A giant corruption scandal that started with Brazilian construction giant Odebrecht has now engulfed several Latin American governments. The total tally of known bribes totals in the hundreds of millions of dollars.
Yet most Americans, distracted by constant rhetoric from their new president about “bad hombres” trying to cross the Mexican border, are woefully unaware the debacle is even taking place.
Unlike the Panama Papers, whose revelations got considerable media coverage in the United States, this scandal has fallen through the cracks – even though these are the real bad hombres Trump should be worried about.
“This is corruption on a global scale, with Odebrecht being the hub of a wide-reaching network,” says Monica de Bolle, senior fellow at the Peterson Institute for International Economics (where I previously worked) and a former economist at the International Monetary Fund.
So in the interest of public information, here’s a breakdown of how a bribery probe uncovered a pit of corruption so deep it presents an ongoing threat to political stability in the region.
Earlier this month, Peru’s President Pedro Pablo Kuczynski asked US President Donald Trump during a phone call to deport the country’s fugitive ex-president Alejandro Toledo. A Peruvian judge has issued an international arrest warrant for Toledo, who denies he took $20 million in bribes from Odebrecht.
Now construction contracts all around Latin America are under scrutiny, and scores of other politicians turned out to have been complicit or are under suspicion.
The Odebrecht scandal comes on the heels of Brazil’s “Car-Wash” investigation of kickback schemes at the state-run oil firm Petrobras.That probe has led to charges against nearly 250 people and the arrest, trial and conviction of some of the Brazil’s most prominent businessmen and political figures.
The firm struck a December agreement with the US Justice Department to pay a world record $3.5 billion fine after admitting it paid $788 million in bribes to score major construction contracts in 12 countries.
In Colombia, prosecutors have alleged Colombian President Juan Manuel Santos’ campaign received $1 million in potentially illegal contributions from Odebrecht. Argentina’s top spy, an ally of President Mauricio Macri, is also under investigation.
“I think there could be a lot more damage — it has already ensnared Colombia and Peru,” said de Bolle. “Odebrecht is Brazil’s largest construction company, but it also has a massive oil and gas operation, and is present in much of South America, as well as Portuguese-speaking countries in Africa.”
A tangled web indeed. How it all unravels is anyone’s guess.