Executive Order (Medida Provisória) 70, setting out rules for foreign investment in news organizations and broadcasters in accordance with the recent constitutional amendment, also gives radio and TV broadcasters another chance to comply with Decree 236/67. Communications Minister Juarez Quadros says the aim is to ?bring the hidden contracts out of the closet?. He may believe companies won?t take any action until Congress ratifies or amends MP 70, but seasoned observers see an opportunity to bypass Congress altogether.
120 days to act
Every MP comes into force as soon as it?s issued by the Executive and has to be ratified by Congress or subsumed into ordinary legislation in 60 days. If Congress fails to do either, the MP is automatically extended for another 60 days. If nothing happens once again in that time span, Congress has another 60 days to issue a ?legislative decree? saying whether corporate actions performed in the original 120-day period are legal. If Congress again says nothing, such actions are deemed to have been legal. In short, if Congress simply does nothing at all about MP 70, media companies have 120 days starting on October 1 (and excluding the vacation from December 15 to February 15) to close any equity deals they consider in order under MP 70. The problem is that Congress will be virtually adrift in this period. The current legislature ends in December and the next session begins in February, with almost 50% renewal. Party leaders are busy campaigning in the second round of the presidential election and in several gubernatorial races. A new Federal Administration will be sworn in early next year.
The Workers Party (PT) has submitted ten amendments to MP 70, which it sees as allowing too much leeway for equity funds and other heavyweight institutional investors to influence the media. Its leaders are worried by the prospect that companies could utilize this period during which Congress is effectively rudderless to take advantage of what the PT sees as loopholes created by MP 70.