Operation Car Wash

Brazil's Institutionalized Crime and The Inside Story of the Biggest Corruption Scandal in History

Jorge Pontes, Marcio Anselmo

• Publisher: Bloomsbury Academic
• Year: 2022
• ISBN:
  9781350265622
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Political Corruption & Misconduct
• Index: Politics & International Relations

A Financial Times Book to Read in 2022 Operation Car Wash is the inside story of two Brazilian Federal Police officers who found themselves at the centre of the biggest corruption scandal in history; uncovering a web of political and corporate racketeering which would lead them all the way to the arrest and imprisonment of the nation's President. Through engrossing first-hand testimony, Pontes and Anselmo recount the uphill battle faced by the Federal Police in apprehending Brazil's white-collar criminals, in a country where the war on drugs has become a convenient distraction for the politicians and businessmen extracting billions of dollars from the public purse. A historical record that reads like a political police thriller, Operation Car Wash is also a warning to the world: demonstrating how easily institutionalized crime can take root in a nation, and how difficult it can be to eradicate.

Chapter 1

The Arrest of Marcelo Odebrecht

What do they think they’re doing? What sort of country is this?

Renato Duque, former director of services at Petrobras, in conversation with his lawyer after being arrested by Operation Car Wash in November 2014

Márcio Anselmo: We’d been executing a search warrant at the office of Marcelo Odebrecht for some hours already when Agent Prado, a colleague at the Federal Police (FP) who’d been working with me since the start of Operation Car Wash, called my attention to a document he’d come across.

“Boss!”

I didn’t get the chance to answer.

“Yes?” said the businessman.

It might not seem like much, just a momentary mix-up, but, for me, it clearly showed just how accustomed Marcelo Odebrecht was to the subservience of others. He continued to behave arrogantly even in jail, as if still surrounded by staff.

The arrest of the owner of Odebrecht, the largest construction company in the country, on June 19, 2015, was a milestone in the history of Operation Car Wash, the police operation which had begun the previous year and would become the most significant in modern Brazilian history. Investigations into the involvement of major construction-sector players in a scheme defrauding contracts with the oil giant Petrobras were advancing steadily, but we still needed proof implicating the largest of them all.

The situation created public distrust, and we began to suffer a great deal of pressure to deliver, precisely because we had so far found nothing concrete on Odebrecht. For this reason this phase of Operation Car Wash was baptized “Erga Omnes”: asserting the law “for all.”

Pressure aside, everything happened in its own good time and in pace with the evidence we managed to obtain. Even with an arrest warrant for Marcelo in hand, the preparations for its execution were far from simple.

We had his address, but we needed to know the exact location in order to spring the operation, and we couldn’t identify which house was his without first entering the gated community he lived in. So, pretending to be a prospective buyer of one of the mansions, an undercover cop accompanied by a real-estate agent and driving a luxury car gained the access we badly needed. Through some apparently innocuous small talk he managed to ascertain which properties belonged to Odebrecht and various other wealthy families: “So-and-so lives in that house, and the so-and-so’s in that one over there said the realtor, eager to land a juicy sale.”

It was a really big day and like every major operation, the team was on tenterhooks. In the weeks leading up to the arrest, we took all the care in the world to prevent leaks. In order to avoid escape or some preemptive judicial action, we had to keep this absolutely under wraps right down to the last minute. Even within the team, only a handful of investigators knew that Marcelo Odebrecht’s arrest was imminent.

Most of the agents found out who the target was only on the day of the operation, already outside the gated community. We went there in three squad cars, one of which was armored, in case we had to crash the gate, which we didn’t. There were nine of us in all, but only Agent Prado and I knew exactly how things would go. In the armored vehicle were myself, Prado and the driver, another cop. At six o’clock that morning, we arrived and informed security that we were there to execute a warrant. We met with no resistance whatsoever. Minutes later we were knocking on the door of the “Prince,” as Marcelo was known in the inner circles of the country’s construction industry. The executive opened the door himself. After a year of Operation Car Wash, everyone knew who was who on our team, and Marcelo recognized me immediately. We went through all the usual motions: I showed him the search warrant and asked him to accompany me. My first impression of him was that he was a cold sort of guy. However unflustered he may have come across then, I think he was stunned all this was actually happening.

That morning, four other Odebrecht directors were arrested too: Márcio Faria da Silva, Rogério Araújo, Cesar Rocha, and Alexandrino de Salles Ramos de Alencar.

