Toffoli’s decision helps J&F contest billion-dollar leniency fine

The J&F group took advantage of the decision of the Federal Supreme Court (STF) minister Dias Toffoli, who annulled the evidence provided by Odebrecht to Lava Jato, to ask him to suspend and discount the R$10.3 billion fine agreed in its leniency agreement with the Federal Public Ministry (MPF).

Although the agreements between the two holding companies were negotiated in separate processes, J&F wants to use the threat of persecution and partiality placed by politicians on Lava Jato to obtain greater financial benefits, beyond that initially agreed with the MPF.

For months, the group has been trying to discount the amount, to pay R$3.5 billion, one third of the fine. In the request submitted to Toffoli, J&F argued that, as the contractor claims, the group had been abusively pressured by the MPF, accepting to pay an exorbitant amount, fixed without reasonable criteria, to continue operating.

For years, the brothers Joesley and Wesley Batista, the group’s main controllers, have also been trying in the STF to renegotiate their plea bargain agreements, in which they confessed to various acts of corruption in public authorities, to also reduce the agreed debt. This request is being processed with Minister Edson Fachin at the STF. J&F’s new request, however, was directed to Toffoli, who became the rapporteur of the process in which Odebrecht’s evidence was annulled.

Although J&F’s corruption cases are not directly related to Odebrecht’s, J&F took action against Toffoli following a statement from the Attorney General’s Office (PGR), the MPF’s top body, which agreed to send the case to the minister. This demonstration was made as part of an action by deputy Rui Falcão, from PT-SP, in which he accused the prosecutors who negotiated the leniency agreement of several irregularities, to the detriment of J&F and supposedly to favor the NGO Transparency International in Brazil.

The leniency agreement provided that, of the R$10.3 billion fine, R$2.3 billion should be applied to social projects under the supervision of Transparency International. For Rui Falcão, the management of resources by a private entity is irregular. Based on this, still in 2020, the then Attorney General of the Republic, Augusto Aras, defended that the resources be allocated to the Union, so that the public authorities could define where they would be invested.

J&F wants access to “Vaza Jato” messages

To reinforce the request, J&F also asked Toffoli for all messages exchanged by prosecutors that were illegally captured by hackers and which were also used by the minister to annul Odebrecht’s evidence. For him, part of the evidence would have been obtained in an informal, supposedly irregular manner, from Swiss authorities, which would compromise its integrity – the main material are copies of the digital systems, Drousys and MyWebDay, which were stored in Switzerland and Sweden and recorded payments to politicians.

As shown by People’s Gazette, obtaining this evidence in Switzerland was carried out legally, through the Department of Asset Recovery and International Legal Cooperation (DRCI), subordinate to the Ministry of Justice. Furthermore, expertise from the Federal Police and the PGR attested to the authenticity and integrity of the data transported to Brazil. The procedure with Switzerland was approved by the MPF Internal Affairs Department. Prosecutors, in turn, argue that some informal contacts between investigators from different countries are common and recommended by international bodies to facilitate the exchange of information.

J&F stated in the request to Toffoli that prosecutors from both investigations were talking on cell phones about issues that “exceeded (far) purely legal aspects”. “Attorneys were seen involved in conversations about such people (individuals and legal entities) with the aim of agreeing action strategies (not only legal, but also political), sharing information with colleagues who did not have any competence to take possible legal measures, including other highly questionable conduct”, says J&F.

The clandestinely intercepted messages never had their integrity and authenticity confirmed by the PF. They are now in the possession of the STF following the seizure, in 2019, of hackers’ computers where they were stored. The only guarantee about them is that they have not been changed since then, but there is no guarantee that they have not been edited before.

Toffoli’s decision on Odebrecht still raises doubts

After Toffoli’s decision, in September, the PGR appealed to the minister to clarify the effects of the decision, especially in the part where he ordered prosecutors to be held responsible for alleged abuse in investigations. Deputy Attorney General of the Republic Lindôra Araujo asked the minister whether these investigations will take place before the STF or whether they can be carried out internally, simply informing the minister of the results. She also asked Toffoli whether Odebrecht’s evidence will really be annulled even after the Ministry of Justice has confirmed that DRCI effectively intermediated Lava Jato’s cooperation with Switzerland.

Odebrecht, in turn, also responded to Toffoli, defending the maintenance of the benefits promised by the MPF in its leniency agreement even after the annulment of the evidence it submitted. The group stated that it collaborated in good faith and that it must remain free from criminal proceedings and misconduct against its executives even if the evidence is no longer sufficient to convict politicians it corrupted. The group complained that, even after the agreement, it has been subject to legal action, being prevented from being hired by public entities and being restricted in taking out loans from public banks, harming its activities.

The Federal Court of Auditors (TCU), for example, has already announced that, with the annulment of Odebrecht’s tests, it will assess whether the punishments it would apply to the group and which were suspended, will be resumed, given the ineffectiveness of the material to punish and obtain compensation for people involved in embezzlement of public resources. Odebrecht wants to ensure that it will not be punished.

“The subjection of the Group and/or its Employees to new persecutions, actions of impropriety, sanctions, declaration of unsuitability and possible precautionary measures due to the unavailability of assets, in addition to representing a very serious violation of legal security and a profound disincentive to the conclusion of leniency agreements and award-winning collaboration, can cause irreparable damage and, ultimately, lead to premature and disorderly interruption of contracted works, layoffs, loss of tax revenue and other associated risks”, the company’s lawyers wrote to Minister Dias Toffoli.

Left-wing parties want to review all leniency agreements for construction companies

After the minister’s decision, left-wing parties – PCdoB, Psol and Solidaridade – reinforced a request to the STF to review leniency agreements with all construction companies that admitted acts of corruption. This action was presented in March this year, but its rapporteur is Minister André Mendonça – before 2019, he was responsible for negotiating agreements within the scope of the Attorney General’s Office (AGU).

“The aforementioned decision will be an important milestone to be considered in these files, from which, it is hoped, objective parameters should emerge regarding the review of other leniency agreements, and this is because the decision issued by Min. Dias Toffoli is masterfully elucidating the relationship structural structure that was established in a pathological way during the Lava Jato period, through which various bodies and agents of the State came together, systematically, in the violation of fundamental rights, in an authentic Unconstitutional State of Things”, stated the parties.