US DOJ gives Lava Jato $682 million kickback

In a measure that bypasses Brazilian transparency legislation and governmental oversight, the US Department of Justice awards 80% of Petrobras fines to Brazilian partners to set up a privately managed fund to “fight corruption”. Petrobras profits were initially earmarked for Public Education and Health systems.

By Brian Mier

Over the past 4 years, as most Anglo media completely ignored the issue, Brasil Wire has extensively covered US government involvement in the Lava Jato corruption investigation. We have written on how the NSA spied on Petrobras, which began shortly after Brazil discovered massive offshore oil deposits. We documented how the Lava Jato investigation appears to have been planned at a 2009 meeting between the DOJ and Brazilian public prosecutors office, and how DOJ officials visited Sergio Móro in Curitiba during the investigation. We wrote on how US Assistant Attorney General Kenneth Blanco bragged, in a speech at the Atlantic Council, about their constant “informal communications” which resulted, among other things in the political imprisonment and removal of Luiz Inácio Lula da Silva from the 2018 presidential elections which opened the door for a victory for Jair Bolsonaro who, ironically, hired the man behind Lula’s illegal arrest to be his Justice Minister. We also wrote how these public comments by Blanco  resulted in Lula’s defense team filing a motion to dismiss all charges on the grounds that the Lava Jato task force broke the law by illegally bypassing official protocol to collaborate with a foreign government.

We also wrote about the effects of the Lava Jato investigation on the crippling Brazil’s nationalist business sector, which was a key ally for job generation in the PT governments development strategy, when it paralyzed Brazil’s 5 largest construction companies during a recession, causing 500,000 job layoffs, how it’s legal harassment of Embraer opened the door for its sell off to Boeing, and how, after the 2016 coup, 75% of Petrobras petroleum reserves were sold off, at below market rates, to Northern Petroleum corporations.

Now, a new chapter on the debacle of US DOJ/Lava Jato partnership is being written. On March 6, the Lava Jato task force announced that the US DOJ is going to transfer 80% of the fines it levied against Petrobras to the Brazilian Public Prosecutors Office (Ministerio Publico Federal/MPF) to set up a privately managed “anti-corruption investment fund” that will bypass all of the public institutions and laws that were set up to protect against corruption, including the Federal Auditing Courts (TCU), the Federal Transparency Portal, and federal budget and budgetary planning laws. This transfer, which essentially constitutes a kickback to the Lava Jato task force for its help in sabotaging Brazil’s national development strategy, turning its oil reserves over to US corporations, attacking the PT party and jailing Lula,  is valued at $682,560,000. Plans have also been announced for the SEC to kick back 80% of it’s Petrobras fines to the same project which would raise the total value of the fund to $2.5 billion. In 2014, President Dilma Rousseff issued a decree earmarking 100% of Petrobras’ royalties to the Public Health and Education systems. This maneuver, therefore, essentially, represents a technically illegal transfer of funds that were meant to benefit the Brazilian people, into the hands of a politicized, right wing agency that has been working in tandem with the US government since 2014. Ironically the Lava Jato task force, which was hailed in the Anglo Media as being a heroic group of impartial corruption crusaders, is now slated to benefit from its own shady Petrobras deal.


By Brian Mier

Writer, geographer and former development professional who has lived in Brazil for 26 years. Former directorate member of the Fórum Nacional de Reforma Urbana (National Urban Reform Forum). Has lived in São Luis, Recife, Salvador, Rio de Janeiro and São Paulo. Author of “Os Megaeventos Esportivos na Cidade do Rio de Janeiro e o Direito á Cidade” (CEPR: Porto Alegre. 2016). Editor of "Voices of the Brazilian Left" (Sumare: São Paulo. 2018). Editor of "Year of Lead: Washington, Wall Street and the New Imperialism in Brazil" ((Sumare: São Paulo. 2019) Irregular correspondent for the Chicago radio show This is Hell.