In a recent post I discussed the positive legacy of Brazil’s Car Wash Operation and argued that this operation, for all its missteps, strengthened the country’s legal and institutional framework against corruption. The operation not only increased public awareness of corrupt practices but also inspired the development of effective tools for corruption prevention, investigations, and case resolution, significantly contributing to a more transparent, honest, and efficient business and political environment. Nevertheless, actions taken by Brazilian leaders in the past year have intensified concerns—already present under the previous Administration—about the government’s commitment to sustaining and expanding this legacy. Transparency International (TI) raised some of these concerns in its recent comment on Brazil’s worsening performance on TI’s Corruption Perception Index (CPI). Now, there are well-known reasons to be cautious about drawing strong conclusions from the CPI or other perception-based international indexes, but in Brazil’s case, there are good reasons to be alert. Senior leaders in both the political and judicial branches have made a series of worrisome decisions that seem likely—indeed, may be intended—to set back Brazil’s fight against high-level corruption. Among those setbacks, the following are the most serious and troubling:  

• President Lula, who was convicted for corruption in Operation Car Wash but later succeeded in persuading Brazil’s Supreme Court (the STF) to annul the cases against him (principally on technical procedural and jurisdictional grounds) nominated his personal defense attorney in those cases to become an STF Justice. Additionally, when appointing the new attorney general, President Lula, following former President Bolsonaro’s approach, disregarded the longstanding practice of selecting one of the candidates on a list forwarded by the Federal Prosecution Office (MPF). These actions have heightened public distrust in the impartiality of STF and MPF to fulfill their constitutional duties, and have prompted concerns that these two institutions—both of which are crucial in the fight against corruption—will be under the influence of individuals closely associated with those interested in avoiding further investigations.
• The STF declared unconstitutional a federal rule, sanctioned by Congress, prohibiting judges from presiding over cases in which a party is represented by a firm owned by or employing one of the judge’s close family members. Then, this past December, an STF Justice suspended the payment of fines that one of the companies investigated by Car Wash had agreed to pay as part of a leniency agreement with prosecutors—and the firm in question was represented by the wife of the Justice who issued the decision. Similarly, the National Council of Justice, a public institution tasked with enhancing the Brazilian Judiciary’s performance, rejected a resolution aimed at regulating judges’ participation in private events, lectures, and academic activities, and in so doing seemed to suggest that bolstering judicial transparency and avoiding conflicts of interest are not priorities now.
• And the STF also issued a preliminary judgement that suspended the rule barring many politicians from being nominated to management roles in public companies. With this rule lifted, the current administration can now leverage positions at public companies as political capital, offering them to members of the governing coalition in Congress in exchange of political support. That practice was at the heart of the corruption scandal investigated by the Car Wash Operation, in which politicians appointed to management roles in public companies would accept bribes from private entities in exchange for contracts. In November 2023, following that STF decision, Petrobras—the state-owned oil company at the heart of the Car Wash scandal—amended its bylaws, removing the prohibition of political appointments to the company’s management and potentially setting the stage for history to repeat itself. 

The news is not all bad, however. As Transparency International’s comment acknowledges, Brazil notched at least three important anticorruption and good governance achievements in 2023. First, the Office of the Comptroller General overturned almost 200 secrecy orders imposed by the Bolsonaro Administration and introduced new rules to protect the Access to Information Act and enhance transparency. Second, Brazil made notable strides with respect to environmental governance, including in the fight against environmental crimes like deforestation and illegal mining that are intricately linked to corruption. Third, the Congress finally passed a tax reform that initiated a process of tax simplification and unification, which should reduce opportunities for firms or individuals to use bribe payments or other forms of influence to get approval of special tax regimes. These accomplishments, however, fall short of what could be done to elevate Brazil’s anticorruption efforts, and do not address any of the major concerns arising from the issues discussed above. 

Corruption is a challenging problem that is unlikely to be solved through one single intervention or crackdown; progress requires the accumulation of seemingly minor advancements. Over the past decade, Brazil has taken numerous small yet significant steps in the right direction. Today, the country has great technologies, strong and better integrated institutions, and a powerful (albeit far from perfect) regulatory framework. But that is not enough, as government support and willingness to use those tools are essential for the fight against corruption to move forward. So, now, the pivotal question seems to be whether that fight indeed is on Brazil leaders’ agenda.