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Amid corruption concerns, prosecutors prod Caixa to replace all VP positions

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Amid corruption concerns, prosecutors prod Caixa to replace all VP positions

Brazil's federal prosecutors office is pushing for the immediate replacement of all of Caixa Econômica Federal's vice presidents after finding "irregularities" at the state-controlled bank.

In a letter addressed to Brazil's presidential chief of staff and Caixa's chairman, the prosecutors said they suspect that some vice presidents of the banks were involved in illegal activity. In September, Caixa launched its own investigation into possible irregularities in its credit operations committed by current and former executives.

"The existence of several prominent figures within Caixa's administration in cases under investigation or targeted for investigation, as well as the perennial political influence on functions that should be essentially technical ... compromise the exemption of the agents, the accessibility of information necessary for the internal and external verification by the control bodies and the reliability in the documents signed in the contracting stage," prosecutors wrote.

The recommendation would have Caixa hire new executives for the vice president positions using a head-hunter service to avoid bias in the selection process and following new hiring standards that factor in, among other items, "reputational risk to the institution because of the applicant's interpersonal relationships."

Current vice presidents may be included in the selection process and could be effectively reappointed to their positions, provided they undergo the same scrutiny as new applicants, prosecutors said.

The prosecutors office also recommended that Caixa change its bylaws to improve its hiring process for high-level executives. It also suggested that top-level executives conduct all meetings involving investment decisions or hiring on bank premises.