Brazilian corruption probe sends politicians running for cover

BRASILIA (Reuters) - Brazilian politicians are scrambling to negotiate an amnesty for illicit funding as part of efforts to shield themselves from a widening graft probe that has engulfed President Michel Temer’s government and the Congress.

A general view of Brazil's National Congress during sunrise in Brasilia, Brazil March 13, 2017. REUTERS/Ueslei Marcelino

Lawmakers have for months sought a legislative slight-of-hand to evade the rapidly expanding “Car Wash” investigation that has exposed systematic corruption on contracts at state enterprises, particularly oil firm Petrobras.

Panic in Brasilia hit fever pitch this week after Prosecutor General Rodrigo Janot, the country’s top prosecutor, called for investigations into bribery and political kickbacks that reportedly target six cabinet ministers and over 100 lawmakers.

The scandal has reached into Temer’s inner circle and, though he is not a target of investigation, threatens his survival and the fate of proposed reforms to curb an untenable budget deficit and pull Brazil out of its worst recession.

The corridors of Congress emptied on Wednesday - the day after Janot’s request to the Supreme Court was made public - as the political class was convulsed by speculation over who would be on the secret list and how to avoid joining more than 80 businessmen and politicians already in jail.

Prosecutors say they are well aware of the efforts to confound their investigation, but remain confident that rising public indignation and the weight of evidence of various crimes will ensure those responsible are brought to justice.

“There are easily more than 100 politicians we have asked the Supreme Court to be investigated,” a senior member of the prosecution team said. “When secrecy is lifted and the details made public, we’ll have some turbulent days.”

Lawmakers told Reuters the thrust of behind-the-scenes negotiations is aimed at an amnesty for the widespread practice of obtaining undeclared campaign funds under the table from private companies.

That would entail a new law to make the practice, known as “caixa dois,” a crime but which would prevent retroactive punishment, effectively pardoning anyone guilty of the practice to date.

“They are trying to put this to the vote, but I don’t think they will have the courage to pull this off,” said Green Party Deputy Antonio Carlos Thame, an anti-corruption campaigner.

Anyone supporting the bill, which has no official sponsor, would face the wrath of an enraged Brazilian electorate in next year’s elections. Two attempts to discretely push the measure through the lower house failed last year.

“It’s an insult to public opinion. The intention is clearly to obstruct the Car Wash investigation,” said leftist Senator Randolfe Rodrigues, who has sponsored a bill to abolish court prerogatives for politicians.


Janot’s request for investigations - the biggest to date in the three-year-old probe - stemmed from 950 depositions given in December by 77 executives from the Odebrecht construction conglomerate.

The company in December signed the world’s largest leniency deal with Brazilian, U.S. and Swiss prosecutors and admitted bribing politicians across Latin America and in Africa.

Carlos Lima, a federal prosecutor who has helped lead the probe, told Reuters he thinks upward of 350 new investigations could stem from the Odebrecht testimony.

Adding to the worries in Brasilia is mounting public pressure on Congress to abolish the “special forum” rules that almost guarantee impunity for politicians.

That law means politicians, members of the executive branch and thousands of other officials can only be investigated if the Supreme Court gives permission.

Any trial must then play out in the over-burdened top court, where cases drag on for years and less than 1 percent of politicians get convicted.

Supreme Court justices are proposing the prerogative be curbed or eliminated, but lawmakers under investigation, including the government’s leader in the Senate, Romero Jucá, are insisting only Congress can make that change.

Even if politicians can avoid conviction, many are conscious that the reputational damage inflicted by the scandal may thwart their hopes of reelection next year. That has put electoral reform back on the agenda.

The favored proposal is to move to a system of closed lists in which voters would cast ballots for parties and not individual candidates. That would allow politicians implicated in the investigation to escape the direct wrath of voters.

Despite that, Senator Rodrigues expects voters to expel tainted lawmakers in 2018, resulting in a renewal of Congress from where a more honest generation of leaders will arise.

Lima, the prosecutor based in southern Brazil, was also phlegmatic about lawmakers efforts to create an amnesty for ‘caixa dois’: even if they pull it off, many of those facing investigation would have to answer for other crimes, he said.

“They would likely face a trial regardless,” Lima said, adding that the Odebrecht testimony - once it is made public - will make it clear that bribery was endemic in public life.

“The political class needs to understand how this amnesty of corruption would be viewed by the population,” Lima said. “It would be a crime against the Brazilian people.”

Reporting by Anthony Boadle; Additional reporting by Brad Brooks; Editing by Daniel Flynn and Paul Simao