Brazil’s Lava Jato scandal deepens with “Operation Panama” admission and more
by Eric Jackson
[Editor’s note: Before getting into this, and without getting into loaded jargon like “lawfare” or “technicalities,” let’s remember some basic principles. One is presumed innocent unless proven guilty. Somebody who is guilty of one thing is not necessarily guilty of another thing. Police, prosecutors and judges will often enough lie or distort the truth, just like someone who is accused of wrongdoing might.]
A series of court and police files, most of them leaked in violation of various laws or ethical rules, has expanded, deepened and fed new fire to a series of scandals known collectively as Lava Jato — “Car Wash,” from the Portuguese name of a police investigation aimed at bribery and kickbacks in contracts with the Brazilian state-owned Petrobras oil company. The legal fallout has spread to other economic sectors and several other countries. Evidence suggests that Panama ought to be one of them but authorities here have invented various purportedly nationalist principles to avoid that. One of the latest revelations is that Marcelo Odebrecht, former CEO and major shareholder of the giant multinational Norberto Odebrecht construction firm, has admitted that when he was arrested in June of 2015 “Operation Panama” rather automatically went into effect. This plan was to scan all company computers for incriminating files and to transfer those computers and those files to Panama, beyond the reach of Brazilian authorities.
Word of this confession comes from a leaked court file — a Brazilian Federal Police report — that made its way into the hands of the Brazilian magazine Istoe. Police, prosecution, defense and judicial participants in the case would all have access to that information. Testimony by other people about Operation Panama had leaked months ago. Brazilian prosecutors have complained that they have sought Panamanian authorities’ assistance in the case but received very little of it. Panama’s prosecutors say that they have cooperated but asserted barriers like banking and corporate secrecy here, only being able to investigate or assist if crimes against Panamanian law have been committed and so on. Were there to be full cooperation with Brazilian authorities, one would expect that there would have been raids in Panama in search of Odebrecht computers and files. If there have been such things, they have not been reported to the public.
Istoe reports that among the things hidden in Panama were payments of about $8 million in cash to former Brazilian President Lula da Silva. These payments, it is alleged, were made after he left the presidency and were purportedly for work helping to secure contracts for Odebrecht in Brazil and abroad. His political adversaries are calling it a simple bribery case, but Lula denies it: “I did not commit any crime before, during or after serving as the President of the Republic,” he said.
Judge Sergio Moro, who is handling the Lava Jato cases, has leaked files on a selective basis to media organizations, including data from illegal wiretaps of Lula. Lula and his supporters also complain that police planted bugs in the offices of the former president’s lawyers, also quite illegal in Brazil.
Following on the removal of leftist President Dilma Rousseff for the non-criminal offense of manipulating the release of official economic data ahead of the 2014 election, supporters of Lula’s and Rousseff’s Workers Party claim a right-wing legislative coup and continuing persecution. Rousseff’s removal did bring her erstwhile right-wing running mate, Michel Temer, to the presidency and with him an all-male, all-white far to the right cabinet. But Temer has been convicted of election law violations that happened before he was vice president and the sentence precludes him from running for office in the next elections. A number of right-wing politicians have also fallen in the series of scandals. Now Brazil’s Electoral Court is investigating whether the Rousseff – Temer ticket received illegal campaign contributions, which could lead to a decision nullifying the 2014 election and calling for a new vote. In that election law case, it was alleged that Otavio Azevedo, former CEO of the Andrade Gutierrez construction company, gave Rousseff a $295,000 donation. She denies it and her lawyers have come up with documents showing that a contribution to Temer’s Brazilian Democratic Movement (PMDB) was made in exactly that amount through Temer. If the Rousseff defense version of that is found to be true, that could also annul the 2014 election and remove Temer from office.
Marcelo Odebrecht is getting his 19-year prison sentence reduced to about two and one-half years for giving his testimony to police and prosecutors. The man is a convicted criminal who gave lots of many to lots of politicians in Brazil and elsewhere, and might have reason to feel betrayed by some of them. One of the reported subjects of Mr. Odebrecht’s interrogation in Brazil is suspected payoffs to former Panamanian President Ricardo Martinelli. Panama’s Public Ministry is reportedly looking at bribes paid in Panama to Panamanians by Odebrecht, but if word comes from a Brazilian source that there is testimony implicating Martinelli the ordinary prosecutors lose jurisdiction and must turn the matter over to the Supreme Court as to Martinelli only. The Varela administration, which has given new contracts to the Norberto Odebrecht company, takes the position that the company’s criminal convictions in other countries don’t count against it for public contracting here.
But Odebrecht’s criminal activities in other countries do get taken seriously in other jurisdictions. In the works is a plea bargain by some 70 Odebrecht executives with prosecutors in the United States, Switzerland and Brazil for a plethora of financial crimes including money laundering. As part of that plea bargain it is reported that the company will pay a record $1.9 billion fine to the three jurisdictions.
There may be a continuing US angle, as Odebrecht was a long-time backer of Jeb Bush, through a private foundation that Bush used to promote his political ambitions, and of Miami Democratic politician Xavier Suarez. Neither of these two men are particularly favored by Donald Trump so there may be some Odebrecht fallout to come in the USA. If actual crimes are discovered in Odebrecht’s relationship to Florida politics there may be statute of limitations bars to prosecutions.
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