Marc Simms is an occasional blogger for Proelium Law LLP. Marc holds a MLitt in Terrorism Studies and a Masters in International Relations, both from St Andrews. His particular interests are in emerging international security issues, unconventional warfare, and terrorism.
Car Wash
Brazil’s wide-ranging corruption investigation “Lavo Jato” (Car Wash) announced the names of politicians it would be targeting over the bribery scandal that has gripped the country since it was first initiated in 2014.
Eight cabinet ministers, including Foreign Minister Aloysio Nunes, as well as other high ranking officials including the President Michel Temer’s Chief of Staff Eliseu Padilha, the former Mayor of Rio de Janeiro Eduardo Paes and a number of sitting members of Congress are on the extensive list released by Judge Edson Fachin.
President Temer himself has not been named as a person of interest but a Brazilian court is hearing witnesses in another case over alleged illegal finance campaigning by the President; this was from when he campaigned in 2014 alongside former President Dilma Rousseff, who was removed from office last August.
Tip Off
“Lavo Jato” was initiated as an investigation in 2014 after an initial tip-off from a Brazilian businessman, Hermes Magnus, indicated to the police that criminals were trying to launder money through his company. This in turn revealed that executives of the government majority-owned oil company Petrobras were transferring significant sums of money into overseas accounts.
As it transpired, directors at Petrobras were secretly colluding with construction firms and other contractors, then diverting 3% of the value of those contracts into their own accounts, as well as acting as a slush fund for political parties. Police have identified over R$ 3.6 billion in misappropriated funds as a result of this corruption. Firms that engaged in this include the Latin American construction conglomerate Oderbrecht, engineering conglomerate Construtora Camargo Correa, Engevix, IESA Óleo e Gás and UTC Engenharia, who acted as a cartel to defraud Petrobras.
Political Fallout
The scandal here has also had significant political repercussions. The most notable of these was the impeachment of former President Dilma Rousseff, who was President of the board of directors at Petrobras during the time frame under investigation, though she has been cleared of any wrongdoing herself. The impact has also been somewhat non-partisan, with officials from the Worker’s Party, Brazilian Democracy Movement Party and the Christian Labor Party arrested or under investigation.
The investigation has also had an overseas component, as it appears the Brazilian branch of Mossack Fonesca provided assistance with regards to offshore accounts and money laundering – leading to the resignation of co-founder Ramon Fonesca Mora from his advisory role in the Panamanian government. The former Peruvian President Ollanta Humala has also been implicated indirectly in the scandal, though he has denied the charges.
With so many of Brazil’s political elite seemingly implicated in this staggering amount of corruption, it seems the country’s political woes will not be over any time soon.
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