Operation Car Wash
Clockwise from top left: Headquarters of Petrobras in Rio de Janeiro; Emblem of the Federal Police of Brazil; Deltan Dallagnol with Rodrigo Janot; Odebrecht logo; Federal Police in an operation; Judge Sergio Moro Operation Car Wash (Portuguese: Operação Lava Jato, Portuguese pronunciation: [opeɾɐˈsɐ̃w lavɐ ˈʒatu]) was a landmark anti-corruption probe in Brazil.
[14][15] Beginning in March 2014 as the investigation of a small car wash in Brasília over money laundering, the proceedings uncovered a massive corruption scheme in the Brazilian federal government, particularly in state-owned enterprises.
The probe was conducted through a joint task force of agents in the federal police, revenue collection agency, internal audit office and antitrust regulator.
Evidence was collected and presented to the court system by a team of federal prosecutors led by Deltan Dallagnol, while the judge in charge of the operation was Sergio Moro.
[18]: 60 The largest amounts of bribes were detected in oil giant Petrobras; company directors negotiated with contractors to receive illegal kickbacks ranging from 1% to 5% of disbursements.
[20] Investigators have also stated that contractors formed a cartel, involving the country's largest engineering conglomerates such as Odebrecht, Grupo OAS, Andrade Gutierrez, and Carioca Engenharia, to share government contracts among themselves and collude with corrupt politicians.
Allegedly, the cartel also operated in contracts signed directly with government agencies, in projects such as the construction of football stadiums for the 2014 World Cup, the Angra 3 nuclear power plant, the Belo Monte dam, and the North-South and Fiol railways.
[23] Teori Zavascki, the judge overseeing the prosecution, died in a plane crash off the coast of Paraty, in January 2017, and the investigation lost a key backer in the Supreme Federal Court.
[25] In January 2019, Sergio Moro announced that he would resign from his position as a federal judge, to join the incoming administration of right-wing President Jair Bolsonaro as Justice Minister.
Dubbed Vaza Jato, the leak purports to expose undue pre-trial coordination between Judge Moro and prosecutors in the case to produce evidence, direct hearings and discuss possible sentencing.
[28] The hacking leak was published in the press by The Intercept Brasil and journalist Glenn Greenwald, who claimed that Moro passed on "advice, investigative leads, and inside information to the prosecutors" to "prevent Lula's Workers' Party from winning" the 2018 Brazilian general election.
In March 2019, judge Gilmar Mendes referred, in a Court session, to Operation Car Wash investigators as "gangsters and scum", adding that their "methods dishonor institutions".
[35] In September 2023, STF judge Dias Toffoli stated that the arrest of President Lula was a "setup", "one of the gravest errors in the country's judicial history", and declared all evidence obtained from a settlement with Odebrecht null and void, adding that Operation Car Wash acted as a "21st-century pau de arara".
After they discovered that doleiro (black-market dealer) Alberto Youssef had acquired a Range Rover Evoque for Paulo Roberto Costa [pt], a former director of Petrobras, the investigation expanded nationwide.
[40][41] After Costa and Soares, many others agreed to collaborate with the prosecution; between 2014 and February 2016, the Federal Public Prosecutor's Office (Portuguese: Ministério Público da União) filed 37 criminal charges against 179 people, mostly politicians and businessmen.
[20] Eduardo Cunha, president of the Chamber of Deputies from 2015 to 2016, was convicted of taking approximately $40 million in bribes and hiding funds in secret bank accounts and sentenced to 15 years in prison.
[45][46] On 19 January 2017, a small plane carrying Supreme Court Justice Teori Zavascki crashed into the sea near the tourist city of Paraty in the state of Rio de Janeiro, killing the magistrate and four other people.
Due in part to the impact of the scandal, as well as to its high debt burden and the low price of oil, Petrobras was also forced to cut capital expenditures and announced it would sell $13.7 billion in assets over the following two years.
[68][69] Marcelo Odebrecht said in his plea bargain testimony that the Social Democratic (PSDB) party, led by Senator Aécio Neves (PSDB-MG), received at least 50 million reals in exchange for favoring the business contractor in energy deals.
[78] The payment was allegedly tied to the approval of Provisional Measure 613, which assisted Braskem, an arm of Odebrecht, and dealt with the Special Chemical Industry Regime (Reiq), and tax incentives to stimulate ethanol production.
[83] During the many years it has been going on, the Car Wash scandal has expanded from its original roots in money laundering, to encompass wider corruption in Brazil, and outside its borders in at least ten other countries, even beyond South America.
[85] In Mexico, the former director of the state-owned oil company Pemex, a close ally of President Enrique Peña Nieto, is suspected of receiving US$10 million in bribes from Odebrecht.
[89][90] During the Peruvian presidential election in February 2016, a report by the Brazilian Federal Police implicated President Ollanta Humala in bribery by Odebrecht for public works contracts.
[100] Former president Alejandro Toledo (2001–2006) was also implicated in the bribery scandal, and was arrested in Redwood City, California in July 2019 for allegedly taking bribes in connection with a highway construction contract.
[106] On 9 June 2019, Glenn Greenwald and other journalists from investigative journalism magazine The Intercept Brasil started publishing several leaked chat messages exchanged via the Telegram app between members of the Brazilian judiciary system.
Some, including then Car Wash judge and former Minister of Justice Sergio Moro and lead prosecutor Deltan Dallagnol are accused of violating legal procedure during the investigation, trial and arrest of former president Luiz Inácio Lula da Silva allegedly for the sake of preventing him from running for a third term in the 2018 Brazilian general election, among other crimes.
Other news agencies, such as Folha de São Paulo and Veja, confirmed the authenticity of the messages and worked in partnership with The Intercept Brasil to sort the rest of the material in their possession before releasing it.
[107][108][109][110][111][112][113][114] On 23 July, Brazilian Federal Police made public that they had arrested and were investigating a hacker from Araraquara, Walter Delgatti Neto, for breaking into the authorities' Telegram accounts.
They also found that money paid by Brazilian companies in the US was funnelled back into Brazil; chief prosecutor Deltan Dallagnol said he would use part of this sum to set up an "independent fund to fight corruption".
[130][131] Leslie Backschies, the head of the US FBI's international corruption unit, alluded to this incident when discussing the sensitivity of anti-corruption investigations in a 2019 interview with AP news, saying "We saw presidents toppled in Brazil".
