AP Explains: 'Car Wash' probe upending Brazilian politics
By The Associated Press
Jul. 13, 2017
An investigation that started more than three years ago in a Brasilia gas station might end the career of the most popular political leader in Brazil's history. On Wednesday, former President Luiz Inacio Lula da Silva was convicted of corruption and money laundering in the sprawling "Car Wash" probe, which is looking into billions of dollars in contracts with oil-giant Petrobras and now affects almost all aspects of business and political life in the South American nation. Current President Michel Temer is also facing charges, recently becoming Brazil's first sitting president to be hit with a corruption accusation. Here is a look at the sprawling investigation.
HOW DID IT START?
Launched in March 2014, the "Operation Car Wash" probe began as an investigation into money laundering led by police and prosecutors of the southwestern state of Parana. It started a few miles away from Brazil's Congress when gas station owner and black-money dealer Carlos Habib Chater was arrested. Investigators discovered Chater was doing business with convicted money launderer Alberto Youssef, who had bought a Range Rover for Paulo Roberto Costa, a former executive at Petrobras, the mammoth state oil company. Yousseff and Costa eventually reached plea bargains that opened windows onto an immense graft scheme.
HOW DID THE SCHEME WORK?
Prosecutors say executives of major construction companies such as Odebrecht, OAS and Andrade Gutierrez effectively formed a cartel that decided which firms would be awarded Petrobras contracts, often worth billions of dollars, and how over-priced each deal would be. The padded prices were used to pay off dozens of politicians and Petrobras executives, investigators say.
WHO HAS BEEN CAUGHT?
The dozens of top businessmen and politicians who have already been convicted or are being investigated is a who's who of Brazil's elite. Among them are former Odebrecht CEO Marcelo Odebrecht and ex-Chamber of Deputies Speaker Eduardo Cunha, both of whom are serving long prison sentences. In addition to the case in which he was convicted, Silva is facing charges in several related cases.
HOW IS SILVA CONNECTED?
Key plea bargain testimonies accused Silva of being the secret owner of a beachfront apartment in the city of Guaruja, in the state of Sao Paulo. The apartment was allegedly prepared by construction company OAS for the former president in exchange for contracts with Petrobras between 2006 and 2012. Silva insists that no documents link him to the apartment and says he visited it only once.
HOW IS TEMER CONNECTED?
Joesley Batista, chairman of meat-packing company JBS, was being investigated for allegedly bribing Cunha. During a meeting with Temer, Batista told Temer about the bribing and Temer told him to keep it up, according to a recording. The allegations against Temer go beyond the audio. He has been accused in plea bargains by Odebrecht executives of taking bribes and illegal campaign financing. Attorney General Rodrigo Janot is also investigating Temer for allegedly trying to impede Car Wash investigations through changes in laws and influencing police investigations.
CONNECTIONS OUTSIDE BRAZIL?
The initial investigation has mushroomed into related probes in other nations because big Brazilian companies operated across Latin America and elsewhere in the world. In a plea deal with U.S. prosecutors, Odebrecht admitted to paying bribes in such countries as Colombia, Venezuela, Peru, Argentina and the Dominican Republic.
Graft has long been part of doing business in Brazil, and historically the elite have operated with impunity. Previous corruption investigations, including into Odebrecht, have ended with prosecutions of a few low-level people. This time it is different, thanks to several factors: a young and crusading group of prosecutors and judges, plea bargains that have helped investigators uncover white-collar crimes normally hard to prove and the practice of keeping defendants in jail while they await trial.