The Lava Jato corruption scandal triggered an earthquake that radically changed the political landscape in Brazil — one whose aftershocks are still being felt throughout Latin America. From Peru to Colombia, from Panama to Chile, accusations of bribery, corruption and illegal campaign contributions associated with nine Brazilian construction companies, including Odebrecht and OAS, have exposed a weakness in democratic institutions and a lack of transparency concerning electoral campaign funding in the region. Though the consequences of the Latin American connection in the Lava Jato scandals have yet to be fully determined, there is an obvious need to introduce reforms to make campaign contributions more transparent and prevent bribery schemes in the awardings of public infrastructure projects.
The Operation Car Wash (Lava Jato) investigation started out as a money-laundering case investigated by Brazilian judge Sérgio Moro in 2014. Since then, it has evolved into a massive inquest into bribes and illegal campaign contributions to politicians in Brazil and elsewhere in Latin America. As some of the Brazilian companies involved in the scheme have branches in other countries, the investigation has reached far beyond Brazil. Through a plea bargain Odebrecht and the Brazilian petrochemical company Braskem SA struck with the US Justice Department, new information was made public in late December 2016 about payments Odebrecht made to politicians in other Latin American countries. Since paying bribes constitutes a violation of the Foreign Corrupt Practices Act (FCPA), Odebrecht negotiated a deal by pleading guilty and agreeing to pay a US$ 4.6-billion penalty to the US, Switzerland and Brazil. The information revealed in that plea bargain has sent shockwaves through different countries in the region.
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