This past March, Brazil’s Supreme Court (the Supremo Tribunal Federal, or STF) issued an opinion that is considered one of the most significant defeats yet to the anticorruption effort known as the Car Wash (or Lava Jato) operation (see here and here). The case involved allegations that the former mayor of Rio de Janeiro and his campaign manager received roughly USD 4 million from the construction firm Odebrecht that was used for a campaign slush fund, in exchange for business advantages in connection with certain construction projects. The particular legal claim on which the defendants prevailed concerned not a substantive issue, but rather a jurisdictional question: whether the case was brought in the wrong court. In Brazil, the ordinary federal courts adjudicate ordinary federal crimes, but there are also special electoral courts that handle violations—including criminal violations—of Brazil’s Electoral Code. The use of slush funds, though not expressly listed as one of the actions criminalized under the Electoral Code, could be prosecuted under the Electoral Code’s prohibition on false statements, because doing what the former mayor allegedly did would entail failure to report funds used in an election campaign. Such charges would ordinarily be heard by the specialized electoral courts. But taking illegal contributions to a campaign slush fund in exchange for political favors could also be charged as bribery (or associated crimes like money laundering) under Brazil’s Criminal Code—crimes that would typically be adjudicated by the regular federal courts. Given that the same wrongful transaction might entail violations of both the Electoral Code and the Criminal Code, which court (or courts) should hear the case?
This is the question that the STF had to resolve, and it had, roughly speaking, three options. First, the STF could have ruled that the whole case (both the electoral crimes and the ordinary crimes) should be heard by an ordinary court. The second option would be to require that the special electoral court adjudicate the whole criminal case, including the ordinary criminal charges. Third, the STF could have held that the case should be split, with an electoral court dealing with the alleged violations of the Electoral Code and an ordinary court handling all the other charges. In a 6-5 decision, the STF went with the second option, holding that whenever an ordinary crime is committed in connection with an electoral crime, the whole criminal case must be decided by an electoral court.
This is hugely significant for the Lava Jato operation, because many of the cases the operation has uncovered involve potential violations of the Electoral Code, in the form of illegal or undisclosed campaign contributions made in exchange for political favors. (The newspaper Folha de Sao Paulo estimates that almost 30% of Lava Jato’s rulings touch discussions of illegal campaign finance.) But although some cases related to Lava Jato have gone to the electoral courts, most of the cases, including all of the main criminal cases, have been prosecuted in the ordinary courts. Federal prosecutors, especially the Lava Jato task force, are very concerned about the STF’s decision and have criticized it as a significant blow to Brazil’s anticorruption efforts.
They are right to be worried. Although some have maintained that there is no serious cause for concern, in fact the STF’s decision poses a very serious problem, for several reasons.
- First, corruption cases, especially grand corruption cases involving complex ongoing schemes, are complicated, and it takes time for the presiding judges to develop the expertise necessary to handle such cases effectively. Over the last five years, several federal courts—especially the ones in Curitiba, Rio de Janeiro, and Sao Paulo—have been dealing with similar cases and have built up the requisite expertise. Shifting these cases to the electoral courts would not only forgo that repository of experience, but replicating that degree of expertise in the electoral courts is unlikely. Electoral judges are ordinary state or federal judges who are appointed to serve on the electoral court for a short period of time, usually just two years, before returning to their regular judicial posts. That discontinuity precludes the development of expertise, and may pose independent problems, since in a very long criminal investigation the judges may change in mid-stream.
- Second, there’s a general perception (admittedly hard to verify) that electoral courts are slower that the ordinary courts handling Lava Jato cases. This difference in speed is not a trivial matter, since under Brazilian law if the case takes too long, the case may be dismissed due the country’s statute of limitations for criminal matters.
- Third, electoral judges serve on electoral courts by presidential appointment or election by their peers, and it is possible that such selection is more subject to political pressure than is the exam-based mode of selection for ordinary judges.
- Fourth, under Brazilian law, shifting cases from the ordinary courts to the electoral courts may also require changing the prosecutors. So, the prosecutors who have been investigating corruption in the context of Lava Jato would not necessarily be the ones handling the cases before electoral courts. To act before electoral courts, such prosecutors would have to be assigned to act in this capacity by higher officials in the Federal Prosecutors Office.
In addition to these concerns, there’s also an issue of the collateral, and retroactive, consequences of the recent STF decision for Lava Jato cases that have already concluded. Under Brazilian law, if a judge issues a decision beyond the scope of his or her powers, that decision may be declared void. This means that if the STF’s recent decision is broadly applied, numerous Lava Jato cases that have already resulted in convictions might be declared void, if a reviewing court determines that the case should have been heard by an electoral court in the first instance. Indeed, former President Michel Temer, who was arrested last March on corruption charges, has already challenged the arrest order before STF claiming that electoral courts should be handling the case. Former President Lula has similarly challenged his conviction.
This is not to say that the STF’s decision was incorrect as a matter of law. That is a hard question on which I do not take a position here. But from a policy perspective the consequences of the STF’s decision are bad, and potentially dire. A legislative reform is probably the best solution for ensuring that grand corruption investigations remain in the hands of the ordinary courts. Minister of Justice Sérgio Moro has already introduced a bill proposing a number of reforms (including the explicit criminalization of campaign slush funds), but his proposed amendments are insufficient because they do not affirm that ordinary courts should have jurisdiction over slush fund cases. An alternative solution, recently advanced by Prosecutor General Raquel Dodge in a petition to Brazil’s highest electoral court, would be an order from that court permitting the ordinary federal courts to hear cases involving electoral crimes. If neither of these solutions is availing, prosecutors may respond going forward by dropping all charges concerning electoral crimes in pending cases.
Still, the best solution would be a comprehensive legislative solution. And it is urgent that Brazil act quickly and decisively to amend its laws so that cases involving bribery go to the ordinary courts, regardless of whether those bribes were intended for use on a political campaign or for personal consumption. Otherwise the extraordinary progress that Brazil has made in its fight against corruption over the last five years may be undone.
Victor, thanks for this sobering post. If either the legislative solution you favor (amending the jurisdiction of Brazil’s ordinary and/or electoral courts) or the suggestion by Prosecutor General Raquel Dodge (that the highest electoral court permit the ordinary courts to hear electoral cases) are implemented, would that solve the voidability issue you discuss with regard to former presidents Lula and Temer? It would seem to me that, if the highest electoral court issued an order allowing electoral cases to be heard in ordinary courts, that might solve the jurisdictional issue going forward, but would it operate retroactively? Congressional legislation might seem more suited to retroactive application, but I wonder too if Congress would be able to add to the scope of a court’s past jurisdiction, with regard to cases that have already been decided. I’m not clear on whether Congress could do this under American law, but perhaps you know for the purposes of Brazilian law? Otherwise, while the proposed responses might make ongoing and future investigations more feasible, they might not be able to do anything about the past Lava Jato convictions under the new Supreme Court ruling.
In the context of your (very logically sounding) arguments, this decision seems rather strange. Out of curiosity – what was the main argument that the Supreme Court used to support their decision to follow the option they selected? Was it following the interpretation of the Electoral Code? Probably that would have not been enough to base this? Is there some sort of other principal argumentation they used (legal principles, procedural laws interpretation, etc.)?