INTRODUCTION: THE PARADOXICAL RELATIONSHIP BETWEEN THE PRIVATE AND PUBLIC SECTORS IN BRAZIL
In her recent book A Organizafao: A Odebrecht e o Esquema de CorrupQao que Chocou o Mundo (The Organisation: Odebrecht and the Corruption Scheme that Shocked the World),[919] Malu Gaspar, a leading journalist, revealed, with breathtaking details, the rise and the rapid fall of the biggest construction contractor in Brazil, Odebrecht, which had ramifications in several countries all over the world, but particularly in Latin America and Africa.
It became a central player in so-called â€?Operation Car Wash’,[920] a massive criminal investigation involving various politicians, including the presidents of both Houses of Congress, Brazil’s largest parties, and CEOs and CFOs of the country’s biggest companies, among them Marcelo Odebrecht, Odebrecht’s CEO, and many of his entourage. Other countries also filed charges against the company. It was, for example, through a leniency agreement made public by the US Department of Justice and which involved Brazil, the US and Switzerland that the world learned how corruption was a standard practice in many of its operations and how widespread it was. That agreement showed that â€?from 2003 to 2014, the company paid 788 million dollars in briberies to Presidents of the Republic and government employees of eleven countries in Latin America and Africa, besides Brazil...’.[921] Such an amount did not include illegal cash transfers to political campaigns, which would increase it to approximately 900 million dollars. It was called the biggest leniency agreement ever made and it imposed a penalty on the company of 2.6 billion dollars.[922]Odebrecht’s rise and fall is possibly the most shocking of any private company in Brazilian history. It reveals how this symbiotic relationship between private companies and public officials has been successful in mutually beneÂfiting from corruption: politicians obtain large amounts of money for their political campaigns through slush funds or for their own pockets, and private companies have their access to normally high valued public contracts facilitated through legal benefits, restrained competition via cartel schemes, tax exempÂtions and other strategies to increase profits such as overbilling.
On the other hand, Odebrecht’s fall is a sign that some institutional reaction against such practices has gained traction in the country. The fact that not only top executives from Odebrecht and other private companies but also some bigwigs in Congress were convicted and arrested is certainly not an expected outcome for a country where impunity of economic, political and legal elites has long prevailedThe Odebrecht case is especially shocking because of its range and the amount of money involved, but not because of how corruption has operated in the country. It is the corruption playbook seen in various parts of the world whereby big contractors develop a symbiotic relationship with politicians in order to obtain mutual advantages. Yet it is revealing of some contrasting analÂyses of the quality of the rule of law in Brazil, and this transforms it into a fascinating case in which we can explore some ambiguities raised by prominent comparative indicators of the rule of law, and specifically corruption indicaÂtors. Odebrecht is one of only a few cases in which members of the economic and political elites were finally punished and, as part of â€?Operation Car Wash’, it is at the centre of developments that led to a generalised anti-political sentiment,[923] which, in turn, paved the way for the rise of a populist president in the country. More interestingly, it is also revealing of how punishment of elite groups - which has always been the Achilles heel of Brazil’s mechanisms of horizontal accountability[924] - can rapidly and efficiently develop resistance and suffer counterattacks that are detrimental to the rule of law.
This chapter develops as follows. First, it introduces some data on corrupÂtion and how interpreting such data may raise more doubts than certainties. The main argument - as the Odebrecht case already suggests - is that there is a structural difficulty in correctly assessing the level of breach of the rule of law when it comes to entrenched corruption in public-private relationships: corrupÂtion exists and is highly entrenched, but nonetheless Brazil features one of the most robust oversight and accountability frameworks in Latin America,[925] which has provided growing evidence of its capabilities in challenging corrupted pracÂtices.
Curiously enough, though, Brazil is persistently ranked by some leading corruption indicators as one of the most corrupt countries in the region, exactly when such impactful cases have become general knowledge. Secondly, it will discuss the role of some key accountability institutions in combatting corrupÂtion, the major movements that gained momentum in this direction and how they may have paradoxically helped destabilise the political arena, leading to a serious backlash.Finally, this chapter delves into the involvement of organised civil society in fostering citizenship and democratisation. The main argument is that the private sector has had a paradoxical relationship with the public sector, either through historical clientelism or through demands for more fairness in public instituÂtions, and such a paradox is directly found in the country’s longstanding use of law to construct and maintain inequality. While there is a visible longstandÂing connection between many corporations and sectors of the industry and the public sectors through distinct forms of clientelism, there is also a growing moveÂment of organised civil society in favour of new policies aimed at democratising the institutional framework and designing strategies to tackle the longstanding inequalities in the country. This chapter also examines the role, structure and dynamics of the media, which, though fairly free, are notably concentrated and influential in Brazil. The power of the new media (Facebook, Twitter, WhatsApp, etc) is also addressed by focusing on their impact on Brazil’s democracy.
II.