RIO DE JANEIRO, Brazil – A federal investigation into a kickback scheme at Brazil’s state oil company has, so far, ensnared 30 executives. In Sao Paulo, prosecutors accuse 33 businessmen of running a “cartel” to profit from the city’s subway system.
And in perhaps the most stunning turn of all, the oil and mining tycoon who once was Brazil’s richest billionaire is on trial for something that, until recently, was not even seen as a crime: profiting from inside information.
The aggressive crackdown on corruption by Brazil’s rich and powerful suddenly raises a once unfathomable question: Is this the beginning of the end for the nation’s entrenched culture of impunity?
Experts on Brazil’s governance and corruption give a cautious “yes.”
Brazil is witnessing an unprecedented flurry of legal activity, provoked by a growing middle class whose anger over corruption erupted in protests last year, and independent agencies increasingly capable of handling complex probes.
“This is all really amazing. We’re seeing extremely interesting developments for checks and balances,” said Carlos Pereira, a professor of public administration at the Getulio Vargas Foundation and one of Brazil’s foremost experts on corruption.
Prosecutors, federal investigators and government audit agencies, he said, “are now the three accountability musketeers in Brazil.”
The agencies’ efforts have been sweeping, with investigations hitting the nation’s most powerful political and business circles.
The kickback scheme at the oil company Petrobras allegedly included executives from Brazil’s powerful construction companies paying bribes for inflated contracts, with some of the money being funneled into the campaign coffers of the ruling Workers’ Party and their allies.
More arrests are expected, according to Attorney General Rodrigo Janot, who recently told an anti-corruption conference in Brasilia that everyday Brazilians have made it clear they’ll “no longer tolerate corruption and the gall of some bad public officials and private businessmen.”
Analysts have said tackling corruption is a key part of making Brazil, the globe’s No. 7 economy a true player on the international stage.
President Dilma Rousseff, who recently won a second term and is widely perceived by Brazilian voters as an honest politician, has vowed to take on the challenge. The charges levied in recent weeks in the Petrobras case, she said, would “forever change the relations between Brazilian society, the Brazilian state and private enterprises. The fact that this is being investigated in an absolutely open manner is immensely differential.”
The roots of the anti-corruption crusade date to 2005, when top aides of Rouseff’s predecessor, Luiz Inacio Lula da Silva, were accused in a series of media articles of paying lawmakers to support their legislation. That opened a long investigation into the cash-for-votes scheme, which ended in 2012 with convictions against more than two dozen people – the first time major political figures, including Silva’s chief of staff, were sent to jail.
The credit went to federal prosecutors, a widely trusted agency which has broad investigative powers. Congress was set to strip them of such authority until last year, when protesters across Brazil staged raucous anti-government marches, in part to denounce the corruption stealing their woeful public services of tax money.
A key rallying point for demonstrators was protecting the ability of prosecutors to investigate, a demand lawmakers quickly conceded. The victory has led prosecutors to dig deeper into corruption, causing the anti-graft movement to snowball.
The biggest fish put on trial so far is Eike Batista, the flamboyant mogul who once was the world’s seventh-richest man. His ongoing trial on insider trading charges is the first to make it to court in Brazil.
In Sao Paulo, charges are expected any day against 33 executives, mostly Brazilians working for international firms who allegedly ran the city’s subway system and its expansion project like a personal fiefdom.
The anti-impunity trend also has Brazilians reevaluating their past. A truth commission last week released its finding from a nearly three-year investigation into atrocities committed by the 1964-85 military regime, the first public accounting of that painful period. It’s renewed a sharp debate over a blanket amnesty law that has protected members of the junta from facing justice for killings, torture or disappearances.
Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Center for Scholars in Washington, said he thinks the Petrobras and Sao Paulo subway probes show Brazil’s anti-corruption tide is nearing a “critical mass.”
“I’m no ‘Pollyanna,’ but we’ve reached the moment where action has to be taken. And action to combat corruption is taking place – and we’re surprised by our own capacity to do what we’re doing,” he said.
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