The following is a guest post by Eduardo Soares, a foreign law specialist from Brazil who covers Portuguese-speaking countries at the Law Library of Congress. Eduardo has previously published posts about the Brazilian law collection, capoeira and the law, a Law Library report on citizenship pathways and border protection, highlights of the Law Library’s collection of materials related to the development of the civil law system, and the new civil procedure code in Brazil.
Brazil has been in the spotlight for quite some time now in relation to corruption scandals involving political figures, state-owned companies, and large corporations. The situation presents an opportunity to explore the legal framework in Brazil for fighting corruption. This post (Part I) covers the most important laws in this area, starting with constitutional principles and subsequent laws issued to regulate such principles, followed by federal regulation such as the criminal law and the law on the role of the Public Prosecutor’s Office (Ministério Público). In Part II, which will be published tomorrow, I discuss the legal framework with a public prosecutor from Brazil who recently visited the Law Library.
1. What is the historical context for the current legal system?
A few details of Brazilian history may help you better understand the current political and legal system in the country. Many changes have occurred in Brazil in the last 500 years, from its discovery by Portugal on April 22, 1500, to the enactment of the most recent Constitution on October 5, 1988, and particularly since 1988.
The First Brazilian Constitution
Following its discovery by Portugal, Brazil lived under the dominance of Portugal for more than 300 years until September 7, 1822, when Brazil declared its independence. On March 25, 1824, the first Brazilian Constitution was enacted by Emperor Dom Pedro I. The Constitution established a constitutional monarchy in the country.
The Constitution of 1891
The first Constitution lasted until November 15, 1889, when, supported by a group that defended a republican form of government, Marshal Deodoro da Fonseca led a military coup against the Brazilian government. On the same day, Fonseca signed a manifesto proclaiming a republic in Brazil and set up a provisional government, which would rule Brazil until a new constitution was created. On June 22, 1890, the provisional government enacted Decree No. 510, which promulgated a provisional Constitution. The provisional government lasted from November 15, 1889, until February 24, 1891, the day a new Brazilian Constitution was promulgated.
Following the 1891 Constitution, several constitutions were promulgated during the 20th century. In 1934, after a civil revolution seized power and installed a provisional government that later called for a National Constituent Assembly to discuss the new Constitution, a new Constitution was enacted. There were also other constitutions that followed coup d’état, enacted in 1937, 1946, and 1967. In 1969, the military council’s Constitutional Amendment No. 1 became known as the Constitution of 1969.
An historic event occurred on November 27, 1985, with the issuance of Constitutional Amendment No. 26 calling for a National Constituent Assembly to discuss and vote on a new Constitution. On February 1, 1987, a unicameral assembly, called the National Constituency Assembly, convened at the National Congress. After the proposals were debated and voted on at the National Constituency Assembly, a new Brazilian Constitution was enacted on October 5, 1988, which is still in force today.
In short, it was not until 1988 that Brazil was able to achieve a stable, long-lasting, and democratic system.2. What constitutional principles are relevant in fighting corruption?
In several decisions, the Brazilian Supreme Court has reiterated the normative force of constitutional principles. While there is no explicit principle on combating corruption in the Constitution, the Constitution provides some tools that can be used in this sense. The Brazilian legislature has also sought to enforce constitutional principles by amending numerous laws to specifically fight corruption.
According to article 5(LXXIII) of the Constitution of 1988, any citizen has standing to bring a popular action to annul an act injurious to the public patrimony or to the patrimony of an entity in which the State participates; to administrative morality; to the environment; and to historic and cultural patrimony. Except in a case of proven bad faith, the plaintiff is exempt from court costs and from the burden of paying the prevailing party’s attorney fees and costs.
Law No. 4,717 of June 29, 1965
Law No. 4,717, which regulates popular action, is one of the very few that were enacted before the Constitution of 1988 and is directly related to the fight against corruption. This law was enacted on June 29, 1965. Article 1 of the law determines who is a legitimate party to request the annulment or declaration of nullity of acts detrimental to the public patrimony of the country. It also defines public patrimony; defines the cases in which the acts practiced by the entities described in article 1 are null or voidable; defines the jurisdiction of the courts to hear such cases; states against whom such actions can be proposed; and provides the applicable legal procedure.
