First Black Court Chief Confronts Corruption in Brazil

Joaquim Barbosa once pored over law tomes while working nights as a typesetter to pay for college. Now he is rewriting them -- and the history books as well -- as the first black chief justice of Brazil’s Supreme Court and the presiding judge in a landmark corruption case.

Barbosa, 58, rocketed to celebrity for his role in a trial that convicted close aides of former President Luiz Inacio Lula da Silva, who appointed him to the top court in 2003. In a country where few politicians are ever tried for corruption and virtually none go to jail, Barbosa led the way in arguing that Lula’s aides stole public money, used it to bribe lawmakers and should be punished with lengthy prison terms.

The son of a brick-layer and a cleaning lady, Barbosa overcame racial prejudices to galvanize sentiment for cleaner politics. While non-whites make up more than half of Brazil’s population, they hold only 8 percent of seats in Congress and earn half as much as whites, according to the statistics agency.

“The entire country is applauding Barbosa,” said Gil Castello Branco, head of Open Accounts, a Brasilia-based watchdog of public spending. “He’s shaking up the judiciary and giving hope to people who had thought nothing could be done about corrupt politicians.”

Ally of Business?

Barbosa, who holds a Ph.D. in law from the Universite Pantheon-Assas in Paris and speaks French, English and German, may score points with business as well.

His pledge to make Brazil’s judiciary more agile could help reduce costs for companies, which often wait years and retain multiple lawyers on tax, labor and other cases stuck in courts. Brazil ranked 116th among 185 nations in enforcing contracts and 143rd in resolving bankruptcies, according to the World Bank’s 2012 Doing Business report.

“What good are the sumptuous buildings and sophisticated communications systems if the judiciary fails in its essence?” Barbosa said at his inauguration for a two-year term as chief justice on Nov. 22. If Brazil doesn’t accelerate legal proceedings, he said, it will “create a scarecrow able to repel productive investment the economy requires so much.”

During the recently-concluded trial known as the so-called mensalao, or big monthly payment, for the bribes legislators received from Lula aides, Barbosa broke legal ground by accepting circumstantial evidence as proof of corruption and money laundering, said Mamede Said, professor of law at the University of Brasilia.

Photographer: Dado Galdieri/Bloomberg

Supreme Court Chief Justice Joaquim Barbosa Carnival masks are laid out to dry at the Mascaras Condal factory in Sao Goncalo, Brazil. Close

Supreme Court Chief Justice Joaquim Barbosa Carnival masks are laid out to dry at the... Read More

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Photographer: Dado Galdieri/Bloomberg

Supreme Court Chief Justice Joaquim Barbosa Carnival masks are laid out to dry at the Mascaras Condal factory in Sao Goncalo, Brazil.

Barbosa’s siding with the prosecution during the nationally-televised trial struck a chord with Brazilians fed up with their graft-ridden politics. The world’s second-biggest emerging economy ranked 69th among 176 countries, behind Cuba and Saudi Arabia, in Berlin-based Transparency International’s 2012 study of corruption perceptions around the world. Graft costs Brazil 85 billion reais ($41 billion) a year, nearly double what the government spent on roads, ports and airports in 2011, according to the Sao Paulo Industry Federation.

‘Difficult Personality’

Alternately leaning on his desk or reclining in one of two chairs he keeps on the bench due to back problems, the former public prosecutor debated the 10 other justices and even traded insults with one who walked out of a session in protest.

“He has a difficult personality, some of the language that he used was not appropriate for a Supreme Court,” Said remarked in a telephone interview. “Still, his accusatory prosecutor’s approach was instrumental to the result of the trial.”

Under Brazil’s legal system, an investigating magistrate supervises criminal inquiries. Barbosa was assigned that role by draw in 2005, when the court opened the mensalao probe.

Carnival Masks

Now Barbosa has his sights set on Lula, who left office two years ago with an 80 percent approval rating. On Dec. 11, he urged prosecutors to investigate allegations against Lula after Marcos Valerio, the advertising executive convicted of being the main conduit in the mensalao, testified that the ex-president partook in the cash-for-votes scheme. Lula, who Barbosa has said he voted for, called the charge a “lie.”

Lula, through his foundation’s office in Sao Paulo, declined to comment on Barbosa when contacted by Bloomberg.

In a uniquely Brazilian measure of Barbosa’s overnight stardom, masks of the judge are among the most popular-selling costumes ahead of Carnival in February.

