Former Minister Antonio Palocci during his arrest, in Sep.2016
The most damaging Operation Car Wash plea deal has yet to come antonio palocci

Former Minister Antonio Palocci during his arrest, in Sep.2016

In 2016, the testimonies of 78 Odebrecht executives were dubbed “the end-of-the-world plea deal”. Since then, the JBS plea deal has proven even more damaging to the Brazilian establishment. Businessman Joesley Batista taped conversations in which politicians (including the president) openly discussed bribes and corruption.

But now, former minister Antonio Palocci has officially joined the list of Operation Car Wash collaborators. If he chooses to reveal everything he knows, Palocci has the potential to become the most chaos-inducing collaborator that Operation Car Wash has seen thus far. Few know the ins-and-outs of corruption schemes at the federal level better than Palocci.

One of the most important political figures in the history of the Workers’ party, he served as Finance Minister under Lula, and was Dilma Rousseff’s Chief of Staff at the beginning of her term. On both occasions, he left office after corruption allegations. He has reportedly started to tell prosecutors about how the Workers’ Party’s money-raising strategies worked for the past 16 years.

</p> <p>Since his arrest in September 2016, Palocci has been trying to sign a plea deal with investigators. Those close to the case mention that Palocci had resisted incriminating himself for any crimes (and admitting guilt is a condition for plea deals). The former minister has already been convicted of corruption and money laundering, receiving a 12-year sentence.</p> <p>By assisting with the investigation, the former minister could reduce his jail time.</p> <p>There’s no doubt that Palocci has the power to complicate life for former presidents Lula (who is also in jail for corruption and money laundering), and Dilma Rousseff. But he might be a far more damaging collaborator. His plea deal was believed to be devastating for big banks, as well. Reports in 2017 said that Palocci was expected to tell (and prove) how financial institutions helped the political establishment to conduct illegal financial transactions and operate money-laundering schemes.</p> <p>According to José Dirceu, another major Worker’s Party figure with multiple criminal convictions, even the Globo media group would become a target.</p> <p>Back in October 2017, a few banks wanted to get ahead of accusations and negotiate their own deals. The Federal Prosecution&#8217;s Office, however, has protected the names of the banks seeking a plea deal. According to law, only the first collaborators can receive a full pardon.</p> <h3>Understand Palocci’s place within the Workers’ Party</h3> <p>Antonio Palocci comes from Ribeirão Preto, a city located in São Paulo state that is known for its agribusiness. During the 1980s, Palocci served as city councilman and federal congressman, before winning the mayoral race in 1992 and getting reelected four years later. In 1998, Palocci returned to Congress, but won a third mayoral term in 2000.</p> <p>Two years later, the mayor would resign to become coordinator of Lula’s winning presidential bid. He is one of the masterminds behind Lula’s famous “Open Letter to the Brazilian people,” a document in which Lula declared he had abandoned all radical leftist theories he might have had in the 1980s, wanting instead to conduct an austere economic policy more aligned to the interests of international investors.</p> <p>As finance minister, he formed part of Lula’s first cabinet. Between 2002 and 2006, he was one of the center figures of Lula’s administration. At one point, he was even considered the natural successor to the former president. His stint as finance minister, however, was cut short because of his suspicious relationship with lobbyists for the gambling industry. He was accused of participating in clandestine meetings with these lobbyists, as well as prostitutes in a mansion in Brasília.</p> <p>He made a comeback with Dilma Rousseff. Considered a political mastermind, Palocci was named chief of staff to a president that had no experience in dealing with Congress. But once again, it didn’t last long. Just five months into Rousseff’s first term, Palocci was forced to resign after the Brazilian press published documents proving that his estate had grown 20 times larger between 2006 and 2010. During that period, the former minister worked for companies that had sizeable contracts with the government.</p> <h3>Dilma lashes out at Palocci</h3> <p>Since reports were released about a Palocci plea deal, his former political allies declared that the former minister would lie to get out of jail. On Thursday, when news of Palocci’s plea agreement first broke, Dilma Rousseff issued a <a href="http://dilma.com.br/sobre-delacao-de-palocci/">statement</a> calling him a liar, accusing him of only wanting to benefit himself. She also compared the tactics of plea agreements to physical torture against criminals – something that she knows about first-hand.

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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.