Jailing the UntouchablesBrazil’s Sérgio Moro crusades against corruption
The story of how Judge Sérgio Moro became the 2018 Commencement Speaker for the University of Notre Dame began with a stroke of luck at a humble gas station in the capital city of Brazil.
Six years ago, a police officer who used to be an air traffic controller was listening to a wiretapped conversation in a money-laundering investigation. He recognized the voice of a long-time pilot and smuggler named Alberto Youssef, which led to a wiretap on Youssef’s phone and an email about a Range Rover used to bribe an executive of the country’s government-controlled oil company, Petrobras.
When the executive, Paulo Roberto Costa, flipped and became a cooperating witness, a pervasive kickback scheme unfolded. A cartel of companies colluded with Petrobras officials to overcharge for construction and service work, with a portion of each fixed contract going to a slush fund for Petrobras and government officials. The gory details included Rolex watches, $3,000 wine bottles, yachts, artwork, cars, prostitutes and an elderly gentleman who delivered bricks of shrink-wrapped cash around the world, strapped beneath a Spanx-style vest.
Moro, 45, has been the driving force leading the ensuing corruption investigation, which Brazilian experts characterize as bigger than Watergate. So far Operação Lava Jato, or Operation Car Wash, has uncovered more than $3 billion in bribes and charged more than 200 politicians and business leaders with crimes. It helped bring down one administration, leveled allegations against corporate titans and the leaders of the Brazilian House and Senate, and in April landed a former president — and leading candidate for the next election — in prison.
Brazilian judges have wide leeway to direct criminal investigations. From his courtroom in Curitiba, the capital of a southern state, Moro leads a team of prosecutors not afraid to pursue and charge the rich and powerful, a break from history that has made him a folk hero to many in Brazil. People wear T-shirts bearing his name; others want him to run for president.
The University presented the Notre Dame Award to Moro last year for his courageous efforts to preserve the “nation’s integrity through his steadfast, unbiased application of the law.” In his acceptance speech, Moro boiled down the message that Lava Jato sent.
“We will never surrender to corruption,” he said. “The age of our robber barons is ending, and the empire of the law is becoming a true possibility in Brazil.”
Curitiba, the country’s eighth biggest city with nearly two million people, was settled by German and Italian immigrants and has a distinctly different culture from the more freewheeling cities of Rio de Janeiro and São Paulo to the north. Inequality and crime rates are lower, and standards of living and life expectancy are higher. There’s also a different attitude toward rules.
“It seems that we, as a people, failed in the prevention of misuse and abuse of public power for private gains,” Moro said at the award ceremony. “So corruption grew and in time it became widespread, endemic or systemic.”
The son of a Portuguese teacher and a geography professor, Moro earned his law degree at the State University of Maringá in 1995 and became a federal judge the following year. He studied briefly at a Harvard Law School exchange program in 1998.
Two years after completing a doctorate at the Federal University of Paraná in 2002, he published an article in a legal journal about the conditions and legal changes that made possible Italy’s “Clean Hands” corruption investigation. He wrote that pretrial detention, plea bargain agreements and positive news coverage allowed Italian law enforcement to create a “virtuous cycle” that took down powerful but corrupt political figures.
“It seems that we, as a people, failed in the prevention of misuse and abuse of public power for private gains. So corruption grew and in time it became widespread, endemic or systemic.”
A decade later, those same circumstances materialized in Brazil at the same time as the lucky nabbing of Youssef, the smuggler who implicated Costa and Petrobras. These important cases were assigned to a team of federal police officers and prosecutors in Curitiba who specialized in financial crimes. Better technology expedited lagging cases, and a new law made it easier to turn defendants into cooperating witnesses with lenient plea bargains, which had been illegal before.
In May 2014, Judge Moro made a courageous stand — facing down a Supreme Court judge who had signed off on Costa’s release — by demanding that he stay in jail, a situation previously common only to the poor. The pressure on, several other suspects agreed to cooperate.
