Category Archives: Guest Commentary

Guest Post: The Brazilian Supreme Court’s Erroneous Nullification of the Car Wash Evidence

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Today’s guest post is from Eduardo Carvalho, a Brazilian prosecutor from the State of Rio de Janeiro.

There has been a great deal of commentary in the Brazilian and global anticorruption community – including on this blog (see here, here, and here) – on a recent decision by Supreme Court Justice Dias Toffoli concerning important evidence on which Brazilian prosecutors relied in securing numerous convictions in the so-called Lava Jato (Car Wash) Operation. The evidence in question—principally files stored on computer disks—was obtained from the Odebrecht company as part of settlement agreements with Brazilian, Swiss, and US authorities. Justice Toffoli, expanding on a previous ruling by Justice Lewandowski, found that this evidence was obtained in violation of Brazilian laws on international cooperation and evidence handling, and therefore could not be used in court. As a result, an enormous number of Car Wash convictions are likely to be nullified. From an anticorruption perspective, this is a disaster, undoing years of hard work and allowing scores, perhaps hundreds, of corrupt politicians to go free.

But according to Adonis Brozoza’s post last week on this blog, the responsibility for this lies with the prosecutors, not the Justices. Mr. Brozoza argues that the prosecutors, in their zeal to secure corruption convictions, ignored relevant laws and procedures on international cooperation and evidence handling. This sloppiness, he maintains, so compromised the reliability of this crucial evidence that the Justices were obligated, under the relevant Brazilian laws, to rule this evidence inadmissible.

Respectfully, this assertion is both legally questionable and factually incorrect. While I do not impugn the good faith of either the Justices or Mr.Brozoza, careful attention to the relevant laws, and to what the relevant authorities actually did, demonstrates that Justice Toffoli’s ruling ought to be overturned by the full Court. Continue reading →

Guest Post: A Proposal for an Online Practical Politics Platform

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Today’s guest post is from Peter Evans, who recently stepped down as Director of the U4 Anticorruption Resource Centre, and who previously led the Anti-Corruption Evidence (ACE) program at the UK’s Department for International Development.

All too often, approaches to anticorruption reform—like mainstream approaches to growth, development and governance more generally—frame the issue as a technical problem. In development agencies, multilateral organizations, and civil society organizations working on corruption issues, it is not uncommon to hear people say, “We don’t do politics,” or to mention politics only in the context of blaming the failure of a project, or non-receptiveness to technically sound advice, on a “lack of political will.” But as Stefan Dercon emphasized in his influential recent book Gambling on Development: Why Some Countries Win and Others Lose, understanding and addressing development challenges requires engaging seriously with the political economy constraints and opportunities related to power and elites. While Dercon’s book is not about corruption specifically, it is chock-full of corruption examples. And, in fairness, an increasing number of anticorruption specialists have gotten the message that “technical only” approaches often fail, and that making real progress often requires us to understand, and be brave enough to talk about, politics—and in particular the way power is distributed and used in the relevant country or sector.

But while recognizing that politics matters—and that serious anticorruption work requires serious political economy analysis—is a necessary first step, actually putting this idea into practice turns out to be hard, even for people who want to do it—because political economy analysis is hard, and much of the available information is obscure, difficult to locate, or difficult for busy practitioners to digest. Some country- and sector-specific political economy research is published, though not all of it is written in an accessible way. And some research that is highly relevant to political economy analysis doesn’t include terms in the title or abstract that would make its relevance obvious to a busy professional trying to find useful information. Some agencies pay consultants to deliver bespoke political economy analysis, or build skills through training courses, but the utility of these efforts may be limited to that particular agency. SOAS ACE takes an explicit political economy framed approach to understanding and tackling corruption, and there have been a few efforts to provide more general information, such as the U4 Centre’s a workstream on the politics of anticorruption and the UK-based Governance and Social Development Resource Centre, but global coverage of relevant political economy research remains patchy.

