BRAZIL: The War on Corruption

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Dec 13 2004 (IPS) - Corruption – and not drug trafficking, as many believe – is the largest source of “dirty money” in Brazil, accounting for 70 percent of laundered funds, according to some specialists.

This eye-opening figure was provided by Milton Toledo Junior, the director of the international legal department of the Brazilian Attorney General’s Office, at a seminar held in Sao Paulo last month.

But Claudio Weber Abramo, the executive secretary of Transparency Brazil – a branch of the Berlin-based anti-corruption watchdog Transparency International – challenges the accuracy of this claim.

“It is impossible to reach exact figures” on dirty money, which includes hefty profits that companies fail to declare in order to avoid paying taxes, along with huge sums sent out of the country, Abramo told IPS.

It is equally difficult to determine the origin of dirty money, since the bulk of corruption-related earnings are laundered through the same channels as those used by the black market money traders known as “doleiros” and others who take advantage of tax havens and various other mechanisms.

In any event, the anti-corruption offensive initiated last year by the Brazilian federal police, who answer to the Ministry of Justice, demonstrates the importance that the authorities have placed on this issue.

Four highly ranked officials from the federal accounting court, a body overseen by the congress and responsible for monitoring public resources and fighting corruption, were arrested last week on charges of aiding and abetting fraud.

“Operation Sentinel”, which has also led to the imprisonment of six business owners, specifically targets security companies that provide services to the government.

One of the companies accused of fraud is owned by the Brazilian minister of communications, Eunicio de Oliveira, who defended himself by arguing that he left the firm’s management in 1998.

The various operations undertaken by the federal police, christened with such colourful names as Anaconda, Vampire, Trojan Horse and the Plague of Egypt, have shaken up numerous civil service sectors, including the judicial system. Even the federal police themselves have not escaped unscathed.

In October 2003, Operation Anaconda dismantled a ring that offered court sentences for “sale”. Among the eight individuals taken into custody were Judge Joao Carlos Rocha Mattos, who is still being held, two police captains, and a federal police agent, along with a number of businessmen. Another two judges are suspected of being involved in the scheme.

In the meantime, the aptly named Operation Vampire targeted fraud in Ministry of Health procurement contracts for the purchase of blood derivatives.

Former state governors, members of congress and officials from various ministries have been involved in corruption rings, with dozens ending up in jail as a result.

The latest officials to be taken into custody, last week, were from the Ministry of Agrarian Development institute responsible for implementing a land reform programme in the northern Brazilian state of Pará.

This year alone, over 300 people have been arrested in various anti-corruption operations. A total of 52 operations have been carried out since June of last year.

While a great number of business owners and politicians have been implicated in corruption scandals, the federal police have been accused of using illegal methods in their investigations, such as illicit wiretapping.

Be that as it may, according to Abramo, the federal police have been successful in fighting corruption, sometimes through impressive joint operations covering five or more states at once.

Their investigations are aided by reports from other bodies, including the Attorney General’s Office, the Comptroller General’s Office, and the country’s tax authorities, he added.

But while these anti-corruption initiatives have yielded significant results in some sectors, they have been less effective in others, Abramo said.

What is lacking, he believes, is a wider-reaching programme for the reorganisation of the civil service as a whole, to “close off the opportunities that give rise to corruption.”

International Anti-Corruption Day, last Thursday, was marked in Brazil with the release of a new pamphlet, “Keeping a Close Eye on Public Money”, published by the General Comptroller’s Office, in conjunction with a number of other national and international institutions, including the U.N. Office on Drugs and Crime.

An international survey conducted by the Gallup Organisation for Transparency International revealed that 91 percent of the Brazilians interviewed rated political or “grand” corruption as a grave problem, while 81 percent were seriously concerned by “petty” or administrative corruption.

Effectively fighting corruption is an urgent need in Brazil today, where “only one-third of resources released by the government reach their intended destination,” as Toledo Junior told last month’s seminar.