Toffoli’s decision to annul Odebrecht tests worries the OECD

The annulment of evidence of Odebrecht’s leniency agreement in the context of investigations into the Lava Jato operation by minister Dias Toffoli, in September, caused concern in the OECD, the Organization for Economic Cooperation and Development. The so-called “rich club” released a report this Thursday (19) evaluating Brazil’s efforts to implement measures to combat transnational bribery.

Brazil has been a signatory to the Convention Against Transnational Bribery since 2002 – it was created in 1999 – and has been evaluated at each period of time regarding the implementation of measures to prevent multinational companies from paying bribes in other countries. This is the country’s fourth evaluation in the group.

During the last government, former president Jair Bolsonaro (PL) had as one of his main aims to make Brazil become a full member of the OECD, an act that is still discussed by the Ministry of Foreign Affairs under Luiz Inácio Lula da Silva (PT ).

The Convention’s working group was in Brazil in mid-May to study the measures implemented, and assessed that only 28 of 60 reports of foreign bribery identified had actually been investigated since the start of the Lava Jato operation in 2014.

The report that the People’s Gazette had access (see in full) praises Brazil’s performance in “enforcing the law during the Lava Jato operation”, highlighting the 60 complaints identified, but states that “in September 2023, a decision by the STF [Supremo Tribunal Federal] raised doubts about the validity of Odebrecht’s (now Novonor) leniency agreement, and the company filed a request to affirm the validity of the agreement with the STF. The decision also raised concerns in other Working Group countries.”

“[Os examinadores líderes] recommend that the Working Group monitor the possible consequences of the recent decision of a STF judge in relation to evidence obtained under the Odebrecht leniency agreement, mainly with regard to its legal certainty, and the possible consequences of this decision on Brazil’s ability to provide and obtain mutual legal assistance in cases of foreign bribery”, the report states.

In another part of the conclusion, the examiners express concern that Brazil neglected or underused part of the documents discovered during the investigation, such as corporate reports, referrals from foreign authorities or media reports and information compiled by the Working Group. This, the entity says, suggests a “lack of capacity to detect and react to allegations of foreign bribery arising from other sources”.

“While Brazil should be commended for its ability to collect data on its detection sources, this data highlights the need for Brazil to be more proactive in its detection efforts and methods, including establishing greater engagement between government agencies,” say the examiners.

The OECD investigation is seen by the opposition to Lula as an “international shame”. Former deputy Deltan Dallagnol (Novo-PR), who acted as federal prosecutor during the operation, stated that “with each passing day the narratives against Lava Jato are falling and proving, once again, that the operation followed the law and he did the right thing.”

“Toffoli makes Brazil an international shame with his bizarre decision to annul evidence of Odebrecht’s leniency. OECD is concerned about the impact of Toffoli’s decision on leniency agreements and Brazil’s capacity for international cooperation,” he said on social media.

Former judge Sergio Moro (União Brasil-PR), who was responsible for judging the Lava Jato criminal actions before being appointed Bolsonaro’s minister, preferred not to comment on the report.

In mid-September, Toffoli declared the nullity of all acts related to the leniency agreement signed by Odebrecht in a “monocratic” decision, claiming that the evidence was contaminated and affected other investigations underway at the STF.

He declared that the evidence obtained from the Odebrecht Leniency Agreement, as well as the Drousys and My Web Day B systems, and all elements related to them, are “useless” in any legal context.

The decision originated from evidence obtained during Operation Spoofing, which revealed an organization that invaded the Telegram accounts of Brazilian authorities and people linked to Lava Jato. This episode became known as “jato leak” and involved hacker Walter Delgatti Neto, who leaked alleged dialogues between Moro and Lava Jato prosecutors.

The measure directly impacted the largest leniency agreement ever signed in the world between a private company and public authorities, involving Odebrecht and corruption investigations in 12 countries in Latin America, the Caribbean and Africa. The company committed, at the time, to pay a fine of US$3.5 billion, as expressed by the OECD in the report.

Toffoli has a history of links with the Workers’ Party (PT) and Brazilian trade unionism, which adds a political component to the decision. The nullity of the acts linked to the Odebrecht agreement should generate debates and reactions in the coming days.