Back in 2017, a Brazilian court convicted former President Lula for corruption offenses in connection with a seaside apartment that Lula allegedly received as a bribe from a construction firm. In 2019, he was again found guilty of a corruption offense in a separate trial, this time for receiving bribes in the form of improvements to his country house. And he faced other corruption charges as well, including an indictment in which Odebrecht—a major construction firm and one of the most significant players in the Car Wash scandal— allegedly bribed Lula by agreeing to construct a headquarters for his foundation, the Lula Institute. The principal evidence for this latter accusation was acquired by prosecutors as part of a so-called “leniency agreement” with Odebrecht. In Brazil, leniency agreements are negotiated settlements, regulated by the Clean Company Act (CCA), in which companies voluntarily agree to confess unlawful conduct, pay penalties, and take other remedial action—including cooperating with prosecutors by providing evidence against other wrongdoers—and, in return, the companies have their sanctions and fines reduced (see, for example, here, here, and here). Such agreements have been critical to the success of the Car Wash Operation, and more generally to the effectiveness of Brazil’s fight against corruption.
But this past June, the Brazilian Supreme Court decided to nullify the evidence against Lula that had been collected under the Odebrecht leniency agreement (here). The Court’s ruling was not only legally flawed, but its reasoning, if accepted, threatens to undo dozens of prior corruption convictions and to create a cloud of uncertainty surrounding the validity of evidence obtained in leniency agreements. Such a ruling would needlessly undermine the ability of Brazilian prosecutors and courts to fight corruption in the future. Of course, the Court may not actually adhere to its legal reasoning in future cases—but that only underscores another problem: though the Brazilian Supreme Court has criticized lower court proceedings as biased against Lula, the Court’s own conduct, particularly in the most recent case, suggests an unacceptable bias in Lula’s favor.
Some additional context is necessary to understand this latest legal development. While Lula’s 2017 conviction seemed at the time to be the Car Wash Operation’s greatest success, it turned out to be the moment when the legal and political momentum began to shift against the operation. Much of the controversy around the Car Wash Operation generally, and Lula’s case in particular, concerns Sergio Moro, who was the presiding judge in Lula’s trial and in several other high-profile Car Wash cases. Critics accused Judge Moro of overreaching and political bias. The latter concerns were further stoked by his decision to accept a position in President Bolsonaro’s government as Minister of Justice. (Lula and Bolsonaro are bitter political rivals, and it is very likely that Judge Moro’s conviction of Lula—which prevented Lula from running in the 2018 presidential election—enabled Bolsonaro to win.) Accusations of bias and partisanship intensified after a trove of hacked text messages between the Car Wash Operation prosecutors and Judge Moro was leaked to the press in the summer of 2019 (see here and here).
Subsequently, Lula’s legal team has won victory after victory in Supreme Court. The Court has not directly cited the leaked messages, most likely due to questions about whether it is permissible under Brazilian law to use illegally obtained evidence in this context. Nevertheless, this background may partially explain the Court’s sympathetic treatment of Lula’s arguments on appeal. First, in early 2021, the Court nullified Lula’s 2017 and 2019 convictions—the cases concerning the seaside apartment and the country house, respectively—on the grounds that the original trial court lacked jurisdiction over those cases. That decision did not result in Lula’s acquittal; rather, it voided the conviction and required prosecutors to retry Lula in a new venue if they wanted to continue to pursue the cases. Then, only a couple of weeks later, the Court, analyzing the same now-voided convictions, issued another ruling that found Judge Sergio Moro biased in deciding Lula’s cases. This ruling did not significantly alter the legal situation, as prosecutors remained free to retry Lula before a new judge. (Some therefore speculate that the Court issued this latter ruling mainly to make known its displeasure with Judge Moro’s alleged bias, though the Court was careful not to cite the leaked text conversations, instead focusing on other aspects of Judge Moro’s conduct during the trial.)
