His name is Alan García, and if you’ve kept up with Latin American politics over the past few decades, you know him as the former two-time president of Peru. The untimely death of this prominent political figure happened the morning of April 17, caused by a self-inflicted gunshot wound to the head.

The narrative goes that police arrived at García’s home in Lima to arrest him. He had been under investigation for money laundering and taking bribes in connection with a massive corruption scandal that has engulfed several former Latin American leaders. According to officials, García told officers he was going to call his lawyer and then went into his bedroom.

A moment later, a gunshot rang out.

Garcia, who served as president from 1985 to 1990 and from 2006 to 2011, was 69.

So, what is this scandal all about? How did it start? Why would it prompt a high-ranking political figure to end his life? What does this mean for the future of Peru and Latin America?

Let’s take a closer look.

Odebrecht Case: Politicians in LATAM and Beyond Suspected in Bribery Scandal

It all started in Brazil.

Brazilian construction giant Odebrecht had wrapped a massive project for the 2016 Olympics venue, adding to an impressive resume that already included the infrastructure for the 2014 World Cup and the metro system in Caracas. On a smaller scale, Odebrecht was behind many of Latin America’s most crucial infrastructure projects like dams and airport terminals.

The deal was simple: Obredecht offered to help fund politicians’ election campaigns in exchange for building contracts in their region. This had been going on since 2001 (about 15 years!), with the process streamlining in 2006.

Odebrecht bribery scandal

García was one of those alleged to have taken bribes from the Brazilian construction giant in return for massive public works contracts. He denied ever receiving money from the company and explained in a suicide note that he preferred to take his own life rather than face the humiliation of an arrest on corruption charges.

Scope of the Scandal Was Broader Than Expected

As the web untangled, it became apparent that the Odebrecht bribery scandal was more than your average breaking news headline.

countries affected by odebrecht scandal
Countries in green were affected by the Odebrecht scandal

To give you an idea of how far-reaching this misconduct has revealed itself to be, it has ensnared almost every politician in Peru including two other former presidents, and dozens more across Argentina, Brazil, Colombia, El Salvador, Ecuador, Mexico, and Venezuela. The scandal even inches into international waters, affecting Portugal, Africa, and Antigua.  

The result?

Obredecht’s bribery scandal has claimed the title of one of the biggest corruption cases in history.

Three years after the construction giant agreed to pay $2.6 billion in fines (described as the world’s largest leniency deal with U.S. and Swiss authorities, which have stakes in the company), the case still is making headlines, most recently with the suicide of García. A string of presidents, lawmakers, and business tycoons alike are currently under investigation in 2019 due to the Obredecht scandal.

Moving Past Corruption: The Future of Latin America

Unfortunately, Latin America is no stranger to corruption. This constant malpractice in government and large corporations is a problem that is systemic and deep-rooted in business culture and political strategy within the region.

Implications on Latin American Business

corruption in latin america effects

Corruption like the Obredecht bribery scandal has several adverse effects on Latin American business, including:

  • Hindering economies
  • Reducing investor confidence
  • Lowering public trust

Still, this is one of the many continued efforts of Latin American governments to expose corruption and other illegal activity.

Latin America is a dynamic and developing region with a lot to offer interested investors and businesses, sitting atop soil rich with minerals for mining while providing a beneficial regulatory environment.

On top of that, innovation is prominent. Recently, Amazon CEO Jeff Bezos invested $30 million in a Chilean startup that produces organic mayonnaise. Yep, you read that right!

The outlook on the Latin American economy is generally favorable — so long as the countries don’t fall prey to another corruption case this large.

Keep It Locked Here for Future Updates

Will this unstable and ever-changing conglomeration of countries finally install justice in its political structure? Will the Obredecht scandal act as a turning point for trustworthy politics or pass as just another indication of the turmoil that has ravaged the region for decades?

Check out the Colibri Content blog’s coverage on Latin American business trends for our in-depth analysis of the most important events that are shaping Latin America in 2019.

Let us know what you think the future holds!

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