These decisions were not without some controversy in Brazil. Instead they are tangled in a partisan political struggle.
Pedro Floriano Ribeiro, a Brazilian political scientist currently visiting Notre Dame’s Kellogg Institute for International Studies as a Fulbright Scholar, said Brazilians have opposing feelings about whether Moro’s ends justify the means. Some, especially supporters of the politicians targeted, believe Lava Jato has sacrificed individual freedoms to fight corruption, Ribeiro said.
When Costa took the plea bargain and returned $23 million hidden in Swiss banks, he testified in Moro’s courtroom that Petrobras officials and politicians had been systematically robbing the company and the country. Moro told CNN’s Anderson Cooper that this was the “point of no return” like in the movie “The Untouchables.”
In the movie, Sean Connery’s seasoned cop character tells federal agent Elliot Ness that if they make the first bust, they are in for a lot of trouble, from which there is no turning back. And like Ness, this moment touched off Moro’s reputation for honesty — and his cultural celebrity.
Brazilians, long used to corruption, poured into the streets to show their support. Many wore Moro face masks or T-shirts. “I support Lava Jato” became a popular bumper sticker.
“The major support of public opinion in Brazil worked as a shield to prevent attempts to obstruct our justice,” Moro wrote in an email. “Of course, there are risks not only for me but for the other judges, prosecutors, and police officers involved, but as you say in United States, so far so good.”
With the floodgates opened, the scope of the kickback scheme slowly came to light. A decade earlier, Petrobras subcontractors formalized a long history of corruption into a cartel calling itself “the club,” according to court documents and depositions. One document laid out the “rules of the game” to rig the contract-bidding process and pick winners that could overcharge for the work, siphoning billions of dollars from taxpayers.
In return, club members set aside from 1 percent to 5 percent of each contract for bribes to Petrobras officials, who were appointed by the government. The money was then split with about 50 politicians from six different parties through complicated routes such as fake corporations with consulting fees, or through money changers like Youssef and the elderly “money mule” delivering bricks of cash. The scheme funded expensive political campaigns in a country with strict donation laws.
Many officials bought fine art as a way to launder their proceeds. Prosecutors seized so much art that the Oscar Niemeyer Museum in Curitiba has an exhibit of confiscated works in its custody.
“On the whole, the investigation is probably a healthy development in the long run for Brazil. Right now, it’s having a disruptive effect.”
The scandal became international when the massive construction firm Odebrecht admitted to paying hundreds of millions in bribes to win business at home and in 12 other countries across Central and South America. The firm had an entire unit that served as the bribe department. Moro sentenced its CEO and dozens of other officials to prison. The U.S. Department of Justice called it the largest foreign bribery case in history.
Meanwhile, the country suffered. A surging national economy, fueled largely by oil, stalled. In one example, plans for a $6 billion Petrobras refinery north of Rio de Janeiro suffered massive cost overruns of eight times its budget before it was shut down, costing thousands of jobs.
“The investigation is probably a healthy development in the long run for Brazilian law and politics,” said Abraham Lowenthal, a Latin America expert and professor of international relations at the University of Southern California. “Right now, it’s having a disruptive effect.”
Lowenthal said Lava Jato has tested the country’s institutions, leaving the future uncertain. Still, he noticed a severe change in attitude during a recent visit. When a senior military official demanded a seat on a full plane, ordinary people refused. The press excoriated the official for what was common practice in the past.
In March 2016, millions of Brazilians took to the streets to protest. Their furor helped bring down the government of President Dilma Rousseff, who was chairwoman of Petrobras for a time but has not been charged with bribery. Ironically, Rousseff’s party came to power in 2013 promising to end corruption and passed the law allowing plea bargains.
Moro added to Rousseff’s problems when he released the transcript of an intercepted conversation she had with her predecessor in office, Luiz Inácio Lula da Silva. She offered Lula da Silva a cabinet position, which would have shielded from prosecution the popular former president many others had named as the mastermind of the kickback system. Rousseff was impeached in April and removed from office in August for breaking the country’s budget laws.
