Peru’s former President Alan Garcia shot himself in the head last week after investigators probing his role in the Odebrecht corruption scandal sought to arrest him in Lima.
The Odebrecht Scandal, one of the biggest corruption cases of its kind in history, was discovered by Brazilian authorities in 2014. The scam gets its name from Odebrecht (pronounced Odeb-resh), a giant construction firm based in Brazil, that has been accused of paying over $800 million in bribes to politicians and government officials in countries across South America over the past two decades.
Odebrecht is alleged to have built an elaborate structure for sending bribes to patrons in over 12 countries in South America and Africa in return for contracts to build largescale projects such as roads, pipelines, trains, and irrigation systems. Many of these projects overbilled the countries many times over the approved costs — an example is the Interoceanic Highway between Peru and Brazil, which cost more than four times the budgeted amount.
Odebrecht allegedly used shell companies in the British Virgin Islands and Belize to funnel money to politicians and officials, using multiple bank accounts scattered across the globe. Smaller banks whose employees could be compromised were chosen, typically in jurisdictions with strict confidentiality laws. A separate “Division for Structured Accounts” at Odebrecht ran these clandestine operations.
The Brazilian investigation began after authorities stumbled upon illicit cash transfers taking place through car-wash stations in the southern part of the country. As their “Operation Car Wash” spread and gathered momentum, politicians started to fall in the net, and public anger grew. 77 Odebrecht functionaries agreed to cooperate with the investigators. In 2016, the company’s CEO was sentenced to 19 years in prison. That same year, the US and Switzerland too pressed charges, and the company was forced to settle for $4.5 billion, one of the largest corruption settlements of all time.
The most visible upheaval was seen in Brazil, with leftist leader and President from 2003 to 2010, Luiz Inácio Lula da Silva,being sent to jail for 12 years and 11 months in 2018. Lula was a favourite to win the recently concluded Brazilian elections, but his conviction paved the way for the hard-right Jair Bolsonaro to grab the Presidency. Another former President, Michel Temer, too was briefly incarcerated.
In Ecuador, a former Vice President has been sent to prison for six years. There are accusations against former Presidents of Colombia and Argentina. In Venezuela, the government of President Nicolás Madurohas targeted journalists investigating the scandal.
In Peru, three former Presidents are accused in the scandal. Garcia killed himself last Wednesday; his predecessor in the post, Alejandro Toledo, has fled to the US. The Peruvian daily El Comercio, while expressing regret for Garcia’s suicide, said, “…We must not lose sight of the importance of continuing with the investigations that are taking place today. It is essential that the truth advances, and that justice prevails in order to break with a past of impunity, and to speak of a future where no citizen is above the law.”