(Bloomberg) — A Brazilian Supreme Court justice broadened police access to a fraud investigation into Banco Master SA, effectively allowing authorities to deepen the probe that has rattled the country’s political and financial systems.
Leia em português.
In a Thursday night ruling, Justice Andre Mendonca authorized federal police to carry out routine investigative procedures in the Master case, including the hearing of suspects and witnesses. He also eased confidentiality restrictions and allowed authorities to share documents related to the probe internally to expedite their work.
On Friday, Mendonca also decided that evidence related to Master and other fraud investigations under the control of the Senate presidency should be returned to a parliamentary commission investigating the case as well as to police.
While Mendonca determined that police will need his authorization to open new investigative fronts, the Thursday decision will significantly ease restrictions fellow Justice Dias Toffoli placed on the case after Brazil’s central bank liquidated Master following its own probe into alleged financial fraud.
The rulings came amid heightened scrutiny of Toffoli’s handling of the Master saga, which has sent shockwaves through Brazil’s elite institutions and pushed the Supreme Court to the edge of its deepest credibility crisis since the country’s return to democratic rule four decades ago.
Mendonca assumed charge of the case last week, when Toffoli relinquished oversight after a police report raised questions about his links to the lender and its chief executive, Daniel Vorcaro.
The report alleged that Toffoli had maintained a relationship with Vorcaro, an executive with a reputation for cultivating ties to powerful politicians and senior officials in the Brazilian capital. It also cited financial transfers connected to the sale of a hotel resort partially owned by the justice to investment funds linked to Banco Master.
Toffoli denied wrongdoing, but the report nevertheless added to controversy that has surrounded the case since he brought it under the Supreme Court’s jurisdiction late last year.
After the central bank concluded its administrative probe and forwarded evidence to police and prosecutors — a step that led to Vorcaro’s arrest and later release under electronic monitoring — Toffoli intervened, citing defense arguments that investigative measures could involve individuals with parliamentary immunity.
He subsequently issued a series of shifting orders governing access to evidence, at one point placing documents and electronic devices under Supreme Court seal before transferring them to prosecutors and ultimately restricting access to a small group of police forensic experts.
Mendonca’s ruling also permits police to maintain custody of material collected during investigations, altering Toffoli’s order that it go to the federal prosecutor’s office instead. Authorities told the court that they are analyzing roughly 100 electronic devices, and had requested broader internal access to conclude their technical review.
(Updates with Supreme Court decision released on Friday in third paragraph.)
