Operation Car Wash: We should take our cue from Brazil
- Oscar van Heerden
- 13 Jun 2017 11:34 (South Africa)
“Operation Car Wash”, as it is known, is an investigation being carried out by Brazil’s federal police and it has been judicially commanded by Judge Sergio Moro since 2014.
Operation Car Wash all started with a simple money laundering investigation. This soon turned to cover allegations of corruption at one of their state-owned companies (Petrobras), much like our own PetroSA and other parastatals here in Mzansi. I pause to remind you of the many shenanigans going on at our state-owned companies: a dubious locomotives deal at Transnet/Prasa, the continuous wastage of money at SAA; regarding Eskom, the less said the better (even the chairperson has now decided to jumped ship), and Denel is also implicated in dubious deals. In fact, these influential families here in Gauteng seem to spare none of our state-owned enterprises.
Anyway, the Operation Car Wash investigation is headed up by a small and brave complement of state prosecutors, with one judge, against all odds. The operation has included more than 100 warrants, arresting individuals ranging from parliamentarians to private sector individuals such as CEOs and CFOs respectively. Two previous presidents have also felt their wrath, with both Luiz Inácio Lula da Silva and Dilma Rousseff suffering under the Operation Car Wash investigations which resulted in one of them being impeached. In fact, current President Michel Temer is now under investigation for bribery allegations as well.
Wow, this is too much to hope for here in Mzansi, right? Wouldn’t it be fantastic if our own law enforcement agencies could act in the same manner as these brave young prosecutors and this one lone judge?
In Brazil the revolution is unfolding, stamping out massive corruption and pushing back on the moral decay that has seeped into the daily fabric of Brazilian society. Much the same way as it is seeping in here in our own beautiful country.
There are two factors that lead to these investigations in Brazil. First, the country is experiencing its worst economic crisis in decades. Second, they too are experiencing a serious lack of leadership. Sound familiar? Our economy is now at junk status with serious foreign direct investment hanging in the balance, the fiscal cliff a daily reality, and our serious lack of leadership cannot be scoffed at either.
It all started when a top executive at the national government-owned oil company Petrobas. Paulo Roberto Costa, together with large construction companies, colluded around hugely inflated construction costs for big infrastructure deals. Anyone recall the collusive behaviour of our own construction companies during the 2010 soccer world cup upgrades of stadiums, airports and roads infrastructure? We have had our fair share of hugely inflated costs in the built environment sectors.
It was the arrest of Costa which was seen as pivotal in Operation Car Wash. The prospect of a long jail time made him sing like a bird. He spilt the beans on all the other Petrobas executives and explained how they had been colluding and had been engaged in bribery with government officials over the years. Arrests followed from that point onwards.
In an interview with Judge Moro on the US investigative show 60 minutes, when asked what it all felt like at the beginning, he said that when Mr Costa started to give up the necessary information about the other culprits, it was like the movie The Untouchables. In this movie a band of law enforcement agents wanted to take down the mighty Al Capone. There is a scene in The Untouchables where a police officer asks the group of federal agents whether they are sure they want to enter through that door. He elaborates that if “you walk through that door now, you walk into a lot of trouble and there’s no turning back, you understand”. The young brave federal agent replies: “Yes I do”. Committing to walk into the trouble, there was no turning back. That was the point of no return, according to Judge Moro.
One of the great successes in Brazil and why people started coming out of the woodwork to divulge information was a plea bargaining method introduced by the prosecutors. With this method, the prosecutors could offer a plea bargain to prospective wrongdoers. In other words, “you tell us all you know and pay back some of the stolen monies, and we will consider reducing your jail time or in some cases make sure you get no jail time”. Many people came forward to take up this offer because they were thinking of their families and the suffering they might incur due to their own illegal activities, I suppose.
Another method that worked for the Brazilian prosecutors was a little more controversial. Prosecutors would arrest certain people without trial and hold them for an indefinite period before sending them to the courts. This they say also worked well to unsettle some of the wrongdoers while sitting in jail uncertain as to when lawyers and families would be granted access to them.
Before thinking that such strategies are outlandish, spare a thought for the desperate times in which such acts occur. A similar method was used by a former president of South Korea many decades ago, when he wanted to cajole big business CEOs to agree to the future plans of rebuilding that country. He ordered the police to arrest most of the top CEOs from the big corporate firms. They were left to sit in jail infinitely, without access to lawyers or family.
