Photo: Daniel Rocha

The Organization for Economic Co-operation and Development (OECD) is more confident about Brazil’s ability to continue fighting corruption. However, the good impression left by Brazilian authorities after a meeting in Brasília was not enough to diminish all of the anti-bribery committee’s concerns. For the group’s president, in spite of the readiness demonstrated by the Executive, the ball is now in the Supreme Court’s hands.

The OECD’s anti-bribery committee made an emergency trip to Brasília on November 12–13. As we explained

in our <a href="https://brazilian.report/power/2019/10/23/oecd-worried-future-brazil-anti-corruption-fight/">October 23 story</a>, the trip was to address concerns sparked by Supreme Court decisions to limit the use of financial reports from the money laundering enforcement agency, tax authorities and other administrative agencies in criminal investigations, as well as the Abuse of Authority Law.&nbsp;</p> <p>According to the OECD’s anti-bribery committee chair Drago Kos, their level of optimism with Brazil grew after the visit, after they saw “a lot of readiness to fight corruption in the Executive branch of power”. However, he told<strong> The Brazilian Report</strong> that “some objective problems make the fight against corruption a bit more difficult and we suggested that our counterparts in Brazil find solutions to these.”</p> <h2>Understanding each case</h2> <p>The OECD is particularly worried about the Abuse of Authority law, which will take force in January 2020. While it had been presented as a way of curbing excesses committed by prosecutors and judges, OECD believes it may backfire and turn agents of the law into targets. Under protest, the law was sanctioned by President Jair Bolsonaro <a href="https://g1.globo.com/politica/noticia/2019/09/24/saiba-como-fica-a-lei-do-abuso-de-autoridade-apos-congresso-ter-rejeitado-18-vetos-de-bolsonaro.ghtml">with 18 vetoes</a>, all of which were voted down by Congress. Critics claim Brazil&#8217;s lawmakers—massively targeted by Operation Car Wash—are the biggest beneficiaries.</p> <p>As usual in Brazil, everything ends up in the Supreme Court, which is already receiving claims against prosecutors based on the new law.&nbsp; For instance, congressman Paulo Pimenta, the leader of the Workers&#8217; Party in the lower house, filed a case against seven prosecutors involved in Operation Car Wash.</p> <p>The claim was <a href="http://www.stf.jus.br/portal/cms/verNoticiaDetalhe.asp?idConteudo=427645&amp;caixaBusca=N">rejected by Justice Celso de Mello</a>, who said the representative did not present evidence that could suggest the prosecutors committed the crimes of procedural fraud, being part of criminal organizations and malfeasance, while noting that the law of abuse of authority has not come into force yet.</p> <p>Judges and prosecutors fought back with five Direct Actions for the Declaration of Unconstitutionality (ADIs) <a href="http://www.stf.jus.br/portal/cms/verNoticiaDetalhe.asp?idConteudo=427628&amp;caixaBusca=N">filed at the Supreme Court</a> by their respective professional associations, claiming the law will make their work a crime, impinging on their autonomy. These cases are still being analyzed by their rapporteurs.</p> <h2>The Supreme Court’s role</h2> <p>The other issue that has been concerning the OECD is Chief Justice Dias Toffoli’s decision to suspend all investigations using financial information sent from Brazil’s money laundering enforcement agency (the so-called Financial Intelligence Unit, UIF) without a court order.</p> <p>His decision came from a <a href="https://brazilian.report/newsletters/daily-briefing/2019/07/17/supreme-court-blocks-investigation-president-son/">request by Senator Flavio Bolsonaro</a>, the president’s son, who is being investigated after a UIF report showed suspicious financial transactions amounting to BRL 1.2 billion involving Fabricio Queiroz, a civil servant from Rio de Janeiro’s State Legislature who worked as Mr. Flávio Bolsonaro’s aide. Mr. Bolsonaro made a request to the court based on a previous case, of which the Chief Justice is the rapporteur. The problem is that the decision has affected every similar case in Brazil.</p> <p>On the back of his decision, Chief Justice Dias Toffoli asked the Central Bank and Economy Ministry to deliver reports produced by the UIF in the past three years, granting the Supreme Court access to the sensitive financial data of 600,000 people and companies. Brazil’s Prosecutor General, Augusto Aras, asked him to reconsider, which was denied. The Court’s plenary is set to evaluate the case on November 20th, <a href="http://www.stf.jus.br/portal/cms/verNoticiaDetalhe.asp?idConteudo=429929">according to the court’s website</a>.</p> <p>“We hope the Supreme Court will change its decision, but it is completely up to the Supreme Court. If not, the government and the parliament will have to find out how to comply with the requirements imposed by the Supreme Court”, said Mr. Kos.</p> <h2>Repercussions</h2> <p>Apparently, it is not only the OECD that has been concerned with the future of the fight against corruption in the country, mostly represented by Operation Car Wash. On November 17, 20 Brazilian cities held conservative right-wing protests demanding the impeachment of Dias Toffoli and Gilmar Mendes.</p> <p>The outrage was sparked by the Supreme Court decision to allow convicted felons to remain at liberty until all of their appeals routes are exhausted, which allowed former President Luiz Inácio Lula da Silva free. Both justices voted in favor of the measure, while Justice Mendes, <a href="https://brazilian.report/power/2019/11/18/interview-gilmar-mendes-moro-car-wash/">who has been a vocal critic of Car Wash Operation proceedings</a>, actually changed his view from a previous decision.</p> <p>The outcry was bigger in social media than on the streets but has drawn support from conservative lawmakers such as Major Olímpio, the whip of Jair Bolsonaro&#8217;s former party in the Senate. But, as Veja reports, even Mr. Olímpio reckons that actually overthrowing a Supreme Court Justice would be a herculean task. “An impeachment of a Supreme Court Justice will only happen if there is a lot of pressure,” he reportedly said.

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PowerNov 18, 2019

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BY Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Most recently, worked as an Editor for Trading News, the information division from TradersClub investor community.