The Incredible Shrinking Scandal? Further Reflections on the Lava Jato Leaks

Last week, I published a lengthy commentary on the recent explosive reports from the Intercept regarding the Lava Jato operation in Brazil—reports that were based primarily on text messages provided by a source who apparently hacked (or otherwise gained unauthorized access to) the cell phone of Deltan Dallagnol, the lead prosecutor in the case. Because I am unable to read Portuguese, my discussion was based exclusively on the two substantive English-language reports, here and here. (There are more reports in the series, but so far they’ve not been translated into English; if and when they are, I may update my commentary.) The Intercept’s reports argued that these leaked text messages indicate: (1) that Judge Moro engaged in unethical and possibly illegal coordinating with and coaching of the prosecutors; (2) that the prosecutors recognized that their case against former President Lula was without solid legal or evidentiary foundation; and (3) that the prosecutors were motivated by political/ideological bias against Lula and his party, the PT.

In last week’s commentary, based on my preliminary analysis of the Intercept stories, and what I knew about the background context, I reached the following tentative conclusions:

  • First, I thought that the evidence of extensive text communications between the lead prosecutor and the presiding judge was (or at least should be) per se impermissible. I used very strong language in making this point, describing the fact that the two were in regular text contact as “the height of impropriety,” and a “shocking and inexcusable breach of judicial ethics.”
  • Second, though, I thought that the specific text exchanges reported by the Intercept—the ones that allegedly showed the coaching and collaboration—were largely innocuous, and didn’t seem to contain much problematic material over and above the fact of the communications themselves.
  • Third, I did not think that the text messages reported by the Intercept provided any reason to call into question the legal and evidentiary basis for Lula’s conviction. That conviction was and remains controversial, but the leaked text messages don’t show anything other than a prosecutor preparing appropriately for his case.
  • Fourth, I concluded that although texts exchanged among prosecutors in late September 2018 did indeed indicate that the prosecutors did not want the PT candidate to win the election, this didn’t necessarily show that the prosecutors were biased against the PT back in 2015-2016 (when the decision to investigate and prosecute Lula took place), nor was there any evidence that the prosecutors had taken any concrete action that could be ascribed to partisan bias.

Much to my surprise, last week’s post seems to have attracted a lot of attention, particularly in Brazil. As a result, I’ve had the opportunity to engage in substantive exchanges with multiple Brazilian experts from across the political spectrum, who hold a wide range of views on Lava Jato, Lula, and related matters. Some of these exchanges can be found in the comment section of last week’s post, which I highly recommend that interested readers check out (particularly those who might have read that post the day it came out, before the comment thread included over 60 separate entries); others have communicated with my privately. (To be clear, though, I have not communicated about the post, publicly or privately, with Mr. Dallagnol or anyone else named or discussed in the Intercept story.)

Based on these conversations, and on further reflection, my views on the Intercept’s reporting have shifted somewhat, mainly in the direction of thinking that this “scandal” is considerably less scandalous than the Intercept reported, or that I’d originally believed. Continue reading

Just How Damning Are the Lava Jato Leaks? Some Preliminary Reflections on The Intercept’s Bombshell Story

[Note: My thinking on the issues discussed in this post has evolved somewhat. For the update, see here.]

Two days ago, The Intercept published a collection of dramatic reports (here, here, and here) regarding the long-running Brazilian investigation into high-level corruption. That investigation, known as the Lava Jato (Car Wash) operation, which began as in inquiry into money laundering and associated offenses at the Brazilian state-owned oil company Petrobras, has led to the prosecutions and convictions of scores of powerful business leaders and senior politicians—including, most notably, the conviction and imprisonment of former President Luiz Inacio Lula da Silva (known as Lula). That conviction prevented Lula from competing in the presidential election in 2018, an election that was one by far-right candidate Jair Bolsonaro. Anger on the Brazilian political left over Lula’s conviction, as well as the impeachment and removal of his successor Dilma Rouseff, has provoked accusations that the Lava Jato operation is really a right-wing conspiracy, and that the Lava Jato task force—the special team of prosecutors led by Deltan Dallagnol—and Sergio Moro, who presided over the most significant Lava Jato trials, including Lula’s, are politically biased enemies of the Left who are engineering a kind of coup d’etat through the judicial system. Many people, both in Brazil and internationally (me included), have pushed back against these accusations.

The Intercept’s recent reports assert that the critics were right all along. The evidence for this consists mainly of a huge quantity of data (texts, emails, and video and audio recordings) from a cell phone—almost certainly Mr. Dallagnol’s, based on the fact that all of the reported exchanges involve him. The Intercept has published a set of stories (some in English, some in Portuguese) based on a small portion of this material, mainly text message exchanges; the reporters emphasize that more is likely to emerge as they and other journalists review more of the leaked/hacked data. The big story here is that, according to the Intercept’s reporting, these text messages provide evidence of serious ethical breaches, particularly by then-Judge Moro, as well as evidence that the prosecutors knew their case against Lula was not strong, and, most damningly, that the task force prosecutors were motivated by partisan antipathy toward Lula and his party (the Worker’s Party, or PT), despite their claims to the contrary.

