Andy Spalding: Brazilian judiciary prevents a setback

Former Brazil President Luiz Inácio Lula da Silva“Nothing changes in Brazil. All these politicians now being convicted of corruption? They’ll be back in power, you wait.” So said my atypically cynical Brazilian student, and tragically, I was starting to believe her.

Until yesterday.

A unanimous three-judge appellate panel upheld the money laundering and corruption conviction of Luiz Inácio Lula da Silva. Mr. da Silva had been President of Brazil from 2003 to 2010, and was perhaps the most significant conviction to occur in Brazil’s sprawling anti-corruption investigation called Operation Car Wash.

Despite his criminal conviction, Mr. da Silva (or “Lula,” as he is widely called) was running for re-election and led in the polls by a substantial margin.  While his failed appeal does not absolutely preclude a presidential run this fall, his chances now drop precipitously.

The appellate decision is about much more than a single candidate’s bid.  Five years ago, Brazil stood at an anti-corruption crossroads. With protesters in the streets demanding reform, Brazil enacted two landmark 2013 bills: the Organized Crime Law and the Clean Companies Act.  Armed with these powerful legal tools, Brazilian prosecutors mounted what may be the largest and most effective anti-corruption crackdown in history:  Operation Lava Jato, or “Car Wash.” An astonishing number of flagship companies, prominent business executives, three presidents and a majority of its federal legislative officials were pulled under by this Brazilian tsunami. 

As one Brazilian federal prosecutor explained to me, Operation Car Wash represents a generational clash: between the older generation, enculturated under Brazil’s pre-1988 military dictatorship, and a younger generation raised in the democratic values of transparency and accountability that took hold after the 1988 Constitution. Many of the business and political leaders felled by Car Wash were members of the pre-1988 generation; the prosecutors and judges are by and large much younger. To the older generation, corruption was a necessary means of beating a corrupt system at its own game. But the new generation no longer accepts it.

Standing at that crossroads, Operation Car Wash seemed to move the country full-bore down the road to sustainable democratic institutions and values. But many wondered, “how far can this really go?  And what happens next? Who will fill the power vacuum that Operation Car Wash is creating?”

It may go too far to say that Lula’s re-election would prove that Brazilians don’t care about corruption. But it might be entirely fair to say it would signal a degree of tolerance for rampant criminal corruption that many thought was passing. Of course, Brazil is hardly the only major country now testing its tolerance for official corruption. But Brazil’s moment seemed particularly historic, a clearly defined pivot point.

The Brazilian judiciary has now affirmed that the rule of law is indeed taking root in this beautiful and fascinating country. It is now for the Supreme Court to decide whether those roots continue to grow.

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Andy Spalding is a lecturer at the International Anti-Corruption Academy, Professor at the University of Richmond School of Law, and Senior Editor of the FCPA Blog.