To address this problem, I advocate the creation of a “Practical Politics Platform” where good quality, clearly explained political economy research is collected, curated, and presented in a form that is easy to search and freely available as a public good. It would be something like Our World in Data, but for practical political economy research. (To be clear, while corruption and anticorruption would be an important element of such a platform, the platform should more broadly integrate research on related issues, such as accountability, transparency, and public sector governance.) To increase user-friendliness, the platform could include clickable maps that allow users to focus on a country, and disaggregate the information, if desired, by sector and sub-unit. Continue reading →

Guest Post: The Odebrecht Ruling and Prosecutorial Transparency in Brazil–A Rejoinder

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Two weeks ago, we published a guest post is from Professor Gregory Michener and Breno Cerqueira, based on an op-ed they had originally published (in Portuguese) in the Folha de São Paulo newspaper, concerning an important decision last by Justice Toffoli of the Brazilian Supreme Court. That decision nullified the evidence that Brazilian prosecutors had acquired from the Odebrecht firm as part of the agreement to settle the corruption charges against that firm; Justice Toffoli’s decision thus called into question ever subsequent corruption conviction that had relied on this evidence. That guest post prompted a response, which we published last week, from a Brazilian lawyer who took issue with many of the assertions that Professor Michener and Mr. Cerqueira had made in their piece. (The author of that post asked to remain anonymous. While GAB does not usually publish anonymous pieces, after considering the reasons for the anonymity request, I decided to grant it in that case.) Today’s guest post is from Professor Michener and Mr. Cerqueira, who offer a rebuttal to last week’s criticisms of their piece.

I realize that some readers may find this a bit excessive, especially since the issues here involve some fine technical points of Brazilian law. But in my view the issues are so important—going to the heart of one of the largest and most important anticorruption investigations in the world over the last decade (the “Car Wash” Operation)—and the legal issues are sufficiently difficult even for attentive outsiders to understand, that a thorough debate about what the most recent decision does and does not mean, that this exchange serves a useful purpose. I am grateful to all the parties involved for being willing to engage in this important conversation..

Without further adieu, here is Professor Michener and Mr. Cerqueira’s rebuttal to the criticism of their post on Justice Toffoli’s ruling:

The Odebrecht case spanned twelve countries and involved nearly a billion dollars of elaborate payments made from Odebrecht’s in-house bribery department to corrupt governments on three continents. (Perhaps the best way to understand the case is through the documents posted with the US Department of Justice press release about the settlement of the US Foreign Corrupt Practices Act charges in the case.)

The primary objective of our editorial was to discuss the deficient transparency of corruption cases in Brazil, an understudied aspect of corruption that should be of concern to citizens everywhere. Transparency of corruption cases can assign responsibility and promote accountability, deter graft among businesses and public officials, identify institutional weaknesses that need to be fixed and, perhaps most importantly, provide an important historical archive to keep the record straight – not only of crimes committed but of retributive government efforts in favor of the public interest. In the case of Brazil, we argued, a lack of transparency worked in favor of corruption and impunity, which is currently on the upswing.

We find it ironic that the critic of our article, a Brazilian lawyer (“Anonymous”), would ask for anonymity if his or her critiques were squarely fair handed and factual. (As an aside, anonymity is illegal as per the Brazilian Constitution (Article 5 IV – “the expression of thought is free, and anonymity is forbidden”). As a leading anticorruption specialist and friend commented on the Anonymous post a day after it appeared, it attempts to “muddy the waters.” Rather than “setting the record straight” it simply creates doubt where little should exist. The following explains why: Continue reading →

Guest Post: The Recent Brazilian Ruling on Use of Evidence from the Odebrecht Case—Setting the Record Straight

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Last week, this blog featured a guest post from Gregory Michener and Breno Cerqueira on the recent decision by Justsice Toffoli of the Brazilian Supreme Court, which concerned the settlement that Brazilian prosecutors had previously reached with the Odebrecht company—and the evidence against other defendants that Odebrecht had provided prosecutors as part of that settlement. A Brazilian lawyer with first-hand knowledge of the case submitted the following guest post, which takes issue with a number of the claims made in the previous post. Although it is not GAB’s usual practice to publish anonymous posts, in this case the sensitivity of the matter and the importance of raising these issues led me to exercise my editorial judgment to publish the post below without the author’s name.

The recent guest post on this blog regarding the recent judicial ruling on the settlement in the Odebrecht case is inaccurate in certain respects.

