Brazil’s so-called Lava Jato (Car Wash) Operation, launched in 2014, exposed one of the largest corruption schemes ever. The investigation resulted in over 361 convictions (for corruption, money-laundering, procurement fraud, and other crimes); among those convicted were numerous prominent members of the Brazilian business and political elite, including the current President, Luiz Inacio Lula da Silva (known as Lula). In building its cases against these defendants, Brazilian federal prosecutors made extensive use of “leniency agreements,” offering some companies lighter penalties in exchange for evidence against other parties. One of the most important of these leniency agreements was the one Brazilian prosecutors, working in conjunction with U.S. and Swiss prosecutors, reached with the Odebrecht company, a major Brazilian infrastructure conglomerate at the center of the corruption scheme.

But over the last few years, the Car Wash operation has started to unravel, with several of its most important achievements reversed. In 2019 a Brazilian hacker publicized text messages allegedly exchanged between Sergio Moro, the presiding judge in many of the Car Wash cases (including Lula’s), and the Car Wash prosecutors, prompting allegations of bias. The specialized Car Wash prosecutorial task force was disbanded in February 2021, and the Brazilian Supreme Court annulled Lula’s conviction on procedural grounds in April 2021, paving the way for his re-election to a third presidential term in October 2022. The most recent setback to the Car Wash Operation, already discussed and debated on this blog (see here, here, and here), is a decision by the Supreme Court Justice Dias Toffoli this past September. In that decision, Justice Toffoli declared that, due to procedural errors, none of the evidence acquired in the leniency agreement with Odebrecht could be used in any judicial proceeding. This ruling puts numerous Car Wash convictions at risk: Defense attorneys may now seek to annul convictions in cases in which their clients were convicted primarily on the Odebrecht evidence.

Many in the anticorruption community, in Brazil and abroad, have denounced Justice Toffoli’s ruling, and have suggested that it may have been improperly influenced by political or personal considerations. But as a technical legal matter, Justice Toffoli’s decision was probably correct. While it is understandably frustrating to see so much hard work wiped away and the prospect of convicted corrupt actors going free, the responsibility here appears to lie more with the Car Wash prosecutors than with the Supreme Court. Indeed, the recent developments in the Car Wash saga should serve as a cautionary tale for investigators and prosecutors. In their understandable zeal to catch and convict bad actors, law enforcement authorities must be careful to scrupulously and rigorously observe all legal requirements.

The basic backstory for Justice Toffoli’s recent decision is as follows. Back in 2020, Lula brought a case to the Supreme Court asking for complete access to the Odebrecht’s leniency agreement, including any documents concerning interactions with foreign authorities, as well as forensic examinations of the systems used by Odebrecht to administer the company’s bribe payments. The Court granted Lula’s request. But Federal prosecutors did not fully and promptly comply with this order, or so Lula’s lawyers argued in subsequent motions. The case remained active in the Supreme Court, and in 2021, Justice Lewandowski (who was then responsible for the case) ruled that the evidence obtained in the Odebrecht leniency agreement was inadmissible against Lula. That decision was based in part on considerations specific to Lula’s case (including the alleged bias of Judge Moro, who oversaw both Lula’s criminal trials and the Odebrecht leniency agreement), but two of Judge Lewandowski’s legal conclusions were more general:

• First, under Brazilian law (see here and here), cooperation with foreign law enforcement agencies must go through the Brazilian Ministry of Justice’s Asset Recovery and International Cooperation Department. This requirement is meant to ensure the involvement of all relevant parties and the integrity of all evidence obtained through international cooperation. Justice Lewandowski found, however, that the Brazilian Car Wash prosecutors had engaged in unauthorized negotiations and information exchanges with U.S. and Swiss authorities, bypassing the formal channels and failing to keep the appropriate records for those interactions. 

• Second, at the time of the Odebrecht leniency agreement, Brazilian chain-of-custody rules required that all evidence be stored under seal, that every access to that evidence be recorded, and that the evidence must be protected from any adulterations—which, in the case of digital evidence like the files on the Odebrecht hard drives, usually means creating a full copy of the files that will never be touched. Justice Lewandowski concluded that the integrity of key Odebrecht evidence had been compromised. For instance, hard drives containing Odebrecht files were inappropriately transported from one city to another in supermarket plastic bags, rather than under seal, and those drives were accessed by Brazilian authorities before any data mirroring or protective measures were implemented. 

Given that these conclusions about the inadmissibility of the Odebrecht evidence would apply in anycase where that evidence was used, Justice Toffoli’s September 2023 ruling didn’t really come as a surprise. Rather, Justice Toffoli revisited the matter previously addressed by Justice Lewandowski and confirmed that the main reasons for finding the Odebrecht evidence inadmissible in Lula’s case were not exclusive to his situation and would apply in any case in which the Odebrecht evidence had been used. So, while Justice Toffoli’s recent decision does expand the scope of Justice Lewandowski’s earlier decision, it does not really break much new legal ground. The main arguments remain the same. 

Now, the remedy ordered by the Supreme Court—nullification of the evidence—may seem extreme, and some might question whether the procedural irregularities here were significant enough to warrant such remedy. And it is true that, under Brazilian law, even though violation of chain of custody rules technically renders evidence (including digital evidence) inadmissible, this and other procedural irregularities may sometimes be tolerated if other factors establish that the evidence at issue is trustworthy, and no harm was caused to the defendant. But in this case, the remedy Justice Toffoli ordered was likely appropriate.

Justice Lewandowski’s two conclusions both concern the reliability of crucial evidence. He noted serious breaches of the chain of custody, and concluded that Car Wash prosecutors did not maintain any type of documentary record regarding the method of collection and preservation of the evidence, who had contact with it, when such contacts occurred, and what exactly happened to the hard drives once in possession of Brazilian authorities. And prosecutors had failed to present the Supreme Court with evidence that the material on Odebrecht’s hard drives was in fact accurate and reliable—and this burden falls squarely on the prosecutors, given their failure to preserve the chain of custody. That’s why Justice Toffoli order, though harsh, seems legally appropriate. This doesn’t mean that every conviction in every case where prosecutors used the Odebrecht evidence will be automatically overturned. But those convictions can be upheld if, but only if, the evidence supporting conviction is strong enough without the inadmissible evidence from the Odebrecht agreement. As a result, many, perhaps most, of those convictions are now at risk of nullification.

         In short, while it is convenient to blame the Court, it seems that the Car Wash prosecutors might have undermined their own efforts by failing to scrupulously adhere to the rules. And there’s an important lesson there for others. When public authorities choose the path of least resistance to achieve their goals, they not only weaken their cause by losing people’s trust, but they also run the risk of facing the scrutiny that Car Wash currently endures. Laws are created to be followed, particularly by those entrusted with upholding them. And if operating strictly within legal boundaries would not permit the government to investigate and penalize corrupt practices, our focus should be on improving the law, rather than circumventing it.