Brazil’s Car Wash Investigation Faces New Pressures
Five years in, the mammoth corruption probe, beset by scandal, shows no signs of slowing down.
In early June, the furthest-reaching corruption investigation in Brazil’s history, known as Lava Jato, or Car Wash, found itself again in the spotlight. The Intercept and its Brazilian arm the Intercept Brasil published an explosive series of reports based on a trove of leaked documents and chats between prosecutors and the investigation’s former lead judge, Sérgio Moro. The revelations show Moro, Brazil’s poster boy for the anti-corruption movement, and Operation Car Wash prosecutors discussing case weaknesses and ignoring strictures about separation between prosecution and the judiciary. Text messages between prosecutors also indicated potential political motivations against former left-wing President Luiz Inácio Lula da Silva, whom the investigation had convicted in 2017 on corruption charges.
Car Wash, which started in 2014 as an investigation focused on money laundering, may not survive the allegations. Investigators must now face the question of whether they can still achieve their aims amid heightened public polarization and with a Supreme Federal Court increasingly divided over questions about the investigation’s judicial autonomy. Together with allegations of political bias, these factors could force the investigation closer to its demise than ever before.
Over the years, Car Wash has expanded from money laundering to include a sprawling war against corruption in Brazil and at least 10 other countries, even spilling beyond South America to the Dominican Republic, Mozambique, and Angola. Much of the graft is connected to the Brazilian construction conglomerate Odebrecht. Investigators allege that construction companies paid billions of dollars in bribes to politicians from Panama to Peru in exchange for lucrative contracts. By May 2019, the investigation had dealt out 90 criminal accusations against 429 different individuals, including 244 convictions among 159 people. Bribes for these cases totaled $1.6 billion. Another illicit $3.3 billion is believed to have been siphoned to countries outside of Brazil, requiring international cooperation for these funds to be recovered. A further $10.4 billion is still to be paid in damages.
Public skepticism about the investigators’ motives began to increase rapidly after Jair Bolsonaro’s presidential victory in October 2018, when Moro accepted an offer to take a job heading Brazil’s Ministry of Justice. Moro had been directly responsible for sentencing Lula, who was Bolsonaro’s main competition until the former president was barred from running a little over one month before the vote. For many observers, Moro’s new position and the Intercept’s discoveries add fuel to allegations from supporters of Lula’s Workers’ Party that the investigation was politically motivated.
Moro’s new ministerial role is troubling in another way. In early February, he proposed a series of legal amendments, termed the “anti-crime package,” meant to address endemic violence and corruption in Brazil. The 19 proposals include measures to formalize plea bargain agreements, create legal recognition for whistleblower roles, and criminalize the use of illegal slush funds known as caixa dois.
The proposals’ reception has been mixed. Although prosecutors have applauded them, analysts and lawmakers say their application would be excessively punitive and likely to exacerbate longstanding problems such as disproportionate incarceration of black Brazilians and greater impunity for an already lethal police force. Furthermore, by condemning caixa dois with the same severity as corruption or organized crime, the proposals invited politically motivated pushback. Moro is aware that any pushback could result in the package’s rejection by Congress: Two weeks after initially unveiling the proposals, he admitted that he had “sensitized” them following pressure from politicians. Although caixa dois would remain a part of the proposal, it would now be treated separately from charges related to corruption and organized crime.
The problem for the Car Wash investigation is that, if Congress does not pass the legal reforms, the investigation will have far less power than Moro wants it to. Its future is thus dependent on some of the politicians it could later implicate.
“I think it’s a risky trajectory, both from the point of view of Car Wash and for Moro’s future career,” said Michael Mohallem, a professor of legislative process at the Getulio Vargas Foundation in Rio de Janeiro. “It’s possible that Moro simply saw moving to the Ministry of Justice as a relevant role to help fight corruption from another angle—as a government member rather than as a judge. But it’s also possible to see a certain carelessness with his public image.”
Serious fractures within Brazil’s judicial system also threaten the investigation. One week before former President Michel Temer’s arrest in March, the Supreme Federal Court ruled that electoral courts rather than criminal courts should prosecute Car Wash charges relating to slush funds and campaign financing. However, experts believe that electoral courts—notoriously slow, understaffed, overburdened, and ill-equipped to deal with the complexities of corruption investigations—could be used as a means for politicians to evade prosecution.
Although the Supreme Federal Court has remained unified behind Car Wash’s aims, differing interpretations of the law—most frequently over the use of preventative imprisonment for accused politicians—have consistently split judges’ opinions. However, one of the most recent decisions has alarmed analysts, who believe that the 6-5 vote splitting the county’s top court this March is likely to hold more sway over the investigation’s future than disagreements over whether accused politicians should await trial in prison or under house arrest.
Following the ruling turning certain charges over to the electoral courts, approximately 30 percent of sentences already handed out by Car Wash could now be subject to appeal. “I believe that the movement has the effect of generating potential impunity,” Rodrigo Janot, Brazil’s attorney general from 2013 to 2017, told Foreign Policy. “The electoral courts, because of their very formation, are not suited to addressing crimes committed by criminal organizations, which are complex and demand specific skills.”
And while some analysts believe the move will help the justice system continue its corruption crackdown, the split vote hints at the court’s current polarization and toward potential future turbulence. “The dilution of [the court] puts Car Wash at risk,” said Silvana Batini, a law professor at the Getulio Vargas Foundation. “Today, it’s a source of uncertainty because it has ceased to act as a collegiate body or a court, and instead has become an atomized forum for individual, monocratic decisions.”
Concerns remain that Car Wash, modeled after the 1990s Italian corruption purge Mani Pulite (Clean Hands), will fall to the same fate that process did. It rooted out a number of high-profile corrupt actors but failed to eliminate entrenched corrupt practices. Eradicating corruption in Brazil is even harder given its to complex tax laws, global difficulties faced by oil and gas companies in eliminating bribery-related offences, and the country’s notoriously widespread and legally ambiguous caixa dois practices that legislation will likely struggle to tackle.
“Historical examples show that this type of isolated anti-corruption effort—which tends to be very herculean and aims at promoting a shock to the system—is not very effective against corruption,” said Nara Pavão, a political science professor at the Federal University of Pernambuco. “Lava Jato had a big impact on politics and on public opinion, but it’s unlikely to promote significant change to the system.”
Public and judicial support for the investigators’ mandate—threatened by the Intercept’s revelations—remains crucial. In April this year, a survey found 61 percent of Brazilians rated the investigation’s progress as “great” or “good”—although in the Workers’ Party heartlands in the Northeast, almost a quarter of respondents saw Operation Car Wash negatively. Polarization will likely deepen, while Moro’s own approval ratings have dipped by 10 points between May and June.
Despite the challenges facing the investigation, it’s possible that Car Wash could still go further than its headline-grabbing arrests and eventually begin to protect vulnerable structures and sectors from corrupt practices. Public support for the investigation remains vital, as does sustained political and judicial will to implement anti-corruption measures. Careful, specific legislation that takes nuance into account will be key, both for future lines of investigation and prosecution and for the protection of political systems from historic vulnerabilities. But at present, volatile public opinion, the investigation’s susceptibility to political agendas, unpredictable court rulings, and open divides in the Supreme Federal Court could leave Car Wash, and its legacy, in tatters.
Ciara Long is a journalist based in Brazil. Twitter: @CiaraLongBrazil