Car wash

The Operation Car Wash aims to investigate a corruption scheme between businessmen and politicians at Petrobras.

The investigation began in 2008 and has already convicted 67 people as of March 2017.

One of them was former president Michel Temer on March 21, 2019, accused of brokering a bribe to his former minister Moreira Franco.

How did Lava Jato start?

Operation Car Wash started by chance.

A businessman, Hermes Magnus, reported a money laundering scheme to the Federal Police.

The Federal Police began to investigate the criminals, including money changer Alberto Youssef. This one had police records for smuggling and the Banestado scandal.

Alberto Youssef's wiretaps revealed a “donation” of an imported car to former Petrobras supply director Paulo Roberto Costa.

In order not to be arrested, or at least to see his sentence reduced, Costa and Youssef agreed to collaborate with the police. This practice became known as “Pleasure Delation” and was a law sanctioned by President Dilma Rousseff in order to help in the fight against corruption.

Based on this testimony, the two unveiled the state-owned oil company's bidding scheme.

Petrobras and Lava Jato

Before understanding Lava Jato, it is necessary to familiarize ourselves with the operation of the largest Brazilian state-owned company:Petrobras.

The company used public tenders to carry out works and works. A tender is a competition between companies to perform services for another company.

In the case of Petrobras, a group of companies formed a cartel to evaluate the state-owned bidding contracts. In this way, they competed in the company's bids, so that one of them was always chosen.

For this to work, some Petrobras employees were also involved in helping the cartel. Their role was to restrict the number of companies invited to bid and provide information that could benefit the company winning the contract.

The “doleiros” or financial operators also entered the scene, who took the money that had been obtained from the bidding and “laundered” it.

“Laundering money” means making an illicitly acquired amount return to circulation in a lawful manner.

There are several ways to do this and one of the most common is to open accounts in “tax havens”. Thus, the money can return to Brazil in the form of investment in shell companies.

As Petrobras is a government company, many of its directors are there by political appointment. Thus, political parties divided the company among themselves to gain greater influence.

It didn't take long for the Federal Police to make the connection between businessman and politicians. In August 2014, Paulo Roberto da Costa stated:

Thus, the Federal Police learned that part of the money diverted went to fund campaigns for political parties such as the PT, MDB and PP.

In turn, Alberto Youssef mentioned the construction companies that participated in the corruption scheme. Several directors of companies such as Odebrecht, OAS and Camargo Corrêa were arrested.

Consequences for Petrobras

With this scandal, Petrobras suffered losses of more than six billion reais due to corruption. In 2014, it ended the year with a loss, something that had not happened since 1991.

Thus, in an attempt to balance the accounts, the company reduced investments and laid off several employees.

Car Wash Trials

It is necessary to understand that the Federal Police, in Operation Car Wash, investigate ordinary citizens and politicians.

Once the investigations are concluded, the Federal Police presents the material to the Public Ministry, who decides whether or not to denounce what was investigated.

Politicians have a privileged forum, that is, they can only be judged by the STF. Ordinary citizens are judged in Curitiba, and politicians in Brasília.

Politicians Involved in Lava Jato

Some parliamentarians found themselves involved in the Lava Jato accusations, such as former deputy Eduardo Cunha (MDB-RJ) and senator Delcídio do Amaral (PT-MS).

Equally, some accusations have been made by former president Lula, on account of a triplex in Guarujá, which is in the name of the construction company OAS.

Former president Dilma Rousseff was accused of obstructing justice by naming Lula as Chief of Staff, the week he would be summoned to testify. Rousseff wanted to guarantee that Lula would have privileged jurisdiction and thus escape the judicial process.

The name of President Michel Temer was also found in spreadsheets by the construction company Camargo Corrêa in 2009 and 2014. Temer claimed that they were campaign donations and the case went to the Superior Electoral Court (TSE). Likewise, Moreira Franco's appointment as minister was seen by some groups as an attempt to obstruct justice.

On March 21, 2019, both Michel Temer and Moreira Franco were arrested in Operation Lava Jato.

Currently, there are 83 politicians investigated in different instances of Justice. In March 2017, the following names stood out:

Ministers

• Marcos Pereira (PRB-RJ), from Industry, Foreign Trade and Services
• Moreira Franco (MDB), Mines and Energy

Governors

• Renan Filho (MDB), from Alagoas
• Luiz Fernando Pezão (MDB), from Rio de Janeiro
• Fernando Pimentel (PT), from Minas Gerais
• Tião Viana (PT), from Acre
• Beto Richa (PSDB), from Paraná

Senators

• Lindbergh Farias (PT-RJ)
• Jorge Viana (PT-AC)
• Marta Suplicy (MDB-SP)
• Lídice da Mata (PSB-BA)

Federal Deputies

• Marco Maia (PT-RS)
• Andres Sanchez (PT-SP)
• Lucio Vieira Lima (MDB-BA)
• José Carlos Aleluia (DEM-BA)
• Paes Landim (PTB-PI)

Car Wash Numbers in October 2017

• 1114 procedures initiated;
• 482 search and seizure warrants;
• 50 plea bargaining agreements;
• 2.9 billion returned to public coffers;
• 67 convictions that add up to 900 years in prison.

Lava Jato and the Governors of Rio de Janeiro

Former Rio de Janeiro governor Sérgio Cabral (MDB) was arrested in November 2016. He was accused of receiving bribes, conspiracy and fraud in several contracts with contractors. He was sentenced to more than 170 years in prison.

His wife, Adriana Anselmo, was also accused of receiving money illegally. Sentenced to 18 years in prison, she was initially in prison and then moved to house arrest.

On November 29, 2018, with a large media apparatus, Governor Luiz Fernando Pezão, Rio de Janeiro Secretary of Works, José Iran Peixoto and former Rio Secretary of Works, Hudson Braga, received a voice of prison in a Federal Police action.

On the same day, six more people, including the governor's nephew, had their arrest decreed.

The arrests were based on allegations made by Carlos Miranda, the person responsible for paying bribes to the governor since he was deputy governor of Sérgio Cabral.

Pezão received an allowance of around 150,000 reais from 2007 to 2014, in addition to a bonus of 1 million reais that were paid at the Guanabara Palace.

With the arrest of former governor Moreira Franco, Rio de Janeiro reaches the mark of 5 former presidents who are or were in jail.

Curiosities about Lava Jato

• Federal Police agent Newton Hidenori Ishii, responsible for escorting suspects to the Federal Police, gained notoriety across the country. A descendant of Japanese, Ishii became known as “Japanese of the Federal” and won marchinha, masks and giant Carnival dolls.
• Operation Car Wash resulted in a film “A Lei é Para Todos”, directed by Marcelo Antunez, in 2017.
• According to the delegates handling the case, Operation Car Wash has no end date.