16 May 2024 –

In the mid-2010’s, Latin America was rocked by corruption scandals related to a Brazil-based multinational company called Odebrecht. The company had allegedly maintained a parallel account to obtain public procurement contracts and contribute to electoral campaigns. Although the case was uncovered through efforts of Brazilian Law enforcement in the framework of “Operation Carwash” (“Lava Jato”), subsequent investigations by the U.S. State Department and other regional law authorities, revealed that its impact spanned throughout Latin America and parts of Africa. In the decade following these investigations, the Odebrecht corruption case has directly and indirectly implicated officials and businessmen from Angola, Argentina, Brazil, Colombia, the Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, the United States, the Dominican Republic and Venezuela..

The case had enormous repercussions: the U.S. Department of Justice convicted the company for alleged payment of bribes in more than 100 public works projects in 12 countries. It is estimated that the total value of bribes paid by this parallel scheme exceeds US$ 788 million. Furthermore, several high level politicians, including Presidents and Ministers have been accused of receiving bribes. Several political candidates in Mexico, Argentina, Colombia and Panama have been accused of receiving campaign funds from Odebrecht’s “parallel account” as well. The scope of the Odebrecht case surpases many of Latin America’s most infamous corruption cases and to this day, links between public officials, candidates and Odebrecht are still being investigated. 

Members and affiliates of the UNCAC Coalition from Latin America and the Caribbean came together on 2 May 2024 to discuss the impact of the Odebrecht case in the region. Representatives from TI Brasil (Brazil), Participación Ciudadana (Dominican Republic), and Transparencia por Colombia (Colombia) spoke about the state of the Odebrecht case and its impact in their countries. Together, we explored how Latin American civil society can prepare for big, regional corruption cases to ensure the corrupt are held accountable in these cases.

An Odebrecht 2.0 in the Dominican Republic?

Claudia Alvarez from Participación Ciudadana spoke about the impact of the Odebrecht case in the Dominican Republic. The Dominican Republic became the stage for the second highest amount of bribes paid by Odebrecht according to court testimony, allegedly amounting to US$ 92 million. Crucially, once the investigation had begun in Brazil, Odebrecht based its Office of Payment Restructuring in the Dominican Republic because, according to court documents, the country provided the most protections for the company.

The presentation revealed that the case of the Dominican Republic is based around two campaign advisors for former president Danilo Medina (President from 2012-2020), who allegedly became middlemen for the bribes being paid as campaign contributions. In 2017, these advisors were charged with eight years of prison for money laundering and corruption in Brazil, and were charged an additional five years of house arrest for 19 counts of money laundering in the Dominican Republic. In 2017, Odebrecht was forced to pay 184 million dollars in fines to the government. Furthermore, due to several instances of evidence manipulation and pressures on investigating judges, two additional public officials were found guilty of corruption and sentenced to a total of 12 years of prison time.

Despite these developments, the National Attorney of the Dominican Republic has announced that his office is gathering further evidence to present a case for bribery and corruption of other public officials and Odebrecht partners. Claudia referred to this as “Odebrecht 2.0”, and she considers that it will be a test on the current administration to hold all responsible parties accountable. This Odebrecht 2.0 has already been mired in controversy, as the former prosecutor for the Odebrecht case has been accused of being involved in a large-scale public procurement corruption case called “Operation Medusa”. This new case allegedly used recovered funds from Odebrecht to favour the former prosecutor’s friends in procurement bidding processes.

Using strategic litigation to combat impunity in Colombia

Sandra Martinez and Paula Fierro from Transparencia por Colombia shared their experiences following the Odebrecht case in Colombia since the mid 2010’s. Odebrecht in Colombia allegedly operated through a subsidiary company in their dealings in Colombia. Former Ministers, Senators and other public officials have been investigated but to this day, the harshest sanction related to the case so far is against a campaign organizer for receiving foreign campaign contributions from the company. 

Transparencia por Colombia and other local actors brought a collective action case against Odebrecht to court, claiming the violation of collective rights of citizens, in regards to their right to good governance and effective use of public resources. The case was taken on by a public prosecutor and a National Administrative Tribunal of Cundinamarca decided against the company. The sentence was significant in that it not only charged the company with a US $1.8 billion fine, but also allowed for the fines to directly repair the collective rights affected in the case.

However, Odebrecht appealed the ruling and the Council of State, the highest administrative tribunal in the country, ruled in favour of the company, overturning the billion dollar fine. The tribunal considered that the judge did not have the correct standing to judge the case or to take on collective action cases related to what the Council considered contract law.  The impact of this ruling cannot be understated, as it created a precedent for other corruption cases that were brought about by collective action cases to be overturned when appealed.

Not giving up, in 2023 Transparencia por Colombia decided to take the case to the Supreme Constitutional Court of the country through a writ of protection, claiming that their right to a collective action has been obstructed by the previous ruling. Furthermore, the organization holds that this case is important, especially because one of the auditors of the case was found murdered last year, so very few avenues are left to hold the company to account. 

Legal reversals and attacks on civil society in Brazil

Guilherme France provided TI Brasil’s outlook on the Odebrecht case, from the country where it originated.

At the end of last year, all the evidence that originated from the Odebrecht leniency agreement was annulled. This agreement provided for evidence of foreign bribery which was subsequently used for cases against Odebrecht all over the region. The annulment of this evidence has led TI Brasil to consider Brazil a “Cemetery of evidence for the Odebrecht case” as many cases rested solely on evidence obtained through the leniency agreement.

In the months since, other companies which had been charged for corruption crimes through leniency agreements have sought the evidence of those agreements to be annulled and their sentences overturned. TI Brasil has suffered judicial harassment by some of these companies in order to discredit the organization’s systematic following of the Odebrecht case in the courts.

The Odebrecht case in the rest of the region

The Odebrecht case also touched Costa Rica: A representativefrom Costa Rica Íntegra noted that despite there not being evidence of Costa Rican officials receiving bribes, a former president of Peru, who was embroiled in the Odebrecht case, opened an account in the country. As a product of this, the Costa Rican state claimed US$6.6 million, whose origin could not be accounted for from that account.

A representative from FUNDE noted that El Salvador was not involved in the Odebrecht scandal, but a recent OCCRP investigation found that the Central American Development Bank had an outsized role in the Odebrecht case in Guatemala. Thus, they are looking into the ways the case could have ripple effects on major multilateral donors in the region.

A representative from Transparencia Mexicana noted that there has not been a definitive sentence related to the Odebrecht case in Mexico and that most of the cases related to Odebrecht are stalled in the courts. The involvement of political candidates in the case, during an election year, has led the CSO to tread carefully in the investigation and calls for justice related to the Odebrecht case so as to not appear to be supporting one candidate over another. Future cases should be handled with tact, aiming to look at the corrupt acts committed as part of larger corrupt networks. 

Conclusions and the way forward

A guiding question that was brought up continuously during the Regional Meeting was, “how do we as civil society organizations prepare for the next Odebrecht?” While there was no definitive answer, most organizations noted that the Odebrecht case provided them with first-hand experiences of working with organizations and activists that are not based in their country when working with an international case. Information sharing, coordination of efforts and joint advocacy were some of the proposed activities that members and affiliates should keep in mind to be prepared for international or regional corruption cases in the future.