaign or other irregularities, it could invalidate Rousseff's election as well as that of Vice President Michel Temer, leading to new elections.
"Together, all these elements have contaminated the political environment surrounding the president and severely weaken efforts to stop the movement to impeach her," Aragao said.
Associated Press writer Jenny Barchfield in Rio de Janeiro contributed to this report.