How Operation Car Wash changed Latin American politics

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How Operation Car Wash changed Latin American politics

The Summit of the Americas happens in the wake of Operation Car Wash.

Lima, the Peruvian capital, hosts today and tomorrow (April 13 and 14) the Summit of the Americas. The event, which has no fixed periodicity, is an opportunity for leaders of the region to discuss how to tackle their most urgent challenges. But the 8th edition of the summit will showcase the political turmoil that Latin American countries have been experiencing for the last few years.

The host country is facing something already well known to Brazilians. The country has been engulfed by corruption scandals involving the Odebrecht construction company, and its president lost power after being accused of receiving millions in bribes. Meanwhile, Brazil’s most popular leader has just gone to jail for receiving a beachfront apartment as a kickback from another construction group.

At this point, the meeting’s official theme of “democratic governance fighting corruption” almost seems like a mean-spirited joke.

Operation Car Wash splashed across Latin America

Peru’s Southern Interoceanic Highway is one of the boldest – and most expensive – engineering projects in the country. With 2,600 kilometers (that’s further than the distance between Boston and Miami), it connects the Peruvian coast to the Brazilian border through the Andes. Built by Brazilian construction company Odebrecht, the road cost over 3 billion USD and was supposed to be a symbol for South America’s efforts to integrate its countries. Instead, it has become a symbol of corruption.

In order to snatch the contract, Odebrecht paid roughly 20 million USD in bribes to former Peruvian President Alejandro Toledo (2001-2006). Toledo has been convicted multiple times of fraud and corruption, but fled to the U.S. In March, EFE informed that the Donald Trump administration agreed to extradite the former leader.

But Toledo is far from the only high-profile Latin American politician cornered by corruption allegations related to Odebrecht – and Brazil’s Operation Car Wash, for that matter. At least 15 other leaders have been placed under investigation, suspected of collusion with the Brazilian construction powerhouse.

Bribery was business as usual for Odebrecht, to the point that the company had a sector specialized in managing kickbacks for elected officials at multiple levels – and countries. As part of a plea deal with the U.S. Department of Justice, the company admitted to paying 788 million USD in 12 countries, initiating a political tsunami in the region.

Besides Toledo, scandals involving Odebrecht have brought the downfall of his successors: Alan García is under investigation, Olanta Humalla was arrested last year, and Pedro Pablo Kuczynski resigned last month to avoid impeachment procedures. All have been accused of pocketing money from the Brazilian construction company.

The extension of Odebrecht’s tentacles in Peru was so big that the firm was banned from ever taking another contract in the country.


odebrecht bribes


Brazil

In Brazil, all former living presidents have been investigated for their relations with Odebrecht. Former President Lula da Silva (2003-2010) is a central figure. He was arrested on April 7 after an appellate court sentenced him to 12 years and one month in prison for corruption and money laundering from a construction company (not Odebrecht). This week, Marcelo Odebrecht told the justice system that the further he digs into past email correspondence, the more damning evidence he finds against Lula.

Federal prosecutors have dismissed the case against Fernando Henrique Cardoso, Lula’s predecessor. Not because his innocence was proven, but rather because he was given a sort of pardon thanks to his advanced age.

Meanwhile, former Presidents Fernando Collor, José Sarney, and Dilma Rousseff have also been cited.

Other countries face similar issues

Four months ago, Ecuador’s Vice-President Jorge Glas was sentenced to six years in prison for his connections to Odebrecht’s corruption scheme. The highest-ranked politician (still in office) to be convicted in an Operation Car Wash-related scandal, Glas allegedly received 13.5 million USD in bribes. He has been under preventative custody since October 2017.

A former high-ranked Odebrecht officer located in Ecuador told prosecutors that the company has paid 33.5 million USD in kickbacks since 2007. In exchange, it secured infrastructure contracts in the country.

Former presidents in Panama (Ricardo Martinelli) and El Salvador (Maurício Funes) have also been cited by top Odebrecht officers as beneficiary of the company’s bribery division.

Is there a silver lining?

While Operation Car Wash is certainly a positive and consequential anti-corruption measure, it has failed to change political culture – at least in Brazil. Even after dozens of billionaires, politicians, and professional money launderers have been put in jail, our elected officials maintained their unethical dealings.

In May 2017, a tape recording revealed that President Michel Temer, the country’s highest-ranked officer, negotiated with a crooked businessman the payment of hush money to a former House Speaker – who was in jail – to prevent him from collaborating with investigators.

As a report by the International Monetary Fund shows, progress in that area has been relatively timid. Meanwhile, voters have grown increasingly fed up with Brazilian institutions. While that is certainly problematic, it could also represent an opportunity for new, more modern leaders.

We will see if that hope is fulfilled in October, when Brazilians head to the polls.

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About the author

Gustavo Ribeiro

An award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.