Operation Car Wash: How Brazil is battling corruption
Nov. 11, 2015, was a historic day for Brazil. Delcídio do Amaral, the senate leader of the governing Worker’s Party (PT), was arrested for trying to disturb a federal investigation.
He was recorded pressuring a person who was under investigation for corruption not to cooperate with the attorney general. They wanted to keep their names out of the corruption scandal. This is the first time that a senator has been arrested since the end of the military government in 1985. On the same day, Amaral’s assistant, his lawyer, and Andre Esteves, a banker, were also arrested.
Esteves is ranked as the 13th wealthiest person in Brazil, with a net worth of 9.07 billion reals ($2.29 billion). He was chairman, CEO and shareholder of BTG Pactual Bank, Latin America’s largest investment bank. After his arrest, he had to resign his position as chairman and CEO of the bank, and its stocks dropped by half of its peak value in November 2015 as clients pulled money out of the bank.
The arrests were part of an investigation led by the Federal Police of Brazil, named Operation Car Wash (Operação Lava Jato), which has been running since March 2014. The operation started as an investigation of money laundering through gas stations and car washes. The Federal Police discovered that this money laundering was part of a huge corruption scheme involving state-controlled oil company Petrobras, which holds a monopoly on oil exploration in Brazil. Petrobras executives accepted bribes from construction firms and awarded contracts at inflated prices in return. Those executives were supported by politicians, who were also receiving money to keep the scheme working.
Operation Car Wash is the largest investigation of corruption in Brazil’s history. So far, 494 people and firms have been investigated, including 57 politicians, and 119 people have been arrested. Those arrests include executives of the biggest Brazilian construction firms, such as Odebrecht, Andrade Gutierrez, Camargo Correa, OAS, UTC, and Egevix. Almost 60 people have been convicted until now.
Almost all of the politicians who have been investigated are from the government party or allied with it, including deputies, senators, and governors. President Dilma Rousseff has faced an approval rating of 9 percent, the lowest of any sitting Brazilian president since the early 1990s. This has led the country into a deep political crisis, which have worsened its economic recession.
On the other hand, Operation Car Wash has made Brazilians proud, Brazil can’t make progress with far-reaching corruption. Many corruption investigations were archived without solution, and Operation Car Wash is arresting people in a way that Brazil has never seen before. We have never seen a senator arrested for corruption. We have never seen so many politicians and executives in jail. These crimes used to go unpunished.
Operation Car Wash has recovered 2.4 billion reals ($610 million), and it still has more work to do. In 2014, Brazil scored 43 out of 100 points on the Corruption Perception Index, which indicates a significant level of corruption. According to the index, Brazil ranks 69th worldwide in terms of corruption.
We are far from perfect, but the work that the Federal Police and Brazilian Justice are doing has started a new phase in the fight against corruption. Brazilians may be tired of these issues, but they still hope that their country will someday be one of the best places to live in the world, with less corruption and more justice.