  • The first and most important inaccuracy is that, in contrast to what the post indicates, Justice Toffoli’s ruling did not annul the settlement in the Odebrecht case. Rather, the ruling held that the evidence included in certain important Odebrecht databases contained in hard drives, obtained by the Brazilian prosecutors from Swiss authorities, may not be lawfully used in criminal or civil investigations. The guest post properly states this aspect of the ruling—that it prohibited the use of this evidence —but the suggestion that the ruling annulled the settlement itself is not accurate.(A potentially important issue is whether the ruling would apply with the same force to the evidence turned over directly to the Brazilian prosecutors by Odebrecht, rather than obtained by the Brazilian prosecutors from the Swiss authorities. But the guest post fails to make that distinction.)
  • Second, the guest post seems to treat Justice Toffoli’s decision as a surprise, or at least unanticipated. But in fact, several prior decisions by other Brazilian Supreme Court Justices (particularly Justice Lewandowsky) had reached essentially the same conclusion, though with regard only to particular defendants. Justice Toffoli’s ruling extends and generalizes those prior decisions, ruling that the evidence in question cannot be used at all, thus obviating the need for individual defendants to obtain a similar ruling by the court in their individual cases.
  • Third, the post seems to imply that Justice Toffoli decided this case because he was appointed by President Lula, and previously served in senior positions in Lula’s first administration. But this is a gross simplification, especially when one remembers that Justice Toffoli handed down several decisions that went against against Lula’s interests (including rulings against prominent members of Lula’s party in the Mensalao case, and during Lula’s time in jail). Notably, Justice Toffoli apologized for some of those earlier decisions in the more recent decision currently being discussed. Therefore, rather than favoring Lula and his party consistently, a more plausible hypothesis, based on Justice Toffoli’s record, is that he seems inclined to decide cases in favor of the interests he sees as commanding the current political agenda. This may be at least as objectionable as guest post’s suggestion that he is decides cases systematically out of loyalty to Lula, but as a matter of empirical analysis of judicial trends, it is importantly different. (And Lula himself is, or should be, attentive to that.)
  • Fourth, another inaccuracy in the post, though admittedly a less important one, is the claim that prosecutors had not made public the Odebrecht agreement’s legal framework until last week. This is not true. The agreement has been publicly available for more than five years on the Ministry of Federal Prosecution’s website, which provides easy access to several of the resolutions that the federal prosecutors have concluded.
  • Finally, it is worth addressing the suggestion at the end of the post that transparency regarding the facts reported by Odebrecht under the settlement agreement might have reduced the chance of a decision such as Justice Toffoli’s. This cannot be characterized as a factual inaccuracy, as it is inherently a speculation about what might have happened under different conditions. Nevertheless, that assertion seems too rudimentary. There may be good reasons why prosecutors (and other control agencies, such as, in the case of Brazil, the Comptroller General and the Attorney General’s office) elect not to disclose all of the facts contained in the evidence turned over by the company right away. The most obvious reason for not publicly disclosing this evidence right away is that the evidence may be relevant to ongoing investigations. And it is not true that the U.S Department of Justice (DOJ) would make public comparable factual material, if doing so would jeopardize ongoing investigations. (Some also claim that the DOJ decides on the degree of disclosure of facts in statements of facts attached to Foreign Corrupt Practices Act negotiated resolutions based more on, or at least with an eye to, strategic or geopolitical considerations than transparency concerns.) Again, though, the claim that more transparency about the settlement and the associated evidence would have helped seems reasonable, and is not strictly speaking inaccurate. There is certainly room for reasonable disagreement about the prosecutors’ approach to disclosure. But the issue is far more nuanced than the post suggests.

I want to emphasize that these comments are not meant to contradict the importance of making pointed critical assessments of judicial decisions in general and Justice Toffoli’s ruling in particular. Nor do I wish to offer any further opinion on these fraught, highly controversial legal and political issues. But given the intensity of the discussion in Brazil, and the unfortunate tendency for all sides in these debates to hurry over or oversimplify key facts, I thought it was important to advocate for subtlety and raise these problems about the recent guest post on this blog.

Guest Post: The Judicial Annulment of the Odebrecht Settlement Evidence in Brazil, and Its Implications

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Today’s guest post is from Professor Gregory Michener, Brazilian School of Public and Business Administration, Getulio Vargas Foundation (FGV-EBAPE) and Breno Cerqueira, a Brazilian public official. The post is based on an op-ed originally published (in Portuguese) in the Folha de São Paulo newspaper.

Earlier this month, a single Justice on Brazil’s Supreme Court invalidated, on dubious procedural grounds, the plea bargain that prosecutors had reached seven years ago with the Odebrecht firm, which resolved serious corruption charges that the prosecutors had brought against the firm. The alleged impropriety concerned how the Brazilian prosecutors had interacted with their counterparts in the United States and Switzerland, which had also brought cases against Odebrecht, which ultimately pled guilty and paid penalties in all three jurisdictions. According to Justice Toffoli (who, incidentally, had been implicated in Odebrecht’s wrongdoing when he was Solicitor General, though he succeeded in suppressing reports about his alleged wrongdoing), the Brazilian prosecutors from the Lava Jato (“Car Wash”) Task Force had engaged in discussions of the case with their U.S. and Swiss counterparts without those foreign prosecutors having first filed a formal official request for international legal cooperation, and without including representatives from the Brazilian Ministries of Justice and Foreign Affairs in the discussions. Strikingly, Justice Toffoli ruled that none of the evidence obtained from Odebrecht in the plea deal—and which was used in hundreds of other cases—could lawfully be used. Tofolli’s decision thereby threatens to undo the vast majority of the convictions that the Car Wash prosecutors had secured before the task force was disbanded.

This decision is troubling for a number of reasons. For one thing, the decision put the private interests of defendants ahead of the public interest of deterring and prosecuting corruption. No one denies that due process is important. However, preserving indisputable evidence of corruption can be achieved without a wholesale dismissal of charges. The nullification of the Odebrecht case is a nullification of justice and of the public interest.

Perhaps even more troubling, the decision is unsettlingly aligned with President Lula’s promise of revenge against the Car Wash Operation—and the individual judges, prosecutors, and others involved in that operation. Lula himself was jailed for 18 months after he was convicted for taking a bribe (in the form of a luxury apartment)— a conviction that was ultimately overturned on technical grounds (principally that the case was brought in the wrong venue). Lula, his supporters, and many mainstream media outlets have characterized the conviction as a baseless and politically motivated prosecution. That Justice Toffoli, a Lula appointee, issued this sweeping ruling—and also issued a broad and highly political statement condemning the entire Car Wash operation—would certainly seem consistent with the notion that the ruling had more to do with political and personal motivations than the law. Worse still, the ruling not only invalidates the Odebrecht plea deal and all other convictions that relied on the evidence it produced, but the ruling also calls for the investigation of the Car Wash prosecutors and judges for (alleged) misconduct.

Now, it is worth noting that Justice Toffoli’s ruling is unlikely to have any effect on Odebrecht’s plea agreement with the U.S. authorities. U.S. evidentiary standards tend to be more permissive, at least in this context, about barring the use of illegally sourced evidence – especially in cases where the public interest has clearly been aggrieved. And Odebrecht is unlikely to try to use the Brazilian ruling to wriggle out of is plea deal with the U.S., especially since that deal provides that non-compliance can result in further prosecution.

One more observation may be pertinent here: The Brazilian prosecutors may have hurt their cause by not providing sufficient transparency in an official register of the crimes, including their investigation, prosecution, and ultimate plea bargain. In the U.S., the Department of Justice website provides open and transparent information about all Foreign Corrupt Practices Act plea agreements. In the case of Odebrecht, company representatives signed affidavits testifying to US$788 million in bribes to government officials in 12 countries, including US$349 million in Brazil. In all, ill-gotten gains netted Odebrecht US$3.336 billion of construction contracts, including US$1.9 billion in Brazil. By contrast, Brazilian authorities failed to provide the transparency required under Brazilian law. The Federal Public Prosecutor, which handles civil and criminal cases, disclosed nothing until, following last week’s decision, it posted the agreement’s legal framework. The Office of the Comptroller General, which handles administrative crimes, posts all plea bargains on its website but includes few to no specific details about crimes.

The issue of transparency raises a counterfactual question: to what extent would things have been different if the facts of the Odebrecht case had been made transparent, engraving outrageous corruption permanently on the public record from the very beginning? Just maybe Justice Toffoli’s decision might have been different. Transparency affects the legal and political environment in unmeasurable ways, and may have impacted subsequent judicial rulings.

Guest Post: Curbing Political Finance Abuse in Moldova

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GAB is pleased to welcome this post on political finance in Moldova by the Independent Anti-Corruption Advisory Committee. Established by reformist President Maia Sandu in 2021, the committee reports regularly on Moldova’s progress in curbing corruption and what more needs to be done. Thanks to its members expertise and their independence, its work carries great weight — both within Moldova and the international community.

The most recent report addresses perhaps the most challenging issue any democracy faces: enforcement of the rules governing contributions to and expenditures by political candidates and political parties. A challenge all the greater in Moldova as post-Soviet oligarchs have yet to be fully tamed and Russia continues to pour black money into campaigns to strengthen anti-Ukraine, pro-Russian candidates.

The report is here, the committee’s summary below.

