Leaked documents have revealed the cosy relationship between Brazilian prosecutors and the FBI in the Lava Jato (Car Wash) investigations – including a meeting kept secret from the Dilma Rousseff administration

Translated by Tom Gatehouse, as part of LAB’s ongoing partnership with Agência Pública. You can read the original article (in Portuguese) here.

In a career spanning more than 20 years in the FBI, special agent Leslie R. Backschies has been to Brazil on several occasions. A fluent Portuguese speaker, Backschies has been visiting Brazil since at least 2012, when she helped to negotiate agreements regarding training of police forces to respond to terrorist threats ahead of the World Cup in 2014.

Dilma Rousseff is making her first state visit to Washington since dramatically cancelling a trip in 2013, when news broke that she was under NSA surveillance

US president Barack Obama and president of Brazil Dilma Rousseff visit the Martin Luther King Jr Memorial on Monday. Photograph: UPI /Landov/Barcroft Media

Of the many diplomatic items on the agenda for Barack Obama’s bilateral meeting with Brazilian president Dilma Rousseff on Tuesday, one is conspicuous by its absence: a formal American apology for spying on her.

It is the Brazilian president’s first state visit to Washington since Rousseff dramatically cancelled an earlier trip two years ago in the wake of the revelations from National Security Agency whistleblower Edward Snowden that her emails, phone calls and text messages were under US surveillance.

Obama has pulled out all the stops to try to put the incident behind America and Brazil, including a visit to the Martin Luther King Jr memorial on Monday night that sought to underline their shared experience as civil rights champions and a grand state dinner at the White House capped with coconut banana opera cake.

Obama paved by the way for the visit during an encounter with Rousseff at the summit of the Americas in Panama, when he reassured her that his review of NSA practices meant it would not put allied leaders under surveillance in the future unless there was an overwhelming US security need.

“He has made clear that with someone like Dilma Rousseff, who I think over the years he’s had a good relationship with, he can speak directly with her and learn her views,” said deputy national security adviser Ben Rhodes in a preview briefing with reporters.

“That has allowed us to clear that air and has opened the door to moving forward with not just this visit but a much more energised bilateral agenda,” he added. “So this visit I think really does indicate the extent to which we’ve turned the page and are moving forward.”

Except that amid all the clearing the air, it does not look like Rousseff will actually get the simple apology she requested.

Asked if Obama would say sorry, Rhodes – one of his closest advisers – replied: “We have not made it a practice to issue apologies related to our surveillance activities.”

Addressing the issue during her joint press conference with Obama, Rousseff acknowledged that her previous anger had led to her cancelling her last trip, but said trust had now been restored.

“President Obama and the US government have stated on several occasions that they would no longer engage in intrusive acts of spying on friendly countries. I believe President Obama,” she said.

“And furthermore, he has told me that should he ever need non-public information about Brazil, he would just pick up the phone and call me. So yes, I am certain that the conditions today have become very different.”

But Obama did not mention the allegations at all during his public remarks, calling for the two countries to “focus on the future”.

It is possible, of course, that such an expression of regret may still come out behind closed doors. But the emphatic denial by senior White House aides suggests this issue is more than simply a matter of not wishing to officially confirm the spying once took place.

A similar silence was evident last week when François Hollande also rang Obama to demand an explanation for revelations of US spying on French presidents. Although the Guardian asked Obama personally whether he would be apologising, there was no mention of the S-word when the White House released a summary of their call.

Only German chancellor Angela Merkel, whose rage came closest to Rousseff’s at the Snowden revelations, actually secured a rare public apology over the affair, but that was perhaps also related to the fact that the US has more to worry about in its relationship with Europe’s dominant power.

Brazil did exact some revenge – pointedly awarding a major military contract to Swedish-owned Gripen rather than the American favourite, Boeing – but both governments are now keen to move on with their stalled trade and defence relationship.

Yet observers of the relationship between the two great powers suggest this week’s summit will mainly be about re-establishing trust before anything more substantial can be achieved.

“The Brazilians felt that the relationship was a friendship and I think they took it to heart and they felt insulted. It meant a lot to them,” says Carl Meacham, director of the Americas Program at the Center for Strategic and International Studies in Washington.

In this respect, Meacham believes US stubbornness over making a Merkel-style apology may be mistaken.

“I believe that in foreign affairs you need to be pragmatic and realistic, and it’s important to acknowledge whatever grievances they have,” he adds. “If that involves talking about regret, so be it.”

There are dozens of references to the FBI and its agents in the conversations leaked to The Intercept Brasil. What comes across most clearly is that the closest relationship is between members of the Brazilian PF and the FBI agents.

‘It’s not a question of practicality. It’s about legality.’

A conversation from 11 February 2016 between Dallagnol and Vladimir Aras, the Secretary for International Cooperation at the Attorney General’s Office, reveals just how close the PF were to the FBI – and how much they distrusted the Dilma Rousseff government. So much so that Dallagnol admitted that the PF preferred to deal with the Americans directly than to follow formal procedure.

