The Biggest Corruption Probe in Latin America’s History Was Just Killed

RIO DE JANEIRO — The most sweeping anti-corruption probe in Latin America’s history was disbanded this week, effectively ending Brazil’s landmark operation Lava Jato, or Car Wash.

Dissolved after months of conflict with the presidentially-appointed Prosecutor General, Augusto Aras, the disbanding of the investigation’s core team marks a final fizzling out for a probe once lauded by transparency experts and international media. An investigation that, for some, changed Brazil’s culture of impunity for good, and for others, operated as its own political project.

What began in March 2014 as a small-scale inquiry into a gas station money laundering scheme eventually tapped into a web of graft involving the state-owned Petrobras oil company, uncovering one of the largest corruption scandals in Brazilian history.

Over the next several years, the team behind Lava Jato would make 295 arrests, achieve 278 convictions, and seize some R4.3 billion reais ($803 million) in assets. Bringing down politicians and business leaders alike, it touched former presidents from across Latin America - Mexico to Peru - as well as executives from some of Brazil’s most well-known construction companies, a class once seen as “untouchable.”

“Before Lava Jato, we didn’t have this kind of culture,” said Marco Vinicio Petreluzzi, a lawyer and former member of São Paulo’s public prosecutors’ office. “[among prosecutors], there was a culture of ‘oh this is hard’ or ‘oh we won’t be able to do this.’ And there was a culture, among the people, that the justice system would never work against the rich.”

But that changed with the arrest of executives like Marcelo Odebrecht, chief executive of Odebrecht, and Otávio Marques de Azevedo, chief executive of the Andrade Gutierrez construction company. “Even people that weren’t investigation targets grew worried,” said Petreluzzi. “It created this feeling that they [the federal police] were at everyone’s door and they’d all be arrested.”

Praise came quickly, and the task force, led by prosecutor Deltan Dallagnol, won international attention for its work. Sérgio Moro, the federal judge leading Lava Jato proceedings won everything from a Brazilian “person of the year” award to an honorary degree from the University of Notre Dame. Inflatable superman dolls made in Moro’s likeness began popping up around the country.

But amid the fanfare, critics pointed out — especially critics from the left — that the team had taken on what seemed to be a war on the Left, and investigations disproportionately targeted the government of the ruling Workers Party. When Moro took the questionably legal move to make public a confidential call between then-President Dilma Rousseff and her predecessor, former President Luiz Inácio “Lula” da Silva in 2016, it was received as proof of a lack of impartiality.

Moro’s choice to accept a position as justice minister under rightwing President Jair Bolsonaro, just months after issuing a ruling that would render Lula ineligible to run in 2018’s presidential elections, cast further doubt on the operation’s supposedly non-political ends.

But the biggest hit to the probe’s credibility came in July 2019, when messages between Moro and Dellagnol, obtained and reported by The Intercept and a cohort of Brazilian newspapers, revealed that Moro, as judge, had been actively directing the Lava Jato prosecution, sending everything from direct orders to complaints over perceived strategic errors. Legal experts, though lamenting the practice is common in Brazil, denounced the collaboration as gravely unethical.

“There is this narrative that Lava Jato ‘went bad,’” said Benjamin Fogel, an NYU PhD candidate studying the history of corruption in Brazilian politics. “It would be more correct to say that it always had its own set of goals and agendas.”

In forming political alliances, mobilizing the press and even coordinating with protest movements, said Fogel, Lava Jato had operated as “its own political faction.” The end result was a compounded economic crisis and the rise of Bolsonaro, a supposedly anti-corruption president who has since proven to be anything but.

Bolsonaro, who spent three decades on the backbenches of Congress before winning the presidency in 2018, had painted himself as an outsider to a rotten system. “It’s a rotten machine that survives and feeds on disgrace, on corruption,” he said in an October 2018 social media live. “There are groups that don’t want to leave because they live off it. They live suckling from the tits of the state.”

Yet despite his campaign vows to acabar com a mamata (“to end the suckling”), he has made little progress.

“I don’t want to end Lava Jato,” he quipped in October 2020. “I have ended Lava Jato, because there is no more corruption in the government.” That was October 7th. On October 14th, federal police caught Senator Chico Rodrigues, a close Bolsonaro ally, with R18,000 ($3,300) crammed into his underpants. Rodrigues was a member of the Senate’s ethics council.

In fact, the president has grown increasingly dependent on the very groups he swore to combat, namely the centrão, or big center, an amalgamation of parties with ambiguous ideological leanings, synonymous with old-school, transactional politics. Over the last two years, Bolsonaro has granted the bloc high-ranking cabinet positions and sprawling reach in his government, even stepping-in to support the election of centrão politicians to the heads of the House and Senate last week. The new House Speaker, Arthur Lira, is himself a defendant in a Lava Jato case.

“The centrão is now openly setting the agenda, more openly than under previous governments,” said Fogel.

The end of Lava Jato, meanwhile, had been long foretold. “When Bolsonaro chose Aras as prosecutor general, he was very clearly making a choice to end Lava Jato,” said Petreluzzi. Even the protocol around the Aras appointment was suspect. Rather than respecting the usual short-list of candidates provided by Brazil’s National Prosecutors’ Association, Bolsonaro chose Aras, a conservative judge and known Lava Jato critic, on his own.

Bolsonaro’s anti-anti-corruption push may, first and foremost, help shore up support among investigation-weary members of Congress, especially those in the center-right parties of the centrão. But he may also hold other motivations closer to home.

In November 2020, public prosecutors charged his son Flávio Bolsonaro, currently a Senator, with running a criminal organization during his time as a Rio de Janeiro state representative. He stands accused of hiring ghost employees and using their posts to conduct a salary kickback scheme.

Asked about Lava Jato’s anticlimactic end, Petreluzzi was adamant that, despite the operation’s excesses, its end result in combating Brazil’s culture of impunity was, overall, positive.

Fogel disagreed. He worries that the media whitewashed Lava Jato’s real legacy, allowing it to set a harmful international precedent. The lack of introspection among Lava Jato's early supporters could be all the more damaging, allowing similar initiatives to flourish without critical revision. This was all the more important, he said, given the Biden administration’s goal of making anti-corruption efforts a pillar of its foreign policy.

“When they talk about ‘Latin America’s anti-corruption crusade,’” said Fogel, “they’re talking about Lava Jato.”