Lula’s Own Crime Bill Returns Rewritten by the Right

Brazil’s Chamber of Deputies approved the most sweeping anti-organized-crime legislation in the country’s history on Tuesday — and the government that authored the original proposal barely recognizes it. The Anti-Faction Bill now goes to President Lula for signature in a form shaped largely by Guilherme Derrite, a right-wing lawmaker and former security chief for São Paulo Governor Tarcísio de Freitas, widely seen as a 2026 presidential contender.

This is part of The Rio Times’ daily coverage of Brazil politics and Latin American financial news.

What the Law Does

The bill creates the crime of “structured social domination,” targeting the territorial control exercised by drug factions and militias. Base sentences range from 20 to 40 years, with enhancements for leaders, transnational connections or violence against vulnerable groups that can push penalties to 66 years. Private militias are classified as a special form of criminal organization, and convicted members are barred from amnesty, parole or conditional release.

Judges may also order extraordinary asset forfeiture regardless of a criminal conviction if assets are shown to have illicit origins. The bill authorizes court-approved monitoring of communications between inmates linked to violent factions and their lawyers, and permits spyware use in investigations — a provision that drew concern from the Brazilian Bar Association.

A Government Bill the Government Dislikes

The bill was originally drafted by the Justice Ministry under Ricardo Lewandowski. After Derrite took over as rapporteur and rewrote it through eight successive versions, the ministry — now led by Wellington César — shifted its position. Officials concluded it was better to accept Derrite’s text than risk an even more punitive version if the ruling coalition voted against it.

The Senate had softened the bill under rapporteur Alessandro Vieira, adding protections against white-collar crime and creating a 15% levy on sports betting — the so-called CIDE-Bets — projected to raise R$ 30 billion ($5.5 billion) a year for the National Public Security Fund. Derrite rejected most of those changes, calling them setbacks that “reinforced impunity.”

The Betting Tax That Disappeared

The Centrão — the broad center-right bloc that controls floor votes — delivered the government a second blow by stripping the betting tax from the final text. PP floor leader Doutor Luizinho led the effort, removing both the levy and measures to force gambling companies to regularize five years of unpaid taxes. The government had opposed the betting tax, but its removal nevertheless underlined the administration’s limited leverage over the legislative agenda.

Left and Right Draw Different Lessons

Senator Vieira accused Derrite of shielding wealthy criminals while coming down hard on the poor. The bill’s tougher provisions, he argued, will fall heaviest on favela residents while schemes involving pension fraud, banking scandals and diverted public funds escape comparable penalties. PT lawmaker Lindbergh Farias called the vote a “historic mistake.”

The opposition dismissed those objections. Cabo Gilberto Silva, the PL’s floor leader, said the bill answers a public demand for action against factions that Congress has long ignored. Derrite declared the law the “biggest response Brazilian parliament has ever given to organized crime.” At the Novo party’s request, a late amendment also stripped incarceration benefits and voting rights from members of violent criminal organizations — provisions the Senate had removed on constitutional grounds, arguing they require a constitutional amendment rather than ordinary legislation.

The bill now sits on Lula’s desk. Whether he signs it unchanged, vetoes specific provisions, or absorbs the political cost of a law drafted by an ally of his most likely presidential rival will say much about the balance of power in Brasília as election season approaches.

For more context, read Brazil’s Morning Call and the Ibovespa market report.