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Preventing Systemic Corruption in Brazil

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Preventing Systemic Corruption in Brazil Preventing Systemic Corruption in Brazil Sérgio Fernando Moro Abstract: This essay describes the Brazilian anticorruption operation known as Operação Lava Jato (“Operation Car Wash”), its findings, and its results based on cases tried up to March 2018. Told from the perspective of the federal judge of the Thirteenth Federal Criminal Court of Curitiba, in whose court most of the Lava Jato cases have been prosecuted, this massive criminal case offers lessons that may be useful to other anticorruption efforts. Preventing systemic corruption is a challenge, but it is a necessary step for the improvement of democracy. What began as an investigation of an isolated in- stance of corruption within a Brazilian oil compa- ny expanded into an immense anticorruption oper- ation known as Operação Lava Jato (“Operation Car Wash”). This investigative operation has penetrat- ed deep within Brazil’s government and corporate elite to root out systemic state-sanctioned corrup- tion. Its criminal cases also appear to be instating new legal norms for how corruption cases are han- dled in Brazil, giving citizens hope that Lava Jato’s impact will be felt far into the future. How Brazilian prosecutors and courts dealt with this immense anti- corruption effort may provide important lessons for the battle against systemic corruption both in Bra- zil and elsewhere. This essay provides a comprehen- sive account of Lava Jato and its significance for Bra- zil going forward. It is important to note from the beginning that Lava sÉrgio fernando moro is Jato is not a single criminal case but several, in which a Federal Judge of the Thirteenth federal prosecutors have decided to pursue separate Federal Criminal Court of Curi- charges against many defendants. So far, more than tiba, Brazil. He is also Professor sixty criminal cases have been brought against about of Procedure Criminal Law at the 1 Unicuritiba–Centro Universitário 289 defendants in Brazilian federal courts. About Curitiba. He presided over the trial thirty-three of those cases have already been tried, of many bribery cases in Operação resulting in convictions of bribery and money laun- Lava Jato. dering for about 157 people. The reflections I offer in © 2018 by the American Academy of Arts & Sciences doi:10.1162/DAED_ a_00508 157 Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/daed_a_00508 by guest on 01 October 2021 Preventing this essay are based on the cases that have by powerful politicians or businessmen. Systemic been tried at the time of writing. I do not an- There are likely two main reasons for this. Corruption in Brazil alyze or comment upon cases that have yet The first is the slow pace at which the to be tried or that are awaiting sentences. judicial process progresses in Brazil. Un- At the core of the Lava Jato cases are til recently, the enforcement of a criminal crimes connected to contracts with Petroleo conviction was possible only after the case Brasileiro s/a (Petrobras). Petrobras is a reached a final decision that could no longer semipublic, majority state-owned Brazil- be appealed. Enforcement of a criminal sen- ian company engaged primarily in oil and tence depended on the judgment of the last gas exploration, refining, and transporta- appeal. Only then would the case be seen as tion. It is Brazil’s largest company and one transitado em julgado, or tried with no possi- of the world’s major oil and gas companies. bility of appeal. Years might pass between It was founded in 1953 to explore Brazilian an initial judgment and the final sentence. oil and gas fields with the goal of transform- This rule emerged from a 2008 Supreme ing Brazil into a self-sufficient producer of Court decision regarding a controversial petroleum products. interpretation of the presumption of inno- As the cases already tried reveal, multi- cence in Brazil’s Constitution.3 Theoretical- ple bribes were paid in contracts between ly, enforcing this rule would not be a prob- Petrobras and its suppliers; these bribes lem, but because of a generous system of were used for the criminal enrichment of appeals and the heavy caseload of Brazilian Petrobras executives and politicians, as Superior Courts, powerful defendants used well as to finance electoral campaigns. Be- it to manipulate the judicial process, initi- fore describing what prompted the inves- ating endless appeal proceedings to prevent tigation and how it unfolded, however, it their cases from ever reaching a conclusion is important to provide some context, in- and effectively avoiding accountability.4 cluding some details concerning Brazilian Until recently, it was very common for criminal justice.2 no final decision to ever be reached in complex criminal cases involving power- White-collar crimes like bribery and ful individuals. Even cases with strong evi- money laundering represent a challenge dence of criminal behavior or cases involv- for