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Petrobras' Carwash graft convictions may get thrown out

Patricia Monteiro/Bloomberg

Brazil's top court may upend Carwash graft convictions after Supreme Court Justice Edson Fachin
former judge Sergio Moro's 2017 convictions of the former president Lula da Silva.

- Court ruling on whether star ex-judge Moro acted impartially
- Panel of 5 justices was tied 2x2 before session suspended

By Simone Preissler Iglesias and Samy Adghirni/Bloomberg

Petroleumworld 03 10 2021

Brazil's Supreme Court could upend years of work by the Carwash anti-corruption task force that has sent some of the nation's top politicians and businesspeople to jail.

A panel of five judges debated on Tuesday whether Sergio Moro, once the judge in charge of the investigation and its most public face, was biased in his rulings against former President Luiz Inacio Lula da Silva. If he's deemed prejudiced, the decision could open the door for others he convicted to request their cases be reviewed.

Four justices have voted so far, two in favor and two against. The fifth requested more time to look into the case, delaying the ruling. Justices can change their votes until a final decision is announced, and there's no set time for the discussion to resume.

The work of Carwash came under harsher public scrutiny after a series of private conversations between the star judge and prosecutors suggested Moro was guiding their hands to secure Lula's conviction.

“You don't fight crime with crime,” Justice Gilmar Mendes said during the Court's virtual debate on Tuesday, adding that Moro had intended to de-legitimatize Lula's Workers' Party and remove the former president from electoral politics.

Moro, who has denied any wrongdoing, left the task-force at the end of 2018 to become Jair Bolsonaro's justice minister. He resigned last April, accusing the president of trying to meddle in the federal police.

The case against him had been stalled for months at the top court but resumed Tuesday, one day after Supreme Court Justice Edson Fachin annulled Moro's 2017 convictions of the former president in another blow to Carwash.

“All those convicted by or who are defendants in Carwash investigation are full of hope after what just happened,” said Debora Santos, a consultant with XP Investmentos who specializes in legal affairs. “Fachin has just given an example of legal uncertainty: someone who was convicted and stayed more than 500 days in prison is now completely free of charge.”

Monday Ruling

Fachin, who oversees the Carwash probe at the top court, ruled on Monday that cases against the left-wing leader were not prosecuted in the proper jurisdiction. The convictions, which were later confirmed by an appeals court, had barred Lula from running for office in 2018. Fachin didn't rule on the merit of the cases and his decision may still be appealed at the full Court.

Yet it upended Brazil's political landscape by accelerating campaigning for the 2022 presidential election, which Lula is now eligible to run in. Early political campaigning could derail discussions of market-friendly reforms currently in congress. Now, if the top court decides to label Moro as biased, it could taint the image of the anti-corruption investigation which at some point set an example to be followed in Latin America.

Read More: Lula's Comeback Adds to Long List of Brazil Investor Woes

Since its inception in 2014, Carwash ensnared some of the nation's top politicians and landed chief executives of construction conglomerates in jail for participating in a large bribery scheme that diverted billions of dollars from public coffers. The investigation had massive public support, with Moro being hailed as a hero and potential presidential contender.

Last year, Bolsonaro announced he'd put an end to the probe because corruption is no longer an issue in his government. His administration had been dismantling the structure behind it for months, and last month Carwash was officially disbanded with many of its members resigning of moving to other positions.

— With assistance by Luana Souza


By Simone Preissler Iglesias and Samy Adghirni from Bloomberg
03 10 2021



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