According to article 37 of the Constitution, the public administration of any of the branches of the federal government (União), states, the Federal District, and municipalities, must obey the principles of legality, impersonality, morality, and transparency. In addition, except for cases specified in law, constructions, services, purchases, and alienations must be contracted through a process of public bidding that assures equal conditions to all bidders. There are clauses that establish payment obligations, maintaining the effective conditions of the bid, as provided by law, which must allow only requirements related to the technical and economic qualifications essential to secure performance of the obligations.
Acts of administrative improbity must result in the suspension of political rights, loss of public office, freezing of assets, and reimbursement to the public treasury, in the form and degree provided by law, without prejudice to any applicable criminal action.
Protection of Administrative Probity
With regard to political rights, paragraph 9 of article 14 of the Constitution states that a complementary law should establish other cases of ineligibility and periods for which it should remain in force. This is for the purpose of protecting administrative probity, morality for the exercise of the mandate (considering the past life of the candidate), and the normality and legitimacy of elections against the influence of economic power or abuse while holding an office, position, or job in the direct or indirect administration.
Law No. 8,429 of June 2, 1992
To protect administrative morality, on June 2, 1992, the most important law to combat corruption was enacted. Law No. 8,429 provides the sanctions applicable to public servants in cases of illicit enrichment in exercising a mandate, position, job, or function in the government.
Complementary Law No. 135 of June 4, 2010
In 2010, by popular initiative, Complementary Law No. 135, which protects the administrative probity and morality in the exercise of a mandate, was approved. Nicknamed the “Clean Slate Law” (Lei da Ficha Limpa), this law prevents people with civil or criminal convictions confirmed by the appellate courts from applying for elective office.
The Constitution of 1988 took the morality issue so seriously that, according to article 85(V), the president of the Republic may be criminally charged and lose his/her mandate in case of acts against administrative probity.
Law No. 12,850 of August 2, 2013
In an effort to strengthen the legal mechanisms available to help the criminal investigation and subsequent prosecution, and inspired by the U.S. plea bargain agreement instrument, on August 2, 2013, Law No. 12,850 was enacted. Among other things, the law extended the situations where a defendant can enter into a collaboration agreement (colaboração premiada), provided that certain results listed in the law are achieved during the investigation or prosecution. If the results are achieved, a defendant can have his or her criminal sentence pardoned (perdão judicial) or reduced by up to 2/3. Such a legal mechanism is very helpful in cases involving corruption, where the cases can be highly complex and obtaining evidence against suspects may not be easy. It is currently being used in the investigation of the biggest corruption scandal in the country.
Law No. 12,846 of August 1, 2013
At the same time Law No. 12,850 was approved, another important law was approved. Law No. 12,846 of August 1, 2013, created a similar tool to be used against companies. In the past, companies were exempt from liability — punishment only reached the persons practicing illicit acts against the public administration, domestic or international. With Law No. 12,846, companies are now also liable for such practice performed by their employees or representatives acting for the company’s benefit or interest.
Law No. 12,846 introduced an additional innovation into the Brazilian domestic system: the possibility of companies to make use of a leniency agreement (acordo de leniência). According to article 16, the federal government (União), states, the Federal District, and municipalities may, through their organs of internal control, with or without the participation of the Public Prosecutor’s Office (Ministério Publico) or the Public Advocacy (Advocacia Pública), enter into leniency agreements with the legal entity responsible for the acts being investigated. Such an entity must effectively collaborate with the investigations and administrative proceedings in a manner that produces the expected results as required by Law No. 12,846.
3. What is the criminal law related to public corruption?
The Brazilian Penal Code was enacted on December 7, 1940, through Decree-Law 2,848. As a consequence of the numerous legislative actions taken to fight corruption, the Penal Code has also been amended several times. Many provisions have been improved or modified, and new provisions have been added to the Penal Code for the purpose of criminalizing conduct associated with corrupt practices. Such conduct is listed in the sections of the Penal Code covering crimes against public peace (art. 288), crimes against the public administration (arts. 312–359), and crimes against public finances (arts. 359-A–359-H).
