GALILEU · e‑ISSN 2184‑1845 · Volume XXIII · Issue Fascículo 1‑2 · 1st January Janeiro – 31st December Dezembro 2022 · pp. 124‑130 124

Brazilian Politics on Trial: Corruption & Reform Under Democracy

by Luciano da Ros and Matthew M. Taylor (Reinner, 281 pp., 2022)

1 Bruce Zagaris is a partner with the law ﬁrm of Berliner, Corcoran & Rowe, LLP, Washington, D.C. His criminal

work has included counseling businesses on anti-corruption and anti-money laundering and preparing due dili-

gence programs. He regularly testiﬁes as an expert in international criminal cases involving evidence gathering,

extradition, prisoner transfers, money laundering and tax crimes, and counseling of witnesses for grand jury

investigations. Since 1985, he has edited the International Enforcement Law Reporter. He has been an adjunct

professor of law at several law schools. He has authored and edited several books, including International White

Collar Crime: Cases and Materials (2d ed. Cambridge U. Press, 2015), International Criminal Law with Jordan

Paust et al (4th ed. Carolina Academic Press, 2013) and hundreds of articles on international law. He has repre-

sented various governments and international organizations on international ﬁnancial services, transparency,

and ﬁnancial regulatory issues. For several governments he has advised on and participated in negotiations with

respect to income tax treaties, tax information exchange agreements, and mutual assistance in criminal matters

treaties. Since 1981, he has registered under the Foreign Agents Registration Act. He has testiﬁed several times in

Congress on international tax, ﬁnancial services, and international evidence gathering issues. He has authored

Foreign Investment in U.S. Real Estate (Praeger Press 1979).

2 Professor Taylor has worked in Brazil for more than a decade, including serving on the faculty of political science

at the University of São Paulo from 2006-2011. He has written several books on Brazil, including D D

 T P E  D B C U P 

BRUCE ZAGARIS1

bzagaris@bcr-dc.com

GALILEU–REVISTA DE DIREITO E ECONOMIA · e‑ISSN 2184‑1845

Volume XXII · 1st January Janeiro–31ST December Dezembro 2022 · pp.124‑130

DOI: https://doi.org/10.26619/2184‑1845.XXIII.1/2.01

Submitted on July 22th, 2022 · Accepted on July 26th, 2022

Submetido em 22 de Julho, 2022 · Aceite a 26 de Julho, 2022

This book analyzes Brazil’s complex his-

tory of corruption and anticorruption

since the return to democracy in 1985,

and evaluates its lessons for anticorrup-

tion reformers in Brazil and in other large

democracies. The authors, an assistant

professor of political science at the Federal

University of Santa Catarina and an asso-

ciate professor of international relations

at American University in Washington,

2evaluate the corruption scandals that

occurred and the anticorruption reforms

that have arisen. The book considers the

conditions whereby anticorruption efforts

succeed. The book discusses the debates

around Lava Jato, the impeachment of

Dilma Rousseff, and the election of Jair

Bolsonaro.

According to the authors, Brazil’s anti-

corruption development has been unique

because its accountability reforms have

followed two distinct strategies, one incre-

mental and the other a big push. From 1985

until the 2010s, Brazil had a piecemeal,

gradual, small-scale reform strategy. Start-

ing in 2014, Brazil’s anticorruption efforts

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underwent dynamic changes as the task

force of the Lava Jato investigation and

many of its allies across government and

within civil society, quickly increased the

tempo of anticorruption efforts, including

investigations and prosecutions of diverse

groups of elite ﬁgures, public mobiliza-

tion, and legislative reforms, in a big push

for accountability.

Chapter 1 discusses the distinctions

between the big push approach to anticor-

ruption, which pushes for quick changes

in the equilibrium while the status quo

is in ﬂux, as occurred with Vicente Fox

in Mexico and incrementalism, whereby

small gradual gains are built on top of each

other.