Dallagnol had sent an email to a contact in the American Department of Justice, containing an informal extradition request for a suspect in the Car Wash investigations. It had been sent directly to the Office of International Affairs (OIA) at the DOJ, bypassing both Aras’ department and the Department of Asset Recovery and International Legal Cooperation (DRCI) at the Ministry of Justice, which, according to the bilateral agreement, is the relevant government authority in such cases.

The dialogue suggests that an arrest warrant had yet to be issued by Sergio Moro, then the presiding judge on the case. It is not clear who the suspect was.

In the conversation, Aras warns Dallagnol several times of the potential for legal problems arising from direct collaboration with the FBI. Dallagnol’s response is clear: ‘Thanks Vlad, but the PF have made it clear that in this case it’s not practical to go through the executive.’ ‘It’s not a question of practicality,’ Aras responds. ‘It’s about legality, Delta. The agreement has the power of an ordinary federal law and it requires the Ministry of Justice to mediate.’

The FBI knew the Odebrecht investigations inside out

Several months later, the relationship with American law enforcement again became a matter for debate amongst the Brazilian prosecutors, this time in an exchange discussing a leniency agreement with Odebrecht, Brazil’s biggest engineering company and one of those most heavily involved in the Car Wash investigations. In June 2019, the company filed for bankruptcy protection.

The subject of the conversation was the IT system My Web Day, developed by Odebrecht to administer a system of bribes to politicians from various countries. The Car Wash investigators made an informal request to the FBI for help in breaking the system’s encryption.

The prosecutor Paulo Roberto Galvão explained to his colleagues in a Telegram chat that he had asked the FBI to ‘break into’ My Web Day or to ‘put us in touch with a hacker’ who could do the job. In response, the prosecutor Sérgio Bruno, the Car Wash coordinator in Brasília, said that the Attorney General, Rodrigo Janot, had been to a meeting at the American embassy to ask for help with Odebrecht’s encrypted IT systems.

‘Without a doubt, the channel with the FBI is much more direct than going through the embassy. The FBI also has total knowledge of the investigations, which the embassy may not,’ said Paulo Roberto. ‘For my part, I think it’s useful to keep both channels open.’

The FBI’s role in the investigations into Odebrecht led to one of the biggest agreements hitherto signed between the DOJ and an international company – $2.6 billion in compensation for acts of corruption which occurred outside the United States.

As Odebrecht is not a publicly listed company and its shares are not traded on the U.S stock exchange, the plea agreement highlights situations when its actions fell within American jurisdiction. For example, Odebrecht is alleged to have used bank accounts in New York to transfer money to offshore accounts in Belize and the British Virgin Islands, which would ultimately be used ‘in part’ to pay bribes in Latin American countries.

Responding to a request by Pública for comment, the Car Wash taskforce responded as follows: ‘This does not concern a working partnership, but cooperation between law enforcement authorities in their respective countries, corresponding to various international agreements of which Brazil is a signatory. The exchange of information between countries follows both international norms and Brazilian law.

‘Besides formal requests made through official channels, it is highly advisable that authorities maintain direct contact. Even before announcement of a request for cooperation, this involves maintaining contacts; holding meetings, both online and in person; and discussing strategy, with the aim of exchanging knowledge on the information to be requested and received.’

After its involvement in Car Wash and the signing of the plea deal with the U.S, Odebrecht became a target for investigations in various countries where it had business in Latin America.

According to the Miami Herald, the creation of the International Corruption Squad in Miami last year was based on the belief that money laundered by members of the Chávez government in Venezuela had ended up in the south Florida real estate market – money which supposedly included bribes paid by Odebrecht. This squad is subordinate to the Investigation Unit led by Backschies.

‘We saw presidents toppled in Brazil’

The expression used by Backschies to describe FBI investigations into foreign corruption is ‘politically sensitive’.

‘These cases are very politically sensitive, not just in the U.S. but overseas,’ she explained in an interview with Associated Press. ‘I mean, look, in Malaysia, the president wasn’t re-elected. We saw presidents toppled in Brazil. These are the results of cases like this. When you’re looking at high-level government officials, there’s a lot of sensitivities.’

It is because of these ‘sensitivities’ that unlike other criminal cases, all FCPA cases are led by the special unit in the Department of Justice in Washington. The head of the DOJ is the Attorney General of the United States, who is appointed directly by the president.

According to the Associated Press report, the FBI supervisors meet lawyers from the DOJ every 15 days to assess potential investigations and their possible political consequences.

The change in Backschies’ career path reflects a change of focus in the Department of Justice and the FBI in the last decade. Based on the belief that money laundering was financing terrorism, the American agents began to focus increasingly on cases of transnational corruption and money laundering using the FCPA legislation, which has extended jurisdiction for the whole world. Today however, most FCPA cases have nothing to do with terrorism.