The Court’s most recent decision concerns the separate charges against Lula for allegedly receiving a benefit from Odebrecht (in the form of a contribution to the Lula Institute) as part of an unlawful quid pro quo—charges that had not yet resulted in a verdict. The Court’s ruling sharply limits the evidence that can be used in any such trial by prohibiting the prosecution from using any of the evidence it received from Odebrecht under the leniency agreement. Since this is the prosecution’s principal evidence in this case, the Court has essentially made prosecuting Lula on those charges impossible.
The Court gave two related reasons for its ruling. First, the Court held that prosecutors improperly presented the evidence collected under the leniency agreement reached with Odebrecht to Judge Moro as part of the criminal trial of Lula, and because Judge Moro lacked jurisdiction over the cases against Lula, the evidence procured through the leniency agreement is invalid—even if it is used in a different proceeding before a different judge. Second, the Court declared (bizarrely) that because the prosecutors used this evidence in an improper venue, the prosecutors must have been biased as well. In short, the Brazilian Supreme Court essentially held that because the evidence obtained through the leniency agreement was improperly used in the first trial (presented to an allegedly biased judge in the wrong venue), that evidence cannot be used in any subsequent criminal proceedings.
That makes little sense. The Court appears to have made up an entirely new exclusionary rule, without any grounding in any provision of Brazilian law. Indeed, the Court’s opinion did not even bother to mention the CCA, even though the CCA is the principal statute that regulates leniency agreements. Nothing in the CCA says that the validity of evidence obtained in a leniency agreement depends on the validity of subsequent proceedings that make use of that evidence. Furthermore, under the CCA (and background principles of Brazilian law) a leniency agreement is a negotiated settlement between the prosecutors and the company; the agreement does not require judicial approval. Because the judge is not a party to the agreement, it should not matter whether the presiding judge in a related legal proceeding has jurisdiction over that proceeding. Yet the Supreme Court reached the illogical conclusion that if properly obtained evidence is later presented in an improper forum, that evidence can no longer be used in any future proceeding—a wholly made-up and unprecedented rule.
Did the Court actually mean to establish such a rule? If it did, the consequences for ongoing and future criminal proceedings would be significant and undesirable. This new exclusionary rule imposes an unreasonable burden on prosecutors, who will now need to spend much more time figuring out the right venue in which to file their cases and present their evidence, because even a good-faith error, uncovered only after the fact, could cause prosecutors to forfeit the benefits they extracted from other defendants when negotiating leniency agreements. And the ramifications are even broader, because prosecutors and others will be left to guess at how courts might rule on issues related to the proper venue for criminal proceedings. As the rules on venue are controversial and easily manipulable, it is far too easy for biased courts to protect clearly guilty defendants by, first, finding some defect in the venue where prosecutors initially filed the case, and, next, making it practically impossible for prosecutors to retry the case in another venue by ruling that all the evidence introduced in the first venue must now be excluded. The risk that this might occur will, in turn, affect prosecutors’ willingness to offer leniency to companies in exchange for evidence against politicians (or others), since that evidence might end up getting invalidated by courts.
That said, it is also possible—indeed, it is more likely—that the Supreme Court did not mean to actually establish a new exclusionary rule that will consistently apply to future cases. (Importantly, in the Brazilian system precedents do not have the same binding force that they do in other systems.) Rather, the most likely explanation for the Court’s unprecedented and incoherent ruling is that the Court was inventing and applying a one-time-only principle to spare Lula from accountability for his acts. In light of the politically polarized environment and ongoing concerns about the fairness of Lula’s earlier trials—especially after the leaked communications between prosecutors and Judge Moro—the Court may have simply wanted to favor Lula, perhaps because some Justices feel Lula has been treated unfairly, or perhaps because they support him politically and want to make it possible for him to run in the next election against Bolsonaro—a face-off that Lula would likely win. But making up ad hoc rules of criminal procedure is improper, and will only raise questions about the Supreme Court’s own political biases. Indeed, it is ironic that the Supreme Court, which has denounced Judge Moro’s alleged bias against Lula, is acting in a way that naturally suggests that the Supreme Court is biased in Lula’s favor, and willing to issue legally implausible holdings solely for the benefit of this one man. Doing so will only further undermine the faith of the Brazilian citizens in the impartiality of the Brazilian judicial system, and in its capacity to hold powerful and popular politicians accountable.