From ‘El Chapo’ to Chile, from bribery to money laundering, the U.S. and South Florida pay for Latin America’s culture of corruption

Jul 17, 2015 | 9 comments

By Tim Padgett

Once again, Donald Trump’s got it all wrong.

Mexican immigrants aren’t the problem. Mexican officials are.

chl opinion logoEspecially all the Mexican officials who live deep inside the pockets of Joaquín “El Chapo” (aka “Shorty”) Guzmán, the world’s richest and most wanted drug kingpin. Thanks to them, El Chapo, or “Shorty,” was able to waltz out of Mexico’s most secure penitentiary through a mile-long escape tunnel that’s already being called one of the country’s engineering marvels.

Have you caught the surveillance video that shows El Chapo vanishing into his cell shower stall, never to return?

Look closely, because in that footage you’ll also see the reputation of Mexican President Enrique Peña Nieto’s government swirling down the drain right along with Shorty. And this time, like Shorty, it may never be recaptured.chl chapo3

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This was Guzmán’s second prison break in 14 years. And it’s a fitting exclamation point to Latin America’s Summer of Corruption – a volcanic eruption of scandals that we’re paying a price for here in South Florida.

In the 25 years I’ve been covering Latin America, I’ve never seen the smallpox of corruption scar the continent as broadly and grotesquely as it is at this moment.

From the prison tunnels of Mexico to the political backrooms of Brazil – where an unbelievable $2 billion bribery scheme threatens to cripple the state-run oil company, Petrobras, if not bring down the government of President Dilma Rousseff – the stench of kickbacks, fraud, embezzlement, judicial abuse and money laundering would knock a buzzard off a manure wagon.

Yes, I know corruption has plagued Latin American officialdom since Christopher Columbus dropped anchor off the Bahamas 523 years ago. Most Latin American countries sit in the bottom half of Transparency International’s annual corruption index. But I don’t have enough thumbtacks to keep track of all the region’s current venal outrages on my wall map.

Step down from Mexico to Guatemala, where street protesters want the resignation of President Otto Pérez as his government unravels under a massive customs tax fraud scandal. Ditto next door in Honduras for President Juan Orlando Hernández, amid a $200 million embezzlement orgy involving the country’s social security fund.

Even Costa Rica, once considered Central America’s oasis of probity, is embroiled in the epic bribery case at the governing body of international soccer, FIFA.

Did I mention FIFA? All but one of the 14 people recently indicted by the U.S. in that scandal are from Latin America and the Caribbean. They include Jack Warner, a member of parliament in Trinidad and Tobago who allegedly plundered $750,000 that FIFA was donating to – take a deep breath here – Haitian earthquake victims.

The news is even worse in South America, and not just because of Brazil’s catastrophe. Take your pick, from deepening probes into drug-trafficking corruption at the highest levels of Venezuela’s ruling socialist revolution, to a slew of scandals in quasi-developed Chile that are rocking the government – and family – of President Michelle Bachelet.

So why should you care about this – and you certainly should – in South Florida? It’s the economy, stupid.

Global Financial Integrity, a Washington watchdog, reported last December that illicit financial outflows from Latin America equal more than 3 percent of the region’s GDP.

Translation: Corruption bleeds the region of economic growth. And now that Latin America’s decade-long, commodities-fueled boom is over, its centuries-long addiction to graft is making it harder to soften the downturn. According to the Institute for International Finance in Washington, Latin America saw just 0.4 percent growth last year and probably a miniscule 0.2 percent growth this year.

In the entire region, only Ecuador, Colombia and Peru showed reasonable healthy growth rates in 2014.

That’s bad news for us, because the world from Tijuana to Tierra del Fuego is by far South Florida’s largest trade partner.

Latin America and the Caribbean accounted for more than two-thirds of the more than $120 billion in commerce that passed in and out of the Miami Customs District in 2013. Brazil alone represented about $17 billion. Those totals dropped considerably last year, and probably will again in 2015.

The cute observation we make here is that Latin America’s corruption costs are our gain: For the past 12 months Brazilians, no doubt wanting to escape their current Amazon-sized mess, have again topped the list of foreigners making website searches for real estate deals in Miami.

But frankly, instead of pushing up my county’s condo prices, I’d rather see Brazilians investing in the country that’s my county’s biggest trading partner.

The one potential silver lining in the Summer of Corruption is that it may lead to an Anti-Corruption Spring in Latin America. But that requires the kind of genuine institutional reform Latin America is worst at.

Meanwhile, like Chapo Guzmán ​– who’s now tweeting threats at Trump because of his slurs against Mexican immigrants – corruption will keep busting loose.

Tim Padgett is WLRN’s Americas editor.

Credit: WLRN News, http://wlrn.org

 

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