The most important decision involving domestic bribery laws was the Supreme Court’s ruling on 4 April 2018 denying the habeas corpus filed on behalf of former president Lula da Silva. Lula had been sentenced to nine years in prison by the trial court for receiving bribery from the construction company OAS, and the penalty was increased by the appellate court, to 12 years, in January 2018. The writ claimed a defendant could only be imprisoned after final decision of the Supreme Court, according to a lax interpretation of the presumption of innocence constitutional clause. The precedent had been set in 2016 only allowing imprisonment after the final, unappealable decision, thus allowing well-off defendants to defer their arrests by numerous appeals before the High Court of Justice and the Supreme Court, which, burdened by the immense amount of cases to consider, would rarely judge them before statute of limitations went by.
Even though this applies to all types of crimes, the impacts of this decision are more palpable in anti-corruption and white-collar crimes in general, where defendants have the ability to afford the legal costs to litigate for years.
It is worth noting, though, that this was a very close majority vote of six against five. This is still an indefinite matter in Brazilian criminal procedure, as the frequent changes of prevailing standards show: more recently, the imprisonment was authorised after the appellate court’s decision until 2016, when a majority of six to five changed the standard to require the Supreme Court’s final unappealable decision before imprisonment. Moreover, the matter will be once again reviewed by the Supreme Court in 2019, in another lawsuit specifically challenging the constitutionality of the imprisonment before a final unappealable decision, and there is an intense debate whether there will be yet another reversal.
On the side of enforcement, by far the most important investigation of Brazil’s recent years is Operation Car Wash. It started in March 2014 as a dawn raid at a gas station to investigate money laundering by black-market dollar dealers and grew to engulf Petrobras, the national oil company, as the centre of a bid-rigging scheme by a cartel of the largest construction companies in Brazil, sustained on bribes to Petrobras officers and government officials. It became a task force, then expanded to other task forces in different states, also identifying corruption in other large-scale contracts such as the construction of the nuclear plant ‘Angra 3’ among many others. Car Wash has been continuously spreading its reach and has grown out of its original concept to become a movement and even the name of an era. The task forces named ‘Lava Jato’ have worked on an impressively long list of corruption cases involving more than 280 politicians, business titans and others, and recovered more than US$3 billion.
An investigation of Car Wash overthrew Eduardo Cunha, the former House speaker, who was sentenced to 15 years in prison. In July 2018, his wife Cláudia Cruz was sentenced by the Federal Regional Court to two years and six months in prison for keeping undeclared assets abroad.
It was also a Car Wash probe that resulted in former president Lula da Silva’s sentence in the case mentioned above. Lula is currently a defendant in seven more cases arising from Car Wash investigations.
The investigations involve many public authorities, such as the Administrative Council of Economic Defence, Congress, the Federal Police, the CVM, the CGU and the Federal Prosecutors Office. They have generated more than 962 search and warrant orders, 513 requests of foreign collaboration with over 45 countries, 175 plea-bargain agreements, 11 leniency agreements, criminal charges against more than 328 individuals, penalties of 1983 years in prison, and recovery of about 13 billion reais. Furthermore, 415 politicians from 26 parties were mentioned in the leniency agreements.
Last year’s efforts by the federal government to end the Car Wash task force notwithstanding, investigations are still being conducted and charges levelled at a fast pace. In November 2018, for example, the Federal Police began the 56th stage of Car Wash, which led to the arrest of 22 investigators in the states of São Paulo, Minas Gerais, Rio de Janeiro and Bahia.
Three former Rio de Janeiro state governors were sentenced to prison, Sergio Cabral, Anthony Garotinho, and Rosinha Garotinho. Sergio Cabral has been convicted on seven charges so far, with another 15 pending, all related to corruption, in several cases of receiving bribery for passive corruption and also for money laundering. Cabral is identified as one of the largest receivers of corruption, at least 78 million reais. Considering his last conviction (September 2018), the imprisonment sentences have already exceeded 183 years. Anthony Garotinho and Rosinha were convicted of passive corruption in 2017.
Also resulting from Car Wash probes, former governor of Paraná Beto Richa was arrested in September 2018. Former governor of Goiás Marconi Perillo was arrested in October 2018. He is facing charges for receiving over 12 million reais in bribes from the Odebrecht construction company, in undeclared donations for his and his allies’ campaigns. Both former governors were released a few days later, but are still facing charges.
On 29 November 2018, the current governor of Rio de Janeiro, Luiz Fernando Pezão, was arrested under charges of having received bribes amounting to over 39 million reais, also from Odebrecht.
In January 2018, Petrobras settled a US class action brought by investors claiming losses because of the corruption scandals, agreeing to pay US$2.95 billion, days after securities regulator CVM accused eight former Petrobras executives of corruption.
Finally, the most famous leniency agreement affair in Brazil was J&F Investimentos’s. J&F controls the world’s largest meat processor, JBS SA. Chairman Joesley Batista taped a conversation with President Michel Temer in March 2017, in which Temer seemed to assent to Batista’s bribing imprisoned lawmaker Eduardo Cunha. Batista signed a plea agreement acknowledging having distributed payments to around 2,000 politicians over the past 10 years, including the equivalent of US$30 million to former President Dilma Rousseff in exchange of state banks loans, that secured the group’s stellar growth in recent years. J&F agreed to pay 10.3 billion reais (around US$3.2 billion at the time). The agreement secured no jail time for any of the accused. However, the federal police later found the brothers had accidentally recorded many conversations the contents of which they omitted from their testimony, having tried but failed to erase them. The J&F agreement was revoked on 26 February 2018, and the Batista Brothers are still in prison.
For other cases involving foreign companies, see question 17.
Back to top