Comments on a Report on Latin American Corruption

*** We welcome this study on Latin American corruption

The title of this excellent Inter - American Dialogue report by Kevin Casas - Zamora and Miguel Carter: “Beyond the Scandals: The changing context of corruption in Latin America”, already suggests its prevailing line of thought:  the most efficient way to fight corruption is by means of improving regulations and by raising the levels of social accountability. I would argue that scandals should receive at least equal attention, as corruption does not exist in the abstract but exists because real people decide to be corrupt.  A scandal is an action or event regarded as morally or legally wrong and causing general public outrage. Public outrage, the authors of the report agree, is a good mechanism to raise public consciousness about the need to act.

 The report is essentially an academic work, depending heavily on polls and published literature on Latin American corruption. There is nothing wrong with that, if only more space had been dedicated to the casuistic aspects of Latin American corruption. After many years of engaging in investigation about corruption I have come to the empirical conclusion that talking about corruption in the abstract does not really work as well as a tool against corruption as it does denouncing the corrupt. This report by Casas – Zamora and Turner and Carter favors the impersonal approach.

THE STATISTICAL APPROACH

Most statistics and polls presented in the report suggest that Latin Americans are now more conscious of corruption being harmful and that the region, as a whole, seems to be heading in the right direction.  However, when looking at the tables in the report there are cases of parallel sources of information reaching very different conclusions. The authors alert us about these discrepancies but explain them away by resorting to the concept of “trends”. Still, tables with information from organizations such as Latinobarómetro, Transparency International, Control of Corruption, World Bank and Americas Barometer show discrepancies that, in my view, tend to weaken the conclusions based on the tables. For example, the Perception of Corruption by countries, as measured by Transparency International and by WGI Control of Corruption, Table 3, page 14 of the report, show frequent contradictions. In about half of the countries “measured” both organizations show numbers with opposite trends.

Of course, I realize that corruption “measurements” are far from being precise and I do not pretend that they should be invalidated. They are what we have and should be given due consideration. However, their fragility suggests that more weight should also be given to scandals, to concrete cases, when looking at the issue of corruption in the region.

The fragility of statistics lead the authors to warn multilateral lending agencies “not to devise region-wide prescriptions against corruption, except at the most abstract of levels”, see page 17 of report. This is good advice although it forgets one concrete prescription, a powerful tool which could easily be applied by multilateral agencies but has not been utilized, so far, to any significant extent: the financing and promotion of long term programs of civic education as part of national policies of the fight against corruption. I led one “pilot” program of this nature in Venezuela during the 1990’s with highly positive results, reaching about 12,000 children, although the program was cut short when Chavez came into power. Such programs need to be of long term duration, exceeding the usual five year political cycles. To anyone interested I can gladly send the paper which I wrote on this subject and which includes a concrete proposal.

The report contains a very good chapter on “Scandals” in Latin America, what the authors term “Grand Corruption” and the lessons that can be learned from them. The countries selected for the chapter are: Brazil, Mexico, Guatemala, Chile, Honduras and Panama. They are excellent examples of corruption at high places, almost always having political imbrications. In this chapter the authors say: “Our case studies are largely based on Journalistic evidence”, pages 18 and 23 of the report. This is as it should be, since journalistic investigations are a recognized source of information on corrupt activities, known as “notitia criminis”, notices made public about a crime being committed. Some of these publications go beyond being simple information into the realm of investigation. In the session I attended at the Inter American Dialogue one of the authors, Mr. Casas-Zamora, in answer to a question from the audience, stated that he would be “terrified to depend on journalistic investigations” for his work. I found this in total contradiction to what the report stated and I am pretty sure that he did not mean it in that sense. Mr. Casas-Zamora simply wanted to minimize the importance of this tool as compared to statistical, impersonal information.  I respectfully disagree.

GRAND CORRUPTION

Although expressing a desire to expand on this topic  I feel that the report missed an excellent opportunity to bring to light what – in my opinion – is the most relevant case of “Grand Corruption” in Latin America during the XXI century. I refer to the criminal alliance among a group of Latin American political leaders to use immense amounts of government money and the services of highly corrupt corporations to consolidate their regimes in power, attempting to establish in Latin America what could be called a system of “socialistic monarchies”. 

This organized attempt at a major crime against the region almost succeeded, only thwarted by fate. I refer to the initiative taken by Venezuelan strongman Hugo Chavez, particularly  during the period 2005-2012, to create an alliance of anti-democratic, permanent political duration in Latin America, leading to what he called a “Socialism of the XXI Century”, following the Cuban model and having as main objective the destruction of the “Evil Empire”, the United States.

This unholy alliance failed mostly due to fate, due to the deaths of Hugo Chavez and Argentina’s Nestor Kirchner but was also helped along by the oustings of Lula da Silva and Dilma Roussef from power in Brazil and of Jose Mujica in Uruguay, by the distancing of Ecuador’s Rafael Correa from the alliance, by the ousting of Jose M. Zelaya from the presidency of Honduras and the forced exit of Fernando Lugo from the presidency of Paraguay. When these multiple setbacks took place, Raul Castro, probably the mastermind behind the gang, decided to abandon this route and to get together with Barack Obama.

