Andy Spalding: Brazil’s New Enforcement Leadership

At a time when U.S. leadership in the world is no longer a surety, we should be comforted to find another western hemisphere country proudly taking the lead.

The United States may well have written the first chapter in global anti-corruption enforcement.  But the second chapter? It’s Brazil’s.

We all know that Brazil is enmeshed in a major bribery investigation, Operation Car Wash. But we may not fully appreciate the way Brazil is emerging as a regional, and perhaps, world leader — in both domestic and foreign bribery, and on both the enforcement and compliance sides.

In December, Brazil claimed the lion’s share of the credit for the world’s single largest anti-bribery enforcement action, a settlement worth between $2.5 billion and $4.5 billion (depending on future ability to pay) against Brazilian contractor Odebrecht. So too did its petrochemicals subsidiary, Braskem, pay an additional fine of almost $1 billion. 

Related investigations have reached two former presidents and the current president, numerous members of the cabinet, and an estimated 60 percent or more of the federal legislature, and countless state and municipal officials. Recently prosecutors began an investigation into bribery in the meat packing industry; this has been styled as the largest police action in Brazil’s history.

These days, that’s saying a lot.

But at least as significant, if less widely heralded, is the way Brazil is using its substantial and newfound clout to build capacity in other countries. 

Officials from eleven countries recently met in Brazil and formed an agreement to carry out a joint investigation on Odebrecht’s bribery across Latin America. Representatives from the attorney general and prosecutor-general offices in Argentina, Brazil, Colombia, the Dominican Republic, Ecuador, Mexico, Panama, Peru, Portugal, and Venezuela. The meeting was organized by Brazilian prosecutor-general Rodrogo Janot. At this gathering, the parties signed the Brasilia Declaration for International Judiciary Cooperation against Cooperation.

Notably, the most thorough coverage of the story I was able to find was here, from Xinhua, an online Chinese news source that describes itself as “an important information organ of the central government.”

The world is indeed changing.

By population, Brazil is the world’s fifth-largest country. But two of the four larger countries, India and Indonesia, do not appear poised for aggressive anti-bribery enforcement, domestic or foreign, any time soon.  Other than the United States, that leaves China and Brazil.

As the Xinhua article suggests, China has indeed addressed domestic corruption with some rigor, though in ways unique to its political system and culture. We might call it “anti-corruption with Chinese characteristics” (adapting the well-worn phrase, “socialism with Chinese characteristics”).  

But if we’re looking for a truly democratic anti-corruption movement — one that fearlessly holds accountable powerful business leaders and politicians across the political spectrum, that is not used to secure the power of elites or neutralize political enemies, that is based on legislation adopted in response to grass-roots political demands and implemented by an independent prosecution and judiciary, and which has ignited an explosion in the compliance industry — we could do no better than Brazil. 

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Andy Spalding, pictured above, is a Senior Editor of the FCPA Blog and a Professor at the University of Richmond School of Law.