Continue reading →

Guest Post: Behavioral Psychology, Transnational Bribery, and “Conditional Corruption”

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GAB is delighted to welcome Nils Köbis, a researcher at the Max Planck Institute for Human Development, to contribute today’s guest post:

Suppose that you need some sort of official license, such as a fishing permit. Would you consider obtaining that license—or obtaining it more quickly—by paying a bribe? Now suppose that you are traveling in a foreign country and you need a similar sort of license. Would you consider paying a bribe to get that license in that foreign setting—if we assume that the probability of getting caught and the possible penalties are the same as in your home country, but that bribery is much more common by citizens of that country?

Are your answers to the two questions the same? Do you think other people’s answers to those questions—or, more importantly, their actual behavior—will be the same or different, depending on whether they are at home or abroad?

This question implicates a more general issue in moral and behavioral psychology. Some believe that the moral constraints on our behavior are relatively stable: In the example above, some people believe paying bribes is wrong and won’t do it, no matter where they are, while others are willing to pay bribes, at least if they the advantage of doing so is big enough and they think they will probably be able to get away with it—again, without reference to other aspects of the surrounding context. But some research has suggested that the (perceived) behavior of others can exert a strong pull on our moral compass (see, for example, here, here, and here).

To further explore this question, my collaborators and I conducted a study that involved online experiments with 6,472 participants from 18 nations, in which the participants played a bribery game based on the our opening example. Our findings were both surprising and intriguing, and suggest that our inclination to engage in corrupt behavior is influenced by our stereotypes (not always accurate) of people from diifferent countries. Continue reading →

FinCEN’s Beneficial Ownership Proposal: Invitation to Evasion

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GAB welcomes this guest post by Gary Kalman, Executive Director of Transparency International U.S.

The Financial Crimes Enforcement Network (“FinCEN”), the bureau charged with implementing our nation’s anti-money laundering laws, is underfunded. They do not have enough staff and significant staff turnover has left the bureau with less institutional knowledge and memory. On top of this, the agency has an Acting rather than permanent Director, undercutting its leaders’ ability to set a clear vision and direction for the bureau.

None of that, however, can explain the agency’s remarkable lapse in judgement in publishing  this proposal to collect beneficial ownership information from U.S. companies.

Let me explain.

Continue reading →

Guest Post: ChatGPT in Anticorruption Research–You Cannot Make This Up!

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Today’s guest post is from Dieter Zinnbauer of the Copenhagen Business School’s Sustainability Center:

Jim Anderson over at the World Bank blog and Matthew Stephenson on this blog kicked of an interesting discussion about how the new era of artificial intelligence—particularly the natural language chat-bots like OpenAI’s revolutionary ChatGPT—will affect the anticorruption field. As Matthew suggested, the ability of ChatGPT to generate plausible-sounding (if a bit bland) summaries and speeches on corruption-related topics should inspire all of us real humans to aim to do more creative and original—and less bot-like—writing and speaking on anticorruption topics. And both Jim and Matthew suggested that in this field, as in many others, ChatGPT can also be a valuable aid for researchers and advocates, performing in seconds research and drafting work that might take a human being several hours.

Yet while ChatGPT may be able to assist in some tasks, we shouldn’t get too excited about it just yet, especially when it comes to research. Some of its limits as a research tool are already well known and widely discussed. But I wanted to call attention to another problem, based on a couple of recent experiences I had trying to use ChatGPT as a research aid. Continue reading →

Making Corruption a National Security Issue: How Will it Change Enforcement Dynamics?

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Today’s Guest post is by Nedim Hogic. Nedim advises clients in the private and public sector on environmental, social, and governance issues. Author of many articles on corruption, international law, and the rule of law and development, he is currently writing a book on judicial anti-corruption campaigns.

Since becoming an important policy goal in the 1990s, global anticorruption efforts have gone through three phases. In the first, anti-corruption policies were considered important for economic development, driven by the belief that successful anticorruption programs would make global borrowing and spending and financial aid more efficient. In the second, spanning the first two decades of this century, it was central to the protection of the rule of law and democracy.

The current phase, and particularly that part denominated “kleptocracy,” is animated by the threat it poses to global security. The Biden Administration’s national security strategy, which followed its memorandum calling the fight against corruption a core U.S. security interest, is not the first American or indeed international document to suggest corruption is a national security threat. But it is the first to state the premise clearly and straightforwardly, thus marking a sharp change in thinking about transnational corruption. Indeed, in my view the change is significant enough to be labelled a paradigm shift.

Continue reading →