In a recent article, I provided a general and country-specific overview of the Odebrecht corruption scandal that is sweeping across Latin America. Since it was published, new and positive headlines from the Dominican Republic suggest that Odebrecht will not be let off the hook for its actions.

Background

In December 2016, the Brazilian construction conglomerate Odebrecht pleaded guilty to violating the Foreign Corrupt Practices Act and settled with the United States, Switzerland, and Brazil for US$4.5 billion.

The report released by the United States Department of Justice details the massive bribery and corruption scheme that was conducted through the Division of Structured Operations within Odebrecht. This division was charged specifically with conducting and coordinating the company’s systematic use of bribery.

 

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Source: United States Department of Justice

 

On February 4, 2017, the Attorney General of the Dominican Republic and Odebrecht signed a confidential agreement. Under the agreement, Odebrecht would pay the Dominican Republic US$184 million over several years, US$21 million less than the US Department of Justice claims Odebrecht gained through its bribery scheme.

Detractors of the deal immediately cried foul and argued that the agreement would limit the liability of Odebrecht and its employees and associates within the Dominican Republic, including Vinicio Castillo, leader of the Fuerza Nacional Progresista opposition party.

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Translation: “To give Odebrecht criminal and civil impunity; to leave it operating in country like nothing , represented one of the most embarrassing crimes against DR [Dominican Republic] .”
On March 1, 2017, Judge Alejandro Vargas rejected the agreement on procedural grounds. Judge Vargas asserted that the method that the Attorney General and Odebrecht used to come to the agreement was not proper for a case of this magnitude, saying “se trata de hechos graves, y en consecuencia, requieren de otro remedio procesal de mayor rigurosidad jurídica.” (Translation: “These are serious facts, and in consequence, require another procedural remedy of greater judicial rigor.”)

Opposition political parties, NGOs and civil society organizations, and even some within the ruling Partido de la Liberación Dominicana greeted Judge Vargas’ ruling with immense praise.

After the ruling, Attorney General Jean Alain Rodríguez reiterated that his office would prosecute those involved in the bribery scheme and announced that he would release the details of the deal his office made with Odebrecht to the public.

So far there have been no arrests made in the Dominican Republic related to the Oderecht scandal, and the government appears to be deliberately proceeding with caution.

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Translation: “A hasty submission, although it would be well received by the society, could end up being the best ally of impunity”

Exporting Prosecutorial Integrity

We do not know if Odebrecht and its employees and associates in the Dominican Republic were offered immunity under the agreement between the Attorney General’s office and the Brazilian company. We also don’t know the full extent of the bribery scheme in the Caribbean nation and who benefitted from it.

What we do know is that Odebrecht’s desire is to make plea deals in as many countries as it can that will allow it to continue to do business throughout the region.

Odebrecht should not be allowed to operate in these countries. Ideally, its offices will be shuttered, or the entire organization will be will be broken into smaller entities.

Odebrecht engaged in a systematic and deliberate manner to bribe and collude with business officials, politicians, and government employees at all levels throughout Latin America and Angola and Mozambique, perpetuating and exacerbating corruption within these developing nations. The ruling by Judge Vargas in the Dominican Republic is a repudiation of any effort to allow the culprits to get off with a slap on the wrist.

Many of the countries involved find themselves in a catch-22. Significant reform to prosecute and investigate corruption and to ensure the integrity of the bidding process for public contracts are necessary. However, as this case has shown, many of these countries are not in the habit of prosecuting powerful business officials, politicians, and government employees for corruption. One solution would be for other Latin American countries to take a lesson from an unlikely source: Brazil.

The Public Prosecutor’s Office in Brazil is independent of the three branches of government. It has been conducting Operation Car Wash, a massive corruption scandal in Brazil involving many members of the Brazilian legislature and Petrobras and is related to the Odebrecht scandal. Because the Brazilian Constitution ensures its independence, the Public Prosecutor’s Office can investigate the most powerful people in government, including Senators, Deputies, and Presidents.

Many in the Dominican Republic are concerned that the politicians that (may have) benefitted from bribery will sweep this case under the rug to protect themselves and their ill-gotten gains. If the Dominican Republic and other Latin American nations adopt a mechanism for prosecutorial independence which can safely and effectively go after the most powerful men and women in their country for high crimes, then the integrity of the government and the rule of law will be reinforced.

Conclusion

The investigations are still unfolding. New information and revelations about Odebrecht’s bribery scheme will continue to come to light. The recent ruling in the Dominican Republic gives hope that the persons involved, both in Odebrecht and the governments, will not escape justice. To better ensure that those in power, especially civil servants, are held accountable, countries in Latin America should look to the Public Prosecutor’s Office in Brazil for inspiration.

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