Our first step was to confiscate all the cellphones on the property, and Marcelo’s contained the hard core of his entire life. Later, during the analysis of the documents and objects apprehended during the search, we discovered that his cellphone was encrypted all the way through. It took us ages to decipher it and unblock the content. There were times it took two weeks to decode just five lines. One of our agents, Gabriel, spent over a year working to crack these codes. Marcelo created encryptions for absolutely everything on his phone, from company strategies to corrupt governmental institutions, down to reminders to spend time with his daughters.

At around eight, Marcelo’s lawyer arrived, Dora Cavalcanti, and she was already apprised about the arrest warrant issued against her client. His lawyers had a minutely crafted contingency plan in place. When the teams started their raids early in the morning, a member of the company’s legal team rang around to “possible targets” to check if “everything was okay.” One thing that really struck me was that Marcelo’s wife asked me if his imprisonment would be the five-day job or “the real deal.” By that stage, everyone knew the difference between a jail term and preventive detention. Despite the apparent surprise, they were, in a sense, prepared for that eventuality.

That was one of the longest, most tiring days of the whole operation. After hours at Marcelo Odebrecht’s home, we took him to the Federal Police Superintendency in São Paulo and from there to Curitiba. At around 11:30 a.m., Dora Cavalcanti arrived with hot lunches for Marcelo and the other executives.

On the way to the superintendency, Marcelo paid close attention to every detail. While waiting for the plane to Curitiba, his lawyers handed him Judge Sergio Moro’s dispatch determining his imprisonment. Marcelo read it through and with a pen in hand underlined passages while complaining out loud about supposed errors and already drawing up a line of defense. However, like dozens of other such decisions, the determination was extremely well grounded in the investigation’s discoveries. So much so that the preventive detentions of Marcelo Odebrecht and the other executives were upheld under appeal by other courts.

Once the arrest warrants had been executed, the teams proceeded to Odebrecht headquarters, on the banks of the Pinheiros River in São Paulo, in order to help with the searches that would continue throughout the day. The company occupies an impressive building, and I was amazed at the quality and functionality of the installations—something unthinkable in the “white elephants” built to house public organs and probably at far higher cost.

I arrived at Odebrecht around midday and the place was bedlam. A HQ had been set up for the operation in one of the meeting rooms and that was where all the seized material was kept. The company’s twenty or so lawyers accompanied the search and tried to create as many obstacles as possible. It was a large team, including some illustrious names, such as Dora Cavalcanti and Augusto Botelho, successors of former justice Minister Márcio Thomaz Bastos. There were others too, who I didn’t know.

Sparks flew between the police and Odebrecht’s lawyers at times and for a very clear reason: “We’re paid to cause problems, that’s our job,” the lawyers kept saying. Without doubt, the sensation I had was that Odebrecht had a far better structure in place than we did. The first team to arrive at the building consisted of roughly fifteen police officers, though these were joined later by other teams. At a certain point, we realized that Marcelo’s laptop had disappeared from his office. We questioned the lawyers about this, and a laptop duly reappeared. The problem was, how could we be sure this was the executive’s real computer?

The arrest of Marcelo Odebrecht and the other executives was a watershed moment for the operation in terms of successfully unveiling corruption schemes within the government.

Other arrests followed, and these would lay bare just how deep and promiscuous ran the company’s relations with politicians and the occupants of key public posts.

The second symbolic moment was the arrest of the marketeers João Santana and Mônica Moura under Operation Acarajé¹ in February 2016. The pair were the most famous political marketing team in Brazil, the arch symbols of the limitless splurging fueled by the multimillion-dollar election campaigns financed by kickbacks on public works contracts with major construction companies. As staff and the marketeers themselves would admit over the course of the investigations, Odebrecht covered the astronomical costs of João Santana’s services on ex-president Dilma Rousseff’s victorious election campaign in 2010, when Operation Car Wash was already underway.

The third episode of note in unmasking and dismantling the criminal scheme at Odebrecht was another arrest made under Acarajé, albeit one that drew far less attention than that of Santana. Maria Lúcia Tavares was a secretary with decades of service at Odebrecht, and she became a key witness in outlining exactly how the company operated.

It was Filipe Pace, an inspector on the Car Wash team, who found his way to Tavares. Though one of the youngest members of the crew, he was a natural-born investigator with a bloodhound’s nose for a lead. Incidentally, it had been Pace who’d traced a handwritten note found at the house of scheme operator Zwi Skornicki back to Mônica Moura. The discovery of this note, overlooked by absolutely everyone else, was the loose thread that led the FP to the gilded couple.

