Corruption has always been an inhibiting factor in the development of Latin American societies. Throughout history, several government officials, from multiple countries in the region, has been publicly condemned for participating in cronyism and graft schemes. However, the problem of corruption in Latin America does not rest solely on the actions of government officials, but also Multinational Corporations, as we can see in the Odebrecht scandal.

The Operation Car Wash, launched in 2014 in Brazil, was designed to investigate a scandal involving the state-owned enterprise Petrobras, with the claim that government officials were funneling public money towards personal enrichment and financing elections campaigns. With time, Brazilian officials discovered a massive web of corruptive practices beyond Petrobras, involving major corporations in Brazil, most precisely in the construction/infrastructure sector. In essence, companies were creating cartels, with the permission of the government, to curb competition from other companies involving public contracts. In reward, companies distributed a small percentage of “contribution” to local politicians. This scheme perpetuated through years and years, revealing how corruption still haunts Brazil.

This scheme expanded not only in Brazil but in other areas of Latin America and in other countries, mostly in Africa. It was revealed, out of plea bargaining, that the biggest multinational corporation in Brazil, the conglomerate Odebrecht, was paying bribes for politicians in Equador, Colombia, Venezuela, Cuba, and in Mozambique, in order to have access to large public construction contracts in those countries. In addition, it was discovered that Brazilian politicians, such as former President Lula, was lobbying in favor of the company for other governments, convincing them to hire the Odebrecht services for their countries.

This example is vivid in illustrating the vices of multinational corporations and politicians and is essential to understand how vested interests from powerful agents transpose boundaries and reach international levels, contaminating countries with corruptive practices. In short, this scheme illustrates the dangers of multinational corporations in bed with local governments and the reality of oligopolistic behavior by corporations. Indeed, the Odebrecht projects brought benefits to Brazilian and other Latin American countries in infrastructural terms, helping the lives of many. However, most of these contracts were plagued with corruption, which illustrated later that a lot of money could be used for reinvestment in the country instead of showing up in politician pockets, aiding in the lives of millions more. This example clarifies the need for a bigger regulatory system regarding the participation of Multinational corporations abroad in Brazil and Latin America.

Link: https://www.nytimes.com/2017/02/13/world/americas/peru-colombia-venezuela-brazil-odebrecht-scandal.html?_r=0