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The difference between the world’s most corrupt countries—the Afghanistans, Angolas, Nigerias, Ukraines, and Venezuelas of the globe—and those that are on the path to probity is visionary leadership. Botswana, for example, had Seretse Khama. Singapore had Lee Kuan Yew, and Georgia had Mikheil Saakashvili. Rwanda has transformed under Paul Kagame, and China’s Xi Jinping has made great strides against graft. Indeed, as recent research by me and scholars in Germany, Sweden, and the United Kingdom confirms, committed leadership makes the biggest difference in reducing corruption, especially when it is deeply entrenched.
That is good news for Brazil, where Sergio Moro is leading the charge against long-standing and endemic corruption. Moro is not a politician, but his actions as a federal judge have modeled a unique kind of leadership that has had a profound impact on Brazil’s approach to corruption. As Gustavo de Oliveira, a law professor at the University of São Paulo, told The Washington Post, Moro’s work is “transforming what had been widespread indifference to the problem of graft in Brazil. It is bringing a very significant change of values in Brazilian society.”
For more than two years, Moro, who is based in the southern state of Parana, has heard one case after another relating to systematic theft from the national coffers. In that time, he has jailed more than 40 politicians and business executives. The punishments handed down by Moro have all but ended the tradition of impunity among Brazil’s political class and given ordinary Brazilians hope for reform. In fact, although Moro’s critics have accused him of crusading, Brazilians of all classes and backgrounds generally welcome his charge. On numerous occasions, younger Brazilians have taken to the streets in Manaus, Porto Alegre, Rio de Janeiro, São Paulo, and other cities to protest proposed legislation to curb Moro’s reach.
Such legislation has never gained much traction against Moro, an earnest 44-year-old judge’s judge whose position is analogous to a U.S. Federal District Court judgeship. But whereas American judges are appointed by the president (and confirmed by the Senate) on the recommendation of senators from the relevant state, usually after many years practicing law, in Brazil such judges achieve their position by performing exceptionally well on a detailed written test. After Moro sat for the special judicial qualifying examination, he joined Brazil’s federal system in 1996 and was sent to several smaller cities in Parana State before being recalled to the imposing federal courthouse in Curitiba, the capital of Parana.
For years, Moro presided over a broad range of criminal and civil cases that had little to do with graft. And then, in 2014, the knot of official corruption known as Lava Jato (Car Wash) became public. Now, and unless Congress interferes, in the months and years ahead, Moro is devoting all of his energy to unraveling the Lava Jato tangle.
The scandal began inconspicuously at a gas station and car wash where black market currency dealers were caught exchanging cash. At first, the police and the prosecutors believed that they had uncovered a relatively limited instance of illegal money laundering. So the case was sent to Moro, purely by chance. But soon the prosecutors and Moro realized that the activities were part of a much more complex case of rampant corruption centered on the Brazilian oil firm Petrobras and involving a web of political parties and their leaders, possibly even Brazil’s beloved former president, Luiz Inácio Lula da Silva.
Petrobras, a mixed private–state owned company, with gas stations throughout the country, was created in 1953. After Lula assumed the presidency in 2003, he and his legislative followers in the Workers’ Party more fully nationalized what became Brazil’s wealthiest enterprise. In 2007, a determination to exert greater state control over petroleum exploitation and distribution became particularly important to the Lula government when a massive offshore oil field was discovered in the Atlantic Ocean, east of Rio de Janeiro. The oil, difficult and expensive to extract, lies under an extensive wall of salt, over a mile thick.
Lula quickly designated Petrobras as the field’s sole operator, and the Workers’ Party and its parliamentary allies scrambled to appoint their own people to run Petrobras and to manage the equipment and facilities’ buying spree that followed. The sudden expansion of Petrobras and its transformation from a smallish oil exploration and distribution enterprise into a leading Brazilian endeavor meant that it would need to construct facilities onshore and offshore at a massive scale and as quickly as possible. Paulo Roberto Costa, Lula’s appointee as a director of Petrobras, quietly agreed to divert the revenue from at least three percent of all contracts to fill the coffers of several of the political parties in Lula’s ruling political coalition, along with Renato Duque, another director. That diversion amounted to at least $3 billion for the political parties.
Once Moro jails another 50 or so politicians and businesspeople, will Brazil be any less corrupt?