Lava Jato did not cause the country’s economic and political problems, Moro said, and it could help in the long run. “With less corruption, you will certainly have a strong economy, because systemic corruption increases the costs of investments and affects the efficiency of the economy,” he said.
During this time, he issued public statements praising the anti-corruption protests and signaling that the economic pain was worth the price. He denounced “the systemic corruption that destroys our democracy, our economic well-being, and our dignity as a nation.”
Moro has often quoted Theodore Roosevelt: “The exposure and punishment of public corruption is an honor to a nation, not a disgrace. The shame lies in toleration, not in correction.”
The Brazilian Supreme Court appears to have joined the fight. It approved investigations of scores of politicians last year, including the current president, Michel Temer, and released audiotapes in which Temer allegedly approved payments designed to silence a witness in the investigation. It also allowed the enforcement of criminal convictions after an appeals court judgment so that a lengthy process did not ensure impunity.
Nobel Prize-winning author and statesman Mario Vargas Llosa, a Peruvian, said he would pick Moro as his exemplar of admirable people in Brazil for leading an unprecedented return to justice.
“Nothing like this has ever happened in the history of Latin America,” Llosa wrote. “A popular movement that was not aimed at bringing about socialist revolution or toppling a government but at regenerating democracy. Its objective was to revive the word of law and ensure that it was properly applied to all, be they rich or poor, powerful or ordinary.”
Notre Dame Honors
The University presented Moro with the Notre Dame Award in a ceremony in São Paulo in early October. Last presented in 2000, Notre Dame relaunched the award as part of its 175th anniversary celebration.
It was first awarded in 1992 in conjunction with Notre Dame’s sesquicentennial and has been given to “women and men whose life and deeds have shown exemplary dedication to the ideals for which the University stands: faith, inquiry, education, justice, public service, peace and care for the most vulnerable.”
Previous recipients of the award include former President Jimmy Carter and his wife, Rosalynn; Mother Teresa; Nobel Peace Prize-winner John Hume of Northern Ireland; and U.S. civil rights leader Leon Sullivan.
In his introduction, University President Rev. John I. Jenkins, C.S.C., said Moro is “engaged in nothing less than the preservation of his nation’s integrity through his steadfast, unbiased application of the law. By addressing the pernicious problems of public corruption in a judicious but diligent way, Dr. Moro has made a marked difference for all Brazilians and for humankind at large in our universal thirst for justice.”
Later that month, Notre Dame chose Moro to receive an honorary degree and serve as principal speaker at the University of Notre Dame’s 173rd commencement ceremony on May 20. Father Jenkins said Moro “is a shining example of someone who lives out the values we seek to inspire in our students. I am pleased he has accepted our invitation and know that he will offer valuable observations to our Class of 2018.”
In Brazil, there is a popular saying about when the rich and powerful are arrested: “acabou em pizza” (to end up with pizza). It suggests that the system is rigged in the favor of elites, who will avoid prison, celebrate with a pizza party, and carry on as before.
But in early April, Lava Jato again crashed the party. Popular former president Lula da Silva at first refused to serve a 12-year prison sentence for corruption. He holed up in a union headquarters in his hometown near São Paulo surrounded by political supporters. He finally surrendered to Brazilian authorities in Curitiba the next day, which will prevent him from running for the presidency.
“Despite these reactions against the Brazil anticorruption movement, there are reasons to keep faith in the future, to maintain an infinite hope that the days of impunity and widespread corruption are coming to an end.”
Moro has said repeatedly that he cannot ensure a future free from corruption. While the movement has spread, opposition forces have fought back. Yet he is as determined as ever.
“Despite these reactions against the Brazil anticorruption movement, there are reasons to keep faith in the future, to maintain an infinite hope that the days of impunity and widespread corruption are coming to an end,” he said. “‘Infinite hope’ are the same words used by Joaquim Nabuco of the Brazilian antislavery movement in the 19th century to mean that they would never give up despite of temporary setbacks. The same is true here.”