In Brazil, Transparency International faces 2nd corruption investigation
As Brazil's Supreme Court opens a corruption investigation against Transparency International, the National Justice Council reveals it is also investigating it
An article published in O Estado de S.Paulo yesterday claimed the National Justice Council (Conselho Nacional de Justica/CNJ) is investigating involvement of Transparency International in a leniency agreement made between the Brazilian government and meat producing company J&F [formerly known as JBS]. After the article ran, the CNJ confirmed the information but did not provide any further details because it is being conducted in secrecy, according to operating procedures.
On Monday, February 5, Supreme Court Minister Dias Toffoli ordered an investigation into the possible misappropriation of public funds by Transparency International within J&F's leniency agreement.
He ordered the Attorney General's Office to forward evidence that has already been gathered on the case, including records from a 2021 investigation of alleged collusion between members of the Operation Car Wash task-force and TI staff.
The Attorney General's Office will also forward records from a 2021 internal investigation conducted by it's Inspector General on whether members of the Car Wash task-force complied with Brazilian laws governing negotiations with foreign officials.
During the lead up to the 2016 coup, TI, which claims to not interfere in politics in nations where it operates, ran a smear campaign against Lula da Silva.
3 years of investigations
The new case against Transparency International started with a petition to the Superior Justice Court filed in 2021 by Congressman Rui Falcão (PT-SP), which accuses Car Wash task-force members from the Federal Prosecutors Office of administrative misconduct, violation of ethical and operational standards and criminal acts.
In his petition, Falcão cites the fact that the Federal Prosecutors Office has been working in partnership with Transparency international since 2014 to develop activities that are broadly described as "anti-corruption." Therefore, the petition argues, Transparency International was an accomplice in acts of criminal abuse of authority committed by the Operation Car Wash task-force.
For example, in March 2018, negotiations were attempted to ensure that funds from a leniency agreement with J&F would be transferred from the Brazilian government to Transparency International. The institution would then be responsible for managing and and allocating these public resources.
J&F's leniency agreement was initially signed and ratified in 2017 but underwent various modifications until 2020 culminating with a fine of R$ 10.3 billion, of which R$ 2.3 billion would be allocated to social projects in the areas of education, health, environment, and support for research and culture, and an independent audit was mandated for these projects.
TI signed a partnership memorandum granting it responsibility for the management and allocation of the resources for social projects. The final agreement stated that there would be no remuneration and that the transfer of funds directly to TI was prohibited.
The memorandum also called for TI's support presenting an investment project for "prevention" and "social control" of corruption, prioritizing the strengthening and training of organizations with the greatest potential impact.
According to Falcão, under the pretext of combating corruption, the Federal Attorney's Office unlawfully granted TI management and allocation powers over public funds without state supervision and control.
In 2021, President Bolsonaro's Attorney General Agosto Aras started an investigation based on the charges. The evidence was presented to the Superior Court of Justice and, last week, Minister Humberto Martins decided to send the records to Supreme Court Minister Toffoli, who is already rapporteur of another corruption case involving Operation Car wash and its relationship with international anti-corruption organizations.
This article originally ran with “editors” as its byline in the excellent Brazilian legal blog Conjur. I translated and edited it for readability for a non-Brazilian audience. It can be read in its original Portuguese here.