How to Reform Brazil’s Freedom of Information Regime

Ten years ago, Brazil enacted its Access to Information Law, which implements the constitutional guarantee of the right to information. Under the law, certain government data must be proactively disclosed, and other information must be provided upon the request of a member of the public, without the requester needing to show any special reason or justification. This law was supplemented with the enactment, last March, of the Digital Government Law, which streamlines the procedures for information requests, clarifies the government’s obligations to provide information in an open format that fulfills completeness, quality, and integrity requirements, and includes a non-exhaustive list of data that must be disclosed.

These laws, like other freedom of information laws, are intended to make government more responsive and accountable and to help fight corruption by making it easier for citizens, journalists, advocacy groups, and prosecutors to scrutinize and analyze government information for evidence of suspicious activity. But while the laws are very detailed about the rules for disclosing information upon request, the law’s provisions on proactive disclosure are not sufficiently specific or effective. And proactive disclosure is quite important. After all, while the right to request information is helpful to those who want to investigate a specific event, the proactive disclosure of data—for example, with respect to public expenditure, public procurement processes, and public contracts—may raise “red flags” that can spur more in-depth investigations.

There are three deficiencies in particular that should be remedied, so that Brazil’s freedom of information laws can be effective in ensuring the sorts of proactive information disclosure that can foster transparency and detect or deter corruption:

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The End of Institutional Multiplicity: A Drawback in the New Administrative Improbity Law

Brazil’s Administrative Improbity Law is one of the cornerstones of the country’s anticorruption framework. The law imposes administrative and civil liability on public officials and political agents for illicit enrichment, damage to the treasury, and acts against the principles of public administration. Before its enactment in 1992, these forms of misconduct were only punishable under criminal law, which imposes a much more demanding evidentiary standard. The enactment of the Administrative Improbity Law thus played a valuable role in enabling the government to hold corrupt actors liable in those situations where the evidence of corruption, though strong, was not enough to establish proof beyond a reasonable doubt.

This past October, the Brazilian government enacted significant amendments to the Administrative Improbity Law. Some of these changes were welcome, particularly those that clarified vague provisions and attempted to speed up the process. (Brazilian courts have taken on average six years to adjudicate administrative improbity claims.) But another change is much less welcome: The amendments to the law reduced the number of institutions that can file a suit for violations of the law. Under the original version of the law, a suit could be initiated either by the Public Prosecution Office (an autonomous body) or by the government entity that was harmed by the corrupt act (the federal Attorney General’s Office in the case of acts that harm the national government, and the state or municipal authorities in the case of acts that harmed subnational government entities). This arrangement is a form of what Brazilian scholars typically refer to as institutional multiplicity—an arrangement where multiple institutions have overlapping authority to enforce legal provisions. Institutional multiplicity is a key feature of Brazil’s anticorruption framework. The new version of the Administrative Improbity Law scraps this multiplicity, at least in this context, by giving the Public Prosecution Office the exclusive right to file administrative improbity suits.

This is a mistake.

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Guest Post: What Should Brazil’s Next President Do To Get the Anticorruption Agenda Back on Track?

Today’s guest post is from Marcelo Malheiros Cerqueira, a Brazilian federal prosecutor and a member of the GAECO/MPF (Special Action Group for Combating Organized Crime) in the state of Minas Gerais, Brazil.

Since 2019, Brazil´s anticorruption efforts have been disrupted and derailed. Institutions in charge of fighting corruption are being constantly weakened or attacked. Tools that have been central to Brazilian prosecutors’ anticorruption investigations, such as plea bargains and leniency agreements, are being dismantled by new legislation, and the Congress has not moved forward on proposals that would enhance the fight against corruption (see here and here). The judiciary, mainly by its Supreme Court, has have nullified convictions, or sometimes entire investigations, in major corruption cases, and in so doing has weakened the anticorruption system (see some examples herehere and also here). And despite the fact that anticorruption was a central theme of the 2018 presidential campaign, the government has been questioned for lending its support to pushback against the anticorruption agenda and politicizing formerly non-partisan bodies like the Federal Police.

While the backlash against Brazil’s anticorruption efforts is a three-branch problem, Brazilian voters have an opportunity to address at least one aspect of the problem next year, when they go to the polls to select Brazil’s next president.