“I can’t stop selling them,” said Olga Valles, whose Rio de Janeiro-based costume maker Condal has so far sold 20,000 Barbosa masks -- 10 times her original estimate. If the current pace holds, sales may exceed the single-season record of 40,000 masks resembling al-Qaeda’s Osama bin Laden following the 2001 terrorist attacks, she said.

Barbosa for President?

Supporters, who have taken to calling him the “punisher,” have also launched a Barbosa-For-President movement. “We are Brazilians who believe Brazil will only find its path with a serious president,” their website reads.

Still Barbosa, who said he has been taken for a parking attendant when dining out in Rio de Janeiro, shows little interest in electoral politics.

“I think I’m a very unlikely person for this kind of job because of my frankness,” he said in a November interview with journalist Ellis Cose for Bloomberg View. “I’ve never dealt with political parties.”

Barbosa’s office did not respond to repeated requests to comment for this story.

Some politicians say they are concerned that Barbosa’s anti-corruption crusade may lead him to overstep his authority. Marco Maia, president of the lower house and a member of the ruling Workers’ Party, accused the court of provoking a clash with the legislature by stripping three lawmakers convicted in the mensalao trial of their seats. Such action is the exclusive prerogative of Congress and recalls abuses committed by Brazil’s 1964-1985 military dictatorship, Maia argued.

Tax Dispute

Among cases affecting investors, Barbosa will preside over one that will determine whether Brazilian companies must pay taxes from the operations of their overseas affiliates. The case could set a precedent for several companies facing similar claims, including Vale SA (VALE3), the world’s biggest iron-ore producer, which is fighting a 30 billion reais tax bill.

Barbosa’s action in the dispute, urging justices in April to consider the global competitiveness of Brazilian companies when deciding the test case, signals he’s “sensitive” to the views of business, said Cassio Borges, head of the legal department at the National Confederation of Industry.

“He heard us out,” Borges said in a phone interview from Brasilia. “Barbosa is very independent.”

Oil Royalties

Barbosa may also preside over a dispute over royalties on oil pumped by Petroleo Brasileiro SA (PETR4) and other companies developing the biggest oil finds in the Americas in three decades. Congress this month took steps to overturn President Dilma Rousseff’s veto of a law that would redistribute royalties from fields now in production to all 26 states. The producing states, including Rio de Janeiro and Sao Paulo, have appealed to the high court on constitutional grounds.

The dispute over royalties has been holding back the auction of new exploration blocks, dragging down investment in a key industry. Brazil’s economy grew 0.6 percent in the third quarter, half the government-forecasted pace, as investment shrank for a fifth period. The benchmark Bovespa index has gained 8 percent this year, less than stocks in the U.S. as well Latin American markets including Mexico and Colombia.

Job as Janitor

Barbosa, whose first job with Brazil’s judiciary was as a janitor in a Brasilia court at age 16, grew up in Paracatu in Minas Gerais state, the oldest of eight children. While 70 percent of its population is black, the town that is home to descendants of runaway slaves has never had a black mayor.

Pictures of Barbosa are on display at town hall, and there are plans to erect a bust of him soon, said Ruth Brochado, who works at the city’s department of culture and used to walk home from elementary school with Barbosa.

“I’m very proud of how far he’s come, not because he is black but because he’s from our own, poor neighborhood,” she said.

Barbosa moved to Brasilia on his own at 16 and graduated from a public high school there. He studied law at the University of Brasilia, earning his degree in 1979, before working as a lawyer for a federal data agency and winning a post as a public prosecutor.

His role models include Thurgood Marshall, the first black U.S. Supreme Court justice, as well as 19th century Brazilian Emperor Pedro the Second, an opponent of slavery, Barbosa told Bloomberg View.

Even as a justice on the high court, Barbosa has remained outspoken on social issues. He favors abortion rights in this overwhelmingly Roman Catholic society and backed affirmative action for minorities a decade before universities and government ministries adopted the policy. Brazil’s judiciary benefits the elites and mistreats poor and blacks, he has said.

“I think my legacy will be in what most people don’t like about me: my style -- the separation between judge and lawyers, judge and politics, the real independence of the judiciary from the executive, from the legislative, from money,” he told Bloomberg View. “I’m criticized in Brazil because of that. In the end, I hope to prevail.”

To contact the reporter on this story: Raymond Colitt in Brasilia newsroom at rcolitt@bloomberg.net; Arnaldo Galvao in Brasilia newsroom at agalvao1@bloomberg.net;

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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