What remains of ‘Operation Car Wash’, Brazil’s historic anti-corruption probe?

Ten years ago, in March 2014, prosecutors in the Brazilian city of Curitiba transformed a money laundering investigation into a historic anti-corruption probe known as Operação Lava Jato (Operation Car Wash). The probe uncovered evidence of corruption involving some of Brazil’s largest companies and most powerful politicians.

The revelations had dramatic political consequences. They led to massive street protests, tipped the Brazilian economy into a full-fledged depression, and provided the background for the impeachment of the country’s president, Dilma Rousseff, in 2016.

Lava Jato also resulted in the conviction and imprisonment of Rousseff’s predecessor (and Brazil’s current president), Luiz Inácio Lula da Silva, in 2017. Lula, who spent 580 days in jail, was undoubtedly the most famous of all the Lava Jato defendants.

Lula and Rousseff’s centre-left Workers’ party (PT) remained in the spotlight for a long period of time. But the scandals involved politicians from across the political spectrum. The two other main parties at the time, the centrist Democratic Brazilian Movement and the centre-right Brazilian Social Democracy party, have also been severely affected.

To start with, both parties were in support of Lava Jato. However, many of their leaders were implicated too, which undermined their ability to capitalise on the PT’s fall from grace. They have each seen their representation in Congress diminish by much more than the PT.

The investigations spurred a wave of anti-establishment sentiment that propelled far-right politician Jair Bolsonaro to the presidency in 2018 on an anti-corruption mandate. You can find out more on the details of Lava Jato in a longer version of this story we wrote in ECO, an Italian magazine (which is also available in English).

Several of the companies and individuals implicated by Lava Jato for siphoning funds from state-owned companies and from public coffers agreed to pay billions of euros in fines. But most of the penalties, convictions and agreements resulting from the probe have now been – or are at risk of being – overturned.

This includes the leniency agreement signed by the construction giant Odebrecht and Brazil’s public prosecutor office in late 2016. The agreement, which involved a heavy fine and various depositions about decades of the company’s wrongdoing, implicated 98 politicians, including eight ministers in the government of Rousseff’s successor, Michel Temer. It also exposed the involvement of 39 sitting federal deputies and 24 senators, spanning 15 different political parties.

The “end-of-the-world plea deal” signed by Odebrecht, as it came to be known, appears to have fallen short of its promises. So, what do these reversals reveal about the capacity of Brazil’s institutions to control corruption?

Malfeasance continued to thrive

Lava Jato became associated with overreach by the prosecutors and judges who handled the cases. They aggressively used plea bargain agreements, pretrial detentions and police raids, while also leaking testimony and documents to the press. Their actions over time came to be perceived as excessive and biased.

The probe itself was also not free from scandal. Sergio Moro, a judge who played a significant role in the conviction of Lula, was appointed minister of justice in Bolsonaro’s government in November 2018.

In a turn of events worthy of a Netflix script, hacked messages dating back to the minister’s time as a judge revealed Moro and prosecutors coordinating some of their moves. Other revelations cast doubt on their management of the resources recovered by the Brazilian state.

Congressional leadership and a “backlash” coalition across parties – ranging from the PT to Bolsonaro’s Liberal party – then orchestrated a rollback of some of the most significant components of Brazil’s anti-corruption framework.

In 2019, for example, stricter sanctions were introduced for prosecutors and judges who overstep their functions. And, two years later, a nearly unanimous vote significantly reduced the scope of the administrative improbity law that had been the grounds for many of Lava Jato’s attempts at reimbursing public coffers.

There is also a discussion currently ongoing in Congress regarding the reversal of plea bargain laws. This instrument was frequently used not only by Lava Jato but also in investigations into Bolsonaro’s involvement in numerous irregularities during his term in office. These range from an attempt at a coup d'état in 2023 to corruption.

Under Bolsonaro, Congress asserted greater control over the federal budget. Individual lawmakers were allowed to direct money to their chosen beneficiaries through a fund known as the “secret budget” due to its lack of transparency. Critics argue that the transfers opened the door to corrupt deals.

The once strong anti-corruption stance of the country’s highest courts has also changed and many of their justices have reversed prior decisions. This has involved strategic compromises with Congress that helped the higher courts fend off offensive moves by Bolsonaro’s government on the court and its justices.

People often assume that prosecutions and convictions deter elected officials from engaging in corruption, as they witness the damaged reputations and fates of their colleagues.

But, in addition to Lava Jato’s own failures, the reversal of the penalties and convictions in Brazil show how hard it is to punish corruption when a large chunk of the economic and political elite benefits from it. To a significant extent, Lava Jato’s grandiose ambitions inadvertently invited such blowback.

Bolsonaro proudly declared the end of Lava Jato in 2020, asserting that his government was free of corruption. However, malfeasance continued to thrive. After a decade it seems clear that the historic anti-corruption probe did not foster a reformist elite with a clear plan to strengthen Brazil’s democratic institutions and the rule of law.

The threats to democracy we have seen since, and the fact that corruption control is weaker now than it was before the investigations began, are together a good case in point.

Luciano Da Ros receives funding from the Conselho Nacional do Desenvolvimento Científico e Tecnológico (CNPq), Brazil.

Manoel Gehrke does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.