Carwash operation and the complex mechanism of political corruption in Brazil

Received: 29 Apr. 2020 Accepted: 14 May 2020 Published: 23 Dec. 2020 Abstract: This article analyzes the relationship between the governance structures of hidden exchange networks as well as the regulation and protection mechanisms of the corrupt system. It is assumed that the actors interact in a complex network of corrupt exchanges based on an informal system of behavioral rules. The empirical material that serves as the basis for this discussion constitutes the extensive set of legal and journalistic data produced from the “Carwash” operation. The analysis showed that it is, on the one hand, a systemic corruption and, on the other hand, networks whose governance structure is centrifugal. Contrary to what the legal narrative of the operation affirmed, the Brazilian case demonstra-tes a polycentric system with a high capacity to develop autonomous networks.


Introduction 2
In recent years, Brazilians have been overwhelmed by a flood of news, scandals and inquiries of legal nature that have contributed to presenting corruption as one of Brazil's central evils. Similar to what has already been observed in the past, delations make up the scene of disputes between political groups for state control. 3 However, what has been observed in recent years is the construction of a legal narrative, led by members of the Public Ministry and Judiciary, which is above political interests. Such narrative contributed not only to the construction of a certain concept of corruption, but also to its possible political and legal uses. 4 In order to understand -from a sociological approach -the dynamics of corruption, this article analyzes the hidden exchange networks of corruption to identify the complex codes and mechanisms that govern it and that allow, at the same time, the circulation of certain types of resources between corrupt and corrupting, among which we can mention: authority resources, privileged information and networks of personal relationships. It is assumed that in political corruption the State becomes the main agent, once as an organization-it delegates powers to a group of public agents (politicians and bureaucrats) to make decisions and establish contracts in favour of the collective interest (Della Porta and Vannucci 1999, 2007, 2012Vannucci 1997). To obtain the benefits that the State can offer, a third actor also emerges whose function is to provoke the public agent to mobilize its resources, such as decision-making power, to grant access to agreements and negotiations.
In return, he offers a portion of the value, usually in the form of bribe. The empirical material that serves as the basis for this discussion consists of the extensive set of legal (awarding statements, 2 This article is the result of a postdoctoral research carried out in Italy on the comparison between the "Carwash operation" and the "Mani pulite" operation (Petrarca 2019). I am grateful to CNPq for offering the material conditions to carry it out. 3 On major corruption scandals in Brazil and their political uses, see Bezerra (1995) and Silva (2017). On networks of corruption see, especially Ribeiro et al. (2018). 4 A more detailed analysis of this aspect can be found in Petrarca (2019). 5 It is the largest public oil company in Brazil and the 10th. biggest in the world. Forbes. 2019. Petrobras é a 10ª maior petroleira do mundo em 2018. Forbes Negócios, May 10, 2019. Accessed on Oct. 10, 2019. https://forbes.com.br/negocios/2019/05/petrobras-e-a--10a-maior-petroleira-do-mundo-em-2018/. testimonies, cooperation agreements) and journalistic data (interviews, news articles, report book) produced from the "Carwash" operation. 3) politicians, who acted by appointing public agents for the positions and negotiating with the contractors in order to gather bribes for the Party.
The party's function was to nominate officials to serve as second-tier positions, thus making sure that their position in the government's alliance system, as well as looking for businessmen to obtain money for the party, in the form of legal and illegal campaign donations. In addition, the parties placed companies in other state, federal and municipal public works; 4) executives of large companies: a group of contractors that through bids obtained contracts with Petrobras and other companies and public sectors. The investigations revealed that the contractors formed a cartel to 6 Prosecutor Deltan Dallagnol stated, in an interview, that the investigations were centered on the allied base of the federal government, since it was this base that controlled the posts at Petrobras and, therefore, the bribe. Furthermore, conversations between prosecutors and other members of the operation -recently made available by the "The Intercept" website through the leak of content from the "Telegram" application -reveal the investigation strategies adopted by the prosecutors. Boechat, Ricardo. 2016. Programa Ricardo Boechat Entrevista. Rádio BandNewsFM. São Paulo. SP: BandNews, Jan. 22, 2016. Acessed on Jan. 28, 2017. https://www.facebook.com/ radiobandnewsfm/videos/boechat-entrevista-dallagnolvoc%C3%AA-pediu-e-est%C3%A1-aqui-a-%C3%ADntegra-da-entrevista-que--o/864926130285298/. The Intercept. 2018. As mensagens secretas da Lava Jato. 2018. The Intercept, June 9, 2018. Accessed on June12, 2018. https://theintercept.com/series/mensagens-lava-jato/. combine values in the execution of works and to have their proposals approved. The cartel divided the works, allowing the company chosen as the winner of the bidding to make a bid. In total, 16 companies formed a group of contractors that disputed contracts for major works, in a kind of "club". The circulation of the bribe had two distinct purposes: illicit enrichment with accounts abroad and illegal campaign financing through the socalled "box 2". In this way, it allowed the re-election of politicians and the concession of public works for a specific set of companies, making sure that the collection interests of each part.