What to make of this? The news is clearly bad for the Lava Jato operation, the task force, and those of us who have supported the operation and defended it against various accusations and attacks. The question I want to address here is: Just how bad is it? My tentative answer is that, while the Intercept’s reports reveal some very upsetting, disappointing, and in some cases likely unethical conduct, the leaked text messages quoted in these first reports are not as damning as either the Intercept or other preliminary reports have made them appear. In this post (which will be longer than usual), I’ll try to work through the various allegations and associated texts and do my best to assess which revelations are most serious, which least so, and where we really need more evidence before making even a preliminary judgment. Continue reading

Proposed Changes in Brazil’s Anticorruption Legislation: A Summary and Critique

Early last month, Brazilian Minister of Justice Sergio Moro (a former judge best known for his role in the so-called Car Wash corruption cases) introduced an extensive anti-crime legislation package. The package includes many measures, including some related to things like violent crime, but it notably includes five measures that are especially relevant to Brazil’s fight against corruption. What are these proposed changes, and what would their implications be?

Continue reading

The Bolsonaro Administration is Quietly Reducing Transparency in Brazil

Right-wing populist Jair Bolsonaro was inaugurated President of Brazil on January 1, 2019. As a candidate, Bolsonaro promised that his regime would break with the large-scale graft of Brazil’s former leaders and would ruthlessly pursue the corrupt and bring them to justice. At the end of January, Justice Minister Sergio Moro released, with much fanfare and press attention, a sweeping anti-crime legislation package that addresses both white collar crime and violent organized crime, and that incorporates some, though not all, of the anticorruption measures proposed by Transparency International. So does this mean that the Bolsonaro Administration is following through on its promise to make the fight against corruption a major priority, and to end the culture of impunity that has shielded Brazilian political elites?

Alas, no. While the anti-crime package (and other high-profile pieces of legislation, like tax reform) have been highlighted by the administration and attracted most of the media attention, less prominent yet equally consequential pieces of legislation related to corruption are being passed with little to no warning or public debate. Here are two examples of major events that have occurred within the first month of the regime that should give anticorruption scholars and the international community pause in their evaluation of the Bolsonaro government’s fight against corruption:

Continue reading

Guest Post: The World’s Biggest Anticorruption Legislative Package You Haven’t Heard About Is in Brazil

Today’s guest post is from Professor Michael Freitas Mohallem (head of the Center for Justice and Society at Fundação Getulio Vargas (FGV) in Rio de Janeiro, Brazil), Bruno Brandão (Director of Transparency International, Brazil), and Guilherme France (a researcher at FGV).

Transparency International’s Brazilian chapter, together with scholars at FGV’s Rio and Sao Paolo law schools, are leading a wide-ranging effort, with input from multiple sectors of Brazilian society, to develop a package of legislative, institutional, and administrative reforms—the “New Measures Against Corruption”—that will address the systemic causes of corruption and offer long-term solutions. The project, which was developed over approximately 18 months in 2017 and 2018, was prompted by two related developments. First, so-called Car Wash (Lava Jato) operation has uncovered one of the biggest corruption scandals in modern times, implicating hundreds of politicians, civil servants, and business leaders. Second, although the Lava Jato operation led to a proposal, spearheaded by some of the Lava Jato prosecutors themselves, for “Ten Measures Against Corruption,” which was endorsed by over 2 million people, that effort was stymied by the National Congress. So, despite the success of Lava Jato in exposing and punishing corruption, Brazil has not yet developed the necessary long-term reforms to address the underlying sources of the problem.

The New Measures Against Corruption are intended to provide a path forward for Brazil, setting out a bold reform agenda that addresses issues relating to prevention, detection, and prosecution of corruption. The New Measures consist of a package composed of 70 anticorruption measures—ranging from draft federal bills, proposed constitutional amendments, and administrative resolutions—in 12 categories:

  1. Systems, councils and anticorruption Guidelines;
  2. Social accountability and participation;
  3. Prevention of corruption;
  4. Anticorruption measures for elections and political parties;
  5. Public servant accountability;
  6. Public servant investiture and independence;
  7. Improvements in internal and external control;
  8. Anticorruption measures for the private sector;
  9. Investigation;
  10. Improvements in criminal persecution;
  11. Improvements in the fight against administrative improbity;
  12. Tools for asset recovery.

