HomeNewsAnalysisBrazil Judge Notes Enormous Cost of 'Systemic Corruption'
ANALYSIS

Brazil Judge Notes Enormous Cost of 'Systemic Corruption'

BRAZIL / 18 JUL 2016 BY MIKE LASUSA EN

The judge handling the biggest political graft case in Brazil's history says "systemic corruption" has generated "enormous" costs for the country, adding that institutional factors have complicated efforts to address the issue.

Sergio Moro, the federal judge in charge of the massive anti-corruption case dubbed "Operation Car Wash" (Operação Lava Jato), made the comments during a July 14 presentation at the Woodrow Wilson Center in Washington, DC.

The judge has jailed a number of powerful political and business figures as a result of the "Car Wash" investigations, which revealed that executives at the state-run oil corporation Petrobras had issued inflated public works contracts to companies in exchange for bribes and kickbacks, some of which were laundered and funneled into political campaigns.

"It seems that payment of bribes on Petrobras contracts was not an exception, but rather the rule," Moro said, noting that some participants in the scheme described bribery as "a rule of the game" when it comes to the awarding of public sector contracts in Brazil.

"Corruption as an isolated crime exists all around the world. But systemic corruption -- the payment of bribes as a rule of the game -- isn't really that common, and it represents a severe degeneration of public and private customs," the judge continued.

Moro called the cost of systemic corruption in Brazil "enormous," pointing out that bribery illegitimately inflates the costs of public works contracts and siphons funds from public coffers for the illicit enrichment of corrupt actors.

He also noted that corruption can result in poor investment decisions by public and private entities. To illustrate his point, he mentioned the role bribery played in the huge overpayment by Petrobras for the purchase of an aging oil refinery in Pasadena, Texas.

Moreover, Moro said, systemic corruption can discourage legitimate investment and can negatively impact confidence in democratic institutions and the rule of law.

The judge also spoke about some of the challenges posed by the Brazilian judicial system when it comes to prosecuting large-scale corruption cases like those stemming from the "Car Wash" investigations.

"As a general rule," Moro said, the system "does not work very well in complex cases, especially in white collar crimes including bribery and money laundering."

He cited the "slowness of the whole judicial process" as a factor that hampers efforts to bring defendants to justice in corruption cases.

Until just a few months ago, the Brazilian legal system allowed defendants who were convicted of crimes to stay out of jail while appealing their convictions. In practice, Moro said, this meant that wealthy and powerful suspects often avoided jail indefinitely by dragging out the appeal process.

The judge also said that Brazil's justice system does not provide for "prosecutorial discretion" that would allow prosecutors to not pursue certain cases, which results in courts burdened by heavy caseloads that slow the process even further.

SEE ALSO: Brazil News and Profiles

In addition to describing the challenges associated with his work on the "Car Wash" case, Moro responded to some of the criticisms he has faced.

Some observers have raised concerns that the "Car Wash" investigation has relied too heavily on evidence derived from plea bargains, in which defendants admit their guilt and provide information about other suspects in exchange for legal benefits.

"The truth is that these cases involved the use of several other investigation methods," Moro said, highlighting the role of financial records in confirming information obtained through plea bargains.

Moro also defended his decision to publicly disclose the content of wiretapped phone conversations between former Brazilian president Luiz Inácio "Lula" da Silva and his successor, Dilma Rousseff, who was suspended from office in May after the senate voted to begin an impeachment trail unrelated to the "Car Wash" case.

"It's important to prevent any kind of justice obstruction," Moro said of his decision to release the recordings. "Our federal constitution says that the case should be tried in public, in an open court, so we are just following the constitution."

Critics of Moro's decision have argued that the wiretaps were carried out without proper authorization and that their release constituted a violation of the ex-presidents' due process rights. 

Others have suggested that the judge's release of the conversations was motivated by a desire to damage the reputation of Brazil's Workers' Party, to which both Rousseff and Lula belong.

Moro, however, denied that his actions in the "Car Wash" case have been motivated by political concerns.

"That's not right," he said. "Of course, if the crime involves bribes paid to politicians, the case will inevitably have political consequences. But this happens outside the court, and the judge doesn't have control of it."

Although Rousseff and Lula have both been investigated in connection with the "Car Wash" case, neither has been formally charged with a crime related to the scheme.

InSight Crime Analysis

Moro stressed that while it is important for the judicial system to be strong enough to investigate and prosecute corruption when it occurs, ending Brazil's "systemic corruption" will require actions by congress and the executive branch to change "rules of the game" that facilitate graft.

"The adequate functioning of the criminal justice system is a necessary, though not a sufficient condition to eliminate systemic corruption," he said. "Systemic corruption is not and cannot be a problem only for the judiciary branch."

SEE ALSO: InDepth Coverage of Elites and Organized Crime

However, the judge also pointed out that enacting such reforms will likely prove difficult, as so many elites benefit from corrupt practices and therefore have little incentive to change the system.

At the same time, Moro said the achievements of Lava Jato case show that "much can be done even under the current system, as long as the problem is confronted and treated with seriousness."

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

ELITES AND CRIME / 24 MAR 2016

Two recent reports on Guatemala's CICIG illustrate the international's body's potential to affect powerful shifts in the status quo, as…

CONTRABAND / 8 NOV 2019

The Los Roques Archipelago -- a group of islands off Venezuela's northern coast known for their white sand beaches and…

CACHIROS / 13 MAR 2017

Two brothers of two different, former Honduras presidents were implicated by the testimony of a leader of a prominent drug…

About InSight Crime

THE ORGANIZATION

Guatemala Social Insecurity Investigation Makes Front Page News

10 DEC 2021

InSight Crime’s latest investigation into a case of corruption within Guatemala's social security agency linked to the deaths of patients with kidney disease made waves in…

THE ORGANIZATION

Venezuela El Dorado Investigation Makes Headlines

3 DEC 2021

InSight Crime's investigation into the trafficking of illegal gold in Venezuela's Amazon region generated impact on both social media and in the press. Besides being republished and mentioned by several…

THE ORGANIZATION

Gender and Investigative Techniques Focus of Workshops

26 NOV 2021

On November 23-24, InSight Crime conducted a workshop called “How to Cover Organized Crime: Investigation Techniques and A Focus on Gender.” The session convened reporters and investigators from a dozen…

THE ORGANIZATION

InSight Crime Names Two New Board Members

19 NOV 2021

In recent weeks, InSight Crime added two new members to its board. Joy Olson is the former executive director of the Washington Office on Latin America…

THE ORGANIZATION

Senate Commission in Paraguay Cites InSight Crime

12 NOV 2021

InSight Crime’s reporting and investigations often reach the desks of diplomats, security officials and politicians. The latest example occurred in late October during a commission of Paraguay's Senate that tackled…