Whistleblowing to a Latin Tune: The Adaptation Problems of the OECD/FCPA Paradigm in Environments with Disseminated Corruption through the Lenses of the Odebrecht Case in Latin America

Abstract

This paper discusses the adaptation and feasibility of some of the tools shared by the OECD Convention and the U.S. Foreign Corrupt Practices Act. The article highlights three of them: incentives and protection to whistleblowers, prosecutorial discretion, and different forms of negotiated justice, including plea bargaining. We call these tools the OECD/FCPA paradigm. We claim that the OECD/FCPA paradigm hardly reconciles criminal punishment needs in Latin American countries. We offer three primary reasons for this inadaptation. The first reason is that most Latin American countries have what the literature calls “disseminated corruption as a point of equilibrium” for grand corruption. In an environment with disseminated corruption (as described in the plea agreement in the Odebrecht case), all actors have incentives to accept or offer bribes. It creates a pragmatic incompatibility with prosecutorial discretion and plea bargaining, as some politicians or businesspersons would suffer anti-bribery enforcement, while many others - including the former’s competitors - would not. The second reason is that the OECD/FCPA paradigm weakens the system of control implemented in many countries, as it reserves the power to a limited number of agencies and prosecutors. Considering environments with disseminated corruption, the concentration of power - and discretion - over a limited number of agents creates the institutional design for the lack of accountability and perhaps collusion. The third reason is mainly connected to Latin America's political history. We argue that collaboration agreements, whistleblowers, and discretion are prone to magnify certain cases of corruption. Considering the traditional connection between corruption scandals and political instability in Latin America, we argue that the OECD/FCPA paradigm offers deleterious tools to political exploitation of anti-bribery enforcement.