This brings us to the question: What should the next Brazilian president do, whoever he or she may be? To put this question another way, when voters and civil society organizations are assessing the future presidential candidates’ anticorruption platforms, what sorts of policies and proposals should they look for? While the issue is obviously quite complicated, here are four initial proposals, from the simplest to the most difficult to implement:

  • First, the president needs to demonstrate a commitment to integrity as a core values of the administration—and must do so not simply through rhetoric, but by taking practical action such as refusing to appoint individuals implicated in corruption cases to senior government positions and pushing for the adoption of integrity measures at lower levels of the bureaucratic hierarchy. Doing so will not only help ensure integrity in the Federal government, but will also set a positive example for state governors and mayors, and help foster a culture of integrity more broadly in the society.
  • Second, the president should respect and empower the institutions of the anticorruption system, avoiding any risk of their political capture. This requires that the appointment of directors for bodies such as the Financial Activity Control Council (COAF), the Federal Police, and the Comptroller General of the Union (CGU) be guided by non-partisan technical criteria, instead of making appointments on the basis of political alignment or personal relationships. Likewise, the next president should restore the longstanding tradition of choosing the Prosecutor General of the Republic (PGR) from the list of three candidates previously voted by the members of the Federal Prosecution Office. This model is ideal for guaranteeing the autonomy of the PGR, which, in turn, is essential for the criminal investigation and prosecution of higher-ranking political agents (including the president) for possible acts of corruption.
  • Third, the president must commit to working to enact legislative and constitutional reforms that decrease impunity for acts of corruption, such as the proposed constitutional amendments to allow incarceration of defendants after the first affirmation of a conviction in an appeal´s court (rather than allowing convicted defendants to remain at liberty until all possible appeals are exhausted) and end to the “privileged forum” rule that says high-level public officials can only be tried in higher courts. On the other hand, the president must also oppose—and if necessary veto—any attempt by the Congress to inhibit the action of anticorruption bodies or to weaken existing anticorruption tools (as unfortunately occurred recently with respect to amendments to Brazil’s Administrative Misconduct Act).
  • Fourth, the most difficult anticorruption challenge facing Brazil’s next president will be reforming the Brazilian electoral system, which is a root cause of the grand corruption that recent investigations have exposed. Any attempt to change the electoral system will face strong opposition by influential politicians, whose power relies in rules that ensure expensive campaigns and unequal distribution of the public electoral fund. Thus, the president must spearhead the attempt to reform the political system—but should probably only do so when he or she has sufficient high public approval, probably after the implementation of the other three proposals mentioned above.

This short list obviously does not encompass all the possible measures that can be taken by the next president against corruption. It would be helpful to know what GAB readers think about these suggestions, as well as what other proposals they might suggest.

One last word. Political leaders can do a lot to help the anticorruption agenda. But that does not mean that societies depend exclusively on them. Good education, transparency, popular control, high standards of morality and many other factors are crucial to the success of the fight against corruption. Therefore, although the central question posed here brings the opportunity to debate the role of the president, civil society also needs to take care of its role.

Corruption’s War on the Law

“Corruption’s War on the Law” is the headline on an article Project Syndicate just published. There former French magistrate and corruption fighter Eva Joly recounts the fate of those who have dared to confront powerful networks of corrupt officials and those who corrupt them.  Maltese investigative journalist Daphne Caruana Galizia was murdered by accomplices of those she was investigating. So was Rwandan anti-corruption lawyer Gustave Makonene. So too was Brazilian anticorruption activist Marcelo Miguel D’Elia.

After a second attempt on his life, Nuhu Ribadu, first chair of Nigeria’s Economic and Financial Crimes Commission, the country’s premier anticorruption agency, famously remarked:

“When you fight corruption, it fights back.”

In her article, Mme. Joly, who received numerous threats for investigating and ultimately convicting senior French officials for corruption, explains that violence is just one way corruption “fights back.”  The most recent head of Nigeria’s EFCC was arrested and detained on trumped up charges of corruption. Ibrahim Magu has been suspended from office pending further proceedings, proceedings unlikely to be held this century.

At the same, Nigerian anticorruption activist Lanre Suraju is, as this blog reported last week, being charged with “cyberstalking” for circulating documents from a court case that implicate associates of the current Attorney General in a the massive OPL-245 corruption scandal. This form of intimidation, which Nigerians have dubbed “lawfare,” has now been exported to Europe. Italian prosecutors are being subjected to both criminal charges and administrative action for having the nerve to prosecute one of Italy’s largest companies for foreign bribery (here).

President Biden has declared the global fight against corruption to be a national priority, and he will shortly host a democracy summit where Brazil, Italy, Malta, Nigeria, and Rwanda will be represented at the highest level. Might he remind them which side of the fight they should be on?

