Ten years ago, in March 2014, prosecutors in the Brazilian city of Curitiba turned a money-laundering investigation into a historic anti-corruption investigation known as Operação Lava Jato (Operation Car Wash). The investigation uncovered evidence of corruption involving some of Brazil’s biggest companies and most powerful politicians.

The revelations had dramatic political consequences. They led to massive street protests, tipped the Brazilian economy to one full blown depressionand gave the background to accusation by the country’s president, Dilma Rousseff, in 2016.

Lava Jato also resulted in conviction and the imprisonment of Rousseff’s predecessor (and Brazil’s current president), Luiz Inácio Lula da Silva, in 2017. Lula, who spent 580 days in prison, was arguably the most famous of all Lava Jato accused.

Lula and Rousseff’s centre-left Workers’ Party (PT) remained in the limelight for a long time. But the scandals involved politicians from across the political spectrum. The two other main parties at the time, the centrist Brazilian Democratic Movement and the center-right Brazilian Social Democracy, have also been hit hard.

To begin with, both parties were in favor Lava Jato. But many of their leaders were also involved, undermining their ability to capitalize on the PT’s fall from grace. They have seen their representation in Congress reduce much more than PT.

The investigations spurred a wave of anti-establishment which drove far-right politicians Jair Bolsonaro to the presidency in 2018 on an anti-corruption mandate. You can find out more about the details in Lava Jato in one longer version of this story we wrote in ECOan Italian magazine (also available in English).

Several of the companies and individuals involved by Lava Jato for the siphoning of funds from state-owned enterprises and from public coffers agreed to pay billions of euros in fines. But most penalties, convictions and agreements resulting from the investigation have now been – or are at risk of being – overturned.

This includes the agreement on preferential treatment was signed by construction giant Odebrecht and Brazil’s public prosecutor’s office in late 2016. The agreement, which involved heavy fines and various depositions about decades of company wrongdoing, involved 98 politicians, including eight ministers in the government of Rousseff’s successor, Michel Temer. It also revealed the involvement of 39 sitting federal deputies and 24 senators, spanning 15 different political parties.

“End-of-the-world plea deal” signed by Odebrecht, as it became famousseem to have broken their promises. So what do these reversals reveal about the ability of Brazil’s institutions to control corruption?

Malfeasance continued to thrive

Lava Jato became associated with abuse from the prosecutors and judges who handled the cases. They aggressively used plea deals, detentions and police raids, while leaking testimony and documents to the press. Their actions over time came to be perceived as exaggerated and biased.

The probe itself was also not free from scandal. Sergio Moro, a judge who played a significant role in the conviction of Lula, was designated Minister of Justice in Bolsonaro’s government in November 2018.

In a turn of events worthy of a Netflix script, hacked messages dating back to the minister’s time as a judge revealed that Moro and prosecutors coordinated some of their moves. Other revelations cast doubt on their management of the resources recovered by the Brazilian state.

Congressional leadership and a “backlash” coalition of parties – ranging from the PT to Bolsonaro’s liberal party – then orchestrated a rollback of some of the key components of Brazil’s anti-corruption framework.

During 2019, e.g. tougher sanctions was introduced for prosecutors and judges who exceed their functions. And two years later, an almost unanimous vote significantly reduced in scope of the administrative improbability law which had been the basis of many of the Lava Jato’s try to replace public coffers.

There is also one discussion is currently underway in Congress regarding the repeal of plea bargain laws. This instrument was often used not only by Lava Jato but also in investigations into Bolsonaro’s involvement in several irregularities during his term of office. These range from a attempted coup d’état in 2023 to corruption.

Under Bolsonaro, Congress asserted greater control over the federal budget. Individual lawmakers were allowed to direct money to their chosen beneficiaries through a fund called “secret budget” due to its lack of transparency. Critics claim the transfers opened the door to corrupt dealings.

The once strong anti-corruption stance of the country’s highest courts has also changed, with many of their judges reversing earlier decisions. This has meant strategic compromises with Congress helping the higher courts fend off offensive moves by Bolsonaro’s government on the court and its judges.

People often assume that prosecutions and convictions deter elected officials from engaging in corruption, as they witness the damaged reputations and fortunes of their colleagues.

But besides Lava Jato’s own failures, the repeal of sentences and convictions in Brazil shows how difficult it is to punish corruption when a large part of the economic and political elite benefits from it. To a significant extent, Lava Jato’s grandiose ambitions inadvertently invited such blowback.

Bolsonaro proudly declared the end of Lava Jato 2020 and claimed his government was free of corruption. However, misunderstandings continued to run rampant. After a decade, it seems clear that the historic anti-corruption probe did not foster a reformist elite with a clear plan to strengthen Brazil’s democratic institutions and the rule of law.

The threats to democracy we have seen since then, and the fact that corruption controls are weaker now than they were before the investigations began, together are a good example.