The complete report on all 70 proposals (which runs 626 pages, and so far is only available in Portuguese) is here. Further discussion of the specific proposals would be welcome, both from domestic and international commentators, and we hope that at some point soon we will be able to provide summaries and translations of all of the measures. But in the remainder of this post, we want to offer some more background on the process that we used to develop the New Measures, as well as the prospects going forward for pushing the government to adopt these reforms. Continue reading

Four Steps Brazilian Judge Sergio Moro Can Take to Remain an Anticorruption Fighter as the New Minister of Justice

The biggest anticorruption-related news to come out of Brazil since the election of the far-right Jair Bolsonaro as Brazil’s next president has been the announcement that President-Elect Bolsonaro has tapped Judge Sergio Moro—the federal judge who oversaw the trials of several high profile Brazilian politicians in the Car Wash (Lava Jato) operation, including former President Lula Inácio de Silva—to be the next Minister of Justice. Some are hopeful that Judge Moro, who has emerged as an anticorruption hero to many Brazilians, will be well-positioned to use this new high-level post to push forward with systemic anticorruption reforms, including the “New Measures Against Corruption” championed by Transparency International and other civil society activists. Others, including Professor Stephenson in a recent post on this blog, worry that Judge Moro’s acceptance of this position would be a step backward for Brazil’s struggle against corruption, because his appointment could further politicize not only the Lava Jato trials, but the entire country. While President-Elect Bolsonaro wants to portray his appointment of Judge Moro as the first step toward making good on Bolsonaro’s promise to make anticorruption a priority of his administration, this appointment could be seen by centrists or the left as adding insult to injury by giving more power to the man who put Lula behind bars.

If Judge Moro accepts the appointment, then, he will be in a difficult and delicate position. He will have the power to influence the anticorruption agenda (assuming Bolsonaro follows through on his promise to give Moro autonomy in deciding how to deal with organized crime and corruption), but he needs to be sensitive to the fact that his very appointment risks entrenching the view in some quarters that the anticorruption agenda is really a politically-motivated conspiracy against left-wing politicians. There are four things Judge Moro can and should do in his new position to minimize this risk: Continue reading

“Say It Ain’t So, Sergio!”: Judge Moro’s Apointment to the Bolsonaro Cabinet Is a Setback for Brazil’s Struggle Against Corruption

Two weeks ago, far-right candidate Jair Bolsonaro was elected President of Brazil. Likely no single factor explains Bolsonaro’s success, but as I noted in a previous post, disgust at the corruption of the Worker’s Party (the PT), which had been exposed by the so-called Car Wash (Lava Jato) investigation, likely played a significant part. The Lava Jato operation has brought to light shocking levels of corruption, mainly though not exclusively at Brazil’s state-owned oil company Petrobras, and has led to the convictions of scores of businesspeople and politicians. Some of the key figures involved in the Lava Jato operation, including prosecutor Deltan Dallagnol and Judge Sergio Moro, have become national heroes, at least in some quarters. But their popularity is by no means universal. The fact that Lava Jato has investigated and convicted so many PT politicians, including former President Luiz Inacio Lula da Silva (known as Lula), has led some PT members and sympathizers to accuse the investigators, prosecutors, and judges involved in the Lava Jato operation as engaged in a politically-motivated right-wing conspiracy against Lula, the PT, and the left generally. On this account, Lula is a “political prisoner,” and the impeachment and removal of his successor, President Dilma Rousseff, was a “coup.”

Many people, me included, have pushed back hard against the notion that the Lava Jato operation is a politically-motivated conspiracy. The evidence that has come too light seems incontrovertible, and while critics have identified a number of questionable decisions by the prosecutors and judges (criticisms I’m not in a position to evaluate on the merits), the notion that it’s all a politically motivated sham are baseless. Overall my impression, shared by many other domestic and international observers, is that the Lava Jato operation has been conducted with great professionalism. Yes, it’s true that the operation has targeted many PT figures, but Lava Jato has gone after politicians from across the political spectrum, and if PT politicians seem to make up a disproportionate share, this is most likely because the PT had held the presidency from 2003 to 2016, first under Lula and then under Dilma. Furthermore, many of us in the international community, along with a number of Brazilian anticorruption scholars and activists, worried that these unsubstantiated attacks on the integrity of Lava Jato—attacks that go beyond challenging individual decisions or rulings—would do serious damage to the longer-term development of an effective set of institutional checks and balances in Brazil. One doesn’t need to subscribe to a naïve view that prosecutors and judges are entirely “neutral” to recognize the importance of developing institutions of justice that are not, and are not perceived as, partisan or “political” in the crude sense.

It’s in that context that I was so disheartened to learn last week that Judge Moro had accepted President-Elect Bolsonaro’s appointment to serve as Minister for Justice. I have no reason to doubt Judge Moro’s integrity or to believe that he accepted this job for any reason other than because he believes it will give him an opportunity to serve his country. But I nonetheless fear that it was a mistake, one that will set back Brazil’s ongoing efforts to develop more robust anticorruption institutions. Continue reading