An Unending Cycle of Crime and Corruption
Brazil has long been known for its corrupt politicians, unfair government, and dwindling economy. Yet, nothing hit the news quite like Operação Lava Jato (Operation Car Wash), the biggest money laundering scandal in the country’s history involving politicians, business executives, and multi-billion-dollar companies. Money laundering has been an ongoing problem amidst the Brazilian government and the country’s most esteemed companies. For such a large-scale problem, the root of it must be just as complex: political corruption. Something seemingly ingrained in Brazilian culture, so technically speaking, could there ever be an end to it? That being said, money laundering is just a small tool in a larger scheme of a plethora of illegal activities that all stem from political corruption. Looking to other countries who have overcome corruption we will be able to begin considering methods to which we can begin to bring an end to corruption in Brazil.
Operação Lava Jato began as a complex and extensive investigation in Curitiba, a southern city in Brazil that extended to other major cities in Brazil, but what now has turned into the biggest anti-corruption effort in the country. The basis of the money laundering operations uncovered in Operation Car Wash initially “focused on doleiros (black market money dealers), who used small businesses, such as petrol stations and car washes, to launder the profits of crime” (Watts). The Car Wash’s initial goal was to investigate small money laundering operations, more specifically those who illegally sold foreign currency and rather than registering their dirty profits, they would set up small businesses in order to “clean” their money so that the money would appear to have come from legal means. However, there was a bigger scheme behind the money laundering of the doleiros; investigators discovered that the doleiros were working for a business executive at the multi-billion-dollar oil corporation Petrobras in Brazil, thus leading investigators to uncover interconnected plots of corruption within the government and the oil company Petrobras. What began as a plot to uncover money launderers and the root of their crimes turned into investigating political corruption amidst Brazil’s most powerful leaders and most affluential business models. Most recently, the son of Brazil’s current president, Flavio Bolsonaro, who holds a seat in the Brazilian Senate, was charged with graft and money laundering through a national favorite chocolate store named Kopenhagen. Well after Operation Car Wash was put to an end, new cases of money laundering and other illegal activities involving politicians still arise.
Abuse of power, bribing justice officials, purchasing electoral votes, are all modes of political corruption. In recent years, Brazil has had various scandals, investigations, arrests, and convictions relating to one of these serious crimes connected to political corruption. The cycle of corruption, lies, crimes, and injustice never ends when there are so many things interconnected, making it impossible to tackle them all at once. Brazil has a long history of political corruption ever since the fall of the dictatorship of Vargas in the 1940s (Fogel). Thus, Brazil has been operating via a corrupt government for nearly a century. Despite promises of reform or opposite parties being elected, the injustices and illegalities remain the same. The victory of Jair Bolsonaro in the 2018 elections looked promising as perhaps a military dictatorship would be able to turn around the corrupt government, but as time passed it was evident that corruption remained as he was later accused of bribing cabinet officials. As Benjamin Fogel describes it, Brazil uses “corruption as a mode of rule,” it is so prevalent in government that it feels as though Brazil is incapable of operating without it.
The repercussions of the findings of Operation Car Wash were extensive, severely affecting the country’s economy, “The alleged involvement of several politicians has complicated government response to the country’s economic crisis. GDP shrank by almost four per cent in 2015,” not to mention the growing inflation, “inflation has reached 10.7 per cent with the bank rate a dizzying 14.25 per cent” (Nicholson) Efforts to avoid money laundering are seemingly inevitable if the country is unable to control the financial system which keeps track of all monetary transactions between the government and other institutions (Oliveira). If politicians continue to hold the power to evade the system, or if doing so fails, bribe officials to evade punishment, then money laundering cannot be resolved through legislation or other government actions. Furthermore, in the Quarterly Journal of Economics Paolo Mauro provides evidence that there is a correlation between a country’s bureaucratic efficacy and economy, which he uses to prove that “corruption lowers private investment”. According to Mauro’s research, Brazil’s bureaucratic efficacy index ranges between 4.5 and 5.5 which is considerably low, which he then utilizes to compare it with the country’s GDP and GDP per capita and combined with data from other countries demonstrates a correlation between bureaucratic efficacy index and the country’s economic efficacy. Various sources prove that political corruption has a direct connection to economic decline, thus explaining Brazil’s inability to grow economically.
