LIMA, Peru — In Brazil, Michel Temer’s brief presidency inches closer to an ignominious finale amid allegations he took $5 million in bribes, the latest chapter in a massive, slow burn corruption scandal that has tainted virtually the entire political class.
Across the Andes, all three of Peru‘s presidents spanning 2001-2016 are under investigation for graft. One, Alejandro Toledo, a sometime lecturer at Stanford University accused of taking $20 million in kickbacks, is now fighting extradition from his Palo Alto home.
In some cases, the leaders have themselves been implicated. In others, it has been members of their innermost circles, from aides to family members and even lovers. Latin America, it appears, is more corrupt than ever.
Yet, counter-intuitively, the steady stream of grim headlines about kickbacks, influence-peddling and nepotism may actually be good news. Many experts regard the public revelations as a sign that corruption in the region is actually being tolerated less and less.
“With all these scandals, it feels like we have gone backwards, but I take a more positive view,” says Alejandro Salas, the Latin America director of anti-graft nonprofit Transparency International. “These are obviously not the first cases of corruption in the region. The fact that they are being exposed and investigated is a sign that there is now more scrutiny than before.”
That scrutiny is long overdue. Some historians attribute the region’s endemic corruption to the legacy of the Spanish and Portuguese colonial masters. Other experts focus on contemporary issues such as the lack of transparency in public administration and lax law enforcement.
The price is awful public services, from transport and education to law enforcement and health care, as state coffers are ransacked while appointments and contracts are awarded as favors rather than on merit. Corruption also brakes economic growth and fuels poverty, most economists agree.
That in turn could pave the way for authoritarian strongmen as citizens grow frustrated with elected leaders. According to the 2016 regionwide Latinobarómetro study, just 34 percent of Latin Americans are satisfied with democracy.
That same study also shows that corruption is now Latin Americans’ fourth biggest worry after crime, unemployment and stalled economies.
In the past, Latin Americans often failed to make the connection between graft and shoddy government services. Provided politicians were effective administrators, electorates often tolerated – and sometimes even expected – that they would be on the take, an attitude summed up by the cynical Spanish refrain: “Roba pero hace obras” (He robs but he carries out public works).
“Now, when people see a politician who earns $2,000 a month but has a yacht, they are making a direct connection with their own quality of life,” says Salas. “Corruption is like passive smoking. People are at long last aware of the cost.”
Brian Winter, a Brazil expert and editor of the Americas Quarterly journal, adds: “What is different this time is the demographics. You have a middle class that outnumbers the poor in Latin America for the first time. They are better educated and no longer solely worried about hand-to-mouth issues. Many are also paying taxes for the first time and expect accountability.”
Yet there is a cocktail of other drivers too, experts agree. These include the mobilizing potential of social media, more aggressive journalists, maturing institutions and tougher new transparency laws.
In Guatemala, both President Otto Peréz Molina and his vice president were forced from office and are now in jail, accused of siphoning customs revenues after a wave of protests organized via Facebook and Twitter raised the heat on the pair.
In that case, the prosecutions were led by a United Nations panel. Allowing that outside tribunal was effectively an admission by local authorities that Guatemalan institutions were not up to the task of cracking down on high-level corruption.
Yet in other cases, the charge has been led by a new generation of experienced and more independently minded judges and prosecutors finally coming of age some three decades after most of Latin America transitioned back to democracy.
Nowhere is that more true than in Brazil, where the Car Wash scandal – so called because investigators first uncovered it after busting a money-laundering operation at a Brasilia service station – has steadily ballooned over more than two years into what may be the world’s largest ever corruption scandal.
The case first revealed kickbacks paid to politicians from Petrobras, Brazil’s state oil company. It then focused on Odebrecht, Latin America’s largest construction firm.
Headquartered in the eastern state of Bahia, Odebrecht has won billions of dollars of public contracts around the region in recent decades. Thanks to Brazilian prosecutors, we now know that it did so thanks to its Division of Structured Operations – effectively a bribes department, which showered nearly $800 million on presidents, governors, mayors and other decision-makers across Latin America.
The Odebrecht case has opened up a Pandora’s box of serious corruption cases, including in Argentina, Ecuador, Mexico, Peru, Panama and Venezuela, among others. It is also thanks to that case that numerous Latin American VIPs have been arrested or formally charged, including Toledo, who led Peru from 2001 to 2006. Toledo, like Temer and Pérez Molina, denies wrongdoing.
Yet the Odebrecht mega-scandal – as well as the U.S. Department of Justice’s pursuit of Latin American soccer administrators as part of the FIFA investigation – has also highlighted the long road that still lies ahead in the region’s battle with corruption.
“The balance sheet remains negative,” says Carlos Rivera, a prominent Peruvian lawyer specializing in human rights and governance. “A lot of the information about Odebrecht’s activities in Peru was already circulating in the media here and in the attorney general’s office two years ago, but nothing happened. It just shows the lack of will.”
Now, propelled by public outrage, it remains to be seen whether prosecutors in Peru, Mexico, Argentina and many other Latin American nations can adequately handle the baton passed to them by their Brazilian counterparts.
“Eliminating corruption altogether and jailing 100 percent of the perpetrators is almost impossible,” notes Winter, the Brazil expert. “But jailing one or two big names can also go a long way.