law-enforcement agencies all over the ing very serious crimes never reach con- world. They are often difficult to discover, clusions in Brazil. As a rule, wealthy and to prove, and to punish. Such crimes are well-connected defendants in these cas- usually committed in secret, by powerful es never go to prison, despite compelling people, and with some degree of sophistica- evidence of their guilt. However, this rule tion. And police, prosecutors, and the judi- changed recently, as I will explain below. ciary are often not well prepared for the in- The second main reason for criminal im- vestigation, prosecution, and judgment of punity among the powerful is the fact that these highly sophisticated crimes. Some- the Supreme Court of Brazil has original times powerful defendants also exploit the jurisdiction over criminal charges against gaps in the criminal law and of the judicial high federal official authorities, including system to prevent effective accountability. the president, vice president, cabinet min- Some countries are more successful than isters, and members of the federal Con- others in enforcing the law against these gress. This is ensured by a controversial kinds of crimes. Brazil, at least prior to Lava provision in Brazilian law stating that high Jato, did not have a strong tradition of en- politicians and authorities in criminal cas- forcing the law against crimes committed es must have foro privilegiado (“privileged 158 Dædalus, the Journal of the American Academy of Arts & Sciences Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/daed_a_00508 by guest on 01 October 2021 forum”). So if, for example, a criminal in- The charges were presented before the Sérgio vestigation in a lower court produces evi- Supreme Court in 2006, though it took un- Fernando Moro dence of criminal conduct by a federal con- til 2012 for the case to go to trial. There was a gressman, the judge must immediately send great deal of skepticism about the Supreme the case to the Supreme Court. However, as Court’s judgment, especially about wheth- mentioned, the Brazilian Supreme Court’s er it would try the case in a reasonable time heavy caseload (its docket contained over and convict the defendants. But in the end, fifty-five thousand cases in the last year the Supreme Court issued a guilty verdict alone) makes it very difficult to adjudicate for most of the defendants, including sev- criminal charges in a timely fashion. Conse- eral powerful politicians. Of course, Bra- quently, cases involving crimes committed zilian courts had produced some convic- by powerful defendants sometimes literal- tions for white-collar criminals in the past. ly never end. In practice, the special juris- But these were the exception, not the rule, diction of the Supreme Court over crimi- and none of them was as important or rel- nal charges involving high-ranking official evant as the decision in Criminal Case 470. authorities worked as a shield against ac- These verdicts marked a clear break with countability. the norm of weak enforcement of the law These are two primary structural reasons against white-collar or financial crimes. A (though there are others) why law enforce- Supreme Court decision has great influence ment is so weak on crimes committed by across the whole judicial system. Beyond powerful defendants in Brazil. The weak en- the importance of the criminal cases’ direct forcement of the law against white-collar consequences, they worked as an example crimes is one of the likely reasons for the for all Brazilian law enforcement agencies development of systemic corruption in Bra- and judges, showing that the shield against zil. However, legal procedures have recent- effective accountability for powerful defen- ly changed the system for the better, at least dants could be broken. in part. Lava Jato is not alone, but rather is part of this broader effort. Two years after the judgment in Crimi- nal Case 470, Operação Lava Jato began. Criminal Case 470, decided by the Brazil- As usually happens with criminal investi- ian Supreme Court in 2012, began to change gations, Lava Jato started small. The fed- the norm of weak enforcement of the law eral police opened an investigation tar- against white-collar crimes in Brazil. geting four individuals involved in what In this case, also known as Mensalão seemed at the time to be a money-laun- (“monthly,” because the case involved dering scheme involving black-market monthly bribes to some congressmen), money exchanges. One of these individu- the Supreme Court convicted several highly als, professional money launderer Alberto placed politicians, including a powerful for- Youssef, was connected to a former direc- mer minister of the federal government and tor of Petrobras, Paulo Roberto Costa. The several congressmen, political leaders, po- investigation revealed that Youssef had litical party operatives, and bank directors, bought a luxury car for Costa, concealing of bribery and money laundering.5 In this the origin of the resources used.
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