What will happen to Justice Minister Sergio Moro?

When he was handpicked by Jair Bolsonaro, Sergio Moro was supposed to become a “super minister” against corruption. He is now becoming a liability for the government, after leaked messages showed his misconduct during the course of Operation Car Wash, while he was still a judge.

His future hangs in the balance—and the president has yet to comment on the affair. But the political world has already started to react.</span></p> <p><span style="font-weight: 400;">The Senate&#8217;s Constitution and Justice Committee has summoned Mr. Moro to explain the revelations. But while many politicians—including some who have historically supported the operation—have offered the minister harsh criticism, most parties are adopting a cautious approach. There seems to be a consensus: before going all out against Mr. Moro, they will wait for new leaks (and </span><i><span style="font-weight: 400;">The Intercept</span></i><span style="font-weight: 400;"> has promised they will come). In these cases, members of Congress have a preferred tool, the congressional hearings committee.</span></p> <p><span style="font-weight: 400;">But Sergio Moro and Operation Car Wash still have their supporters. And many seem willing to defend the investigation, even when its members stepped out of bounds. &#8220;Corruption existed and must continue to be fought, as it had been,&#8221; said Supreme Court Justice Luís Roberto Barroso. &#8220;I&#8217;m puzzled by the euphoria shown by the corrupt and their acolytes.&#8221;</span></p> <p><span style="font-weight: 400;">Brazil&#8217;s highest court will analyze a habeas corpus case filed by former President Lula, asking for his release on the grounds that he was tried by a partial judge. According to many legal scholars, the justices could use the Car Wash leaks </span><i><span style="font-weight: 400;">even</span></i><span style="font-weight: 400;"> if they were illegally obtained. If that&#8217;s the case, the evidence can&#8217;t be used to convict someone—but could be considered to acquit a defendant. The trial has no date yet.</span></p> <p><b>Listen:</b> <a href="http://brazilianreport.buzzsprout.com/299876/1269271-64-you-can-t-spell-car-wash-without-leaks"><span style="font-weight: 400;">Explaining Brazil podcast talks to </span><i><span style="font-weight: 400;">The Intercept </span></i><span style="font-weight: 400;">managing editor</span></a></p> <p><script src="https://www.buzzsprout.com/299876/1269271-64-you-can-t-spell-car-wash-without-leaks.js?player=small" type="text/javascript" charset="utf-8"></script></p> <hr /> <h2>Congress raises government&#8217;s debt ceiling</h2> <p><span style="font-weight: 400;">The Jair Bolsonaro administration had a taste of the fruits that solid political negotiations can bring. Desperately in need of a higher debt ceiling—to avoid cutting social security payments or breaking the law—the government agreed to allow more money for housing projects for the poor, as well as unfreeze funding for universities and research. In return, lawmakers approved the new debt ceiling. And all that amid the Sergio Moro-Car Wash scandal.</span></p> <p><span style="font-weight: 400;">It remains early to celebrate the deal as a shift in the government&#8217;s relationship with Congress—which has been more dysfunctional than not. But political leaders seem to want to focus their attentions on the economic reforms. On Twitter, Speaker Rodrigo Maia said: &#8220;The House will be shielded from any crisis. Out effort is in approving the reforms and all projects essential to Brazil. Nothing is more important than restoring [investors&#8217;] confidence.&#8221;</span></p> <h4>Sergio Moro in Congress</h4> <p><span style="font-weight: 400;">Even Mr. Moro&#8217;s summons to the Senate (more above) is a sort of olive branch. Senate President Davi Alcolumbre gave Mr. Moro one week to prepare for new leaks. A gesture of courtesy to avoid having the minister say one thing to the Senate, only to be debunked by the next round of leaks. </span></p> <p><span style="font-weight: 400;">What worries the government is not how congressional leaders will react to Mr. Moro&#8217;s presence—but how congressmen from the president&#8217;s own party will. The lack of unity has been a constant since the beginning of the legislature—with some party members saying they are &#8220;disappointed&#8221; with the president.</span></p> <ul> <li><b>Go deeper: </b><a href="https://brazilian.report/power/2019/06/04/brazil-faith-democracy-almost/"><span style="font-weight: 400;">Brazil is recovering its faith in democracy … sort of</span></a></li> </ul> <hr /> <h2>Brazilian trees for pork chops in Europe</h2> <p><span style="font-weight: 400;">A Greenpeace report published yesterday warns that Europe&#8217;s increasing consumption of eggs, chicken, and pork increases deforestation in Brazil and Argentina. The massive imports of genetically-modified soybeans are increasingly encouraging Latin American producers to destroy areas of forest to plant the oilseed, used mostly to feed animals in Europe.