Brazil
Lavo Jato – or Operation Carwash – was Brazil’s largest ever corruption and asset recovery case. The case was not without controversy however and there have been consistant allegations of political motivation. This politicisation has affected work on asset recovery in Brazil. It not only negatively impacted the progress made in the amount of assets recovered from financial crimes. Since 2022, CiFAR has engaged with key Brazilian civil society groups in developing efforts to improve the perception of asset recovery as a pro-democratic tool among civil society in the country.
Overview
Lavo Jato – or Operation Carwash – was Brazil’s largest ever corruption and asset recovery case. It began in 2014 and saw money laundering investigations at the highest levels of Brazilian politics involving Petrobras, the state oil firm, and construction giant Odebrecht in schemes where bribes were paid for contracts. Brazil alone recovered approximately USD 800 million and convicted almost 280 persons. The scandal stretched beyond Brazil’s borders however, and implicated politicians and business persons from across Latin America, many of whom were arrested and convicted of corruption offences. It was estimated at the time that illegal payments to a total of USD 5 billion were involved in the case. The most high profile – and one of the most controversial – convictions in the case was that of then former President Lula for his alleged involvement, by the main judge in the cases and later justice minister, Sergio Moro.
The case was not without controversy however and there have been consistant allegations of political motivation. Messages leaked in 2019 implicated Sergio Moro in collusion with prosecutors. This led to Brazil’s Supreme Court annuling former President Lula’s convictions in the case, ruling that Moro had exhibited bias. The case was eventually shut down in February 2021 by then President Bolsonaro. Some commentators have suggested this was because there were fears the investigation could reach his own family.
This politicisation has affected work on asset recovery in Brazil. It not only negatively impacted the progress made in the amount of assets recovered from financial crimes between 2014 and 2019, given the decision of Brazil’s Supreme Court invalidating all of the evidence obtained in the Operation Car Wash/ Lava Jato via leniency agreements, but also significantly decreased the willingness of civil society organisations to actively promote and support the anti-corruption agenda in the country, which can be pivotal given the Brazilian legal framework for asset recovery.
Our work in Brazil
Since 2022, CiFAR has engaged with key Brazilian civil society groups in developing efforts to improve the perception of asset recovery as a pro-democratic tool among civil society in the country. This seems critical to overcome the obstacles posed not only by the extreme political polarization surrounding the main corruption scandal in the country – Operation Car Wash/ Lava Jato – but also by the significant setbaks in the fight against kleptocracy, due to interferences in the anti-corruption framework, and allegations of high-level officials in corruption crimes.
Given the challenging Brazilian context, our work focuses on the notion that corruption is not a victimless crime, and that asset recovery is essential to end impunity and to compensate victims for their losses, including through the re-use of recovered assets for social purposes.
Our work in Brazil takes place along three main work streams:
contributing to improving the perception of asset recovery as a pro-democratic tool;
analysing and discussing with policymakers current opportunities and challenges in the Brazilian asset recovery framework;
promoting and supporting cross-border networking.