When it finally dawned on these CEOs that this could potentially be the order of the day, the president then invited each one of them individually to meet with him to discuss the future national plans. The expectations placed on their respective companies for the future of the country were spelt out: “Agree, or return to jail right now.”
Look where South Korea is today. Drastic times call for drastic measures. Judge Moro justifies these unorthodox methods by explaining that the Brazilian corruption was simply too widespread that they had to do something big in response. He furthermore indicated that once these people were arrested (the ones who thought they were above the law, because of the protection of their legislature status or being protected by the president), the cookie started to crumble in a big way. The vast sums of money recouped through this operation in Brazil amount to billions of US dollars. The amounts we are seeing just from the #GuptaLeaks findings indicate that there are vast sums to recoup here in Mzansi.
A further clear similarity between South Africa and Brazil was the use of money laundering. Executives and politicians laundered money because this was the most reliable way of ensuring that they would not be liable for income tax (their SARS and Financial Intelligence Centre staff would not be able to trace the funds). So they bought expensive cars, paintings, went on paid holidays and so forth. When the money is difficult to trace, the conspicuous lifestyles are less so.
Perhaps it’s time we listen to calls for lifestyle audits all round for all people who occupy public office, including sitting judges in our courts?
The parallels between Brazil and South Africa’s corruption are obvious. In Brazil corruption found expression through the building of infrastructure installations, such as a major oil refinery just 30 miles outside of Rio, in which the building costs were hugely inflated to the tune of billions. I can bet you that if we took a much closer look at some of our own future infrastructure installations’ build programme, we would also find massive corruption. Think nuclear deal, some of our future energy plants, the dry dock infrastructure project soon to commence in KwaZulu-Natal (where the old airport use to be), and many more potential sites of corrupt activity.
Money laundering and cost inflation seem to be the rules of the corruption game.
Is an Operation Car Wash too much to wish for in Mzansi?
Reflecting on our own corruption and state capture saga here at home, I wondered what ought to be done to stop our own moral decay and unabated corruption patterns. It struck me that there might be several impediments to taking similar admirable action as Operation Car Wash, here at home.
Is one such impediment to action a result of the cadre deployment strategy of the ANC? Or is it a reflection of our understanding or misunderstanding of the separation of powers and the independent nature of some law enforcement agencies?
I am aware this matter has been under the spotlight before but in this specific context one must ask the question yet again. The governing party insists on deploying its own trusted cadres in certain critical positions. This sometimes results in deployment of people who are not necessarily the most competent. Does this deployment strategy hamper us citizens when we rightfully expect independent action from certain quarters of our government? When there are loyal cadres in key positions who are meant to take action, but fail to, we must just forget about it?
The NPA head, the Hawks heads, the National police commissioner and indeed now the Public Protector, are all now cadre deployees by the current president of the governing party. How was it that the drafters of our Constitution gave such far-reaching powers to our Head of State?
The supreme law of the land, the Constitution of the Republic, guarantees the independence of certain law enforcement arms of government. Yet we do not see them act on allegations of subversion, treason, corruption and state capture. There is the small exception evident in the the recent announcement by the Hawks that they will now investigate the state capture matter. I wait with bated breath.
Since there seems to be a commonly held belief in our country that corruption is the lone purview of government officials and politicians, I must make one last point. Private sector executives were also arrested in Brazil for their part played in bribing officials and politicians. There cannot be collusion, price inflation and kickbacks without both a palm greaser and a greasy palm. Palm greasing happens here on a large scale and I’m not talking about the lone home affairs official or the lone traffic officer with their small bribes. We are talking about the billions of rand in large-scale tenders and partnership schemes both here and abroad. There are many South African companies paying bribes and involved in corrupt practices in other parts of the continent and the world.
In launching an Operation Car Wash here we should of course expect pushback from all these powerful people. There must be many a parliamentarians who would want to change laws to exempt themselves and possibly the president from future prosecution. This must not deter us.
Judge Moro concludes his interview with 60 minutes by telling us that this corruption busting campaign must be done, because it will mean a better and brighter future for Brazil.
The question I ask is: Where is our Judge Moro and our small band of untouchables, I wonder…? DM