The name of the case, “Lava Jato”, arises from the use of a network of gas stations and car washes to move illicit resources belonging to one of the criminal organizations initially investigated. Although the investigation has advanced to other criminal organizations, the initial name has become established.
The Lava Jato operation is the largest corruption and money laundering investigation Brazil has ever had. It is estimated that the volume of resources diverted from the coffers of Petrobras, the largest state-owned company in the country, is in the billions of reais. Added to this is the economic and political expression of those suspected of participating in the corruption scheme that involves the company.
In the first stage of the investigation, carried out from March 2014, before the Federal Court in Curitiba, four criminal organizations led by money changers, who are operators of the parallel foreign exchange market, were investigated and prosecuted. Afterwards, the Federal Public Ministry collected evidence of an immense criminal corruption scheme involving Petrobras.
In this scheme, which lasted at least ten years, large construction companies organized in cartels paid bribes to senior executives of the state-owned company and other public agents. The bribe value varied from 1% to 5% of the total amount of overpriced billion-dollar contracts. This bribe was distributed through the scheme’s financial operators, including money changers investigated in the first stage.
The contractors – In a normal scenario, contractors would compete with each other, in bids, to obtain contracts from Petrobras, and the state-owned company would hire the company that agreed to do the work at the lowest price. In this case, the construction companies cartelized themselves into a “club” to replace real competition with apparent competition. The prices offered to Petrobras were calculated and adjusted in secret meetings in which it was decided who would win the contract and what the price would be, inflated to the private benefit and to the detriment of the state-owned company’s coffers. The cartel even had a regulation, which simulated the rules of a football championship, to define how the works would be distributed. To disguise the crime, the written record of the distribution of works was sometimes made as if it were the distribution of bingo prizes (see documents here ).
Petrobras employees – Companies needed to ensure that only those from the cartel were invited to bids. Therefore, it was convenient to co-opt public agents. The employees not only remained silent in relation to the cartel, of which they were aware, but favored it, restricting guests and including the winner among the participants, in a marked card game. According to surveys by Petrobras, unjustified direct negotiations were carried out, unnecessary and excessively priced additives were signed, hiring was accelerated with the suppression of relevant stages and confidential information was leaked, among other irregularities.
Financial operators – Financial operators or intermediaries were responsible not only for intermediating the payment of the bribe, but especially for delivering the bribe disguised as clean money to the beneficiaries. At first, the money went from the contractors to the financial operator. This happened in kind, through movement abroad and through simulated contracts with shell companies. Secondly, the money went from the financial operator to the beneficiary in kind, by transfer abroad or through payment for goods.
Political agents – Another line of investigation – corresponding to its vertical integration – began in March 2015, when the Attorney General of the Republic presented 28 petitions to the Federal Supreme Court for the opening of criminal investigations aimed at investigating facts attributed to 55 people, of whom 49 are forum holders by function prerogative (“privileged forum”). These are people who are part of or are related to political parties responsible for appointing and maintaining Petrobras directors. They were cited in award-winning contributions made in the 1st instance upon delegation from the Attorney General. The first instance will investigate political agents for misconduct, in the civil area, and in the criminal area, those without jurisdictional prerogative.
This political division proved to be more evident in relation to the following directorates: Supply, occupied by Paulo Roberto Costa between 2004 and 2012, appointed by the PP, with subsequent support from the PMDB; of Services, occupied by Renato Duque between 2003 and 2012, nominated by the PT; and Internacional, occupied by Nestor Cerveró between 2003 and 2008, nominated by the PMDB. For the PGR, these political groups acted in a criminal association, in a stable manner, with common efforts and unity of purpose to commit various crimes, including passive corruption and money laundering. Fernando Baiano and João Vacari Neto worked in the criminal scheme as financial operators, on behalf of members of the PMDB and PT. Source: http://lavajato.mpf.mp.br/entenda-o-caso
See the graphical representation of the scheme:
