How the FIFA Scandal Put Latin American Corruption Under the Microscope

Por: José Cárdenas

It certainly hasn’t gone unnoticed that 13 of the 14 individuals named last week in the FIFA bribery and kickback scandal represent Latin America and Caribbean soccer organizations. While no one country or region has a monopoly on corruption, it is likewise true that weak rule of law and endemic corruption issues have unfortunately been the norm in Latin America, impeding as they do economic development and sowing widespread public distrust of government institutions. One wonders, however, whether public tolerance for official misconduct in Latin America may be reaching a tipping point.

It turns out that even as the FIFA news was unfolding, a number of regional governments are being besieged by an unprecedented number of high-profile corruption scandals that are reaching the highest levels of government and have generated widespread public protests.

Consider:

In Brazil, President Dilma Rousseff has been reeling over an ongoing scandal related to corruption in the state-owned oil company Petrobras, allegedly involving $800 million in kickbacks to politicians — the vast majority of whom are from Rousseff’s Workers’ Party. Rousseff, whose popularity continues to drop, chaired the Petrobras board from 2003 to 2010.

In Chile, the son of President Michelle Bachelet was forced to resign from his government post amid influence peddling allegations. Bachelet is also confronting one of the country’s largest ever political corruption scandals, which involves major financial institutions and several government ministries.

In Mexico, President Enrique Peña Nieto has been engulfed in scandals related to his real estate holdings. That has come against the backdrop of the disappearance and presumed murders of 43 students in the state of Guerrero last September, an atrocity that apparently involved local elected officials and police, and which has sparked national outrage.

In Venezuela, the Wall Street Journal reports that U.S. authorities are conducting an extensive investigation into drug trafficking among high-ranking officials in the Venezuelan government, including National Assembly president, Diosdado Cabello. And even as the government struggles with cash shortages to purchase basic consumer goods, a leaked report revealed that Venezuelan clients had some $14.8 billion in Swiss bank accounts.

Finally, in both Guatemala and Honduras, thousands of citizens turned out this past weekend to demand their respective presidents’ resignations related to alleged misuse of government funds. Guatemala’s vice president has already been forced to resign due to her alleged involvement in a customs fraud scheme.

The World Bank rightly singles out corruption as the greatest obstacle to global economic and social development. And Latin America has historically fared poorly in anti-corruption indices such as Transparency International’s Corruption Perceptions Index, with the majority of countries ranked in the bottom half of the global list. But as the current cascading scandals demonstrate, the public may finally be getting fed up the bribery, kickbacks, and embezzlement that have constituted “business as usual” in the region for too long.

The United States can be supportive, but ultimately this is a battle that must be waged by Latin Americans themselves, electing leaders who commit to major public sector reform and changing entrenched attitudes. Of course, it won’t be easy. The temptation to profit illicitly from the public till is universal, as any headline in any newspaper in the world will tell you.

But the issue matters because it has important implications for U.S. interests in the region. Corruption and impunity undermine popular respect for and confidence in democracy, which opens the door to radical populists of the Hugo Chávez mold who are given free rein to dismantle democratic institutions and repress the private sector and others for their alleged transgressions against “the people.” It also creates a poor climate for increased U.S.-Latin America trade and investment, a loss for both sides. But until regional governments eliminate rent-seeking and other corrupt practices, the potential for beneficial growth and strengthening democratic institutions will always remain that.