Hydra of Lerna: Brazil’s New Anti-Corruption Action Goes After Ministers and Governor

    Brazil's federal police in action

    Brazil's federal police in action Brazil’s Federal Police officers executed warrants for Operation Hydra of Lerna at the Workers’ Party (PT) state headquarters in Salvador, Bahia state’s capital city, at Propeg advertising company and at OAS construction company, also investigated under Operation Car Wash.

    Bahia Governor Rui Costa (PT) is being probed under the operation, suspected of having received illegal funding for the campaign that elected him in 2014.

    The former ministers of cities are also being investigated. They are Mário Negromonte, member of the Progressive Party (PP), current member of the Bahia Court of Auditors, and Márcio Fortes, employee of the Federation of Industries of the State of Rio de Janeiro (FIRJAN).

    The Operation Hydra of Lerna was launched in Brasília, Salvador, and Rio de Janeiro. In total, 16 search warrants were granted by Superior-Court (STJ) Justice Maria Thereza Rocha de Assis Moura, because some of those investigated had jurisdictional prerogative.

    Brazil's federal police in action

    According to the Federal Police, the group is being probed for allegedly illegally financing campaigns and for fraud in bidding contracts with the Ministry of Cities.

    The OAS construction company hired communications companies, like Propeg, to run campaigns for the construction companies. However, the companies were actually running campaigns for political parties. Another line of investigation pursues fraud in bidding contracts with the Ministry of Cities.

    According to the federal police, the operation is dubbed Hydra of Lerna in a reference to the Greek mythical creature: for every head chopped off, the Hydra would regrow two heads.

    Negromonte’s lawyer, Carlos Fauaze, confirmed that the police went to the former minister’s house, but said he will not make further remarks on the matter until he reads the operation’s files.

    In a note, Propeg confirmed that the searches were executed in their offices in Brasília and Salvador and in directors’ houses. The company said it has helped investigations since June this year and denies that the facts investigated have “any connection with the PT, the Bahia government, and the OAS company.”

    Probing Senate’s President

    Brazil’s Supreme Court (STF) Justice Edson Fachin submitted this Tuesday (October 4) to all members of the court a complaint against Senate’s President Renan Calheiros, according to which he would have used a lobbyist from a construction firm to pay the alimony to a daughter born out of wedlock.

    The senator is also accused of having tampered with documents to justify the payments. He denies the allegations.

    The complaint against Calheiros, member of the Brazilian Democratic Movement Party (PMDB), which is the same party of President Michel Temer, is under deliberation at the Supreme Court since 2003. Now Chief Justice Cármen Lúcia will be responsible for setting a date to examine the case.

    Senate’s President Renan Calheiros said all matters concerning the complaint against him at the Supreme Court related to his affair with journalist Mônica Veloso, with whom he had a daughter, “have already been explained.” The senator seemed confident of being acquitted for lack of evidence.

    “I am not worried about that. This complaint does not involve public money, these matters have already been explained, thoroughly explained. I have requested the investigation, I have revealed my secrets, so I have absolutely no concern about this, no concern,” said the senator.

    Plea Bargain Plus

    Judge Sergio Moro, responsible for the Operation Car Wash procedures in a court of first instance in Curitiba, in Paraná state, responded to critics of the operation, saying that plea bargain deal is not the only method used by the investigation.

    According to him, when foreign currency dealer Alberto Youssef was arrested, they already had evidence and his plea bargain was just the “icing on the cake.”

    When the currency dealer was arrested, they had uncovered the scheme involving kickback payments on contracts with the Brazilian state-led oil company Petrobras.

    In the judge’s view, plea bargain deals “have to be made according to rules, with care and caution. Never trust a criminal,” he said. The judge said it is necessary to estimate whether it is worth or not to close a deal with the informer. “Because it also has a cost, since the informer will receive proportionate criminal sanctions,” said Sergio Moro.

    In a speech to federal judges, Moro said he would only comment on cases already tried by the Operation Car Wash. According to him, a Petrobras executive manager, who received bribes, has returned US$ 98 million embezzled to secret accounts abroad.

    Moro pointed out that he found “systemic corruption” in Petrobras. “Systemic corruption as something widespread, pervasive, and deep, which is not very common,” he said. The judge noted that the practice in the oil company was to pay bribes between 1% and 3% of the value of contracts.

    The judge said that the percentage may not be considered significant, but on works contracts, refinery equipment, and acquisition of drillships, the values may reach US$ 310 million.

    “This bribe was not only earmarked to Petrobras, part of it would go to politicians and parties, which would give support to Petrobras agents to remain in offices,” he added.

    Lula Spectacle

    When denying the appeal filed by former President Luiz Inácio Lula da Silva, Supreme Court (STF) Justice Teori Zavascki criticized the operation carried out by the Federal Prosecution Service (MPF) when they filed the complaint against Lula. During the session that considered Lula’s defense’s appeal, Zavascki said that they made a “spectacle” of the episode.

    “News reported a criminal organization of which Lula was considered the mastermind, suggesting that this criminal organization was under investigation. But what was effectively offered as the object of complaint was nothing like that,” said the justice.

    Despite criticizing the MPF’s operation, the justice has denied the appeal filed by the former president’s defense which asked to suspend the investigations against him under deliberation in Curitiba, in the hands of federal judge Sergio Moro, from the Paraná Federal Court, and requested the case to be sent to the Supreme Court.

    The defense questions Moro’s competence to conduct three investigations against the former president within Operation Car Wash and claims that the facts investigated are the same probed by the Supreme Court in another case against Lula.

    However, Zavascki noted that the Supreme Court determined that people who have jurisdictional prerogative would be solely tried at the Supreme Court, as established by the Constitution.

    ABr

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