Brazil Should Rethink the Corporate Death Penalty for Corrupt Acts

Brazil’s Clean Company Act (CCA), enacted during a time of mass protests against corruption and impunity, was a major step forward in the fight against corporate crime. While the CCA is best known for its imposition of strict civil and administrative liability on legal entities that commit corrupt acts against public administration, the CCA is also notable for its authorization, in extreme cases, of a “corporate death penalty.” More specifically, the CCA requires the dissolution of a corporation or other legal entity when (1) the legal entity is in fact a “shell company” used to conceal illegal acts (such as money laundering, tax evasion, or procurement fraud), or (2) the legal entity was used on a regular basis to facilitate or promote the performance of wrongful acts. Applying the corporate death penalty to shell companies created for the purpose of facilitating or concealing criminal acts is straightforward and not terribly controversial, especially since these shell companies do not engage in any genuine productive activity. The controversy arises with respect to the second category, which can include productive companies.

Applying the extreme sanction of corporate dissolution might seem like appropriately strong medicine for companies, even productive companies, that have been involved in serious and ongoing illegality. In practice, however, this sanction is not working as intended. A much more effective and realistic sanction, at least in the Brazilian context, would be to compel a persistently corrupt (but productive) company’s shareholders to sell their controlling stake in the company—thus preserving the company as a going concern, but placing it under new ownership and management.

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Guest Post: Shifting Anticorruption Messaging from “Crime and Punishment” to “Guardrails for Good Government”

Today’s guest post is from Joe Grady, a co-founder of the Topos Partnership, a firm that specializes in public opinion research:

Public backing is critical to the success of anticorruption reform efforts. Yet communications intended to mobilize the public against corruption often backfire, making audiences less engaged and less confident the problem can be solved. To better understand this problem, the Open Society Foundations recently sponsored an international research effort led by the Topos Partnership to better understand how residents of three countries—the United States, North Macedonia, and Brazil—think about corruption in the public sphere, and how best to engage them in efforts to combat the problem. In each country, ethnographers spoke at length with roughly 150 people, followed by internet surveys testing different kinds of messages.

Not surprisingly, findings across the countries are distinct in various interesting ways. Macedonians, for example, often have a sense that their country lags behind other European countries, and they may also look back nostalgically at the Yugoslav era when things seemed to run more predictably. Brazilians see themselves as being culturally averse to rigid rules and procedures, including those that keep government “honest.” The U.S. public has a strong sense that government is supposed to be by and for the people. But despite these important differences, there are also important similarities across the three countries. Continue reading

Guest Post: Brazil’s Bill Restricting Cash Transactions Would Help Fight Corruption

Today’s guest post is from Marcelo Costenaro Cavali, a Brazilian Federal Judge in the District Court of Sao Paolo and a Professor of Criminal Law at the FGV Sao Paolo law faculty.

Criminals like to use cash because it is widely accepted, anonymous, and virtually impossible to track. Paying bribes in cash, for example, may be less risky than using more easily traceable electronic transfers. For this reason, many countries have enacted, or are considering, legislation restricting the use or possession of cash in large quantities. For example, in Brazil, the Senate is currently considering a bill that would prohibit the use of cash for all real estate transactions and for all other transactions over 10,000 Brazilian reais (approximately 1,900 US$); the bill would further prohibit carrying over 100,000 reais (approximately 19,000 US$) and possessing over 300,000 reais (approximately 57,000 US$) in cash, except in specific situations. (The bill would leave the implementation and enforcement to the Brazilian Financial Intelligence Unit (COAF), which would also have the power to adjust the threshold amounts.) Such limits on holding and using cash can be an effective means for disrupting money laundering, corruption, and tax evasion, and this bill, if passed, could therefore be an important step forward in Brazil’s fight against corruption and other economic crimes. Continue reading

New Podcast Episode, Featuring Fernanda Odilla and Anwesha Chakraborty

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, my colleague Nils Köbis interviews Fernanda Odilla and Anwesha Chakraborty, two researchers studying how technology can be used to assist bottom-up anticorruption efforts–particularly, though not exclusively, in Brazil and India. The interview covers a range of initiatives in this category, discussing their strengths, limitations, and future possibilities. You can also find both this episode and an archive of prior episodes at the following locations: KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

