ACCOUNTABILITY INSTITUTIONS, INCREMENTAL IMPROVEMENTS IN COMBATTING CORRUPTION AND POLITICAL BACKLASH: TWO STEPS FORWARD, ONE STEP BACK?

A. Accountability Institutions

In such an environment, progress is made with some degree of success through distinct strategies and workarounds that tackle corruption by focusing on incre­mental and risk-adverse changes instead of structural and radical reforms.

For instance, reforms in the Federal Audit Court (TCU)^[983] and the creation and later strengthening of the Federal Controller’s Office (CGU),^[984] with expanded specialisation^[985] and monitoring,^[986] have improved Brazil’s oversight capacities. The Federal Audit Court, which, among other roles,^[987] exerts control over federal accounts and expenditures, punishes misconduct and examines - and advises Congress on - the accounts rendered annually by the President, �saw its insti­tutional design overhauled in the 1988 Constitution’.^[988] It is highly professional,

158 The Extra-Legal Influences on the Rule of Law well-funded and, in many respects, outperforms other audit courts in Latin America despite some serious dysfunctionalities.^[989] Among them, only two of its nine Ministers (who finally decide matters in the Court) are originally staff members selected among its auditors and prosecutors, whereas the other seven Ministers are normally former politicians with strong ties with Congress and the president.^[990] Despite that, it has achieved greater autonomy^[991] and can itself directly punish misconducts, which it has done more frequently.^[992] As an �aid’^[993] of Congress, however, it usually needs to interact with other institutions to perform its main tasks,^[994] whereas its decisions can be appealed to the judiciary.^[995] A similar design and function is also found in state and municipal audit courts,^[996] even if their performance varies across the states and municipalities depending on the level of political competition and power fragmentation and turnover.^[997]

On the other hand, the Federal Controller’s Office (CGU), created in 1991 and then empowered in 2006, has added further accountability and transpar­ency to such a web by monitoring federal public expenditures and transfers of federal funds to units of the federation, most notably the municipalities.^[998] It has performed as an �anticorruption agency’^[999] and features numerous programmes for auditing public expenditures, such as the �Random Audits Program in Federative Units’(Programa de Fiscalizafdo em Entes Federativos), which, like a lottery, selects some municipalities among the 5,570 in the country that will be audited at a certain given time;^[1000] the �Access to Information’ (Acesso a Informafdo)^[1001] and the �Transparency Portal’ (Portal da Transparencia),^[1002] which are aimed at providing information and transparency of all activities of the executive; and Time Brazil (Brazil Team), whose goal is to help states and municipalities to improve their governance and mechanisms to combat corruption.^[1003] It works directly with the Corregedoria-Geral da Unido, which has investigative and punishment powers.^[1004] Particularly notable is that, with the creation and strengthening of CGU, TCU has become more efficient, in what

Carson and Prado see as a major case of �institutional multiplicity’: even if there is some overlap between both institutions, the creation of CGU has led to mutual improvements in accountability and transparency as diverse pathways were opened to monitor expenditures of public funds and punish wrongdoings.^[1005]

There is also a web of federal and state^[1006] regulatory agencies with expertise in strategic sectors of the economy,^[1007] such as telecommunications (ANATEL), oil, natural gas and biofuel (ANP), health (ANVISA), electricity (ANEEL) and water (ANA).

Legislation such as the Anti-Money Laundering (2012),^[1013] Anti-Corruption (or Clean Company, 2013),^[1014] and Organised Crime (2013) Acts^[1015] have also introduced important mechanisms to curb corruption based on the interna­tional experience, such as plea bargains, tracing of assets and financial data, international cooperation^[1016] and specialised courts. The Anti-Corruption Act (commonly known as the Clean Company Act) is, in many respects, an inter­esting example of �institutional multiplicity’ since it can reduce the judiciary’s bottleneck through the introduction of new players to judge and punish corrup­tion cases, either through administrative proceedings or civil courts, and foster cooperation between parties and authorities in exchange for reduced penalties.^[1017]

Therefore, some progress in punishment - Brazil’s longstanding Achilles Heel in tackling corruption - has been made through strategies aimed at expanding collaboration among distinct institutions.

B.

