Brazil’s crusading corruption investigation is winding down

Sabrina Valle and Jessica Brice – Bloomberg, 05/04/2016

The crusading federal judge behind Brazil’s explosive corruption investigation, facing the limits of his mandate and signs of political pushback, sees his role in the case winding down by the end of the year, a turning point in a probe that has helped push the president to the brink of impeachment.

For more than two years, Judge Sergio Moro and his team of prosecutors and police in the southern town of Curitiba have tracked the $1.8-billion graft scandal across four continents. They uncovered a crime ring so epic that it shattered Brazil’s political and economic leadership and helped tip the nation into its worst recession in a century.

Now, legal challenges are chipping away at Moro’s jurisdiction over executives amid criticism that he’s over-reaching. Brazilian law also bars him from going after sitting politicians accused of graft. So he expects significantly fewer new operations under his watch starting next year, according to three top officials who asked not to be named relaying details from private conversations. The press-shy judge declined to comment.

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Brazil government denies illegal funding, says can defeat impeachment

Silvio Cascione and Anthony Boadle – Reuters, 04/07/2016

Brazilian President Dilma Rousseff’s government rejected new accusations on Thursday that her election was illegally funded with graft money and expressed confidence it can block an attempt to impeach her.

Executives from Brazil’s second-largest engineering company testified that Rousseff’s 2014 re-election campaign was partly funded by kickbacks from large infrastructure projects, according to a report by the Folha de S. Paulo newspaper.

The testimony, part of a plea bargain with 11 executives of builder Andrade Gutierrez [AGIS.UL], would be the strongest link yet between Rousseff’s campaign and a widening corruption investigation that has toppled her associates and dozens of other political and corporate officials.

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Insider’s account of how graft Fed Brazil’s political crisis

Simon Romero – New York Times, 04/04/2016

BRASÍLIA — The silver-haired senator from Brazil’s western frontier was still in his pajamas when federal police agents banged on the door of his suite at the Royal Tulip, the futuristic luxury hotel that serves as a bastion for much of Brazil’s political elite. It was 6 a.m.

The agents were armed with a secret recording that sounded like the plot for a Hollywood thriller. The senator, Delcídio do Amaral, had been caught detailing an elaborate plan for an oilman ensnared in Brazil’s spiraling graft scandal to flee the country on a private plane.

Mr. Amaral, 61, was until his arrest in Brasília that morning in late November the governing party’s most powerful leader in the Senate. He quickly sought a plea agreement, but prosecutors let him fester in prison for weeks, making a deal only after the disgraced senator provided one stunning disclosure after another that betrayed his former comrades and brought the government of President Dilma Rousseff ever closer to collapse.

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Brazil graft crackdown spurs work for lawyers, corporate change

Caroline Stauffer – Reuters, 03/24/2016

In the midst of Brazil’s worst recession in decades, lawyer Thiago Jabor Pinheiro switched firms to focus full-time on one of the only booming fields in the scandal-plagued country: compliance and corporate ethics.

For Pinheiro, a massive corruption investigation unfolding at state-run oil firm Petrobras offers a golden opportunity. The scandal broke just as a tough new anti-corruption law went into effect in Brazil, raising the risk of prosecution for scores of companies.

The sweeping Petrobras investigation and the 2013 law, known as the Clean Companies Act, have sparked a frenzy of legal activity similar to what happened in the United States over a decade ago when the Foreign Corrupt Practices Act (FCPA) was implemented.

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How Brazil’s ‘nine horsemen’ cracked a bribery scandal

Will Connors/Luciana Magalhaes – The Wall Street Journal, 04/06/2015

Last summer, a haggard-looking former oil executive stared across a table at six stone-faced federal prosecutors in a cramped office in southern Brazil.

For weeks, he had promised to tell what he knew about a suspected money-laundering scheme but kept holding back, according to prosecutors. Then, he learned they were investigating his family, too, for potential evidence tampering.

Paulo Roberto Costa began to talk.

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Brazil attorney general seeks investigation into political figures in big kickback scandal

US News/AP – Brad Brooks, 03/02/2015

Brazil’s attorney general on Tuesday asked the Supreme Court for permission to investigate 54 people, the majority top political figures, for alleged involvement in what prosecutors say is the country’s largest corruption scandal yet uncovered.

Attorney General Rodrigo Janot’s request opens an expansive new phase of the investigation into the kickback scheme at state-run oil company Petrobras.

“We’re going to work with tranquility, with balance. Those who must pay will pay,” Janot told supporters outside his office late Monday night. “We’re going to investigate. This will be a long process, we’re just now beginning. The investigation begins and we’ll follow it through to the end.”

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Brazil graft case sets back economy

Marla Dickerson/Rogerio Jelmayer – The Wall Street Journal, 02/01/2015

A corruption scandal at state-controlled Petróleo Brasileiro SA has created political headaches for President Dilma Rousseff . Now it’s threatening Brazil’s economy.

What began as a probe of money launderers operating out of a gas station has reached the executive suites of Petrobras and the nation’s best-known construction firms, which prosecutors accuse of ripping off the oil giant. The fallout is battering some of the nation’s most important business sectors.

Petrobras, Brazil’s largest company and a major source of capital investment, is in chaos. Still scrambling to calculate the extent of the massive fraud, it has canceled planned projects and delayed payments to accused contractors, setting off a chain of defaults and credit downgrades.

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