Brazil: Lava Jato thrown into turmoil after top judge killed in plane crash

Operação Lava Jato, the investigation into Brazil’s massive bribery scandal, was thrown into turmoil on Thursday after the Supreme Court judge overseeing testimony from the most credible witnesses was killed in a plane crash.

But the tragic incident is unlikely to cause more than a delay to the probe before it resumes and ensnares more corrupt politicians and officials in Brazil, and elsewhere in Latin America.

Judge Teori Zavascki died when the light aircraft he was travelling in plunged into the sea off the coast of Rio de Janeiro state. There was no immediate indication of the cause, but the accident will inevitably spark conspiracy theories, even if crash investigators conclude there was no evidence of sabotage.

There is no doubt that the judge had enemies, and that he was handling sensitive and politically explosive material. Zavascki was in the middle of assessing witness statements taken from the 77 executives at Brazilian construction and engineering giant Odebrecht who signed leniency deals with prosecutors in December.

These witness statements are rumoured to criminally implicate as many as 200 politicians, including legislators and governors, and possibly President Michel Temer. Chief public prosecutor Rodrigo Janot had urged Zavascki to lift the secrecy on the statements and make them public, which he was expected to do next month.

In a landmark USD3.5bn combined settlement signed in December with authorities in Brazil, the US and Switzerland, Odebrecht admitted it paid USD800m in bribes over the previous decade to secure billions of dollars’ worth of public works contracts in a dozen countries, mostly in Latin America.

Zavascki’s death requires that Temer nominate a replacement to be confirmed by the Senate. However, given the urgency and sensitivity of the Lava Jato matter, the Supreme Court could reassign the case to another judge.

Either way, while this development will delay proceedings, it is unlikely to permanently derail Lava Jato: whoever assumes the caseload will be under pressure from various quarters in Brazil to swiftly pick up where Zavascki left off.

Meanwhile, the Lava Jato investigation has ceased to be a scandal confined to Brazil.

The US component of December’s settlement revealed the amounts Odebrecht paid in each country: USD35m in Argentina, USD11m in Colombia, USD92m in the Dominican Republic, USD33m in Ecuador, USD18m in Guatemala, USD10m in Mexico, USD59m in Panama, USD29m in Peru, and USD98m in Venezuela.

Add to this the names and bank account numbers contained in the witness statements that will come to light sooner or later, and Odebrecht’s disclosure represents a unique opportunity to measure each country’s political willingness and institutional autonomy to act on a raft of evidence of industrial-scale corruption.

Colombia has so far led the pack. Authorities have already arrested a former deputy transport minister, Gabriel García Morales, who has admitted receiving USD6.5m to ensure Odebrecht was the only bidder for a road project. A former Senator, Otto Bula, has also been detained for taking USD4.6m to help Odebrecht obtain another contract.

The reaction has also been strident in Peru, Odebrecht’s largest market outside Brazil. No-one has yet been charged, but anti-corruption prosecutors are preparing to take testimony from former presidents Ollanta Humala, Alan García and Alejandro Toledo—as well as incumbent Pedro Pablo Kuczynski.

But in other countries where Odebrecht had for years been rumoured to be paying off officials to win contracts, the reaction to the December bribes-per-country revelation has so far ranged from tepid to indifference.

In the Dominican Republic, another key market for Odebrecht, the authorities have begun seizing documents and hauled in for questioning the Brazilian company’s local lobbyist, Angel Rondón. In Ecuador, President Rafael Correa, under whose tenure since 2007 many of Odebrecht’s projects began, has so far dismissed much of the Odebrecht affair as unsubstantiated rumour tantamount to ‘fake news’.

And in Venezuela, the other big market for Odebrecht and where the company paid the largest amount of bribe money outside Brazil—USD98m—there has been neither a squeak nor a tweet from President Nicolás Maduro or from the attorney-general. Of the USD98m in bribe money paid in Venezuela, USD39m was channelled to a single intermediary who represented various directors of a state-owned company, presumed to be oil giant PDVSA.

Zavascki’s death is untimely, and for now it means that the names of all the intermediaries, officials and politicians across Latin America who received bribes from Odebrecht remains under wraps. But it is probably only a matter of time before the names are revealed and, at least in some countries in the region, more heads roll.