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Analysis
Latin America's saga of corruption

Latin America's saga of corruption

'We can dare to hope the people will say: enough!'

by David Smith in Buenos Aires

Thu 29 Jun 2017

Striking developments in the last few days in Latin America's leading economies, Brazil and Argentina, highlight how the region faces its most critical chapter yet in the battle against large scale political chicanery.

In Brazil, President Michel Temer has been formally charged with corruption for allegedly arranging bribes totalling $R38m ($9m). He joins one-third of his cabinet and four former presidents under indictment in a scandal endangering his government's proposed economic reforms.

In Argentina, by contrast, former President Cristina Fernández de Kirchner is defying corruption charges by declaring herself a candidate in October's mid-term elections. She is seeking a Senate seat which would grant her immunity against arrest.

'On the face of it, this is two steps forward in Brazil in the fight against corruption, then one step back in Argentina,' according to a top Argentine prosecutor working closely with the Brazilians. 'The variable is public opinion after months of drip-drip revelations in both countries about how our leaders have broken the law.'

The strategy of prosecutors in Brazil suggests the judiciary there has no intention of withdrawing the first charge against the president. With Temer's party suggesting they control enough seats in Congress to prevent him going on trial, lead prosecutor Rodrigo Janot has made it clear he will file one charge after another to force successive, arduous votes.

'This could be political death by 1,000 cuts,' to quote one of Temer's erstwhile political allies, himself under investigation. 'First they charge the president with taking bribes. Then they will come with obstruction of justice. After that, embezzlement. Every charge will drain votes away from him in Congress.'

Temer's expansive economic package, ranging from reforms to welfare, pensions and deregulation of business, has already been smothered by scandals. Key figures in Temer's coalition predict much-needed labour reforms will be thwarted if they are obliged to vote on charges against the president.

In Argentina, Fernández' decision presages a bitter election campaign which will greatly impact the prospects of Mauricio Macri's government delivering its economic programme. Many commentators see President Macri's reforms as the last chance to reanimate the country after years of high inflation, deep deficits and endemic corruption.

Fernández is running for a Senate seat in the key province of Buenos Aires, home to almost 40% of the country's population. She is breaking away from the Judicialist party to form her own Citizen Unity alliance. 'That's potentially good news for Macri,' according to one of Argentina's veteran pollsters. 'Her rather obvious attempt to stay out of jail has her splitting the Judicialist vote. That opens the door for Macri's alliance to show they can stay in power and make these elections about clean government.'

As in Brazil, much depends on how the judiciary proceeds. Fernández and key associates from her eight years in power, as well as her two children, face a battery of charges ranging from illicit association to embezzlement and money laundering. Prosecutors say further indictments will be levied.

Fernández is betting that support around Buenos Aires, where her populist welfare programmes made her a heroine figure, will secure her a seat and immunity from arrest. By way of precedent, witness the way former President Carlos Menem, convicted of arms smuggling and embezzlement, has clung to his Senate seat to avoid jail.

'But in Argentina and Brazil we are shining a massive torchlight on corruption at the highest level,' to quote the Argentine prosecutor. 'In both countries we can dare to hope the people will say: enough!'

David Smith is a Member of the OMFIF Advisory Board and represented the United Nations Secretary-General in the Americas between 2004-14.

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