What is relevant to our topic is that this alliance was fueled by the most extraordinary display of “Grand Corruption” ever seen in the region. About $50 billion of Venezuelan oil money was made available to the members of this ideological cabal: Evo Morales, Nestor and Cristina Kirchner, Jose Mujica, Rafael Correa, Andres Lopez Obrador, Ollanta Humala (first campaign), Lula da Silva, Dilma Roussef, Daniel Ortega, Frente Farabundo Marti in El Salvador, Jose M. Zelaya, Fernando Lugo and Raul Castro, as well as friendly terrorist groups such as the Colombian FARC. This money went to the financing of the presidential campaigns of these members of the gang, to the financing of terrorist organizations such as FARC and to groups such as the “Piqueteros” in Argentina and, in general, to the consolidation of political power of the group through political maneuvers such as the convoking of a Constituent Assembly, a mechanism that worked well in Venezuela and Ecuador but was broken up in Honduras. The money given to the gang also went to help the economies of Cuba and those countries ideologically aligned, as well as to the Caribbean countries, in order to buy the political loyalty required to control the OAS, PetroCaribe, UNASUR and other regional organizations.

The gang also worked to generate money by means of corrupt government practices which went across national boundaries.  Chavez gave pro-Lula Brazilian construction companies a huge amount of no-bid contracts worth some $5 billion. Odebrecht, among others, received the money but failed to do the work. Bags of money were sent to Cristina Kirchner and Evo Morales to finance their political campaigns while Cristina arranged for her ministers and friends to send products to Venezuela at gross over-pricing. One of the daughters of Hugo Chavez, now Ambassador to the U.N., has been mentioned in Argentina as a beneficiary of these transactions, being termed in the local media as “The Queen of Rice”. 

Chavez provided Jose Mujica’s government with financial relief for failed Uruguayan companies. Ecuadorian crude oil was converted into products in Venezuelan refineries, at a loss for Venezuela. Venezuelan oil tankers were commissioned to Argentina but never materialized or did so very late. Venezuelan helicopters and planes were given to Evo Morales, together with checks to be distributed among the corrupt military and public employees. In Venezuela, billions of dollars went into the wrong hands of oil company contractors and managers.

ORGY OF CORRUPTION

All of this orgy of corruption has been revealed by the Latin American and U.S. media and enough information exists beyond the simple description of the events to merit, not only a mention in any report on Latin American corruption, but also a full-fledged investigation on the strength of “Notitia Criminis”.  In fact, the U.S. Congress has just issued a proposal for a new law that states:

“the Secretary of State, acting through the Bureau of Intelligence and Research, and in consultation with the intelligence community (as defined in section 3(4) of  the National Security Act of 1947 (50 U.S.C. 15 3003(4))), shall submit a report to Congress that  describes the involvement of senior officials of the Government of Venezuela, including members of the  National Electoral Council, the judicial system, and  the Venezuelan security forces, in acts of corruption in Venezuela, with a specific emphasis on acts of grand corruption.

The report submitted under paragraph (1) shall— (A) describe how the acts of corruption described in the report pose direct challenges for United States national security and international security; (B) identify individuals that frustrate the ability of the United States to combat illicit narcotics trafficking; and (C) include input from the Drug Enforcement Administration, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network. The report under paragraph (1) shall be submitted in unclassified form, but may include a classified annex.

It would be highly advisable for this approaching Congress investigation to have the full support of Washington based think tanks such as the Inter-American Dialogue and CATO, as well as the contribution of any individual that could have valuable information on corruption activities in Venezuela. I will be glad to cooperate, if my cooperation is accepted. Since 2006 I have published reports for CATO Institute and for Venezuelan think tank CEDICE, as well as in my blog www.lasarmasdecoronel.blogspot, in articles where I try to go beyond simple speculation and into solid accusations concerning Grand Corruption in Venezuela and other countries. The material on Venezuela, Nicaragua and Argentina existing on the public record is particularly abundant. 

In The Wall Street Journal, The New York Times and El Pais, from Spain, to name just a few publications, there are excellent examples of investigative journalism that can be used to expand the cases into legal, official investigations. Already some corrupt contractors have been sent to prison on the strength of this work, as it is the case of Venezuelan contractor Roberto Rincon, in prison in Houston, after frauds related to the Venezuelan oil company mounting to some one billion dollars. Other important investigations are in process, thanks to journalistic publications.

I fully agree with Mr. Casas-Zamora that corruption has no ideological preferences in Latin America. From the extreme right to the extreme left, from Somoza to Castro, from Martinelli to Lula da Silva and Hugo Chavez, from Trujillo to Kirchner, there are numerous examples of Grand Corruption. The Socialism of the XXI Century happened to be a mega-fraud of the left. Panamá and Guatemala’s Grand Corruption involves leaders from the right. Corruption is a switch hitter and is batting a high average from both sides.

I offer anyone interested my full cooperation in this important matter.