It wasn’t just the parties that got tied up in the Petrobras scandal. Brazil’s major engineering firms, including Odebrecht SA and Andrade Gutierrez SA, were involved as well. Their bids for contracts always included extra padding to provide handsome payments to both the Petrobras officials overseeing the contracts and to the politicians in Brasilia who were the patrons of the overseers.
Some of the Lava Jato money purchased fancy art collections and gaudy jewelry. But much of it went straight into Swiss bank accounts with the help of a convicted criminal and his gang, who facilitated the money laundering that moved the illicit proceeds out of Brazil. In the end, it was the blunders of the criminal gang that finally led the police and prosecutors to Costa, who had deposited millions into offshore accounts, and to the unraveling of what once must have seemed a tidy and easy scheme. After all, until the first Lava Jato cases reached Moro’s courtroom, Brazilian politicians had typically enjoyed easy freedom from prosecution. In fact, bribery was so common that, Moro has remarked, some of the criminals who came before his court pleaded that they had only followed the “rule of the game for public sector contracts.”
But the scale this time was different. When one case after another came before Moro, he and the federal prosecutors in Parana began to realize that the corruption in the Lava Jato case involved an elaborate web of individuals holding significant political posts at various state and federal levels. One Petrobras manager reached a deal with Moro to collaborate with the official inquiries; he returned nearly $97 million in bribes that he had stashed overseas. In part, such witnesses have cooperated because, as The Washinton Post reports, citing Oliveira, "Moro has changed the way corruption cases are tried [by] speeding up the processes and making liberal use of pretrial detentions to keep defendants sweating in jail instead of out on bail. As a result, many of them have opted to turn state’s evidence, a procedure that had been uncommon in Brazil.”
In December, for example, federal prosecutors allied with Moro persuaded the imprisoned head of Odebrecht to name all of the politicians who profited from bribing Petróleo Brasileiro (the proper name for Petrobras) and accepting lucrative kickbacks. The same month, Braskem SA, a subsidiary of Odebrecht and Petrobras and South America’s largest petrochemical company, agreed to forfeit $957 million for its role in Lava Jato.
By now, it is widely believed that 60 percent or more of the members of Brazil’s National Congress are implicated in the scheme, possibly including Michel Temer, the president of Brazil since the impeachment of President Dilma Rousseff, and Speaker of the House of Representatives Eduardo Cunha, who was ousted from Congress earlier this year. Still to be tried is Lula, who is accused by prosecutors of being the “ultimate commander” of the scheme. They claim that, as president, Lula masterminded the system of kickbacks and campaign donations—more than $26 million—that Odebrecht paid to participate in bidding for Petrobras contracts. Lula is also accused of illegally receiving from Odebrecht more than $1 million in improvements and expenses for a beachfront apartment and of obstructing investigations.
Moro and the public believe that they will be able to wipe clean the Brazilian political system, and punish the enablers—the construction company heads and the Petrobras executives—who gave the offending politicians what they demanded. And already, he has made significant headway. For example, the importance of the public’s newfound appreciation that corruption is eradicable, not an inevitable part of the Brazilian condition, should not be understated.
Moro believes that, so long as he “can count on the support of public opinion, [his crusade] can move forward and produce good results.” And to date, Moro’s backers have taken to the streets in the thousands whenever Brazil’s Congress has threatened to impede his progress. But such protests hardly substitute for a detailed public opinion poll that would show how well Brazilians approve of what Moro is doing.
Moreover, with their backs against the wall, it is unclear that public support will be enough to force Brazil’s national politicians to continue to accept Moro’s crusade. Congress could attempt to give its members legislated impunity. It could try to transfer Lava Jato cases to the Supreme Court, which has a huge backlog. The minister of justice could also try to interfere with the way the Thirteenth Criminal Court in Curtiba is run and financed. Still, given Temer and Congress’ lack of legitimacy, and given Moro’s immense popularity, it is very hard to see how they could face down so many angry citizens.
But then there is the bigger question: Once Moro jails another 50 or so politicians and businesspeople, will Brazil be any less corrupt? It will take a decade to know. For now, things appear positive because political impunity has been smashed and because Moro’s exemplary actions permit Brazilians for the first time to demonstrate their intolerance of public and corporate corruption. That is what happened in the Nordic countries, in New Zealand, and Canada over many decades in the nineteenth and twentieth centuries. In each case, the transformation was led by a figure or figures like Moro. The nerdy judge looks as if he is really remaking Brazil.
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