Supreme Court's biggest test.

Photographer: Pedro Ladeira/AFP/GettyImages)

Brazil's Supreme Court Fights Rot at the Top

Mac Margolis writes about Latin America for Bloomberg View. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”
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Here’s something you probably already know about Latin America: In a region ravaged by graft and political payola, regard for elected authorities is dragging bottom. Serial corruption scandals are one of the main reasons why dissatisfaction with democracy is higher in this region than in any other.

Here’s something you may not know: The long-flawed justice system is on the mend, and it’s finally holding seemingly untouchable authorities to account.

Nowhere is this more critical than in Brazil, where independent judges -- backed by diligent prosecutors and federal police -- have led the way in exposing the rot at the top, clawing back a modicum of respect for the country’s discredited democratic institutions.

A poll in February found that Brazilians rated former Supreme Court chief justice Joaquim Barbosa, who presided over an earlier political corruption trial, the most trustworthy of 12 leading public figures. (Federal Judge Sergio Moro, who is overseeing the “Car Wash” case on corruption at the state oil company Petrobras, placed third.) “The courts have responded better than other institutions to the corruption crisis in Brazil,” said Joaquim Falcao, dean of the law school at the Getulio Vargas Foundation in Rio de Janeiro.

It’s about time. The surge of political crimes has put the country’s highest bench to perhaps its most rigorous test since the return of democracy three decades ago. How the supreme court performs will help determine how Brazil emerges from a crisis that has stunned the economy, paralyzed decision making and roiled society as never before.

Since it began, in March 2014, the massive investigation into corruption at Petrobras has snared scores of shady lobbyists, senior bureaucrats and top business executives. But only now are the police and prosecutors reaching into the political establishment.

One reason is that sitting politicians are an encastled caste, spared by parliamentary immunity from answering to cops or courts unless they are caught red-handed at some egregious act, like stealing or murder. Only the Supreme Court can order their investigation or put them on trial, and no legislator can be prosecuted without the prior consent of congress, where camaraderie rules. No wonder that only three of the 62 suspects so far convicted in the Car Wash case are politicians.

But that’s changing, thanks to zealous cops and courts scouring the country’s graft-riddled bureaucracy. Consider Sergio Machado, a former executive at Petrobras now turned Car Wash snitch. Machado’s 377-page plea-bargain testimony on corruption at Petrobras, released by prosecutors on June 15, reads like a shortlist of Brazil’s governing elite.

Not excluded are provisional president Michel Temer and opposition leader Aecio Neves, who Machado accused of helping to siphon some $29 million from Petrobras supply contracts into campaign war chests. Those allegations haven’t been proven. And with three of 10 lower house lawmakers currently under criminal investigation, and state witnesses now pointing to the top tiers of government, the high court has its work cut out.

So are Brazil’s top justices up to the job? That’s complicated.

In a recent massive study by the Getulio Vargas Foundation’s law school, researchers painted a troubling portrait. In their estimation, the 11-justice court is massively overburdened, slow to rule and given to arbitrary decisions.

Part of the problem can be traced to the court’s unwieldy constitutional mandate; unlike the U.S. Supreme Court, which can choose its cases, the Brazilian high bench is obliged to hear almost every case it receives. Hence, each year the court fields a staggering 70,000 or so cases, ranging from questions of constitutional law to domestic violence.

This is the result of good intentions run amok. Brazilian history is a cautionary tale in overreaching autocrats. A powerful judiciary was the country’s answer to two decades of military dictatorship (1964 to 1985), which muted all other institutions. The Supreme Court today is no monocracy, but it is something of a monster. The dysfunctional caseload is its collateral damage.

Since the court’s full bench cannot possibly hear so many cases, the burden is shared out to individual judges. Approximately 90 percent of all Supreme Court cases are decided by a single justice. Such prerogatives are an invitation to arbitrariness and, occasionally, shameless self-interest. Consider the 2014 case when Justice Luiz Fux approved on his own a motion to grant federal judges housing allowances, thereby setting off a cascade of copycat petitions by judges and prosecutors nationwide that eventually added some $575 million to the taxpayer’s tab. 

“You have 11 justices and each one can decide which cases to hear,” said Falcao, who coordinated the study for the foundation. “Instead of resolving uncertainties, this creates legal insecurity.”

Nor is the quality of such decision making always reliable. A basic text-search of 120,000 decisions handed down between 2011 and 2013 revealed that judges regularly cut and pasted whole passages from prior rulings.

Despite these failings, analysts reckon the pioneering Car Wash investigation is not in jeopardy. The same case overload that allows judges to cherry-pick legal battles also ensures that public opinion will keep them focused.

That proved to be the case in 2012, when the high court convicted two dozen ruling party allies and higher-ups in a political payola scandal, even though eight of the 11 justices were appointees of the same governing coalition.

“With all the pressure from the streets, I have no doubt the court will ably handle the political corruption cases before it,” says Ivar Hartmann, a constitutional law expert at the Getulio Vargas Foundation. “My worry is for the thousands of other cases that fall by the wayside.”

In a country where crooked officials too often have proved untouchable, that’s a tradeoff many Brazilians can live with.

  1. Guatemala's Supreme Court cleared the way for the fall of president Otto Perez Molina, who was jailed for tax fraud last year. Former Argentine president Cristina Fernandez de Kirchner  and some of her onetime top aides are under investigation for corruption and money laundering, and a Peruvian court just barred the former first lady from leaving the country on suspicion of money laundering.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Mac Margolis at mmargolis14@bloomberg.net

To contact the editor responsible for this story:
Susan Warren at susanwarren@bloomberg.net