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Updated May 27th, 2020 at 10:30 IST

Spread of coronavirus fuels corruption in Latin America

Even in a pandemic, there's no slowdown for swindlers in Latin America.

Spread of coronavirus fuels corruption in Latin America
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Even in a pandemic, there's no slowdown for swindlers in Latin America.

From Argentina to Panama, a number of officials have been forced to resign as reports of fraudulent purchases of ventilators, masks and other medical supplies pile up. The thefts are driven by price-gouging from manufacturers and profiteering by politically connected middlemen who see the crisis as an opportunity for graft.

“Whenever there’s a dire situation, spending rules are relaxed and there’s always someone around looking to take advantage to make a profit,” said José Ugaz, a former Peruvian prosecutor who jailed former President Alberto Fujimori and was chairman of Transparency International from 2014-17.

Coronavirus clusters are still

Against this backdrop, reports of fraud have proliferated.

On Tuesday, police in Rio de Janeiro

In Colombia, 14 of 32 governors are under investigation for crimes ranging from embezzlement to unlawfully awarding no-bid contracts. In Argentina’s capital of Buenos Aires, prosecutors are probing a politically connected crony for buying 15,000 N95 surgical masks that, despite having expired, cost the city 10 times their listed price.

Perhaps the biggest fallout is in Bolivia, where the health minister was arrested amid allegations that 170 ventilators were bought at inflated prices. The breathing machines were purchased for nearly $28,000 each. But their Spanish manufacturer said it sold them to a distributor for only 6,000 euros ($6,500). Making matter worse, the machines aren’t suitable for longer-term care.

The probe threatens to derail the presidential candidacy of interim leader Jeanine Anez. She assumed power in November, promising a clean break from 13 years of leftist rule by Evo Morales, who resigned amid vote-rigging allegations.

Similar accusations of over-billing have shaken Panama, where a top aide to President Laurentino Cortizo quit and his vice president is under pressure to resign after prosecutors last month began investigating the planned purchase of 100 ventilators at nearly $50,000 each.

In Brazil, which has the world's second-highest number of confirmed cases, police in one state created a task force to investigate pandemic-related crimes. Its nickname, “Corona Jato,” is a nod to the region’s biggest recent corruption scandal, the “Lava Jato,” or “Car Wash,” probe that uncovered billions stolen from state-run companies.

Tuesday's surprise search of the governor's mansion and 10 other addresses in Rio has rattled Brazil's political establishment because Gov. Wilson Witzel is a fierce critic of President Jair Bolsonaro, accusing him of undermining state measures to fight the virus. Witzel denied any wrongdoing and accused Bolsonaro of ordering the raid as political retribution.

To be sure, disasters breed corruption all over the world, not just in Latin America. Spain, Italy and other countries also have been rocked by revelations of impropriety during the pandemic. In the U.S., an

But stealing state funds is especially vexing in Latin America because of gaping poverty and a tattered social safety net. More than half its workers toil in the informal sector without health care or social security.

“That's the real scandal,” said Argentine writer Martín Caparrós, co-editor of a book about the region’s most shameless stories of graft called “We Lost: Who Won the Americas Cup of Corruption?” (Spoiler alert: An Argentine vice president convicted of buying a stake in a money-printing company while overseeing its bankruptcy proceedings was voted the worst offender by readers).

Acceptance of corruption dates to the Spanish conquest, when powerful viceroys gave extensive land holdings to friends, and forgiveness of sins could literally be bought from the Roman Catholic church, Caparrós said.

Roberto de Michele, the top transparency expert at the Washington-based Inter-American Development Bank, disagrees, saying that even in normal conditions, an estimated 10% to 25% of global spending on health care is lost to corruption — hundreds of billions of dollars every year.

But abuse multiplies in emergencies like natural disasters. He said the risks are even higher in the pandemic, as officials compete for limited supplies, disrupting established price mechanisms.

“If you don’t stop at the red light, and nothing happens, or you can bribe the policeman and get away with it, then more people will have incentives not to stop at the red light,” said de Michele. “That’s institutional design, not culture.”

Latin America countries consistently rank among the most corrupt. The latest

Still, de Michele is optimistic that social pressure will bring change.

A turning point came in 2016, when Brazilian construction giant Odebrecht admitted to paying $788 million in bribes across Latin America over more than a decade. That led to the jailing of former presidents in Peru and Brazil.

Technology can also help protect state funds, de Michele said.

He cited Paraguay, which unveiled a

“The solution to corruption is punitive justice,” López told The Associated Press. “But at least this tool puts all public officials on notice that our actions will be under the microscope."

 

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Published May 27th, 2020 at 10:30 IST

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