Brazil & Southern Cone - July 2024

José Antonio Dias Toffoli, a justice on Brazil’s supreme court (STF), ruled on 21 May to annul legal decisions and cases against Marcelo Odebrecht, former CEO of construction firm Odebrecht, relating to the Lava Jato corruption investigation. However, on 4 June the STF received an appeal from the attorney general’s office (PGR) to challenge the annulment of the Odebrecht cases, suggesting that the complex legacy of the discredited corruption probe remains a contentious political and juridical issue.

In 2016, former federal judge and current senator Sergio Moro convicted Marcelo Odebrecht on charges such as active corruption, money laundering, and criminal association. Odebrecht and other executives of the construction company later agreed plea bargains with the Lava Jato investigators, confessing to have participated in bribery schemes and giving up the names of other participants and beneficiaries of the bribes, in exchange for reduced prison sentences. Dias Toffoli annulled Odebrecht’s Lava Jato cases on the grounds of a lack of impartiality on Moro’s part and of procedural breaches in the agreement of plea bargains. These abuses by Lava Jato judges and investigators provided the basis for overturning previous convictions, such as Moro’s 2017 conviction of then-former president (2003-2011) Luiz Inácio Lula da Silva, who returned to the presidency with his 2022 election victory, after the STF annulled the Lava Jato cases against him and restored his political rights in 2021.

In 2019, leaked messages revealed that Moro was colluding with prosecutors to build their cases against defendants. However, even before the leaks, supporters of Lula’s left-wing Partido dos Trabalhadores (PT) had suspected Moro’s lack of impartiality. One of Moro’s most controversial decisions was the removal of the court seal on Lava Jato case files which included an unauthorised interception of a phone call in 2016 between Lula and his protégée, former president Dilma Rousseff (PT, 2011-2016). The vague conversation, which was about the transfer of documents for Lula to sign, was used by opponents of the Rousseff administration to argue that she might have been trying to urgently appoint Lula as her chief of staff so that he could gain immunity from prosecution; the appointment was later blocked by a federal court. In 2018, shortly before the October presidential vote, the Brazilian left expressed more doubts over Moro’s impartiality when he made more Lava Jato case files public at politically inopportune moments for the PT. He released documents a week before the 2018 first-round vote that included testimony implicating PT members in corruption schemes. This further damaged public trust in the party and contributed to the second-round election defeat of its candidate, Fernando Haddad, by the far-right Jair Bolsonaro, who served as president from 2019-2023.  

Moro’s lack of impartiality was a key justification for the STF to annul decisions against two of the most high-profile convictions of Lava Jato, Lula and Marcelo Odebrecht. However, the attorney general, Paulo Gonet, has highlighted that Odebrecht had confessed to committing crimes and appealed Dias Toffoli’s recent decision. Although all Lava Jato decisions and proceedings against the former CEO were annulled, Dias Toffoli did not annul the 2016 plea bargain that Odebrecht agreed with Lava Jato investigators. On 4 June the PGR filed an appeal before the STF requesting that Dias Toffoli’s decision be reviewed, arguing that if the plea bargain that reduced Odebrecht’s sentence remains valid, then all the legal cases and decisions which were launched based on his confession should also remain valid. In addition to the PGR, anti-corruption NGO Transparency International has also criticised Dias Toffoli’s decision, stating on social media that the “destruction of the fight against corruption” in Brazil is “relentless”.

Alleged improper fund management

On 7 June the national judicial watchdog, Conselho Nacional da Justiça (CNJ), opened investigations into the alleged misconduct of four judges involved in Lava Jato cases. The CNJ released a report last year which suggested possible procedural breaches regarding funds from the payments of fines on companies implicated in Lava Jato. One of the four judges which the CNJ is investigating is Gabriela Hardt, who replaced Moro after he stepped down as a federal judge and joined Bolsonaro’s cabinet in 2019.