Chapter 2 describes the prevalent syn-

drome of “elite cartel” corruption. The

authors discuss four prominent cases of

grand corruption that occurred in the pre-

Lava Jato era. The authors attributed the

syndrome to “the perilous combination

of coalitional presidentialism3 in a hyper-

fragmented party system, a large state

with a developmentalist4 economic pol-

icy infrastructure, and a loose campaign

3 Coalitional presidentialism refers to the “strategy of directly elected minority presidents to build stable majority

support in fragmented legislatures, particularly through the coordination of two or more legislative parties by

the president”. In this regard, no president’s party since 199 in Brazil has held more than one-ﬁfth of congressio-

nal seats. B P  T  

4 The developmental state is the idea that the state can be an engine of long-term development through consciously

changing investment conditions, grappling with market failures, and addressing coordination problems. B

 P  T  

5 Campaign ﬁnance in Brazil enables both private individuals and businesses to contribute to candidates with only

limitations as a proportion of an individual’s income or a company’s revenue respectively. As a result there is an

extreme concentration of donors; Signiﬁcant parts of the contributions were irregular, unregistered with elec-

toral ofﬁcials, and were characterized as caixa dois, a so-called second registered, meaning they are from a second,

off-the-books, illicit source. Id.

ﬁnance system.” 5 The cases showed recur-

ring historical patterns of weak accounta-

bility, which may have contributed to the

emergence of Lava Jato.

The book notes that in the Lava Jato

cases, the operators, doleiros, and ﬁxers in

the scheme, were prosecuted, but not the

economic and political elites involved in

these scandals. One of the reasons federal

ofﬁceholders were not prosecuted is that

they can be prosecuted for their crimes

only before STF. The speciﬁc rules of the

STF have been revised to preserve political

elites.

Chapter 3 traces Brazil’s incremental

progress from a fairly low accountability

equilibrium toward a much-improved, if

still intermediate, equilibrium during the

course of three decades between 1985 and

2014. The chapter evaluates the substan-

tial reforms in the accountability policy

that facilitated these improvements, and

discusses the reforms that followed.

The authors trace the fact that in the

ﬁrst seven years following the return to

democracy in 1985 there was a strengthen-

ing of civic engagement and transparency

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mechanisms such as increased media cov-

erage and greater citizen access to public

information required in a democracy.

Overall, the reputational, political, and

legal forms of accountability grew in the

context of responding to grand corruption.

Endogenous reforms occurred due

mainly to agencies responsible for the

implementation of anticorruption tasks.

They involved innovations at the organ-

izational level, such as training and spe-

cialization programs, initiatives for inter-

agency coordination, and the development

of new technologies and processes. ENC-

CLA (Strategy for AntiCorruption and

Anti-Money Laundering), the proliferation

of task forces, and the establishment of

courts specializing in ﬁnancial crimes are

examples of the endogenous reforms.

At a grassroots level, new civil society

organizations devoted to issues of crime,

corruption, voting rights, and improved

public sector performance. They included

in the anticorruption work Amarribo,

Articulaçao Brasileira Centra a Corrupção

e a Impunidade (ABRACCI), Instituto

Ethos de Empresas e Responsabilidade

Social, Movemento de Combate à Cor-

rupção Electoral (MCCE), Transparencies

Brasil, and Observatório Social do Brasil.

Chapter 4 evaluates the big push

which occurred in Lava Jato. The chapter

discusses the contingent and highly con-

textual factors, and the longer-term insti-

tutional changes that had incrementally

accumulated over the prior three decades

in Brazil. The authors underscore the var-

ious capacities in the accountability insti-

tutions in Brazil as a whole, and especially

in Lava Jato’s headquarters in Curitiba.

The legal and political strategies used by

the task force of prosecutors and investi-

gators to help judicial cases progress are

reviewed, as well as the context of severe

political gridlock that prevented any cred-

ible threat of political interference in the

investigations, particularly during the

operation’s ﬁrst two years. The chapter

underscores how the task force achieved

a big push through legal action, a media

push, broad public engagement, and a

reform effort that tried for ambitious

changes in the statutory rules governing

corruption prosecutions.

Lava Jato signaled the court’s unu-

sual proactivity and its decision to con-

vict powerful political ﬁgures, including

Lula’s former chief of staff, José Dirceu.

