Corruption Fights Stall In Latin America
RIO DE JANEIRO — The biggest corruption investigation in Latin American history began, humbly enough, 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 Aldaña, a former attorney general of Guatemala who indicted the country’s president and vice president in a corruption case in 2015.
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 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 García shot himself to death rather than face arrest. In Brazil, Luiz Inácio Lula da Silva, a former president who remained the country’s most commanding politi
cal figure, was sentenced to time in prison, as was Marcelo Odebrecht, the head of Latin America’s largest construction conglomerate.
But efforts to adopt anticorruption reforms sputtered amid political pressure. As discredited figures in business and politics mount comebacks, many of those who led the crusade against graft face retaliation. Ms. Aldaña, who is now in exile, faces death threats at home.
“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, Brasília. The task force has filed charges against 476 people, struck 136 plea agreements and recovered more than $900 million in stolen assets.
Brazilian companies used money-laundering operations 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 these companies was Odebrecht, which paid more than $780 million in bribes across Latin America and the Caribbean to capture contracts worth $3.34 billion, according to the United States.
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 Mr. da Silva for accepting the use of a seaside apartment in exchange for steering government contracts represented a turning point for the country.
The unusual zeal and speed with which the case was handled made it politically fraught: When Mr. da Silva was imprisoned in April 2018 to start serving a 12-year sentence for corruption and money laundering, he was the front-runner in the presidential race. The conviction paved the way for the election of the far-right candidate Jair Bolsonaro.
Months later, prosecutors cried foul over Mr. Bolsonaro’s protocol-breaking appointment of the new attorney general, who has traditionally been picked from a list put forward by the national association of federal prosecutors. This system was intended to prevent a president from picking a deferential top law enforcement official.
Mr. Bolsonaro instead picked his own man, a move that the prosecutors’ association called “the biggest democratic and institutional setback” for the office in 20 years. With the authority of law enforcement officials curbed, major graft cases in Brazil are stalled. 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.
Former President Michel Temer remains free despite a flurry of criminal charges that have dogged him since 2017. They include an instance in which Mr. Temer was surreptitiously recorded 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 anticorruption measures.
In Guatemala, President Jimmy Morales shut down a United Nations panel that had been helping the attorney general’s office build corruption cases. The decision came after Mr. Morales, who campaigned under the motto “neither corrupt nor a thief,” came under investigation for allegedly receiving illegal campaign contributions.
The government of Honduras, which had signed off on the establishment of a similar entity in 2016, declined to renew its mandate in 2019.
Those models enjoyed widespread public support in 2016, when the United States Justice Department announced that Odebrecht had agreed to pay a $3.5 billion penalty after confessing that it had set up a department to bribe politicians.
The company then extended an offer to the countries where it had paid bribes: In exchange for immunity from new prosecutions, it said, it would disclose the money paid and the contracts secured fraudulently.
Some countries — including Ecuador, Peru and the Dominican Republic — took Odebrecht up on its offer, and saw former presidents arrested as a result. But in Colombia and Argentina, a lack of political will has prevented investigations from advancing.
Vice President Marta Lucía Ramírez of Colombia called the failure to crack open the Odebrecht case deeply troubling.
“It has very serious consequences, and it’s seriously undermining people’s trust in institutions, political parties, Congress and the justice system,” she said. “That puts the future of democracy in jeopardy.”
After successes, ‘the pendulum has swung back.’