After diverting millions of dollars into those funds, Petrobras directors then used them to funnel money to the politicians who had appointed them in the first place, and to the political parties they represented. The main objective of the racket — which fleeced taxpayers and shareholders out of billions of dollars — was to fund election campaigns to keep the governing coalition in power. Huge sums were deposited in Swiss bank accounts, or laundered via overseas property deals or smaller companies.
Prosecutors discovered that elderly mules were flying from city to city with shrink-wrapped bricks of cash strapped to their bodies. Petrobras was no ordinary company. As well as having the highest market valuation and the largest debts of any corporation in Latin America, it was a flagship for an emerging economy that was trying to tap the biggest oil discovery of the 21st century — huge new oil fields in deep waters off the coast of Rio de Janeiro.
Petrobras accounted for more than an eighth of all investments in Brazil, providing hundreds of thousands of jobs in construction firms, shipyards and refineries, and forming business ties with international suppliers including Rolls-Royce and Samsung Heavy Industries. As the Car Wash investigation was to prove, if you could unravel the secrets of this company, you would unravel the secrets of the state. First, though, investigators had to get executives to talk.
Until very recently, that would have been unthinkable. A culture of impunity had long reigned in Brazil. When he saw the state of the mattress in the airport detention centre, he threw a tantrum. By Brazilian standards, at km it is not far from Rio, but culturally, they are worlds apart. In recent years, it has won international praise for its pioneering public transport system, environmental policies and hipster scene.
Thanks to Operation Car Wash, however, it is now best known for its judges, prosecutors and police.
Without one simple reform, however, the investigation might never have taken off. In the wake of nationwide anti-corruption demonstrations in , Rousseff had tried to placate an angry public by fast-tracking laws aimed at rooting out systemic fraud. New measures included, for the first time in Brazil, plea bargaining: prosecutors could now make deals with suspects, reducing their sentences in return for information that could lead to the arrest of more important figures.
In the overwhelming majority of cases, Brazilian prisoners remanded in custody before trial are poor. Moro took the unusual step of also denying bail to the rich. Ostensibly, he did so to stop them using economic or political influence to escape any charges against them. However, the pressure was on them: make a deal or stay in jail. He joined a parade of VIP Car Wash suspects — corporate executives, wealthy entrepreneurs and, later, even one or two powerful politicians — who spent months inside the Curitiba detention centre.
They had to be kept separate from other inmates for their own safety, which meant their side of the jail quickly became overcrowded. Having lived in luxury, these super-rich prisoners were squeezed three to a one-man cell.
Their new circumstances came as a shock. His cellmates complained that he urinated on them in the night and washed his backside in the sink. If inmates refused to cooperate with the prosecution, privileges such as TV and exercise were withdrawn. But almost all of them broke in the end.
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Defence lawyers complained, with some justification, that these tactics were legally dubious and unethical, because defendants would say or do anything to get out of jail. But polls indicated the public was delighted that the age-old problem of corruption was finally being exposed in a major nationwide operation.
The newspapers trumpeted the message that the dirty socialists in Brasilia were wholly responsible for the problem. The reality was considerably less clear-cut. Just about every major party was involved in multiple, interconnected trails of corruption going back to earlier governments. There would have been no Car Wash if the government had not appointed, in September , an independent attorney general. When Judge Moro walked into a restaurant, people would stand up and applaud.
The federal police also won praise.
Ishii became the public face of the investigation: as the officer charged with taking suspects from the airport to the detention centre and the courthouse, he was in almost every picture and video related to the case. On social networks and in headlines, he was nicknamed Japones Bonzinho the Good Japanese. Knocking at my door is the Japanese fed. In person, Ishii is circumspect and austere.
When I visited him at his modest apartment in Curitiba, he was careful to downplay his role. He explained that his celebrity had reached the point where he felt trapped.
At one public event, he was mobbed by adoring members of the public and had to be escorted out by security guards. A traffic cop pulled him over to ask for his autograph. Bizarrely, even the relatives of the Car Wash prisoners would ask him to share selfies and say how much they admired his work.
Ishii said he realised Car Wash was something special when he saw wealthy businessmen not just go to jail, but stay there. More was to come. From corporate executives, Car Wash investigators turned their attention to politicians. Dishonest and venal senators and congressmen had long been protected by the immunity of office. But a window for prosecution was opening.
The judiciary was in the ascendant, the electorate was mad as hell, and old loyalties were starting to crack. All the prosecutors needed was a little leverage. They had worked together at Petrobras between and Unaware that Bernardo was secretly recording the conversation, the senator made a number of incriminating statements, which were later leaked to the press. Amaral would arrange the whole thing. As soon as the judges heard the recording, they ordered the senator to be detained on charges of conspiracy to obstruct justice.
It was a momentous decision. All this is happening at a difficult time for Brazil as a nation.
By contrast, Dilma faces a stagnant economy , weak currency , and water shortages and electricity blackouts due to a record drought. But combined with general dissatisfaction, it also could create the incentive for real reform. Now he is considered an important ally for Mr. But Mr.
Sarney has been the subject of news reports here saying he abused his status as a senator by giving jobs and favors to friends and family members. Sarney, 79, has refused to resign, denouncing the accusations as false or exaggerated. He has also acted mildly surprised about concerns of nepotism and patronage, saying his conduct was not unusual for a senator. The accusations against Mr. Sarney have embroiled the Senate in yet another pitched battle over the fate of its leadership. Two years ago, Renan Calheiros, a member of Mr.
The latest debacle comes at a difficult moment for Mr. Despite his high popularity personally, Mr. The Brazilian government is preparing a proposal that would give the national oil company unprecedented control over the development of huge deepwater oil fields that could transform Brazil into a global oil power, according to one person with knowledge of the proposed law. And the president is seeking congressional support for the candidacy of Dilma Rousseff, his chief of staff, whom he chose to succeed him in the elections.
But with the Senate in disarray and amid allegations involving both Mr.