All the anticorruption investigations, the

impeachment of Dilma Rouseff reﬂected

declining popular support by political

elites and rising dissatisfaction of the pop-

ulation with political leaders. In 2012 and

2013, Congress enacted three important

new laws: (1) the reform of the 1998 Anti-

Money laundering Law; (2) the Anti-Cor-

ruption Law; and (3) the Organized crime

Law. These laws formally instituted plea

bargaining, corporate liability for corrup-

tion, leniency agreements, and penalties

for racketeering. Capacity was increased

by technological innovations during Lava

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Jato. They included the Sislava system per-

mitting shared information system used

by prosecutors and the Receita Federal

(the Internal Revenue Service) to analyze

bank and ﬁscal records. Online access to

bank records was expanded and more than

500 requests for international cooperation

occurred involving forty-ﬁve countries,

producing an abundant amount of infor-

mation.

Chapter 5 discusses the disintegra-

tion of Lava Jato and its implications

for accountability institutions that had

developed prior to the investigation. The

impeachment of President Rousseff’s in

2016 is discussed, and the effects of politi-

cal realignment and saturation. The chap-

ter discusses how, starting in 2016 and

continuing under the Bolsonaro regime

after 2018, new governing coalitions tar-

geted Lava Jato and reversed accountability

improvements.

Developments resulted in the ques-

tioning of the Lava Jato task force on sev-

eral legal, political, and ethical grounds.

They reached their apogee with the arrest

of former president Lula in April 2018. 35

percent of the population believed Lula

received worse treatment than other

defendants. The increasing doubts about

the case and about the costs of account-

ability facilitated a reversal of the gains

of Lava Jato and accountability improve-

ments. The concerns resulted in the

shifting of campaign ﬁnance cases out

of federal criminal courts. In addition,

President Temer replaced the head of the

Federal Comptroller’s Ofﬁce (CGU) and

most of the top ofﬁcials in the Justice

Ministry. Bolsonaro overruled his justice

minister in seeking to replace the head of

the Federal Policy in Rio and ultimately

the director general of police, resulting in

Sergio Moro’s resignation. The Brazilian

executive also sidelined top ofﬁcials in the

Receita Federal and COAF (the Financial

Intelligence Unit) after they criticized the

high court or appeared not willing to sup-

press investigations of Bolsonaro family

members.

Chapter 6 considers the broader lessons of

Lava Jato from a comparative perspective.

One is that judicial pushes, such as Lava

Jato, have not succeeded in democracies,

as has been showed in examples of Italy

and France in the 1990s and Indonesia

since the 2000s. The authors discuss the

reversion to equilibrium closer to the

old status quo ante before Lava Jato. They

conclude that big push efforts out of low

accountability equilibria can easily lead to

a perverse effect whereby the end result is

worse than the initial condition. The chap-

ter concludes that the big push approach is

especially challenging in large democra-

cies such as Brazil. In a large consolidat-

ing democracy like Brazil, big push efforts

may threaten the democratic regime by

destabilizing the political system without

restructuring the underlying incentives

of political engagement that triggered the

corruption.

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Chapter 7 focuses on two bottlenecks to

the accountability process in Brazil: (1) the

extent to which collusion between politi-

cal and economic elites enabled them to

push back against accountability policies

and reduce the effectiveness of reform; (2)

and the weakness of the sanctioning pro-

cess, which is weakened due to adminis-

trative lethargy and judicial breakdowns

in grand corruption cases. These two bot-

tlenecks have served as obstacles to Bra-

zil’s progress and have even contributed to

regression.

While Brazil has achieved some gains

in transparency, oversight, capacity, and

effectiveness, two important obstacles

continue: achieving effective sanction,

especially for the political elite, and the

unique patterns of political dominance in

the coalitional presidential system. Brazil

has not sustained the early gains it made

in accountability. Progress has not been

deep insofar as it does not seem that the

institutional incentives have changed. The

progress was narrow insofar as many of

the most concrete gains of recent years in

the Lava Jato case, as opposed to improved

effectiveness of police, prosecutors, and

judges in other contemporary cases.

