Supreme Court Justice suspected of fraud, corruption

. Feb 09, 2019
supreme court corruption Supreme Court Justice Gilmar Mendes. Photo: Nelson Jr./ASCOM/TSE

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Hello! In this week’s issue: The most important facts in Brazil. Supreme Court Justice suspected of fraud, corruption. Brazil’s infrastructure shortcomings.

  • Tragedy. A fire destroyed a dormitory at the youth team training center of Flamengo, Brazil’s most popular football club, on Friday.
    Ten teenage players (between 14 and 16) died, and three others were injured. The lodging area was only licensed to work as a parking lot—in 2015, state prosecutors had shut down the dormitory and compared it to a juvenile prison. One surviving player told the press the fire was started by an air conditioning unit in his room—an investigation is underway.</li> <li><strong>President.</strong><strong> </strong>A day after being diagnosed with pneumonia, President Jair Bolsonaro was reportedly feeling better and resumed work activities from his hospital room. The president is recovering from surgery to remove the colostomy bag he used after being stabbed on Sep. 6. Doctors have yet to set a release date for Mr. Bolsonaro.</li> <li><strong>Rio de Janeiro.</strong><strong> </strong>At least six people have been confirmed dead after heavy rains hit Rio de Janeiro on Wednesday evening. Severe tropical storms are common in January and February, but the city was caught off-guard. The mayor&#8217;s office slashed the budget for flooding prevention actions by 3.5 times since 2014—and emergency sirens went off hours after the first floods were registered.</li> <li><strong>Brumadinho.</strong><strong> </strong>Email exchanges between Vale employees and safety inspectors prove that the mining company knew about the risks of a collapse days before the Brumadinho dam burst. Weekly magazine IstoÉ reported on Friday afternoon that Minas Gerais state prosecutors have already prepared an arrest order against Vale CEO Fabio Schvartsman.</li> <li><strong>Lula.</strong><strong> </strong>Former President Luiz Inácio Lula da Silva was convicted in a second corruption and money laundering case, being sentenced to 12 years and 11 months in prison. The ruling further isolates his Workers&#8217; Party and makes the potential release of Lula even more unlikely. Lula was found guilty of secretly owning a country house in the São Paulo countryside—adjudged to be a kickback from construction companies.</li> <li><strong>Central Bank.</strong><strong> </strong>The Selic benchmark interest rate remained unchanged for the 7th consecutive time, staying at 6.5%—a move highly anticipated by the market. The Central Bank&#8217;s monetary policy committee is attempting to stimulate the still-sluggish economy through cheaper access to credit. Monetary authorities have warned that macroeconomic reforms—such as the pension reform—remain crucial for economic recovery, the control of inflation rates, and, therefore, to keep interest rates at a lower level.</li> <li><strong>Anti-crime bill.</strong><strong> </strong>Justice Minister Sergio Moro presented on Monday a set of proposals to fight crime—particularly organized crime. The bill was criticized by human rights advocates due to making it harder to punish law enforcement agents who kill people on duty. Legal scholars also said Mr. Moro&#8217;s proposals don&#8217;t improve police intelligence—focusing more on crime repression rather than prevention.</li> </ul> <hr /> <h2>Brazil&#8217;s infrastructure shortcomings</h2> <p>The year has barely started, and Brazil has had four major problems related to infrastructure. An iron ore tailings dam collapsed on January 25 — killing at least 157 people. This week, a bridge in São Paulo was shut down due to problems with its joists (two months ago, another bridge gave away). On Wednesday, a Rio de Janeiro beachfront cycle path collapsed for the third time in as many years. Finally, on Friday, a fire at the training complex of football club Flamengo killed 10 people.</p> <p>(For more detail, click <a href=";ll=-22.03647526541007%2C-45.53204485086479&amp;z=8" target="_blank" rel="noopener noreferrer">here</a> or on the map).</p> <p><img class="alignnone size-large wp-image-13986" src="" alt="" width="1024" height="688" /></p> <p>On Friday morning, 500 people were removed from a municipality after the national mining agency raised alert levels on a Vale dam showing &#8220;high risk&#8221; of collapse. The map below shows the dramatic situation of Brazil&#8217;s dams — we highlighted <em>only</em> those presenting a high risk (Source: Brazil&#8217;s National Water Agency).