In order to zone in on Maria Lúcia Tavares, Pace combed through all the Odebrecht directors’ electronic correspondence. On one file, tied to suspect payments, Pace located the initials of the user who had generated the document—luciat—and this enabled him to identify the former employee of what would become known as the “Bribery Department,” Odebrecht’s now-infamous Department of Structured Operations. A search warrant executed at Maria Lúcia’s house by federal inspector Renata Rodrigues proved pivotal to Operation Acarajé. As soon as the agents found a trove of spreadsheets with code names and sums paid by Maria Lúcia, the team alerted us to a potential breakthrough. The spreadsheets were downloads from Odebrecht’s in-house system Drousys, used for internal communication within the Bribery Department.

Maria Lúcia Tavares was placed under temporary detention—five days— but denied all wrongdoing. She rejected the allegation that the “acarajés” mentioned in the directors’ e-mails referred to money and went so far as to claim that actual dumplings were packaged and sent around the country—an obvious insult to the investigators’ intelligence. It was only after her detention was renewed that she decided to talk. Maria Lúcia was the first Odebrecht employee to opt for a plea bargain. Prior to her arrest, the company had denied all improbity and taken a conflictual approach to Operation Car Wash. Maria Lúcia’s decision was made personally and was not discussed with company lawyers. By that stage, Marcelo Odebrecht had already been in custody for nearly a year.

Maria Lúcia’s testimony confirmed that Odebrecht had indeed set up the Department of Structured Operations exclusively to process hidden payments to politicians and moneymen, but she had little of relevance to say concerning the origin of the funds or the recipients of the outlays. Nevertheless, her deposition was of immense value in slotting together important pieces in the jigsaw puzzle. One thing the Tavares spreadsheets confirmed without doubt was the existence of a nationwide cash-delivery scheme. For example, the secretary was able to describe in detail how money was sorted, packaged, and delivered to hundreds of politicians across dozens of cities.

This third episode was a death blow to the Odebrecht strategy. The information provided by Maria Lúcia Tavares soon led the FP to material evidence of a scheme that proved to be far more sophisticated than first imagined. The “Bribery Department” was structured just like a regular sector, with cash flow, director, organizational chart with lines of report, an in-house coded communication system, list of telephone extensions, and its very own database. A director would request a sum, another would sign off on it, and the department paid out.

Odebrecht was the perfect example of a criminal company with a parallel structure in place specifically to corrupt, flagrantly rationalizing and normalizing the venality with which politics is conducted and financed in Brazil. The secretary’s decision to cooperate led to her dismissal and culminated in the fourth key point in the Odebrecht chapter of Operation Car Wash.

With the documents seized at Marcelo’s house and the details provided by Maria Lúcia, Operation Xepa was rolled out one month to the day after Acarajé, on March 22, 2016. Warrants were issued for the arrest of thirteen people, including the executive Hilberto Mascarenhas Filho, chief of the “Bribery Department.”

While it is true that the company’s top-tier executives, including Marcelo Odebrecht himself, were all already in custody, Operation Xepa—phase 26 of Car Wash—was checkmate for the construction giant. Up until that point the company had stubbornly denied all wrongdoing and endeavored to disqualify our work in any way it could, through injunctions, attempts to influence judges and justices, and by waging a campaign in the press.

But on that day Odebrecht finally threw in the towel. The spreadsheets unearthed at Maria Lúcia Tavares’ house were incontestable proof of its illicit practices. When she decided to say what she knew, they realized the game was up. That very day, March 22, Odebrecht issued a statement in the press. It read:

After assessment and reflection on behalf of our shareholders and executives, Odebrecht has decided to collaborate with the investigations of Operation Car Wash. The company recognizes the need to improve its practices and has been in constant contact with the authorities with a view to cooperating fully with the investigations and with the leniency agreement sealed in December with the General Controllership of the Union. We hope the clarifications made under this collaboration contribute significantly to the pursuit of justice and the construction of a better Brazil.

For the first time, faced with a robust and consistent body of evidence, the company dropped its campaign of denial and began negotiating a leniency agreement with the federal prosecutors.

Despite the change of tack, an apology and confession would only be issued in December 2016, when the terms of the collaboration agreement—nicknamed the “end-of-the-worl...