Olympics cast light on Brazil's corruption: Column

For months, the world’s eyes have been focused on Rio de Janeiro, Brazil, an Olympic city whose country’s missteps have created the perception of an unmitigated disaster for the Games. Even as the world’s best athletes prepared to compete in Rio revelations of endemic corruption continued to dominate headlines.

The attention is justified: The former president is under impeachment proceedings, systemic corruption has been exposed at flagship companies, and nearly a third of Brazil’s Congress has been implicated in these corruption scandals.

Yet, Brazil should be commended for its Olympic legacy. Yes, commended, and not for the medals, memories and world records.

The untold story is that Brazil is creating a governance legacy, a legacy that can serve as a model for other cities and countries hosting future Games or international events such as the FIFA World Cup. Whereas Russia emerged from the 2014 Winter Games much worse in terms of governance, Brazil appears the opposite: It has created meaningful change that will be felt in that country — and others — for years to come.

It shouldn’t come as a surprise that corruption has existed at the highest levels of business and government in Brazil. What’s stunning is that this corruption is now being uncovered and publicly reported.

Over the past few years — with the 2016 Summer Olympics and 2014 FIFA World Cup as catalysts for meaningful government reform — Brazil has proven that democracy works. As public concern about government corruption and mismanagement mounted, citizens took to the streets in protest. In response, Brazil’s Congress enacted four major new laws.

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First, in 2011, came procurement reforms that made public procurement more efficient and accountable. Then, that same year, came an access-to-information law that obligated the government to make various kinds of information routinely available to the public. So too did it create a mechanism, like the U.S. Freedom of Information Act, to allow citizens to petition the government to release further information. And it prohibited the practice of “eternal secrecy,” in which Brazil routinely would reclassify information indefinitely.

A new era of Brazilian transparency had begun.

Then, just two years later, Brazil enacted a pair of laws that triggered an earthquake in its anti-corruption landscape. That started with the Clean Companies Act, which holds corporations accountable for their role in public corruption, creates incentives for corporate compliance, and imposes far harsher penalties for noncompliance. It also encourages companies to cooperate with the government in investigating corruption — a practice that is now a cornerstone of U.S. enforcement.

In that same year, Brazil gave prosecutors new tools that enable them to flip witnesses, uncover facts and put wrongdoers in jail. These very tools were put to use in the Petrobras investigation — called Operation Car Wash — and allowed prosecutors to uncover an official corruption scheme that makes Watergate look almost trifling.

In short, Brazil’s enforcement agencies now can investigate and prosecute corruption because they have the legal resources they have needed. Widespread political protest combined with a democratically elected government can be praised for producing what is nothing short of an astonishing success story for anti-corruption reform.

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Brazil has been brazen with these reforms despite a lack of support or encouragement from the International Olympic Committee regarding corruption. Countless bribery scandals in recent Olympics have led the IOC to adopt numerous internal reforms. While recent doping scandals illustrate its commitment to addressing that form of corruption, the IOC to date hasn’t directly addressed this third dimension of Olympic corruption – host-city and national corruption in the build up to the Games.

Has the time come to make host-nation anti-corruption reform a priority in Olympic governance? Should a commitment to addressing corruption in the preparation for the Games be a criterion for the IOC in awarding bids? Brazil has demonstrated the dramatic effects that a bona fide commitment to addressing domestic corruption can produce. If only Sochi had done the same.

The reputational hit that Brazil has suffered for detecting and publicizing its corruption is undeserved. The simple fact that the corruption has come to light demonstrates that Brazil’s government is more effective and less corrupt. Brazil is now more transparent, not less — and more democratic too.

Perhaps the Olympics still can be, as they purport, a catalyst for positive change.

Andy Spalding is an associate professor of law at the University of Richmond. For the past two years, Spalding has led Richmond Law students in analyzing corruption in Brazil, with the online publication of Olympic Anti-Corruption Report: Brazil and the Rio 2016 Summer Games. Spalding is senior editor of the FCPA Blog and instructor at the International Anti-Corruption Academy in Vienna, Austria.

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