Brazil is a Latin American giant. Not only are they leaders in population and overall size, but they also control enormous sections of the exchange of agricultural products. As of 2020, Brazil leads in coffee, cotton, sugar, and meat, always competing with global powerhouses like the United States over the control of the agricultural market. Despite this leadership in the global economy, Brazil is still deeply affected by the widespread poverty affecting over 31.7 million people as of 2019. The Brazilian Institute of Geography and Statistics says that around 6.5% of the population lives on less than US $1.90 per day. This means that out of the 212,780,000 people inhabiting Brazil, 13,826,670 have difficulties accessing resources like food, water, sanitation, and health care. Thirteen million people living paycheck to paycheck, waiting for the sun to rise to figure out how to feed their families. Thirteen million people don’t know how much longer they can stay in their house, or keep their plates full, or protect their families from the pandemic. Numbers so large are often hard to comprehend, but even more baffling is that despite this gut-wrenching poverty, Brazil also suffers greatly from extreme levels of corruption and a highly unstable political climate. Might it be greed, ego, or unyielding need for power, some of the most important politicians and executives in Brazil have been deeply involved in terrible corruption plots and scandals.
Although the history behind the various corruption operations extends as far as Brazil’s history, arguably the most relevant started in March 2014. Initially, a small investigation regarding money laundering in small businesses like gas stations and car washes, Laval Jato, also known as Operation Car Wash, escalated into one of the most surprising and convoluted corruption scandals in Brazil’s history. The investigation began with operation authorities looking into doleiros, also known as black market money dealers, who carried out secret transactions to profit from crime. Despite the illegality of the crimes investigated, they were largely irrelevant to the world stage, as small and isolated organized groups conduct similar operations on the daily. Nevertheless, as investigators started digging deeper into these seemingly standard transactions, they discovered a pivotal connection between these car washes and gas stations and Paulo Roberto Costa, an important executive at Petrobras. Petrobras is a Brazilian company that focuses on producing and refining petroleum. The company is state-owned, but it is also a strong competitor to other Brazilian and international companies. Widely known for its role in increasing Brazil’s crude oil production, Petrobras discovered a huge oil field off the coast of Rio de Janeiro in the ‘70s and ‘80s and consequently proceeded to export the deepwater oil fields. The average oil production in 1953 was around 2,700 barrels per day, and with the discovery and usage of this new plant, production grew to more than 2,000,000 barrels per day in 2010. Because of this, the company asserted its dominance over not only the oil industry but also over the government and Brazilian economy. Through the decades, Petrobras made alliances with other oil refining companies, and they continued to make outstanding discoveries, which therefore increased their revenue and power. Nevertheless, their success started declining when international oil prices started falling in 2014, starting the chain reaction of corruption that would leave the world stunned at its complexity and scale.
During the early stages of the investigation, Paulo Roberto Costa was a director of Petrobras, and his connection to the car wash money laundering activities led investigators to uncover a string of executives just like Costa who were working with these small businesses to carry out the scandal. While he was under investigation, Costa confessed as to how was over-paying contracts with construction companies, drilling rigs, exploration vessels, and refineries so that as a result of these profitable transactions, the executives would be promised between 1 and 5 percent of every deal. The money gained in these deals would be deposited into what are called secret slush funds, also known as money reserves for illegal means, that are not declared to any financial regulation entity. With millions of dollars already invested in these funds, Costa, alongside other Petrobras executives like Nestor Cerveró, used this money to pay politicians and political parties. Said governmental entities that were profiting from this transaction had initially appointed the executives to their high positions in Petrobras and therefore saw this payment as compensation. Petrobras has always been deeply connected to Brazilian politics. During President Luis Inácio Lula da Silva’s presidency between 2003 and 2010, the highly coveted Petrobras executive positions were offered to Lula’s political allies. This would subsequently generate support and a uniform ideology in Congress, all culminating in helping grow Lula’s power. It was Dilma Rousseff who took over after Lula’s presidency, and she, too, was a loyal ally to Lula and the Worker’s Party. Huge anti-corruption protests sparked in 2013, as Brazilians advocated against the sinking claws of corruption. Around a million livid citizens took to the streets to complain about poor public services like transportation and healthcare, alongside the reigning complaint about the corruption scandals that were rotting the government and intrinsically affecting the average quality of life. In an attempt to calm the raging waves of protesters, Dilma Rousseff attempted to quicken the pace and implementation of certain new legislations that would supposedly put an end to the government corruption that was becoming the norm. One of the legislations that she put in place was the implementation of plea bargaining, which would allow prosecutors to make monetary deals with suspects to reduce their sentences; the only thing that the suspects would have to do was leak useful and relevant information. Knowing that they would either have to go to jail or snitch on the operation, a few high executives like Nestor Cerveró preferred the latter, and authorities used him as a starting point to pinpoint other corrupt politicians and executives. Most notably, Senator Delcídio Amaral of the Worker's Party was fundamentally tricked into meeting Cereveró’s son, who was being monitored by authorities since his father had agreed to collaborate in uncovering the other members of the scandal. In a movie like meeting, Cereveró’s son covered with wires and tape recorders and Amaral lounging in the Royal Tulip Hotel, Amaral unknowingly confessed to several illicit activities while also trying to negotiate Cereveró’s silence with a payment of one million dollars as an initial payment, followed by $13,000 a month. Cereveró’s son, of course, declined under the watchful eye of investigation authorities, but Amaral insisted, saying that if Cereveró did not want to accept the payment, he would help coordinate a prison escape, as long as his name was never mentioned under the gaze of the Car Wash investigation. After the recording was acquired, he was arrested on charges of conspiracy to obstruct justice. Deathly frightened of a life in jail, Amaral was not able to withstand the idea of remaking in custody, hence his immediate acquiescence to authority investigations. He agreed to confess everything he knew, and one of his most surprising claims regarded one of the most powerful women in the country. Amaral claimed that then-president Dilma Rousseff had also conspired to obstruct justice, and also announced that former president Lula had been the main coordinator of the Petrobras corruption web. Because of his collaboration with the investigation, Amaral now lives on house arrest in one of São Paulo’s most prestigious and expensive neighborhoods. Stories like these are many. The extent and reach of the Car Wash corruption scandal was outstanding, involving almost every high-ranking executive and politician both in Petrobras and the government.