The Brazilian judiciary’s inefﬁciency

and uncertainty has continued to protect

elites. The politicians have also blocked

further anticorruption progress. The oper-

ation of campaign ﬁnance and the role of

the executive branch as a source of patron-

age and privilege, even for members of

the opposition, make politicians reticent

to criticize incumbents for accountabil-

ity breaches. Most of the accountability

changes are due to developments outside

the political system, from agencies such as

the Federal Police, from autonomous bod-

ies such as the Ministério Publico, or from

civil society and the media.

Police and prosecutors have been force

to rely on a court system that not only was

slow and timid in combating wrongdoing

by the political elite, the authors say that

the two highest courts, the STF (Supreme

Federal Tribunal) and the STJ (Superior

Tribunal of Justice) were interlinked with

the very political bodies they are asked to

control.

The anticorruption improvements in

Brazil are the improvement in oversight,

with the media, congressional commit-

tees of inquiry, and in the 2000s, effective

investigation and prosecution, especially

in lower court criminal trials and civil

cases, even the high courts repeatedly

overrode them on procedural grounds and

enormous delays. Starting in the 2010s, a

problem was that few trials actually lead to

effective punishment for powerful elites.

The authors conclude that eventu-

ally Lava Jato “became a victim of its own

success. Public exhaustion, self-inﬂicted

wounds, failure to expand more broadly

across the judicial system, increasing

controversy, and the growing opposition

of judicial, political, and economic elites

began to slow the progress of anticorrup-

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tion efforts.” During 2016-2021, the legisla-

tive branches reasserted their supremacy

over the judiciary and the accountabil-

ity institutions. As the key actors, such

as Judge Sérgio Moro joined the politi-

cal regime, critics of the anticorruption

efforts characterized those efforts as par-

tisan.

As a result, the STF realigned and pri-

oritized more defendants’ rights. President

Temer, and Bolsonaro reduced the budgets

available to oversight agencies and dest-

abilized the bureaucracy by appointing

unsympathetic directors to key agencies.

Congress blocked and diluted reforms.

Nevertheless, several signiﬁcant anti-

corruption laws, such as the Anti-Money

Laundering Act of 1998, The Law of

Administrative Improbity, the Criminal

Organizations Law of 2013 (formalizing

plea bargaining) have been enacted.

The authors prioritize four interrelated

areas as ripe for incremental reform in the

future: revising the incentives within coa-

litional presidentialism, tightening cam-

paign ﬁnance, judicial reforms (reducing

the privileges to politicians such as access

to the original jurisdiction of the high

courts), and improving control and over-

sight of the expansive developmental state

apparatus. The latter gives rise for huge

patronage opportunities.

The authors point to important les-

sons from Brazil’s anticorruption efforts.

The Brazilian developments illustrate the

beneﬁts of incrementalism over big bang

approaches, especially when the judicial

system drives these big pushes; the gains

from viewing accountability as a process

more than an outcome; and the realization

that anticorruption progress can be made

by focusing on smaller reforms to each

of the components of the accountability

regime.

As the authors observe, one of the con-

tinuing improvements in anticorruption

in Brazil has occurred because civil serv-

ants and policymakers developed incre-

mental improvements in the elements

of overall accountability: transparency,

oversight, sanction, and capacity. They

improved audits, enacted laws governing

corporate behavior, and improved bureau-

cratic coordination. In addition, efforts

to strengthen oversight agency, prose-

cutorial independence, and better anti-

money laundering laws enabled Brail to

incrementally strengthen accountability.

While Brazil’s anticorruption progress has

not always been even, it nevertheless has

signiﬁcantly improved. As a result, the

authors hold hope for the prospects that

Brazil has a much better anticorruption

and accountability framework going for-

ward.

An appendix provides tables for Brazil’s

major federal corruption scandals during

1985-2021. It considers as “major federal

political corruption scandals” those scan-

dals that allegedly involved misconduct

by members of Congress or the executive

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branch, or both, and that received signiﬁ-

cant attention from the national media.

The book contains 35 pages of useful

references.

Even though only the Brazilian author

has a law degree, the discussions focus on

the development of anticorruption and

accountability institutions and frame-

works, including law, legal actors, and the

various pressures inﬂuencing them.