High-Stakes Corruption Case in Brazil Sets Off a Judiciary Civil War

When Opportunity Bank owner Daniel Dantas, mega investor Naji Nahas and former mayor of São Paulo Celso Pitta were arrested following accusations of tax evasion and illegal money transfer to the Cayman Islands in the Caribbean back on July 8, Brazilian media was in shock. For many years Brazilians have been used to viewing their country as showroom of corruption schemes, populating TV news on a daily basis, but rarely any one goes to jail.

At times politicians and major corporations are part of the plot, as it happened to Brazil telecom, which involved Opportunity Bank Owner, Mr Daniel Dantas, accused of espionage and affiliation to Citigroup in order to benefit from financial advantage over the public offer of Brazil Telecom, a formerly state-owned telecommunications enterprise.
 
Celso Pitta, investor Naji Nahas and Daniel Dantas are being accused of active and passive corruption and illegal wire of US$ 2 billion to foreign accounts between the years of 1997 and 2002. Mr Dantas was also accused in the past of supposedly receiving privileged information from financial institutions, mainly when formerly impeached president Fernando Collor de Mello's was in office. Collor is now a senator for the state of Alagoas.
 
For many, the arrest authorized by Federal Judge Fausto De Sanctis is proof that Brazil is no longer a corruption paradise, as many thought it was doomed to be. The operation called Satiagraha involved 300 federal police agents. Federal police  agents were  able to intercept and listen to phone conversation  between Dantas and his right-hand assistant Humberto Braz.

According to federal agents, the phone calls also  indicate the exact moment bank owner Mr. Dantas makes an attempt to bribe a federal agent with US$ 1 million in order to be dismissed from the money laundry scheme federal investigation.
 
Judge De Sanctis did not expect however that something was about to change. A month later following Dantas' arrest, the story has taken a sudden turn and now Federal Judge Fausto De Sanctis is the one being called to provide details on whether the use of eavesdropping was  extreme, and whether its use was legal or not, while Justice authorized bank owner Daniel Dantas to abstain from providing details on the matter.  

In  a shocking decision by Supreme Federal Court Minister Gilmar Mendes,  bank owner Daniel Dantas was also granted  a habeas corpus, setting him free from prison. For many federal judges across country  the action was a slap in the face.
 
"There is no substantial belief or clear evidence that can prove the accused will attempt to escape prison, therefore his detention is unjustifiable", declared Supreme Federal Court Minister Gilmar Mendes, contrary to De Sanctis decision.
 
The decision provoked  frustration amongst judiciary powers in Brazil, and led federal judges to demonstrate their support towards Judge De Sanctis by signing a petition defending impeachment of Minister Gilmar Mendes.

The legal dispute also forced the creation of a  CPI (investigation parliamentary commission), called "CPI dos grampos" or eavesdropping CPI. The focus is whether the judiciary system should or should not monitor phone calls, and how far they can go.

To add  even more debate to this  polemic legal battle, a petition signed by 121 federal judges demanding the impeachment of Minister Gilmar Mendes was closed  with no further analysis and no end results, since it depended exclusively on Brazil Senate review, who abstained  themselves from such controversy.
 
According to news daily O Estado de S. Paulo, during the CPI interrogation procedures held in Brazilian capital Brasí­lia, Federal Judge Fausto De Sanctis defended more autonomy to federal police.

"The fear of eavesdropping is folkloric and will only favor impunity," declared judge De Sanctis.  President Lula addressed the issue by  demanding  congress urgency in approving the law that would put limits on eavesdropping, while defending the federal police performance in this case.
 
In an interview published by Folha on line, Minister of Justice Tarso Genro also congratulated  federal police agents, while also expressing his agreement with Minister Gilmar Mendes decision:
 
"Federal police did an extraordinary job, bringing up to surface important and serious events that were hidden in darkness, however we should remember that there are many types of Justice (sic), federal, state, labor law, military, sports law, to mention a few, and we should not consider them as just one thing. Minister Mendes did not commit an error on his decision", declared the minister.
 
The CPI dos grampos will continue, even though no one really seems to know what the focus will be.
 
Edison Bernardo DeSouza is a journalist, having graduated from the Pontifical Catholic University in São Paulo, Brazil. He lived in the US and Canada for close to 10 years and participated in volunteering activities in social works agencies. DeSouza currently lives in São Paulo where he teaches English as a Second Language, and is pursuing further advancements in his career. He is particularly interested in economics and human rights articles.