The Legacy of Icarus: Assessing the Impact of Lava Jato in Brazil’s Anti-Corruption Landscape
In this article, authors James Tillen, Gregory Bates, Francisco Grosso, Fabio Molar Albano de Aratanha, and Julia Herring assess the impact of Operation Lava Jato in Brazil's anti-corruption landscape. Lava Jato began in 2014 with the discovery of a corruption scandal at Petrobras. Prosecutions were aided by passage of the Clean Company Act of 2014, which established civil and administrative liability for companies engaging in corrupt practices involving either Brazilian or foreign officials. Task Forces charged with investigating Lava Jato followed the money to unravel multiple bribery schemes and actively prosecuted individuals and companies with unprecedented results. In July 2017, at the height of Lava Jato, Brazilian Judge Sérgio Moro sentenced former Brazilian president Luiz Inácio Lula de Silva (Lula) to nine-and-a-half years in prison. This conviction reinforced the appearance of a shift toward individual and corporate accountability in Brazil. "Like Icarus's escape from Crete, Brazil's investigatory teams flew higher and higher on the wings of Lava Jato," the authors wrote, noting that "major Brazilian corporations, including state-owned oil company Petrobras and industrial conglomerate Odebrecht, faced convictions in some of the world's largest anti-corruption probes. In the flurry of successes, Lava Jato failed to heed one warning: do not fly too close to the sun."
According to the authors, "[i]n late 2019, Lava Jato began to crash. Lula walked free from jail in November 2019 and, on October 30, 2022, won the presidency, defeating the incumbent, Jair Bolsonaro. The Lava Jato task forces shuttered their doors abruptly in the middle of Bolsonaro's term. Icarus's once soaring wings have melted."
Although there has been a steep decline in enforcement and public confidence in authorities, the authors argue that the evidence suggests that there is a more positive future, with Brazil's anti-corruption efforts having provided clarity to the settlement negotiation process within Brazil. "The Clean Company Act and Lava Jato contributed to fostering corporate compliance programs in Brazil, which now has a robust compliance community," the authors wrote, adding that "[r]ecent settlements highlight Brazilian cooperation with other countries' authorities, which may have a knock-on effect and improve domestic enforcement."