Suggesting that new legislation should be passed in order to combat money laundering in a severely politically corrupt country would be useless. Brazil has a plethora of anti-money laundering laws already and yet, despite this money laundering scandals continue to be uncovered. Following a large money laundering scandal in 1991, Brazil’s first Money Laundering Act was passed in 1998 in attempt to curb money laundering at the time (Millard 3). However, just over a decade later Operation Car Wash was initiated, revealing money laundering and political corruption. This demonstrates that greedy politician and business executives are willing to disregard laws despite the consequences that might follow in order to satiate their greed. Therefore, new legislation would not be an effective solution to combat money laundering. Although efforts have been made to combat money laundering in the form of legislation and anti-money laundering regimes, money laundering will never fully be abolished until corruption is resolved. At the end of the day, corruption is the true culprit: greedy and dishonest politicians, bribed officials and business executives. It is an unending cycle of crime and corruption.
The solution to money laundering and all of its causes and repercussions is not a simple one: ending political corruption. The task is seemingly impossible, but by comparing how virtually corruption-free countries operate and thrive, it might give us insight on how to possibly take on this challenge. Countries such as the Netherlands, Switzerland, and Denmark were highly ranked as having some of the least political corruption based on the corruption perception index (CPI) in 2020. As stated in an article in Study in Denmark, Denmark was ranked as the least corrupt country in the world, largely due to “Denmark’s high degree of press freedom, access to information about public expenditure, stronger standards of integrity for public officials, and independent judicial systems,” many of which Brazil lacks. Despite promises of change and honesty, the public is already aware that many are false promises and as a politician enters office, they are already expected to be corrupt. According to studies, public trust in government in Latin American countries (many of which are also extremely corrupt) is very low, 63% of Brazilians said they have low trust in government (Bachelet). The reason for this lack of trust is evident, corruption runs wild within the Brazilian government, and Brazilians are aware of that. Simply comparing 1st world countries and their nearly-perfectly ethical governments is not enough to help lead us to a solution to the dishonesty, greed, and injustice running wild in the Brazilian government.
Much like Brazil, Indonesia has had a long history of political corruption, at one point ranking last in Transparecy.org’s Corruption Perception Index list, however in 2018 they jumped up to 89 out of 180, a tremendous increase in just a few years (Blank). In his book Strategies for Preventing Corruption in Indonesia, Rudy Harahap advocated for a four-step strategy to eradicate corruption. Throughout his book, Harahap emphasized the need to gain support from the public. However, it was only in recent years that Indonesia truly succeeded in its efforts against political corruption. In 2002, Indonesia founded its Corruption Eradication Commission, shortened as KPK in Indonesia, and since its founding it has set a record of “a conviction rate of nearly 100 percent, and over 1,000 corrupt public officials sentenced” (Blank). What is unique about the KPK is that it is an entity separate from the police and the government, making it less susceptible to corruption.
While Indonesia may not rank as high as Denmark or Switzerland, it has demonstrated great progress, and if anything, it has shown that there is hope for abolishing corruption. Like Indonesia, it might take Brazil years, maybe decades to truly accomplish a corrupt-free government, but little by little progress can be made, and little by little the country can become a better one. Taking a page out of Singapore’s book, Brazil should create an institution designated to combating corruption that is separate from the police and the government that cannot be so easily bought. And while reaching the corruption-free levels that Denmark has seems like a stretch there is still much we can learn from highly advanced countries like Denmark, Switzerland, the Netherlands.
Corruption has long plagued Brazil for nearly a century; with it a multitude of illegal actions within government and elite businesses have followed. An operation that began as a plot to unveil a string of money laundering ended up revealing corrupt politicians and business executives, giving rise to an ongoing fight against corruption. Many efforts that were put in place in the form of legislation failed because of the excessive amount of corruption within the government, allowing the culprits to bypass laws or evade punishment. However, we can learn from other countries who are not corrupt or who are also actively fighting against corruption and apply that knowledge within Brazil in order to advance our own fight against corruption.