Figure 1 -Corruption networks
Source: Prepared by the author.
The system observed at Petrobras, from "Carwash", was only part of a diffuse scheme that occurred in the states through various public works such as highway concession and construction of overpasses. But despite the fact that the disclosures reveal a much broader and more extensive dynamic, they were gradually directed, by the prosecutors, specifically to Petrobras case from 2003 to 2012 and involving, above all, the political alliances of Lula's and Dilma's governments. 6 As a result, they allowed the construction of a particular legal narrative that has limitations in understanding the dynamics of corruption.
To understand how the logic of corruption operates and how governance is structured in systemic corruption networks, it is essential to analyze the relationship between the actors involved and the resources mobilized by them.
It is, therefore, learning how different skills are converted to the corruption market in order to guarantee exchanges and make agreements feasible, which can be expanded or reduced when necessary. In this dynamic, corruption functions as a market that adjusts itself in order to maintain the regulation and functioning of the system (Della Vannucci 1999, 2007;Vannucci 1997).
To address these issues, the article is divided into three fundamental moments. At first, the role of mediators in corrupt exchange and the place it occupies is analyzed. In a second step, public agents and the resources available to them and, finally, private companies, in particular, contractors.
Based on the material analyzed, it is therefore necessary to demonstrate two fundamental questions. On one hand, it is possible to identify that the dynamics of corruption is systemic, since it involves several actors inserted in a complex specialization of tasks. In this type of corruption, there is an inclination towards corrupt practices by a large part of the members of the public structure, who work to guarantee and facilitate exchanges (Della Porta and Vannucci 2012).
On the other hand, the analysis shows that the governance structure of this network of corrupt exchanges is centrifugal and without a center of authority. In a centrifugal system, parties lose the role of controlling corrupt exchange and companies can, on the other hand, take a more active role and can even organize themselves into cartels with the capacity to limit competition 7 Scandal discovered in 2006, involving leaders of different parties, revealed a scheme to buy votes from deputies to approve measures and projects of the federal government. Such a scheme was centralized by the parties, whose functions involved everything from controlling the process of co-opting party leaders to the ability to define the system for collecting and distributing the bribe payment. 8 Brazil has a multiparty system characterized by strong internal dissent and the formation of competing party factions. After the redemocratization of the country (1988), a model for forming governments was associated with this system, characterized by broad alliances and without ideological inclination (Carreirão 2015;Nobre 2013). The "coalition presidentialism", as defined, characterizes the need for the president to compose the base of the government based on the formation of a large majority in the congress with parties that are not part of the electoral alliance (Abranches 2018). In this model, many parties organize themselves just to guarantee alliances, in a pure exchange of favors. and define the share (the quota), in other words, each one's place in the corrupt exchange (Della Porta, Sberna and Vannucci 2015).
Contrary to what happened in previous scandals, such as the "Big Monthly", 7 what can be seen from Carwash is that the system has adapted, reducing the parties' ability to control the dynamics of corruption networks. If in the case of "Big Monthly", the parties, through their bureaucratic structure, had a greater control of corrupt exchanges, guaranteeing participation and entry, now the system has expanded and with this the resources have also been expanded. This centrifugal structure also has an effect on legal investigations and the restructuring of the political system after major anti-corruption operations. In one respect, this dynamic makes legal work difficult, making it practically impossible for investigations to have a chain effect with the capacity to disrupt the scheme. In contrast, the legal operations that focus on certain links in the networks, as observed in the case of "Carwash", focusing only on a few actors, have no capacity to dismantle the governance structures that organize corrupt exchanges. In addition, they contribute to the consolidation, resistance and rapid rearticulation of certain niches of corruption.