New Podcast Episode, Featuring Michael Mohallem

A new episode of KickBack: The Global Anticorruption Podcast is now available. In this week’s episode, I interview Michael Mohallem, a Brazilian law professor, lawyer, and consultant based in Rio de Janeiro, about recent developments in Brazil’s struggle against corruption. Our conversation focuses on the so-called Lava Jato (“Car Wash”) operation, particularly recent developments including the Bolsonaro Administration’s decision to terminate the Car Wash task force, and recent decisions by the Supreme Court invalidating the corruption conviction of former President Lula. We also discuss the Bolsonaro administration’s overall anticorruption record, and the prospects for future progress against corruption in Brazil in light of what appears to be a very challenging and inhospitable political environment for the foreseeable future. You can also find both this episode and an archive of prior episodes at the following locations: KickBack is a collaborative effort between GAB and the ICRN. If you like it, please subscribe/follow, and tell all your friends! And if you have suggestions for voices you’d like to hear on the podcast, just send me a message and let me know.

Why AMLO Won’t Let the Pemex Investigation Clean Up Corruption in Mexico

The case was expected to be a “blockbuster.” In July 2020, Emilio Lozoya Austin, former director of Mexican state-owned oil giant Petróleos Mexicanos (Pemex), was extradited from Spain to Mexico on charges of bribery, money laundering, and racketeering. The most significant of the charges related to his receipt of $10.5 million in bribes from embattled Brazilian construction firm Odebrecht. Upon his return to Mexico, Lozoya leveled bombshell accusations in a plea for prosecutorial leniency, claiming that former Mexican President Enrique Peña Nieto, along with his former treasury minister, two other former presidents, five former senators, and two former presidential candidates, orchestrated an extensive corruption scheme throughout the government ranging from securing bribes to passing controversial energy reform legislation. Lozoya’s accusations appeared to confirm information that Mexican authorities uncovered years ago. Back in 2017, after Odebrecht admitted to paying millions of dollars in bribes in Mexico, a Mexican special prosecutor determined that in 2012 Lozoya, then the newly-minted Pemex director, awarded Odebrecht several lucrative contracts in exchange for bribes. Then-President Peña Nieto, however, fired the special prosecutor and stalled the investigation.

But Mexico’s current president Andrés Manuel López Obrador (AMLO), who made anticorruption a cornerstone of his 2018 presidential campaign, vowed to reignite the investigation and prosecution of Lozoya. And last year’s extradition of Lozoya to Mexico seemed to be a sign that Mexico was (finally) on the verge of a real reckoning with endemic corruption akin to the Lava Jato (Car Wash) investigation in Brazil. Lava Jato, which began as an investigation into alleged corruption and money laundering by Brazilian state-owned oil company Petrobras, eventually ensnared Odebrecht, exposed the company’s decade-and-a-half long bribery scheme in a dozen countries, and led to the recovery of more than $5 billion in government funds and the conviction of more than 170 people—including several senior politicians. Despite recent setbacks (including the premature disbanding of the Lava Jato Task Force and the judicial invalidation of the operation’s highest-profile conviction), the Lava Jato investigation nonetheless provides a template for how an investigation that starts with one corrupt official at a state-owned country can snowball into a national reckoning that disrupts a long-entrenched corrupt system. The parallels between Lava Jato and investigation into Pemex are obvious, and many anticorruption advocates, both inside and outside of Mexico, were hoping for something similar.

Instead, nearly a year after Lozoya’s arrest, there has been little progress on the case, and it seems increasingly unlikely that this investigation will prompt the same kind of anticorruption reckoning as in Brazil. Indeed, court-watchers now fear that Lozoya and those he named will escape any real consequences. While many factors have contributed to this disappointing result, an apparent lack of enthusiasm and commitment from AMLO and his government has played an important role. Instead of doing everything in his power to move the investigation forward, AMLO slashed the budget of the Mexican Attorney General’s Office (FGR), which is leading the Pemex investigation, condoned soft treatment for Lozoya, and has seemed generally ambivalent about the investigation’s apparent lack of progress.

AMLO’s behavior is this regard seems puzzling, since one would think that AMLO has every incentive to support the investigation. After all, AMLO’s 2018 anticorruption platform was wildly popular, and—especially given that his support is waning—revitalizing this anticorruption narrative might improve the standing of his newcomer political party, Morena, heading into this coming June’s midterm elections. So why has AMLO’s support for the Lozoya investigation been so tepid? There are, I think, two main explanations, both of which cast doubt on the sincerity of AMLO’s commitment to rooting out corruption in Mexico’s government.

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