Anti-graft steam cools in Brazil
5-year-old crackdown sputtering under political pressure
The biggest corruption investigation in Latin America history began at a Brazilian gas station, but as it steamrollered across the region, it took down top government officials and corporate titans alike.
For those caught up in the scandal, it was a moment of reckoning. For ordinary citizens, it was a moment of hope. Even the most powerful, it appeared, were finally being held to account.
Now, five years after the scandal exploded into public view, the region’s drive against corruption has begun to stall.
“For a brief moment in time, everyone was within the reach of justice,” said Thelma Aldana, a former attorney general of Guatemala who indicted the country’s president and vice president in a corruption case in 2015 and became one of the emblematic figures of the crackdown.
That crackdown came after years of high commodities prices that buoyed many economies in the region, lifting millions out of poverty — but also feeding government spending and therefore opportunities for graft. When that period of plenty ended, it left government officials vulnerable and prosecutors free to pursue the powerful.
In Peru, former President Alan Garcia killed himself rather than face arrest. In Brazil, Luiz Inacio Lula da Silva, a former president who remained the country’s most commanding political figure, was sentenced to time in prison, as was Marcelo Odebrecht, the head of Latin America’s largest construction conglomerate.
But efforts to adopt anti-corruption changes sputtered amid political pressure. As discredited figures in business and politics mount comebacks, many of those who led the crusade against graft face retaliation. Aldana, who is now in exile, faces death threats at home. The task force that enabled Guatemala’s corruption fight was shut down.
“The pendulum went to one side, and now the pendulum has swung back,” said Deltan Dallagnol, the federal prosecutor who led Brazil’s main anti-corruption task force. It was established in 2014 to prosecute cases from the scandal that came to be known as Lava Jato, or Car Wash, after the gas station in Brazil’s capital, Brasilia.
All of this has fueled widespread anger and distrust of the political establishment. Millions of Latin Americans have voted out incumbents and over the past few months have poured into the streets in large protests.
In some cases, the credibility of efforts to fight graft was undermined by transgressions committed by the crusaders themselves. In Brazil, leaked cellphone text messages showed the main judge in the investigation giving strategic guidance to federal prosecutors in what criminal procedure experts saw as a clear violation of legal and ethical guidelines.
Brazil’s backsliding on corruption may be the most dramatic and consequential in the region, given how much prosecutors accomplished in a few years. The Car Wash task force has filed charges against 476 people, struck 136 plea agreements and recovered more than $900 million in stolen assets.
Brazilian companies with projects around the region exported the corruption scheme that they had perfected at home.
The companies used money-laundering operations — like the one that operated out of the gas station in Brasilia — to clear cash used to pay off high-ranking politicians and parties. In exchange for the money, inflated public works contracts were steered the companies’ way.
Chief among those companies was Odebrecht, a Brazil-based construction conglomerate that paid more than $780 million in bribes across Latin American and the Caribbean to capture contracts worth $3.34 billion, according to the U.S. Department of Justice.
The scandal upended politics in Brazil, where every large party was implicated in illegal campaign finance and kickback schemes.
The arrest and eventual imprisonment of da Silva, the former president widely known as Lula, for accepting the use of a seaside apartment in exchange for steering government contracts represented a turning point for the country.
For some, seeing Brazil’s most commanding political figure in jail was the culmination of the anti-corruption drive and evidence that the law was finally being applied equally to everyone. For others, it was evidence that the investigation was politically contaminated and beginning to backslide into the influence trading it was intended to remedy.
The unusual zeal and speed with which the leftist firebrand’s case was handled made it politically fraught: When da Silva was imprisoned in April of last year to start serving a 12-year sentence for corruption and money laundering, he was the front-runner in the presidential race. The conviction blocked him from the ballot and paved the way for the election of the far-right candidate Jair Bolsonaro.
Suspicion that the prosecution was politically motivated grew after Sergio Moro, the judge who handled da Silva’s case, joined Bolsonaro’s Cabinet as justice minister.
That appointment — which came with a promise of an eventual seat on the Supreme Court — angered politicians on the left and tarnished the image of Moro, who had become a folk hero at home and a celebrated jurist abroad.
With the authority of law enforcement officials curbed, major graft cases in Brazil are stalled or moving at a glacial pace as powerful defendants appeal convictions and use legal tactics to put off prison sentences.
Eike Batista, once one of the world’s top 10 richest men, was sentenced in July 2018 to 30 years in prison for paying millions in bribes, but he has yet to start serving time.
Brazil’s former President Michel Temer remains free despite a flurry of criminal charges that have dogged him since 2017.
They include a surreptitious recording of Temer condoning the payment of a bribe to keep a former political ally from detailing crimes to the authorities.
The backsliding in Brazil has been watched closely across the region, where politicians have largely prioritized self-preservation over measures that would make judiciaries more independent, campaign financing more transparent and the public works contract process less prone to bribery.
In Guatemala, President Jimmy Morales shut down a U.N. panel of experts that had been helping the attorney general’s office build complex, sensitive corruption cases.
The decision came after Morales, who campaigned under the motto “neither corrupt nor a thief,” came under investigation for reportedly receiving illegal campaign contributions.
The government of Honduras, which had signed off on the establishment of a similar entity there in 2016, declined to renew its mandate this year.