Brazil’s supreme court has quashed convictions against two high-profile figures targeted by the political corruption investigation known as “Car Wash”, dealing a severe blow to the legacy of the probe that rocked Latin America’s largest democracy.
The court on Tuesday evening overturned a 2017 conviction against José Dirceu, a leftwing politician and longtime ally of president Luiz Inácio Lula da Silva, on the grounds that a limitation period had expired.
A single justice on the country’s top tribunal also annulled rulings against industrialist Marcelo Odebrecht, who in 2016 was found guilty of offences including bribery and money laundering.
Together the decisions are another nail in the coffin of Operação Lava Jato, or “Operation Car Wash”, which began in 2014 and uncovered a multi-billion-dollar kickback scheme that siphoned money from state-controlled oil major Petrobras.
A cartel of construction companies systematically paid bribes to officials and Petrobras executives in exchange for contracts, according to investigators, in what the US Department of Justice once described as the “largest foreign bribery case in history”.
Dozens of politicians and businessmen were jailed, as Car Wash earned plaudits at home and abroad for exposing widespread graft at the highest levels of Brazilian politics and business.
However, the methods involved were labelled improper by those targeted, while critics called it a politically motivated witch hunt against the country’s left.
A series of recent supreme court orders has threatened to roll back the investigation’s achievements, leading some to warn about a return of impunity.
Filipe Campante, associate professor at Johns Hopkins University, said the latest rulings were “symbolic of the utter defeat and reversal” of Car Wash.
“Before Lava Jato it was completely unthinkable that certain players would ever face prison,” he added. “What these decisions seem to establish is that things have not changed.”
By three votes to two, the court on Tuesday overturned Dirceu’s conviction for receiving bribes between 2009 and 2012 from a company that contracted with Petrobras. His lawyers argued that the conviction was not valid — he was over 70 years old at sentencing, which reduces the statute of limitation period for the offence by half to six years.
He had been sentenced to almost nine years in prison. Dirceu, who had multiple different convictions with jail sentences attached, spent time in and out of prison pending appeals but is no longer behind bars.
A leftwing activist in the 1960s, Dirceu was deported by Brazil’s military dictatorship and sought exile in Cuba, where he underwent plastic surgery to alter his appearance in order to return to his homeland undetected.
Once considered Lula’s right-hand man, the 78 year-old has another outstanding corruption conviction that is under reconsideration by a separate court. If that conviction too is reversed, it could open the door for him to stand for election.
One of the justices who voted in favour of the annulment, Ricardo Lewandowski, has since retired from the bench and joined Lula’s government as justice minister.
The eponymous family enterprise of Marcelo Odebrecht, which is formerly South America’s largest construction conglomerate, was identified by prosecutors as a key player at the centre of the bribery scheme.
A lower court in 2016 imposed on the executive a 19-year custodial sentence, which was later reduced, and he spent two years in prison before transferring to house arrest, which ended last year.
Those rulings were annulled on Tuesday by Justice Dias Toffoli. In Odebrecht’s case he found there was “collusion” between the magistrates and prosecutors and that proper legal process had been ignored.
“It’s clear there was a mixing of the prosecutorial and judicial functions, eroding the foundations of the democratic criminal process,” the justice wrote in his ruling.
A plea bargain struck between the scion of the construction dynasty and anti-corruption task force, however, remained intact. The company previously admitted to making illegal payments.
Toffoli last year nullified vast amounts of evidence obtained during the Car Wash probe, saying investigators had “disrespected due legal process and acted with bias”.
In recent months, he has suspended fines for corruption scandals imposed as part of leniency agreements on Novonor — the successor company to Odebrecht — and J&F, the holding entity for the Batista family, which controls meatpacker JBS.
Anti-corruption campaigners said the latest rulings were detrimental to the rule of law in Brazil.
“The destruction of the fight against corruption in the country is relentless,” NGO Transparency International said on X.
Its country manager, Bruno Brandão, said: “This further undermines the credibility of the Judiciary in society, which has serious implications for democratic stability. Considering that these are cases that reach multiple jurisdictions, Brazil’s Supreme Court has clearly become a factor of insecurity for the international legal order.”
Lula, who previously ruled South America’s most populous nation between 2003 and 2010, was himself convicted of corruption and spent 580 days in prison.
However, his sentence was overturned by the supreme court in 2021 on a jurisdictional technicality, allowing the former trade unionist to successfully run for the presidency again the following year.