MercoPress. South Atlantic News Agency

Brazil's STF launches corruption probe against Transparency International

Dias Toffoli questioned the NGO's ties with former Lava Jato Prosecutor Dallagnol, who jailed Lula da Silva in 2018

Brazil's Supreme Federal Court (STF) Justice António Dias Toffoli has launched a corruption probe against the Non-Government Organization (NGO) Transparency International after it sided with Deltan Dallagnol to create a foundation with the money from fines paid by companies that admitted to bribes to win contracts with the state-run oil company Petrobras.

Dallagnol was the chief prosecutor during the Lava Jato Operation but resigned after the STF found that he participated in political maneuvers to indict and imprison current President Luiz Inácio Lula da Silva in 2018.

Dias Toffoli ruled last week in favor of suspending the payment of fines imposed on the Odebrecht construction company in Operation Lava Jato citing irregularities in the confessions obtained by the prosecution which were believed to be in breach of the law of the plea bargain requiring the willingness of the incriminated party.

According to Toffolli, the creation of a private foundation to manage the some US$ 500 million the Brazilian treasury was to receive from companies that admitted to corruption was “dubious.”

Transparency International claimed in a statement that “the information indicating that the amounts recovered through clemency agreements would be received or managed by the organization are false.” Founded in 1993, Transparency International promotes measures against corporate crime and political corruption in the international arena. Every year it publishes the Corruption Perceptions Index, a global corporate corruption index.

In a separate case, STF Justice Alexandre De Moraes ruled that the unfounded dismissal of public and mixed-capital company employees was constitutional. Acting as a rapporteur in a case that began to be tried by the Court on Wednesday, De Moraes understood that the need for motivation could affect the principle of efficiency, Agencia Brasil explained.

“Removing this possibility from the manager would be taking away an instrument of competition,” he said. He was the only one to vote on Wednesday. The trial is due to resume on Thursday 8. The discussion deals with employees subject to the Consolidation of Labor Laws (CLT) and not public servants protected by stability.

The case reached the Supreme Court through an appeal filed by Banco do Brasil workers against a decision by the Superior Labor Court (TST), which was in favor of their unmotivated dismissal. The case, however, has general repercussions and will affect hundreds of similar cases in the courts.

Moraes stressed that the Supreme Court is not discussing the creation of a new form of stability. “The fact of requiring a public examination had a specific purpose: to guarantee full access to public jobs, equal conditions and to rule out favoritism.”

The plaintiffs are asking that the bank be ordered to reinstate the dismissed employees and pay the amount corresponding to the salaries they no longer received during the period. For its part, Banco do Brasil maintains that public companies are subject to the legal regime of private companies and therefore there is no need for motivation.

In 2018, the Supreme Court ruled on a similar case, but it applied only to the legal regime of the Post Office, as it is a state-owned company that provides a public service under a monopoly regime. At the time, the justices understood that admission by public examination imposes the need for motivation. For Moraes, the case being discussed now is different from that precedent.

“The case of the Post Office is exceptional because it is a company that provides a public service on an exclusive basis and has all the characteristics of direct administration: its debts are paid by precatory order, it enjoys tax immunity,” he said.

In a statement sent to the Court, the Federal Attorney General's Office (AGU) argued that granting the appeal could cause serious damage to the public coffers since it would “disadvantage” public companies and federal mixed-capital companies when compared to private companies.