The repercussions of the scandal started manifesting in 2016 when the Brazilian economy suffered a recession. Because of Petrobras’ well-known corruption, prosecutes ordered the company to stop business with many contractors, one of them being Odebrecht, also a significantly influential company in Latin America as it is the largest building firm in the continent. Not only did hundreds of people lose their jobs because of the suspension of Petrobras’ activities, but political activity also reached a standstill. Politicians had often thought themselves unreachable, untouchable. They believed that their influential positions in the government would protect them from investigation and scrutiny, but Operation Car Wash proved them wrong. As a result, tensions between political parties started rising, and President Rousseff’s popularity took a huge dip. The anger and tensions between politicians led to grave accusations, including Eduardo Cunha’s assertion that Rousseff had been handling governmental funds in order to make the government finances look stronger than they truly were. It is important to know, however, that Cunha himself was also deeply involved in the Car Wash scandal given that during the investigation, around five million dollars worth of laundered money were found in a secret Swiss Bank account. The political climate became agitated and volatile. People and politicians alike started pushing for Rousseff’s impeachment due to her involvement in the scandal, supporting the scandal’s main orchestrator, Lula, amongst other charges. As a result, Michel Temer was appointed interim president while Rousseff continued her impeachment trials. Unfortunately, Temer had been prohibited from running for office after he was found guilty of election violations in 2016. Notwithstanding, Temer reached the ultimate position of power. The first months of his presidency resulted in a handful of ministers being forced to resign as they confirmed not only their involvement in the corruption scandal, but also confirmed that Dilma Rousseff was aware of Operation Car Wash and refused to shut it down. Time passed and in 2017, a similar corruption pyramid appeared to be playing out in Petrobras’ associate company, Odebrecht. It was discovered that eight members of Temer’s administration were involved in illicit activities tied with Odebrecht. Odebrecht was known for dedicating a whole department to corruption— the Division of Structured Operations— which was responsible for around $800 million in illegal payments of over 100 contracts in more than twelve countries through the course of fifteen years. There was an alleged recording of Temer discussing money to silence Cunha, hinting at his involvement in this corruption pyramids, but Temer denies all allegations. Brazil is currently led by Jair Bolsonaro who was elected towards the end of the Car Wash investigation. His campaign was based on fighting against corruption but has leaned more towards promoting populism, exploiting the Amazon region to profit landowners and go over the justice system’s head. Bolsonaro is not exempt from his predecessor’s corruption allegations given that he is also accused of salary splitting while some of his family members, like his son Carlos Bolsonaro, have been involved in corruption investigations as well. Organized Crime and Corruption Reporting Project claims that while Bolsonaro himself has not been accused of corruption, he has surrounded himself with corrupt people coupled with the destruction of the Amazon forest and his inability to truly placate corruption in Brazil. Lula has been recently cleared of all charges, opening up the possibility for him to reenter politics. He will be retried in a court in Brasilia to confirm the annulment of his charges.
Brazil has had a complicated relationship with clean democracy. Time and time again, corruption seems to seep through the walls of the revered governmental buildings, tainting the walls with dirty and illegal money. The country has been extremely hard hit by the COVID-19 pandemic, as Bolsonaro has brushed off the virus as another simple cold. As politics and bureaucratic proceedings become increasingly confusing and convoluted, the only hope is that Brazil’s politicians will adopt a mindset of transparency and progress, but until then, the eyes of the media are upon them.
Written By: Carolina Mejia Rodriguez
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