Lava Jato

Public Ministry denounces Lula, others in Operação Lava Jato

The Brazilian Federal Public Ministry on 15 December 2016 denounced former President Lula on corruption and money laundering charges related to the Petrobras corruption scandal (Folha de S. Paulo, Valor). The crimes involve US$22.4 million in eight contracts between the state oil firm and Odebrecht, a major construction firm that has admitted to its involvement regarding bribes and cartel activity in the scandal. Lula stands accused of accepting US$3.7 million worth of land, used for the headquarters of his Instituto Lula in São Paulo, and a penthouse addition to his apartment in São Bernardo do Campo (SP) valued at US$150,000. The Ministry also cited Marcelo Odebrecht, Lula’s wife, and others on money laundering.

Odebrecht executive cites Temer, dozens of other politicians for bribery and illicit campaign funds in plea deal

Cláudio Melo Filho, former Vice President of Investor Relations at Odebrecht, the embattled construction firm under investigation for its involvement in bribery and cartel activity in Operação Lava Jato, cited dozens of politicians in a testimony as a part of a plea deal on 9 December 2016 (Folha de S. Paulo, Valor). Melo Filho said the company paid politicians to influence the passage of a bill that would provide tax concessions to producers of ethanol and the chemicals industry, allowing Odebrecht to save on taxes. The list of politicians includes President Michel Temer, to whom Melo Filho said the firm paid nearly US$3 million in bribes and illicit campaign funds, Chief of Staff Eliseu Padilha (US$1.2 million), Geddel Vieira Lima (minister under both Temer and Lula, US$1.75 million), former President of the Chamber of Deputies Eduardo Cunha (US$3.4 million), current Chamber President Rodrigo Maia (US$178,000), Senate President Renan Calheiros (US$1.8 million), Senator and leader of Temer’s government in Congress Romero Jucá (US$5.7 million), and Jaques Wagner (minister under Dilma Rousseff, US$6.1 million). Melo Filho stated Romero Jucá may be considered the front man for the solicitations. Many of the politicians have denied the accusations, including Temer (Valor). 

The accusations will have significant consequences for the Temer administration, which took power after the opening of the impeachment process of Dilma Rousseff in May 2016, finalized in August 2016. The Temer administration began with low public support, and polls from 7 December show a sharp decrease in support for the new administration. Datafolha, Folha de S. Paulo’s polling service, revealed that 63 percent of Brazilians want Temer to resign so the country may hold a direct presidential election. Temer would need to resign by 31 December 2016 for this to be possible under Brazilian law. Datafolha reported that 51 percent disapprove of the administration, up from 31 percent in July 2016. The testimony also comes as new economic data from the Brazilian Central Bank has continued to revise down growth projections given at the start of the new administration’s mandate. With low support and mounting evidence of corruption, on top of weak economic growth and fragmented support in Congress, the administration’s mandate has become even more complicated.

Odebrecht strikes leniency deal in Petrobras scandal

Odebrecht, one of the largest construction firms implicated by Operação Lava Jato in the Petrobras corruption scandal, reached a leniency deal (essentially a plea bargain) with prosecutors on 1 December 2016 (Folha, Valor). The accompanying fine is ~US$1.9 billion, which Odebrecht will pay in annual increments over twenty years. Inclusive of interest payments over this period, the actual amount paid by the company will surpass US$2.4 billion. The company will pay the majority of the fine to the Brazilian Ministry of Justice, with smaller portions going to the Ministry's American and Swiss counterparts. Operação Lava Jato expected to begin reaching plea deals with almost 80 executives and former employees of Odebrecht, including former President Marcelo Odebrecht, as soon as 1 December 2016 in Brasília. Supreme Court Minister Teori Zavascki, who oversees the Lava Jato operation for the Court, must approve these plea bargains before they may be finalized, meaning that attorneys must find the testimonies or evidence presented by the defendants to be valuable in the case. 

Lava Jato coordinator criticizes "intimidation law" approved by Chamber of Deputies

Federal attorney Deltan Dallagnol, who coordinates the Operação Lava Jato task force investigating the Petrobras corruption scandal, criticized on 30 November 2016 the Chamber of Deputies' decision to include a provision for judges and members of the Public Ministry to face crimes of responsibility in their new packet of anti-corruption laws (Valor, Estadão). The approved amendment holds that judges and Public Ministry members may answer for abuse of authority if they begin proceedings without any indication of a crime having been committed. Dallagnol called the amendment a "law of intimidation." Judges may already answer for crimes in at least eight situations, among them expressing an opinion about a pending judgment, with penalties ranging from six months to two years in prison and fines.

Former House Speaker Cunha's lawyers ask for his release from custody

Former President of the Chamber of Deputies Eduardo Cunha's defense team asked for his release from custody, the request was presented to the Porto Alegre (RS)-based Regional Court on 24 October 2016 (Folha, Jornal do Brasil). Cunha has been in custody since 19 October 2016 by the order of Judge Sergio Moro, who is presiding over the Lava Jato operation. He has been implicated in the Petrobras scandal for laundering bribes through Swiss bank accounts. Pertinent to his current imprisonment, his team of lawyers cited a decision of Supreme Court Minister Teori Zavascki to throw out Attorney-General Rodrigo Janot’s request to imprison Cunha in May. They have argued Moro does not have the power to hold Cunha in preventative custody after such a decision.