When commentators consider endemic corruption they are usually considering a plethora of rules and regulations that allow low-level government functionaries to hold their collective hands out. This attitude in turn then permeates the entire culture, whether directly from the government or in a state-owned enterprise. One of things becoming apparent in the ever-burgeoning Brazilian corruption scandal, however, is that access to capital can be a prime mover in creating endemic corruption. To overcome such a structural component, it may require a radical reordering of Brazilian political structures.

The most recent corruption settlement in Brazil centers on meat-packing company JBS, which agreed to the largest fine ever for bribery and corruption, $3.2bn in Brazil. JBS engaged in widespread bribery of meat and poultry inspectors, but its widest swath of bribery was to obtain access to capital in the form of low interest loans from the country’s national bank, BNDES. To keep the tap open, the company spent approximately $184 million on bribes for politicians of all political stripes. JBS was certainly not the only company engaged in such antics, as its settlement replaced the December 2016 settlement of Odebrecht as the largest of all-time.  

Apparently once Brazilian politicians go on the take, they stay on the take. This process is so ingrained in the country that its current and four former presidents are all alleged to have been involved in corruption. Part of this has to do with the number of political parties in the country and their impacts on the ruling coalitions. With such institutionalized corruption, it was not until anti-corruption reforms, specifically including the ability of prosecutors to offer plea bargains, that prosecutors began to crack all of this—most publicly with Operation Lava Jato (car wash), the investigation into state-controlled oil company Petrobras.

All of this means major structural reforms may well have to take place, in addition to the placement of the rule of law in Brazilian culture, at least around bribery and corruption. 

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