4. Are there any relevant court decisions?
Recently, the Brazilian judiciary took great steps in the fight against corruption when the Federal Supreme Court (Supremo Tribunal Federal) decided two cases that will have a huge impact in this area.
The first case has to do with the enforcement of criminal sentences. On February 17, 2016, the Supreme Court ruled that requiring a defendant to start serving a sentence after an appellate court’s confirmation of a criminal conviction does not offend the constitutional principle of the defendant’s presumption of innocence. This decision indicates a change in the Court’s view. Since 2009, the Court has made execution of a criminal sentence conditional upon the final judgment in the judicial process (that is, the point at which there is no possibility for appeal), with the exception of decisions determining the preventive incarceration (prisão preventiva) of a defendant.
After the enactment of the Constitution of 1988, the defense and enforcement of civil rights became a strong staple in the country. Jail time was only served after all appeals had been exhausted, and in white collar crime and corruption cases, such procedures meant delays and an infinite number of postponements. As a rule of thumb, the idea was to extend the appeal procedures to a point that the statute of limitations would extinguish the criminal sanction, which generated impunity. Therefore, despite the defendant’s conviction, the person would not serve time. This shift in the Court’s understanding put an end to the lack of punishment so common in Brazil in cases involving high-level criminals.
The second decision concerns the use of evidence derived from bank secrecy. In the past, an investigator had to obtain a warrant issued by a judge before accessing any bank records. Even if the documents were in the possession of other government agencies, it was unlawful to obtain and use such documents without first obtaining the warrant. Because it was almost impossible to convince a judge to issue the warrant, this requirement affected the investigation of bank transactions.
In this regard, the Supreme Court decided that if the bank records are in the possession of a government agency, it is possible to share the records without breaching bank secrecy and there is no need for a warrant.
As a result, the most important evidence related to corruption and white-collar crimes became more easily accessible and there is greater possibility of it being successfully used during the prosecution of such crimes. It diminishes the opportunities for impunity and empowers law enforcement agencies in the fight against corruption.
5. What are the key agencies in the fight against corruption?
Public Prosecutor’s Office
The Constitution defines the Public Prosecutor’s Office (Ministério Público) as a permanent institution that is essential to the jurisdictional function of the State and in charge of defending the juridical order, democratic regime, and social and individual interests. The governing principles of the Public Prosecution are its unity, indivisibility, and functional independence. The composition of the Public Prosecutor’s Office is listed in article 128 of the Constitution and its institutional functions in article 129.
Law No. 8,625 of February 12, 1993, governs the functions and organization of the Public Prosecutor’s Office in the states. Complementary Law No. 75 of May 20, 1993, governs the organization and functions, and creates the statute of the Public Prosecutor’s Office of the Union (Ministério Público da União).
Controller General of the Union
The Controller General of the Union (Controladoria Geral da União, CGU) was created on May 28, 2003 by Law No. 10,683. The CGU is a typical anti-corruption agency. It is responsible for directly and immediately assisting the president in the performance of his/her duties as to the issues and actions that, under the executive branch, are concerned with protecting public assets and increasing transparency of management within the federal government. Such responsibilities are performed through activities of internal control, public audit, correction, prevention and combating of corruption, and ombudsman. The CGU is also the central organ of the Internal Control System (Sistema de Controle Interno) and Disciplinary System (Sistema de Correição) of the federal executive branch.
6. Are any changes to the law being considered?
On March 29, 2016, civil society groups delivered to the National Congress a popular initiative with ten measures and twenty proposals for legislative changes to improve the fight against corruption. The measures were prepared by the Federal Public Prosecutor’s Office (Ministério Público Federal, 10 Medidas Contra a Corrupção). The initiative was supported by more than two million signatures collected in all states of the country. It includes, among other things, criminalization of illicit enrichment of public officials; an increase in the punishment for many crimes related to corruption; making corrupt practices involving high sums of money a heinous crime; imposing criminal responsibility on political parties; and criminalizing the use of money not officially received and recorded for political campaigns.