FCPAméricas Blog
What a Top Brazilian Federal Judge Wants You to Know about Corruption There
11.29.2012
Fausto De Sanctis is a federal appellate court judge in Brazil. His court is responsible for Sao Paulo and Mato Grosso do Sul states, which represent more than 50% of all federal cases in Brazil. Before that appointment, he served for years on a specialized court for money laundering and financial crimes, which included corruption cases. He has presided over many of Brazil’s largest corruption proceedings, including the Satiagraha case and the Castelo de Areia case. Mr. De Sanctis recently sat down with FCPAméricas to tell us what he thinks U.S. businesses need to know about corruption in Brazil.
How would you describe corruption in Brazil?
Corruption is like a bus. You can stay inside the bus and be part of it. You can sit beside the bus, close your eyes, ignore that corruption exists, and not say anything. Or you can stand in front of the bus. But, in a place like Brazil, the bus is very hard to stop because you don’t have much institutional support. Judges, prosecutors, and the police are not always independent.
Corruption is systemic in Brazil. It is common at all levels. The powerful business elite bribe politicians with money and things like cars, real estate, and services. Public procurements are the source of many problems as well. Corruption in public bids is often well orchestrated and can be fixed before the project even begins.
Is there an answer to the problem of corruption in Brazil?
The first answer to the problem is acknowledging that corruption exists. The second is making necessary changes to local anti-corruption laws.
Under current law, if prosecutors cannot prove that a government official received a bribe, then any proof that a person gave a bribe has relative weight. You need evidence on both sides to put someone in prison. The penalties are also too low to be effective. Right now, a penalty for corruption is between 2 and 12 years in jail, plus fines. But defendants have excessive rights, and these rights are often abused. For example, defendants can always appeal convictions based on habeas corpus. As a result, higher-level judges with strong political connections often overturn lower court decisions. This has the effect of undermining lower courts’ authority. Moreover, crimes like corruption that are seen as economic in nature are treated with more leniency than crimes like murder that are seen as moral. For economic cases, judges usually interpret the law in favor of defendants rather than society. There is a judicial culture that tends to tolerate financial crimes. In these ways, the current laws often allow guilty parties to go free.
Has the mensalão corruption case had an effect?
There is feeling among society that impunity is the rule, not the exception, for corruption. But the mensalão case, for which there are now convictions of many politicians related to an important political party, can represent a start of an important change.
On one hand, the mensalão reveals the weaknesses of the judicial system overall. The Supreme Court is supposed to be a constitutional court. In this case, under the Brazilian Constitution, it served as a trial court of first instance for politicians, bypassing the normal judicial process. Some saw it necessary for the Supreme Court to act in this way because, otherwise, the judicial process would be unacceptably slow. Final decisions usually take years.
On the other hand, the mensalão shows the Supreme Court justices experiencing what lower court trial judges are used to. Since Supreme Court justices are appointed directly by the President, they are not accustomed to trials like this. Lower courts are often criticized for decisions in criminal cases when reviewed on appeal. But now the Supreme Court has experienced the pressures associated with the first level of review. Having reached so many convictions in the mensalão, the Supreme Court seems to be confirming many of the approaches that trial courts often take.
What are your thoughts on the anti-bribery bill currently under consideration by the Brazilian Congress?
The law is extremely important since the current law is insufficient. It covers not only domestic bribery but also foreign bribery. And Brazil must meet its commitments under the OECD Anti-Bribery Convention.
I think the law will pass especially if there is international pressure. Without pressure, it will be very hard. Confronting organized crime internally is extremely difficult since criminal networks reach so far. The mensalão is evidence of this. With its decision, the Supreme Court has confirmed that there is organized crime even in the Brazilian Congress.
How important is it for Brazil to embrace notions of corporate liability for corruption?
In 1998, I wrote a book supporting the notion of corporate liability in Brazil. I wrote another one two years ago. It is critical that we adopt this concept because we know that corporations play a central role in bribery here. In addition to establishing criminal liability, we should empower companies to implement compliance measures to minimize liability. You tackle corruption in the public sector by tackling it in the private sector. When you throw a stone in the water, it makes ripples.
Do you have any message for U.S. companies and businesspeople that wish to participate in the Brazilian market?
Brazil is an important market. U.S. companies and businesspeople must come here. But they must be partners in confronting corruption when they come. They must believe that we are now experiencing changing times for combatting corruption. Brazilian society is requiring it. U.S. companies and businesspeople must get in front of the bus.
The FCPAméricas blog is not intended to provide legal advice to its readers. The blog entries and posts include only the thoughts, ideas, and impressions of its authors and contributors, and should be considered general information only about the Americas, anti-corruption laws including the U.S. Foreign Corrupt Practices Act, issues related to anti-corruption compliance, and any other matters addressed. Nothing in this publication should be interpreted to constitute legal advice or services of any kind. Furthermore, information found on this blog should not be used as the basis for decisions or actions that may affect your business; instead, companies and businesspeople should seek legal counsel from qualified lawyers regarding anti-corruption laws or any other legal issue. The Editor and the contributors to this blog shall not be responsible for any losses incurred by a reader or a company as a result of information provided in this publication. For more information, please contact Info@MattesonEllisLaw.com.
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© 2013 Matteson Ellis Law, PLLC
Post authored by Matteson Ellis, FCPAméricas Founder & Editor
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