Weekly InSight: Brazil Elites and Organized Crime, Systemic Corruption or Mafia State?

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In our June 22 Facebook Live discussion, Senior Editor Mike LaSusa spoke with Matthew Taylor, an associate professor at American University, about recent developments in a massive, unfolding corruption scandal in Brazil.

LaSusa and Taylor began the conversation by discussing recent allegations lodged against Brazilian President Michel Temer, who has been investigated for appearing to encourage a businessman to engage in bribery as well as allegedly taking bribes himself.

Taylor explained that Brazil’s political system traditionally has depended on providing judicial impunity that allows politicians “to finance their campaigns by using instruments of state capitalism to collect bribes.”

However, he argued, the ongoing, expansive investigations — which have ensnared not only Temer, but many other powerful elites — “will shake the foundations of both the economic system … and the way of doing politics in Brazil.”

SEE ALSO: Brazil News and Profile

The multifaceted scandal, known as “Car Wash” (“Lava Jato”), began in 2014 as a fairly routine money laundering investigation. But as investigators unraveled the threads of the case further, their probes revealed the immense scale and sophistication of graft in South America’s largest country.

“Many people knew there was corruption in Brazil before this emerged. [But] I don’t think anybody had a sense of how organized it was. And nothing could prepare us as foreign observers or Brazilian observers for the incredible brazenness of some of these cartels,” Taylor said, refering to pacts between major construction companies aimed at “getting together to bilk the government.”

As an example of the complexity of the graft operations, Taylor brought up Brazilian construction giant Odebrecht’s “Division of Structured Operation,” which one US prosecutor called a “Department of Bribery.” Last year, Odebrecht admitted that the company had funneled almost $800 million in bribes through the unit, which was specifically created for that purpose.

However, Taylor emphasized that the Car Wash investigations have also provided evidence that many politicians were complicit in this graft and at times were “organizing these corrupt behaviors.”

SEE ALSO: InDepth Coverage of Elites and Organized Crime

In this context, Taylor and LaSusa discussed ongoing efforts by Brazilian elites to derail or water down anti-corruption initiatives like the Car Wash investigations. Taylor said that he was “deeply concerned” that anti-graft momentum might flag, bringing up the example of Italy’s “Clean Hands” (“Mani Pulite”) investigations, which eventually suffered from “corruption fatigue” as they dragged on for years, and in the end failed to eradicate graft from the political system.

Taylor noted that Brazil’s Car Wash investigations currently enjoy very high levels of popular support. But, he said, “what’s lacking right now is any kind of consensus on how to remake the system.”

LaSusa and Taylor ended by talking about the effects that the Car Wash scandal has had on the Brazilian economy, which only recently began to emerge from its worst-ever recession. Taylor pointed out that while the investigations have indeed resulted in many successes in terms of prosecuting corrupt actors, those prosecutions have hit some of Brazil’s biggest companies, forcing them to downsize their operations and disrupting investor confidence in the country. 

Watch the Facebook Live broadcast for the full conversation:

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