However, even if progress is more incremental than structural, backlash tends to be inevitable once punishment reaches prominent figures in the politi­cal, economic and legal sectors. More reactive still are those sectors if serious mistakes are made while enforcing this new legislation. A common mistake is the politicisation of corruption scandals and the consequent abuse of the new tools against corruption, such as those brought by the Clean Company Act. �Operation Car Wash’, with its overarching scope, exemplifies this phenomenon quite clearly. Since its inception, it has been challenged as a case of lawfare partic­ularly targeting the Worker’s Party (PT), which ruled the country from 2003-16. It was a key factor for President Dilma Rousseff’s impeachment in 2016^[1018] and the imprisonment of former President Lula da Silva for 580 days, who could not then run in the 2018 presidential elections.^[1019] The federal judge presiding over that operation was Sergio Moro, who would later become President Jair Bolsonaro’s Minister of Justice^[1020] and even unsuccessfully attempted to run for presidency in the 2022 elections.^[1021] Judge Moro’s objectionable relationship with the prosecutors became a national scandal as conversations between them leaked to the press.^[1022] �Operation Car Wash’ has since become an interesting case as it showed not only the deep wounds caused by Brazil’s dysfunctional relationship between the private and public sectors, but also how the judiciary - and the media that enthusiastically broadcast such developments - looked increasingly partisan.^[1023]

�Operation Car Wash’ largely made use of the new tools brought about by the Clean Company Act, such as leniency agreements and whistle blowers. Those tools could, if they were properly implemented, create an important pathway to curb corruption. However, the goal of strengthening the rule of law through such mechanisms was marked by consistent abuses of basic constitutional guar­antees, even if the language seemed to express the rule of law ideals.^[1024] [1025] The lack of diligence, impartiality and observance of basic procedural guarantees by authorities when adopting those tools was considerable.

The abuses through the language of the rule of law led to a political backlash, laying the groundwork for reversing some positive features of those instruments aimed at curbing corruption. What could be, in principle, beneficial to the rule of law became then dominated by the conclusion that, in the way those tools had been implemented, they did more harm than good. It is as though the rule of law needed to regain its normative strength against such abuses by sacrificing some potential benefits those tools could have brought. Such an outcome is a two-way street: it brings some justice to the victims of such abuses, but it also provides a strong argument for self-preservationist movements. As long as â€?Operation Car Wash’ continued to be scrutinised and criticised for non-observance of basic procedural guarantees,¹¹¹ the traditional political, economic and legal actors who have benefitted from clientelism and corruption would naturally seize the moment to reposition themselves and attack the operation with reasonable constitutional grounds.

This context is evidence of what rational theorists usually call the �rational­ity of fear’, according to which �when citizens or groups are threatened, they take steps to defend themselves’.^[1026] Even incremental changes are not immune to this phenomenon. In addition to other causes - for instance, corruption in the political realm and loss of political support in society and Congress - self-preservation certainly lay beneath President Dilma Rousseff’s impeach­ment in 2016.^[1027] Most of those anti-corruption laws were approved during her administration (2011-16),^[1028] and the reforms in oversight and investigation institutions were largely carried out during the governments of Lula da Silva and Dilma Rousseff, both by the Worker’s Party (PT). When such investigations began reaching members of the political class besides the government and PT, the reaction was immediate.

The following events revealed how Brazil’s embedded and self-reinforcing mechanisms behave in the face of such institutional innovations. President Bolsonaro took advantage of the anti-political sentiment promoted by that agenda against corruption, which was largely broadcast nationwide.^[1030] However, as a typical would-be autocrat, once in power, he steadily moved to attack that anti-corruption agenda because of graft investigations against his family and allies^[1031] as well as the desperate need to build a coalition in Congress in order to bar a potential impeachment.^[1032] There have been a series of attacks on the inde­pendence of the Public Ministry, the Federal Police, the Federal Revenue Services and the Financial Intelligence Unit (COAF). A new law aimed at limiting abuses of authority by public officials,^[1033] though reasonably justified given those violations of constitutional guarantees in cases like �Operation Car Wash’,^[1034] can nonetheless constrain public officials in carrying out investigations. The Supreme Court, by the same token, has increasingly reversed its political conver­gence with some anti-corruption task forces and resorted, for this purpose, to a strong emphasis on procedural guarantees.^[1035] Such a move is justified given the breach of some such guarantees in those large-scale investigations, but the side-effect is the general perception that white-collar crimes will again remain unpunished.^[1036]

The upshot is that, in order for the rule of law to be strengthened, it demands proper care. Any mistake or abuse is costly and the consequences, as was the case in Brazil, can be dramatic. It may sound paradoxical and can sometimes goes against popular opinion, but at least some such abuses were disclosed and later recognised by Brazilian institutions, such as the Supreme Court^[1037] - and this is a positive sign for Brazil’s rule of law.

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