As Brazil's 'Car Wash' case surfaces more corruption, will scandal fatigue slow progress?

A wave of investigations has pushed Latin American voters to demand change, and the justice system is starting to respond. For reform to take root, however, the movement needs to sustain its energy.

A small group of men and women marched along Copacabana Beach here on a recent sunny Sunday afternoon, carrying banners and yelling out the name of a federal judge as though he was a soccer star.

“Moroooooooo,” chanted the Brazilian fans of Judge Sergio Moro, who has spearheaded the prosecution for the country’s largest corruption case in history.

Last month marked the three-year anniversary since the Lava Jato, or Car Wash, scandal first rocked Brazil. The graft scheme siphoned more than $3 billion from the state-run oil company Petrobras into the pockets of government officials. It has led to the convictions of 89 politicians and business people, totaling more than 1,300 years of prison time sentenced.

Public protests have played a key role in keeping the case top of mind, and sending a message to politicians. But recent marches have been significantly smaller, raising concerns about possible “corruption fatigue” in Brazil and across the region as high-profile scandals continue to emerge.

“It’s one day at a time – there’s a lot of change,” says Marcia Wallier, a pediatrician and one of the organizers of this day’s protest. “People are learning about their citizenship; Brazilians traditionally aren’t so involved in politics. It looks like they’re getting tired, but they’re not,” she says.

The Car Wash scandal caught global attention when it exploded, overshadowing events the nation had hoped would put it on the map for more positive reasons, like the 2016 Summer Olympics. It reached far beyond national borders – implicating and embarrassing leaders around the world, but also setting an example of what a well-funded judicial system can accomplish. 

The cases helped confirm that new norms about transparency are taking hold, and highlighted new prosecutorial tools, like plea bargains. But as investigations drag on, many question how to keep the public engaged and hopeful that change can come, however slowly.

“There’s an enormous effervescence in Latin America around corruption at the moment,” says Kevin Casas Zamora, the former vice president of Costa Rica, who recently co-authored a report on the changing context of corruption in Latin America for The Inter-American Dialogue. “A lot of the actions we’re seeing in Latin America in regards to corruption are happening because of social pressure,” he says.

“But, when you increase transparency, you harvest a succession of scandals,” says Mr. Casas, who is now a senior fellow at the Dialogue. “This might prove very healthy for democracy in the long run, but in the short run it’s having a devastating effect” on public patience and confidence.

Changing expectations

Latin Americans have long accepted corruption as a given: from collusion between dictators and private companies during the 1980s in Central America to graft plaguing each administration since democracy was restored in Brazil.

“Here in Brazil, corruption is very engraved; it’s from father to son,” says Salete Medeiros, a retired assistant at Rio’s city hall, now out protesting.

In recent years, however, the environment has started to shift. In part, that's due to investigative reporting, the prevalence of social media, whistle-blowers, and stronger judicial institutions, according to The Inter-American Dialogue's report. Over the past two decades, more nations have signed on to international corruption and transparency standards like the UN Convention Against Corruption or the Open Government Partnership, of which 14 Latin American countries are signatories and have submitted action plans. There has also been greater investment in judicial systems and national oversight laws.

As more large-scale cases of graft have come to light, it’s easy to feel like corruption is getting worse. But “I’m very persuaded by the notion that these [acts of corruption] have been happening for a long, long time,” says Casas. “The big difference now is that we know about it. Because there’s more transparency and the information that gets out there circulates much faster than before.”

Then there's the public's voice. Anticorruption movements mobilized millions of Brazilians to the streets since the investigation began. In March 2016, Brazil saw its largest street protest since the military dictatorship fell in 1985, with roughly 3 million participants in more than 200 cities.

“Legislators never legislate preemptively. They legislate reactively, if at all. There is very little incentive if there is no visible social pressure for this,” says Casas.

And along with the uptick in exposure of high-profile cases has come an “expectation of change,” says Christopher Sabatini, a lecturer at Columbia University’s School of International and Public Affairs in New York.

But that can be a double-edged sword, he adds: If public pressure and reliable news coverage are key to keeping corruption cases chugging along, but the investigations continue to unearth more evidence of corruption, a sense of apathy emerges.

“There’s still a lot more to go in Lava Jato. I’m getting tired and frustrated,” says Beatriz Cunha, a retired pharmaceutical consultant in Rio. “It’s frustrating to come here and see so few people. Everyone complains about our political situation, but few do anything about it. I want a better Brazil, and this public pressure helps continue the investigation.”

Lessons learned

The Car Wash brought Brazil to its knees, slamming confidence in the already faltering economy and irreparably changing the political landscape. 

And its reach has kept growing. Last December, for example, the Brazilian construction firm Odebrecht revealed to authorities in Brazil, the United States, and Switzerland that it paid $788 million in bribes related to public works contracts over the course of nearly two decades – information that came to light thanks to Car Wash. Not counting Brazil, about half of the illegal payments were made to officials in nine Latin American countries. The case has now implicated high-level officials, including two sitting presidents; spurred investigations in Argentina, Colombia, Chile, the Dominican Republic, Ecuador, Guatemala, Panama, Peru, and Venezuela; and led to the protests, calls for leaders to step down, and a demand for more transparency in how private-public partnerships are made. 

But the Odebrecht investigations got off the ground thanks to a new tool in the region, implemented in Brazil starting in August 2013: plea bargains.

The investigation has relied heavily on these agreements, with the scheme’s key players having handed over large portions of the evidence in exchange for much-reduced sentences. Three years in, the investigation has hinged on more than 150 plea bargains.

The Car Wash investigations have created a “good model,” says David Fleischer, a political science professor emeritus at the University of Brasília – although, for some politicians, it may have simply been a lesson in how to “be more careful.” Brazil, since its transition to democracy, has poured money into its justice system, strengthening its independence, and better training public prosecutors. All of these changes have come to bear fruit over the past three years of intense corruption investigations. But, Dr. Fleischer adds, “What has really helped was plea bargains.”

The Odebrecht corruption across the region, for example, was exposed due to a plea bargain struck with Marcelo Odebrecht, the company head, who is currently in prison.

Plea bargains have not historically been a part of the Latin American justice system. But in recent years a handful of countries have been talking more seriously about implementing similar tools, says Casas. Most prominently, that includes Argentina, which has allowed plea bargaining under some conditions in the past, but is talking about expanding the law to better tackle white-collar crimes.

The Car Wash has also illuminated the need for better oversight of public-private partnerships in Latin America, says Sabatini.  

“Everyone knew that Odebrecht was doing this,” he says. “Collusion was clear from the beginning.”

Chile, Peru, and Colombia have approved laws in recent years that make it harder for private contractors to renegotiate partnerships with the government after a project has been awarded. “If more governments put in place strict rules for the granting of public infrastructure contracts, including technical oversight” and the ability to see on what grounds a contract is granted, much like the current “and imperfect” US system, that will be the “real proof that Latin America is learning from the Car Wash,” Sabatini says.

But, “political systems, the elites, [they] are not particularly interested in replicating the [corruption] investigations seen in Brazil,” says Casas. “It will come down to whether there is enough social pressure for this to happen.”