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Odebrecht Prosecution: Big Country Differences
Brazil and Peru lead the way, while Mexico and Colombia lag behind.
BY LATIN AMERICA ADVISOR
Inter-American Dialogue
Miguel Atala Herrera, a former vice president of Peruvian state oil company Petroperú, has confessed to acting as a frontman for late President Alan García in a bribery scheme in connection with Brazilian construction conglomerate Odebrecht, prosecutors said April 30. Days earlier, Mexico announced it had banned the company from receiving any federal contracts for three years. Odebrecht has admitted to paying officials in a dozen countries in Latin America nearly $800 million in bribes in exchange for government contracts. How well are the different nations in the region, including Peru and Mexico but also Brazil and Colombia, among others, handling probes into the massive corruption scandal? How much longer will the investigations last, and is there still a lot more to uncover? Which countries are employing the best policy measures to avoid repetition in the future, and should governments and businesses be doing more?
Eileen Gavin, senior politics analyst at Verisk Maplecroft: There has been a notable difference in the regional response, with countries such as Mexico and Colombia taking only limited steps, to date, toward the ‘Pandora’s Box’ that is the Odebrecht scandal. In the case of Mexico, the Peña Nieto government appeared to have little political will to take action. And now, despite his ‘instructions’ to investigate former public officials, current President Andrés Manuel López Obrador’s announcements do not demonstrate a very clear commitment to tackling grand corruption either. Rather, they point to politically motivated and rather selective efforts, which could risk due process, in fact. In the case of Colombia, despite some initial actions and prosecutions, there is some concern that the investigations appear to have been compromised, casting a negative spotlight once more on the country’s weak judicial transparency and effectiveness, and raising uncomfortable questions about judicial independence. After Brazil, Peru has taken been the most proactive country in response to the Odebrecht case. As in Brazil, the Peruvian investigations have been led by a trailblazing judicial official, prosecutor José Domingo Pérez, who, like Sérgio Moro in Brazil, has become something of a national figure. Pérez’s team has more than 30 cases open, and critically, has signed a plea bargain agreement with Odebrecht, thereby securing access to critical documentation and testimony. The political response in Peru has also been similar to that of Brazil, with loud rhetorical support at the political level, but notably, some quite glaring efforts by the country’s Congress in particular to push back, whether that be in looking to deter and hinder the work of the investigators/prosecutors, or in trying to water down any legislative efforts against corruption. This also calls to mind the Honduran congressional pushback against the work of the U.N.-backed Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH) and illustrates a situation in many Latin American countries whereby the various institutions are aggressively trying to assert their ‘dominance’ over each other—with the notion of democratic coexistence between independent powers getting lost.
Michael Camilleri, director of the Peter D. Bell Rule of Law Program at the Inter-American Dialogue: While Odebrecht’s corruption schemes and the public fury they engendered were common across much of Latin America, the resulting response has been far from uniform. In some countries, former presidents, ministers and business tycoons went to jail. In others, cases barely budged. The investigations showing the greatest progress, in countries such as Brazil and Peru, are characterized by prosecutorial independence and initiative, technical capacity, the innovative use of tools such as plea bargaining and international prosecutorial cooperation, accompanied by a vibrant civil society and independent media. It is little surprise that in Venezuela, where the judiciary is co-opted by the regime of Nicolás Maduro (himself implicated in Odebrecht bribery), there has been no progress. More troubling are the still inconclusive efforts at accountability in countries such as Argentina, Colombia and Mexico—where an anticorruption prosecutor was fired when he began gathering evidence against the official accused of funneling bribes to the campaign of then-presidential candidate Enrique Peña Nieto. Even for countries that have achieved progress in the courtroom, the adoption of preventive reforms has not been straightforward. Former Lava Jato judge and current Brazilian Justice Minister Sérgio Moro, for example, had to water down an anti-corruption bill before presenting it to Congress. More encouraging is the growing anecdotal evidence that corporations’ risk tolerance has diminished, and their compliance programs improved in response to the Odebrecht scandal.
Gene M. Smith, president and CEO of Smith Brandon International: Odebrecht will go down in history as a model of corrupt practices, even given its cooperation in the process of tracking the estimated $788 million in bribes paid over roughly 15 years (2001-2016) to politicians across Brazil and at least 12 other countries. Odebrecht’s ‘bribery department,’ the Division of Structured Operations, managed and expedited the payment of bribes through designated banks and other intermediaries, including the relatively low-ranking ‘doleiros’ who assist in currency exchange at the person-to-person level in Brazil. Odebrecht entered into a settlement agreement with the authorities in several countries (including the United States and Brazil) that resulted in it being fined roughly $2.6 billion. For comparison purposes, it might be useful to review the parallel operations of Siemens (Germany), which had developed its own bribery department, the Major Projects Division of Siemens Business Services (SBS). Siemens entered a guilty plea and paid a $1.6 billion fine, among other penalties, in 2008 due to its bribery operations and other corrupt practices. Last year, a former SBS technical manager pleaded guilty in the United States to charges of participating in a $100 million bribery scheme in Argentina. Ten years after Siemens’ 2008 plea, the prosecutions continued. The Siemens case may be a benchmark for how long it might take to review Odebrecht’s operations, contracts and relationships with government officials. It might also be useful to factor in the level of cooperation among international law enforcement authorities that became the hallmark of the Odebrecht case. There are no real winners in the Odebrecht investigations. The sooner they’re concluded and the sooner that justice is rendered, the better.
Republished with permission from the Inter-American Dialogue's daily Latin America Advisor
