The Law Firm of Piacentile, Stefanowski & Malherbe LLP

Corruption in South America

There is no denying that corruption is a big problem in South America. In Brazil, Venezuela, and Bolivia, it is estimated that around $30 billion are lost each year to corruption. This is a huge amount of money that could be used to improve the lives of citizens in these countries. Corruption affects every aspect of life in South America. From education and healthcare to infrastructure and economic development, corruption has a negative impact. It creates an unequal playing field, where those with connections and power can get ahead, while the majority of people are left behind.

South America is no stranger to corruption. In fact, it is one of the most corrupt regions in the world. Corruption is a major problem in Brazil and Venezuela, two of the largest and most populous countries in the region. Corruption has led to economic decline and political instability in both countries. Corruption also fuels organized crime and violence. Drug trafficking, human trafficking, and other illegal activities are often linked to corrupt officials who turn a blind eye to these activities. This makes it difficult for law-abiding citizens to get ahead and creates an environment of fear and insecurity.

One of the ways we can see how corruption is spread across the continent is by utilizing Transparency International's Corruption Perceptions Index ("CPI"). The CPI measures corruption in different regions and countries of the world using various data sources from reputable institutions like the World Bank and the World Economic Forum, as well as, many corruption surveys and local assessments. Looking at the CPI's 2021 rankings for the continent, Brazil, Bolivia, and Venezuela are among the most corrupt countries in South America.

In the case of Bolivia, corruption is so rampant that it has been called an accepted part of life in the country and can be found in all levels of society, with the judiciary branch of the government being seen as the most corrupt sector as many of the decisions taken by the courts are clearly influenced by bribery. It reached a boiling point in 2014 and 2015, with President Evo Morales calling for a referendum designed to root out corruption in the judicial system and the Senate asking the attorney general to suspend 300 out of 508 public prosecutors for corruption and other offenses. Only 45 were disbarred. This, however, represented double the amount disbarred in prior years.

Venezuela is the lowest-ranked country on the continent for corruption, according to the CPI. Corruption is such a common part of daily life that a 2014 poll found that 76% of Venezuelans believe that corruption is widespread in their government. People were so convinced of the corruption that in 2014 and 2017, they had massive countrywide protests calling for the corruption to stop. This of course did little to reduce corruption as there have been many high-profile cases since. For example, in 2019 it was revealed that millions of euros were transferred from a state-owned oil company to Investbank, a small Bulgarian bank that triggered many money laundering flags.

In Brazil, as recently as 2014, the country's biggest corruption scandal was revealed thanks to "Operation Car Wash." Over 30 individuals were arrested for corruption. Among the arrested were the CEOs of some of the biggest companies in the country. Senators, Ministers, and then-President Dilma Rousseff were also implicated. These arrests would set in motion the events that would lead to President Rousseff's impeachment and removal from office. Operation Car Wash also revealed how the country's biggest enterprise, Petrobras, was being used for virtually every type of governmental corruption, from kickbacks to get contracts, to money laundering and directly stealing money from Petrobras. In fact, when Petrobras released its audited financial reports for 2014 it revealed that $2.1 billion were paid in bribes and there were $17 billion in write-downs due to overvalued assets used to hide fraudulent activities

South America has a long way to go in tackling corruption. But there are some signs of progress. In Brazil, the "Operation Car Wash" investigation has led to the arrest of several high-ranking officials and is helping to clean up some of the country's institutions. In Venezuela, civil society groups are working together to expose corrupt officials and demand accountability. And in Bolivia, a new law requires public officials to declare their assets, in an effort to prevent corruption. There is still a lot of work to be done, but if progress continues to be made, then there is hope for a brighter future for South America.