Regulation & Law

Brazil After Petrobras Scandal: What to Do Now?

Operation Car Wash (Operação Lava Jato) has already revealed a lot of crucial information in the last two years, implicating dozens of major companies’ CEOs, as well as politicians. To date, more than 200 people have been officially charged for taking some part in the multi-billion-dollar scandal, but there’s more to come.

Operation Car Wash (Operação Lava Jato) has already revealed a lot of crucial information in the last two years, implicating dozens of major companies’ CEOs, as well as politicians. To date, more than 200 people have been officially charged for taking some part in the multi-billion-dollar scandal, but there’s more to come.


Public prosecutor Deltan Dallagnol, who heads the taskforce overseeing the operation, spoke to the International Bar Association through its podcast in December 2016 and shared some thoughts on the subject. He also pointed out the need for a criminal justice and political reform in the country.

 

Dellagnol started by describing the initial steps of what has become the biggest anti-corruption investigation in the country’s history: “We began with a concise corruption investigation involving money laundering and crimes against the financial system. At the beginning, only international transfers made by money laundering agents were being investigated, but we noticed that one of them had ties with a Petrobras director.”

 

He continues by saying that, after six months, this agent decided to cooperate with authorities and finally revealed that many contracts between Petrobras and other companies (in range of different fields) were filled with bribery schemes. More than just major executives, the schemes also implicated congressmen and high-profile politicians.

 

Dellagnol points out that, in Brazil, the Federal Prosecution Office is very independent and has powers very similar to the ones possessed by the federal judges. This is something that, according to him, enables the office to act impartially and effectively in charging culprits.

 

About the cooperation agreements with defendants, Dellagnol says that they play a crucial part in the success of the investigation: “agreements are the reason we were able to develop and reach a lot of people.” So far, his team has been able to close agreements with 50 defendants through which they were able to recover one billion dollars.

 

These agreements led to major discoveries in the investigations. According to the prosecutor, there used to be this idea that just following the illicit money path would be enough to find the concerned sources. However, since criminal agents have created and developed a lot of techniques to hide illicit paths, only through inside information are the police really able to get to more agents and schemes. 

 

The whole operation has changed the way Brazilian society sees crime and punishment, which, for Dellagnol, is a good thing: “if you don’t punish the company simply because they are too big to fail or jail, you send a message to society that if you’re big, you’re unreachable. You can get away with anything. The message we want to send is another: we are going to unveil corruption everywhere, anywhere. No matter the company or political party. This is our constitutional role.”

 

Finally, the theme of a criminal justice reform was discussed. Dellagnol thinks it’s necessary to reduce the rate of corruption. “I believe that we need to improve our criminal justice system. We have flaws and loopholes in the system that allow powerful and wealthy people to get away with the crimes they commit. The political system also favours corruption. Electoral campaigns depend on huge amounts of corporate money and we need to diminish this amount.”

 

This led to the conclusion that the Supreme Court also needs a reform. “In Brazil, more than 20,000 people have the right to be judged by the Supreme Court, but the right thing would be to judge only people whose function is essential for the regular ruling of the country, which is not always the case. We need to change that because it is much more difficult to investigate a person before the Supreme Court, which makes it more difficult to punish the ones who commit serious crimes.”

 

L.A.

Read the full Special Report: Brazil: From Political Turmoil to Economic Reassertion

Brazil has been the center of attention for almost a decade now. During this period, the country has gone through various phases. Some argue that it has now entered its most challenging and crucial one. Deep transformation is needed in the political, economic and social landscapes. We talked with some of the very best lawyers, general counsels and financial advisors in the country to better understand the situation and the impact on the Brazilian market.
Summary Mediation Gains Strength in Brazil

interview

Accenture's CEO and CFO interview by Leaders League Group

About us

Download