Artigos

What Remains of Operation Car Wash in Brazil?

Edward Rocha de Carvalho 

Operation Car Wash was the most extensive investigation ever conducted in Brazil in terms of scope, commencing in 2014 with the arrest of a foreign currency operator suspected of facilitating bribery payments involving the state-owned oil company, Petrobras. With the support of the local judiciary, the Public Prosecutor’s Office quickly organised a task force, assembling prosecutors already renowned for their involvement in other operations and who possessed some experience in the subject matter. The operation soon expanded, reaching the country’s largest construction companies, which had contracts not only with Petrobras but also with other major ongoing projects in Brazil, which had recently completed its infrastructure for the 2014 World Cup and was preparing for the 2016 Rio Olympics.

Arrests proliferated and became the cornerstone of the operation. Once detained, the suspects tended to collaborate more readily. This was facilitated by the fact that the detentions were upheld by higher courts, thereby increasing the pre-trial detention period. Consequently, collaboration agreements began to emerge, accompanied by leniency agreements from companies.

“These messages revealed a highly unprincipled modus operandi, [including] collusions with the judge on the steps to be taken.”

The investigations soon reached the major projects in the country and a wide range of politicians from almost all parties. In a short time, opting for collaboration ceased to be the last resort and became one of the first options considered, either to avoid imprisonment or to prevent the collapse of a company involved in dubious dealings.

Initially centralised in a city in the south of the country, Curitiba, the investigations were shared with the State of Rio de Janeiro, where another task force was also established. Various countries were involved, including Switzerland, the USA, the Netherlands, France, Spain, Norway, Sweden, and others from Latin America.

The outcome thus far included hundreds of years in convictions, billions of dollars seized, and further billions negotiated in collaboration agreements with individuals and companies. This was the outcome up to that point, although the cases against politicians were progressing slowly.

Possible positive prosecution

The operation was celebrated by the press as a model of cleansing, with immaculate prosecutors and judges leading a renewal in how things were done, demonstrating that a different approach is possible. However, in 2019, circumstances began to change.

One of the prosecutors involved in Operation Car Wash was targeted by a hacker attack, and the perpetrator was arrested. Along with him, a vast collection of messages exchanged by the public agent with other individuals was discovered. These messages revealed a highly unprincipled modus operandi:

• collusions with the judge on the steps to be taken;
• requests from the judge for certain evidence to be produced or actions to be taken;
• violations of the rules for obtaining evidence through legal means;
• access to confidential data abroad without the necessary court order;
• admission of using detention as a means of coercion without even having evidence to prosecute citizens;
• targeting individuals for arrest solely to force them to confess to crimes;
• pressure on company executives to compel them to enter into billion-dollar agreements; and
• various messages showing the political and power project that the investigation leaders aimed for.

The Higher Courts acknowledged the validity of the messages (not as evidence against the investigators and the judge, as they were obtained illicitly) in favour of the defendants, and gradually the cases began (and continue) to be declared null due to the aforementioned violations.

Remainder of Operation Car Wash

So, what remains of Operation Car Wash? On one hand, it demonstrated that oversight by higher courts is necessary and that the work of lawyers was crucial in uncovering what was happening. Nowadays, there is a trend for investigative actions not to be automatically deemed valid, with a healthy scepticism towards what is produced.

At the time of the events, the companies that signed collaboration agreements were subjected to extremely tough negotiations with the Federal Public Prosecutor’s Office, often without any opportunity to present arguments of reasonableness and coherence regarding the values proposed by the prosecution. The ability to pay was not even considered. The feeling was that debts were being imposed that could never be repaid. Evidently, this led many companies (most of them) to be unable to fulfil their commitments, and recently, a renegotiation was reopened under the co-ordination of the Federal Supreme Court.

From all this, a lesson was learned that the conduct of negotiations (by public agents) should be guided by objectivity and technicality, without passions. Recently, in the leniency and collaboration agreements in which the firm has participated, a very significant and positive difference has been noticed. “Real ability to pay” is no longer a taboo topic. The dialogue has become more open, more direct, and less imposing.

“What was once reactive is now preventative.”

On the other hand, the corporate diagnosis is difficult to make. Indeed, there was a welcome reinforcement in the commitment of large companies to good practices and a strengthening of rules and compliance measures. This is significant and can be considered a positive, albeit traumatic, legacy of the operation.

Increasingly, companies are concerned not only with claiming to have good practices but ensuring they are followed by all members. In this regard, the focus of criminal law firms has shifted somewhat: from being reactive to proactive, participating in the development of those controls and ensuring they are adhered to. What was once reactive is now preventative.

In the same manner, certain criminal law firms that were already operating in multiple jurisdictions have further specialised in these matters and can provide enhanced contributions to issues raised by clients and their lawyers from their home countries, providing a refined insight into how matters can be handled within Brazilian law.