The Odebrecht Corruption Scandal: the End of the World Plea Deal

Both positive and negative aspects undoubtedly characterize Latin America, and one of the negatives is corruption. Odebrecht is the most outstanding example of this, a corruption scandal that emerged from a money-laundering scandal. Odebrecht's statements would lead to the collapse of the already very unstable Latin American governments. In 2015, the president of one of the largest construction companies in Latin America was convicted of money laundering in the Brazilian Lava Jato (car wash) operation, related to the well-known Brazilian oil company Petrobras, as part of his statement towards The US government, Marcelo Odebrecht along with other Odebrecht executives carried out what would be known as “the end of the world plea deal,” thus uncovering the largest corruption scandal not only in Latin America but in the world.

The end of the world plea deal involved senior officials from at least 12 Latin American countries, as well as some African countries, accusing them of taking bribes to give Odebrecht the most critical public works contracts in those countries. In that article, we will review all the essential details that this case has and the political impact of the case country by country.

According to the investigations carried out after said declaration, it was discovered that between 2005 and 2014, the construction company made millionaire bribes in a wide variety of countries, including Brazil, Peru, Ecuador, Colombia, Venezuela, Argentina, Guatemala, Panama, the Dominican Republic, in Latin America, in addition to Angola and Mozambique, in Africa, as well as the United States.

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The bribes that the partners of Odebrecht gave to the officials were for them to execute multimillion-dollar contracts and infrastructure works in favor of the Brazilian construction company, which is the one responsible for building the infrastructure for the 2014 World Cup, the 2016 Olympics, and the metro system in Caracas, etc.

Fireworks at the Maracana stadiums which was involved in the Odebrecht scandal. Pascal Le Segretain/Getty Images

Some of the countries in which the case had the most political impact are mentioned below.

Brazil

In Brazil, where the construction company is from and where it all started, the money laundering operation is known as Lava Jato, which led to the discovery of large corruption networks, has imprisoned essential people in business and politicians since 2014, this includes former presidents Luiz Inácio Lula da Silva (president from 2003 to 2011), who has been serving an 8-year and 10-month sentence since April 2018 for corruption and money laundering; Dilma Rouseff (president from 2011 to 2016) who was dismissed from her position as president in 2016, for her involvement in Lava Jato and for receiving $ 48 million from Odebrecht; and Michel Temer (president from 2016 to 2018), who has already been put in preventive prison twice and released.

Peru

In Peru, the Odebrecht case led to a political crisis. Pedro Pablo Kuczynski (president from 2016 to 2018) was forced to resign from the presidency after being linked to Odebrecht bribes; today, he is under house arrest.

Also involved are ex-presidents Alejandro Toledo (president from 2001 to 2006), who fled to the United States, and Ollanta Humala (president from 2011 to 2016), who spent nine months in detention. The case also led to the suicide of Alan García (twice president, 1985-1990 and 2006-2011) when he was to be arrested as part of the Odebrecht investigations against him.

Ecuador

Meanwhile, in Ecuador, Jorge Glas (Vice-president from 2013 to 2018), since 2017, has been serving a 6-year sentence for the crime of illicit association in the Odebrecht corruption case. Other politicians have also been involved in the case.

Venezuela

Venezuela is supposedly the country where Odebrecht gave the most bribes, around 98 million dollars in bribes to officials. As a result, the Venezuelan Supreme Court in exile sentenced Nicolás Maduro to 18 years in prison. However, it did not happen due to the great crisis that the country is experiencing.

In addition, there are specific projects pending to be built or finished in the country, such as highways, bridges, and subway lines.

Mexico

In Mexico, Odebrecht transferred more than 10 million dollars between 2010 and 2014 in exchange for contracts with the productive oil company of the State, Pemex. Emilio Lozoya (general director of the company from 2012 to 2016) also faces a legal process for this and the Fertinal case. Lozoya fled to Spain but was extradited in 2020 and faced Mexican justice.

In turn, he accused former presidents Enrique Peña Nieto (2012-2018), Felipe Calderón Hinojosa (2006-2012) and Carlos Salinas de Gortari (1988-1994) among other politicians of receiving bribes from Odebrecht too. However, no action has been taken against them.

Conclusion

The Odebrecht scandal undoubtedly shook the Latin American governments. However, if something is essential to rescue from what happened, it is the actions that various governments have taken, since before, it could seem impossible that the removal of a president or a judicial process could take place against this.

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The Odebrecht is just one of the cases of the Latin American reality that will be discovered over time. However, with this case, it is possible to see the failures in the system and how corruption has very colluded within governments.

Latin America continues to have its failures, not for nothing, this is the largest corruption scandal in the world, in some countries, cases of impunity continue to be presented, and it is very likely that we still do not know all of those involved, as well as another case of corruption of this magnitude, may be occurring at this very moment.

Protests against corruption and Odebrecht in Santo Domingo, Dominican Republic in 2017. The sign says ‘Wanted corrupted senior’. Reuters

Written by Dulce María Hernández Márquez, Associate Fellow on Latin America Politics (Mexico)