How does Odebrecht bankruptcy affect victim countries of corruption?

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The fact that Odebrecht has declared bankruptcy means only one thing: impunity for the cases in the countries that were victims of corruption

The past June 17 was a crucial day in one of the corruption cases of greater magnitude in Latin America, with Odebrecht as the protagonist. Through a press release, picked up by Argentina's El Clarin, the Brazilian construction company declared bankruptcy, "as a result of an economic crisis (…) the impact on reputation due to errors made, and the difficulty of companies to get credit and new contracts after collaborating with justice."

Leer en español: ¿En qué afecta la bancarrota de Odebrecht a los países víctimas de corrupción?

But behind this statement is a creditors' meeting used by Odebrecht, to be able to solve legally and economically and thus avoid their disappearance. This judicial remedy, which has already been approved by a bankruptcy court in Sao Paulo, is nothing more than the form used by the company to settle accounts with its main creditors, either by means of a readjustment of the debt owed to them or the partial assignment of their assets with which they can settle a part or all of the said debt.

Economic losses

According to AFP, with the collaboration of creditors, Odebrecht expects to negotiate an economic commitment of more than 20,500 million dollars owed, not only to a dozen countries (ten of Latin America and two of Africa), but to "public banks Brazilians (National Development Bank, BNDES, Banco do Brasil and Caixa Económica Federal) and also bondholders ".

Countries such as Colombia, Peru, Ecuador, Venezuela and Panama are just some of those in which Odebrecht, according to the Universidad de los Andes' 070 portal, deposited 230 thousand 500 million dollars in bribes to win tenders in civil works within its territory.

However, this figure does not come close to the 349 million dollars that the construction company leaked in its own country (Brazil), according to the information exposed by the Department of Justice of the United States (DOJ). Stratospheric figures that demonstrate the dimension of what has already become a political and judicial problem in the region.

However, as it is obvious, Odebrecht did not inject money into the purchase of civil contests within these countries without expecting a profit that doubled, and often tripled what was "invested".

For example, just in Colombia, Odebrecht told the DOJ that its revenues amounted to 50 million dollars. However, in 2018, El Espectador reported that the construction giant intended to close all research, as well as its debt to this country, with just a little more than 33 million. So, how much will they be willing to negotiate, now that they are on the verge of bankruptcy?

And so it will be with the rest of the victims. As stated earlier, there were twelve countries that were affected by the corruption of Odebrecht and its governments (the five named above, plus Mexico, Guatemala, Argentina, Cuba, the Dominican Republic, Angola and Mozambique), with deals that embezzled the construction projects within these and, in addition, stopped the civil growth that was intended with these architectural projects.

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Judicial losses

But in addition to the economic losses, there is something that worries, even more, those affected by this case: judicial silence. Assuming that Odebrecht managed to reach a monetary agreement with the entities and countries to which it owes (thanks to the bankruptcy), these deals would not only close the accounting books, but also the investigations against this corporate monopoly.

It should be remembered that, for example, in Mexico, a presumed bribe of 4 million dollars was paid to "Emilio Lozoya, who, in 2012, was the coordinator of the international area of Peña Nieto's presidential campaign," as reported by El País from Spain.

Likewise, in countries like Colombia and Peru, they have been involved in cases of corruption former presidents such as Juan Manuel Santos or Pedro Pablo Kuczynski, for money that supposedly entered into campaigns or that strengthened the political exercises, respectively. Even, a couple of months ago, the former mandatary of Peru, Alán García, who was investigated by Odebrecht, decided to take his own life when the authorities came to his home to capture him and take him to prison.

As well as these cases, there are dozens that still need to be clarified, but that hang in the balance with the possible negotiations between Odebrecht and its creditors. Solving once and for all economic problems is not a good strategy for countries that still live in ignorance of what happened, when and where, as well as the characters that were part of these acts of corruption; the largest in this region.

LatinAmerican Post | Christopher Ramírez

Translated from "¿En qué afecta la bancarrota de Odebrecht a los países víctimas de corrupción?"