</p> <p><img class="aligncenter size-full wp-image-16915" src="" alt="" width="2412" height="2412" srcset=" 2412w, 150w, 300w, 768w, 1024w, 610w" sizes="(max-width: 2412px) 100vw, 2412px" /></p> <ul> <li><strong>Podcast:</strong> <a href="" target="_blank" rel="noopener noreferrer"><em>Brazil&#8217;s infrastructure woes</em></a></li> </ul> <hr /> <h2>Supreme Court Justice suspected of fraud, corruption</h2> <p>Supreme Court Justice Gilmar Mendes, among the most controversial members of the court, has been placed under investigation by Brazil&#8217;s federal revenue service.</p> <p>Auditors have reportedly found evidence suggesting the justice and his wife have committed crimes of fraud, corruption, influence peddling, and money laundering. A May 2018 report points out a change in net worth of almost BRL 700,000 in 2015, with no substantiating reasons. Moreover, the document explains the influence peddling allegation due to the fact Mr. Mendes &#8220;rules on cases represented by firms linked to his [wife],&#8221; suggesting that said connection sways Mr. Mendes&#8217; opinion on cases.</p> <p>In response, Justice Mendes asked Chief Justice Dias Toffoli, Prosecutor General Raquel Dodge, and Minister of the Economy Paulo Guedes to investigate whether the auditors crossed the line when targeting him. In a statement, Justice Mendes compared Brazil&#8217;s fiscal authorities to the Gestapo and his fellow court members expressed concerns that the judicial system was being targeted by the political class—as many high-profile politicians are battling corruption cases of their own.</p> <p>While there has been a silent war between the Judiciary and other branches of government going on for years, the truth is that Justice Mendes has faced suspicions for years. Both for his rulings—as his interpretation of the law can change depending on the case—and for shady deals concerning his law institute.</p> <h4>The anti-anti-corruption Justice</h4> <p>Justice Mendes has always <a href="" target="_blank" rel="noopener noreferrer">acted more like a regular politician</a> rather than a judge. Seeing him ranting about left-wing parties has become so normal that Brazilians are no longer shocked by it. Nor are they take aback by reports of Mr. Mendes meeting politicians that he is supposed to judge for personal engagements. Moreover, on more than one occasion, he ruled in favor of defendants represented by the law firm where his wife works.</p> <p>Law professor Conrado Hübner once called Justice Mendes &#8220;an enemy of the Supreme Court,&#8221; saying his behavior is a menace to the court&#8217;s legitimacy. &#8220;Gilmar Mendes is neither &#8216;controversial&#8217; nor &#8216;brave.&#8217; These euphemisms used by journalists only cloud the problem. His behavior is flat-out illegal.&#8221;</p> <p>During former President Dilma Rousseff&#8217;s administration, Justice Mendes acted as the presiding judge of Brazil&#8217;s Superior Electoral Court. He was outraged by the level of corruption in Ms. Rousseff&#8217;s re-election effort—and championed for the court to decide whether her election should be annulled. However, once Ms. Rousseff was impeached by Congress on unrelated accusations and replaced by Michel Temer, Justice Mendes decided the case was no longer worth pursuing. This kind of 180-degree shift has become his trademark.</p> <h4>Opaque deals</h4> <p>In 1998, Justice Mendes founded the IDP—the Brasília Public Law Institute. IDP is well-known in Brasília for its prolific academic production and influence on the Brazilian legal community. It makes money through its law school and high-level events that earn millions in sponsorship deals—including from companies which have cases pending in the Supreme Court. A conflict of interest? Gilmar Mendes doesn&#8217;t appear to think so.</p> <p>Over the past few years, IDP has also raised money from deals with state governments—which don&#8217;t face nearly as much scrutiny as the federal administration. Between 2014 and 2018, the states of Goiás, Maranhão, and Alagoas gave IDP BRL 12m for courses in public management—curiously, not one of the institute&#8217;s fields of expertise. All contracts were signed without following the steps of public bidding regulations.</p> <p>In 2018, IDP started facing scrutiny from revenue authorities. Even the Federal Police briefly investigated the institute—after it found out that Joesley Batista, owner of the meatpacking group JBS, was a regular face at IDP weeks prior to his plea deal with Operation Car Wash prosecutors was made public. Marshals believed he used IDP as a bunker to bribe federal judges. The investigation was, however, shut down.

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