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The cost of corruption in Brazil

On 15 March thousands of Brazilians will take to the streets to protest corruption. The scandal unfolding at Petrobras, the country’s oil giant, has exposed a web of deceit that involved alleged bribery and kickbacks among top politicians and top businesses. Thirty-four sitting politicians and 18 companies linked to the scandal face investigations.

The people want answers. Corruption, as Transparency International has always said, is not a victimless crime.

The problems at Petrobras exacerbate an already weakened economy where jobs across many industries are under threat.

  • Petrobras has lost more than two-thirds of its market capitalisation in the past year.
  • 18 companies linked to the scandal face investigations.
  • The speakers of the Chamber of Deputies and the Senate face investigation.

Accountability

The people will be asking for accountability. Those who designed, used and profited from this corruption must face the consequences.

A strong deterrent, that is blind to privilege, both political and social, is the only way to limit (if not stop) a repetition of this sorry tale.

It is worth remembering that the Petrobras scandal, popularly known as Petrolão, or big oily, was being perpetrated at the same time that the Supreme Court was hearing testimony in another political bribery scandal known as the Mensalão, or big monthly payments.

The Supreme Court held firm to hand down prison sentences to those convicted in the Mensalão scandal. They must do the same for those convicted of corruption in the Petrolão scandal.

The framework to prevent corruption in Brazil is relatively strong on paper with the exception of whistleblower protection legislation.

Transparency International research on the state of corruption in Brazil suggests that the country has made good progress in the past three years passing key anti-corruption laws, but that it is stymied by a political system that makes the cost of entering politics too high. This only encourages corruption among the political classes.

It is alleged that some Petrobras divisions diverted 3 per cent of their value into slush funds for political parties. Mensalão was all about bribing politicians.

It is unlikely that Brazil’s president will be impeached now because of the Petrolão scandal. Under the Constitution that can only happen for misconduct in the current term. President Rouseff’s second term started in January.

Investigating and bringing to justice those involved in the Petrobras scandal can act as a framework for reform.

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