</span></p> <p><span style="font-weight: 400;">Thirty-seven percent of the soybeans used in the European Union come from Brazil, according to the report. Three-quarters of imports are destined for industrial poultry farms for slaughter and laying hens (50%), or for hog farming (24%). Dairy cows consume 16% of imported soybeans, while cows used for beef consume 7% of it.</span></p> <p><span style="font-weight: 400;">Soybean production in Brazil has more than quadrupled in the last 20 years. If the Amazon is &#8220;relatively protected from this expansion&#8221; thanks to the moratorium negotiated in 2006 between Brazilian NGOs, companies, and authorities, soybean cultivation has developed in the savannah, which has lost half of its original vegetation.</span></p> <p><span style="font-weight: 400;">Since 1990, pesticide use per unit area has increased by more than 170% in Argentina and Brazil, Greenpeace estimates, and &#8220;more than a third of the pesticides allowed in Brazil would not be authorized by the EU,&#8221; especially carbofuran and paraquat.</span></p> <ul> <li><b>Go deeper: </b><a href="https://brazilian.report/money/2019/05/30/brazil-pesticide-spree/"><span style="font-weight: 400;">Brazil’s pesticide spree continues and 2019 set to break records</span></a></li> </ul> <hr /> <h2>A new Brazilian unicorn</h2> <p><span style="font-weight: 400;">Gympass, a network of fitness services that operates in partnership with existing gyms, has just become Brazil&#8217;s new unicorn. In its latest round of funding, the company raised USD 300m from a group of investors led by Softbank. The Japanese group is set to use its connections to help Gympass (already present in 14 countries) expand to Asia in the near future. But the short-term goal continues to be growth in the U.S.</span></p> <p><span style="font-weight: 400;">In 2013, Gympass launched a business model focused on the corporate world and based on the partnership between wellness facilities, companies, and their employees. It offers low-cost plans—with up to 80% off retail membership prices—for workers to choose from various facilities to sign up for. Gympass&#8217; current ecosystem includes 2,000 corporate clients and 47,000 gyms—22,000 of which are in Brazil. </span></p> <p><span style="font-weight: 400;">CEO Cesar Carvalho recently said the company is not yet willing to hold an initial public offering, as the company remains &#8220;in its early beginnings&#8221; of growth in America.</span></p> <ul> <li><b>Go deeper: </b><a href="https://brazilian.report/money/2019/06/11/brazilian-tech-companies-new-york-ipo/"><span style="font-weight: 400;">Brazilian tech companies preferring New York to São Paulo for their IPOs</span></a></li> </ul> <hr /> <h2>Also noteworthy</h2> <p><b>Torture.</b><span style="font-weight: 400;"> A historical advocate for the use of torture, President Jair Bolsonaro has dismantled the National Mechanism for Fighting and Preventing Torture, a group that monitors human rights violations in prisons. In theory, the group still exists, but its 11 members will no longer be paid by the government. Moreover, Mr. Bolsonaro slashed the determination for new members to be recruited based on gender and racial parity. More details on this story over the weekend, on </span><b>Brazil on the Record</b><span style="font-weight: 400;">. </span><a href="https://botr.brazilian.report/brazilian-record-yearly/"><span style="font-weight: 400;">Subscribe now and get a discount</span></a><span style="font-weight: 400;">.</span></p> <p><b>Indigenous affairs. </b><span style="font-weight: 400;">General Franklimberg Ribeiro de Freitas has confirmed he was fired as head of Funai, Brazil&#8217;s agency for indigenous affairs. He said he had suffered enormous pressure from landowners vying for grabbing indigenous land—led by none other than the land ownership secretary at the Agriculture Ministry. &#8220;Unfortunately, the president&#8217;s entourage thinks they know the life of indigenous people and has offered him poor advice,&#8221; said Gen. Freitas.</span></p> <p><b>Oil refine.</b><span style="font-weight: 400;"> Cade, Brazil&#8217;s antitrust authority, approved an agreement establishing that Petrobras is to sell 8 of its 13 refineries—the company currently controls 99% of the oil refining business in Brazil. To avoid antitrust violations, the same buyer will not be allowed to purchase multiple refineries. Petrobras CEO Roberto Castello Branco defended the move: &#8220;Any monopoly is unacceptable in a free society.&#8221;</span></p> <p><b>Violence.</b><span style="font-weight: 400;"> The number of violent deaths continues to drop in Brazil. Between January and April, there have been 3,636 murders—23% fewer than one year ago. The numbers show a continued trend since the beginning of the year (which we explored in our </span><a href="https://brazilian.report/newsletters/daily-briefing/2019/06/03/june-3-2019-neymar-brazil-drop-murders/"><span style="font-weight: 400;">June 3 Daily Briefing</span></a><span style="font-weight: 400;">), thanks in large part to more investments in intelligence and a better-organized strategy to fight criminal gangs.

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BY Gustavo Ribeiro

An award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.