From money dealers to financial operators: the role of intermediaries
One of the actors that becomes central in cases of corruption involving large sums of bribes are the so-called "brokers" or intermediaries. In general, these actors take on high-risk functions in the corrupt exchange market, guaranteeing and enabling business to be carried out. For this, they mobilize a set of skills acquired in certain diversified professional spaces, providing various resources such as information, contacts, confidence. Among the trades with a high capacity to convert into mediators of corrupt exchanges are lawyers, brokers, ex-bureaucrats, ex-civil servants, since their professional activities contribute to building trusting relationships with those who can benefit from corrupt exchanges (Della Porta and Vannucci 2012;Pizzorno 1992).
Among the mediators who played a central role in the corruption scheme discovered by "Carwash" are "financial operators". These are agents specialized in illegal markets and money laundering, whose function is to carry out the task of operating the financial part of the corrupt exchange, such as money transfer, value transfers, financial negotiation. These intermediaries, who must remain hidden, mobilize their illegality competence (Pizzorno 1992) and enter the scene to guarantee security and protection mechanisms, besides having the role of socializing public and private actors in the market for illegal norms. Its function is the centerpiece of the system's gear and may even collapse in the event of large-scale judicial inquiries (Della Porta and Vannucci 1999).
In Brazil, the so-called "dollar dealers" have become a central component of this network, since their skills in illegal foreign exchange markets were fundamental for carrying out financial operations. That was how the dollar dealer Alberto Youssef, arrested in the first phase of "Carwash", became the centerpiece in the mechanism of corruption. He and his partners, also experts in the illegal market, were transferring large sums of 9 In times of greatest performance, Youssef came to move 40 million dollars a day, according to the prosecutors of "Carwash". Jelin, Daniel. Na trilha da operação Lava Jato. Veja, s.d. Accessed on June 2019. https://complemento.veja.abril.com.br/brasil/na-trilha-da--operacao-lava-jato/. money abroad using a network of more than 100 shell companies and hundreds of bank accounts.
Among the numerous activities was import and export, without any trade in products or services, in addition to consulting companies that only served to issue bills of services that were never In the words of one of his lawyers: "He moved like a fish in the water between the companies". 12 Expressions such as "had good credibility", "opened doors" and related to people "decision makers", were used by Youssef's partners in the discussions and statements. Such expressions demonstrate, at least, three essential characteristics of the mediators: capital of social relations; confidence of the other players in the corrupt game and reputation among customers.
One of the functions of intermediaries is precisely to enable agreements, create opportunities and connections between the world of politics, public administration and the business sector. As a mediator between "social worlds", he is also given the responsibility of maintaining the secrecy of hidden exchanges and ensuring protection to those involved (Della Vannucci 1999, 2012;Pizzorno 1992  Roberto Costa, who became another important part of the system, as we will see below.

Public Agents
The role of the public agent in a network of corrupt exchanges is to ensure that the system is kept hidden and to preserve the benefits for

The triangle: parties, governments and companies
In previous governments, the same thing was done, indication, if everything was asked for. And there was an attempt to make an election by doing the businessman a favor so that the businessman could help the politician to make an election. This happened in all the governments in which I participated since 1978 when I was elected for the first time (Pedro Correia, ex-deputy, ex-president of the PP).
This system of triangular relationship between party, government and companies did not come up with the so-called "Petrolão", a corruption scheme unveiled by "Carwash". It is narrated by the 24 Youtube. 2016. Testemony by Pedro Correa, in prosecution number 504651294, to the judge Sérgio Moro. Accessed on Jan. 5, 2019. https://www.youtube.com/watch?v=l_apYkFi39U-.

25
According to an article published on the Senate website, one of Costa's sons-in-law, Humberto Sampaio Mesquita, was the operator of the scheme involving ships at Petrobras on behalf of the PP. Beto, as he is known, controlled at least three accounts abroad and moved the bribe in the naval area to his father-in-law. Macedo, Fausto e Brandt, Ricardo. 2014. Lava Jato apura elo de esquema na Transpetro. O Estadão, Nov. 29, 2014. Accessed on Jan. 5, 2019. https://politica.estadao.com.br/noticias/geral,lava-jato-apura-elo-de-esquema-na-transpetro,1599955. 26 An analysis of the dynamics of the relationship between business and politics can be found in Petrarca (2017  They all asked me: can you help me with campaign problems? [...]. I never dealt with values. I delegated someone of my confidence. I used to instruct them to have a meeting whenever possible. [...]. My staff wanted to minimize and the other side to maximize. They were fighting for the minimum whereas the other side wanted to get the maximum (Emilio Odebrecht, in testimonial to "Carwash"). 28 In systemic corruption parties play a key role in the relationship between companies and the world of politics, "selling difficulties to make facilities", as the entrepreneurs say. In a context of party fragmentation, as observed in Brazil, the money is given to politicians who form their own alliances, therefore there is no centralization in the control of resources. In the Brazilian context States have autonomy to make their own alliances that do not always match the alliances at the federal level. So governors, state and federal deputies and senators follow the alliances of states. While at the federal level, the party can adopt another alliance.
Furthermore, for support and governability, the president must conquer a majority in the camera and the Senate. To have the support of the majority he needs to negotiate the federal positions, in a complicated balance of party forces. Such a balance aims to ensure the alliance system necessary for maintaining "governability". If the president does not know how to maintain this system, it can generate a deep political crisis capable of making his government unfeasible and leading to impeachment.
The companies in turn invested into politicians in order to gain access to public works, especially large ones.
What we have in Brazil is not a 5-year old business. It's 30 years old one. Everything that is happening is institutionalized. It is a normal thing. Due to all these names of parties where they fought, it was not for positions, but for fat budgets. There, the parties placed their representatives to raise funds. And that's been done for 30 years. In 30 years it is difficult for things not to become normal (Emílio Odebrecht, in testimony to "Carwash"). 29 The testimonies of the largest contractors' directors in the country revealed a relationship structure established in exchange for advantages.

Centrifugal corruption in a centripetal legal narrative
The legal narrative, constructed by the operators of the Carwash task force, highlighted that the corruption scheme observed in the case of the so-called "Petrolão" had a boss, a maximum commander", a "great general". The legal narrative is fundamentally based on the figure of the highest authority of the executive who is the President of the Republic. As chief executive he was not only able to restrain the system, he was also fully aware of its functioning and had sufficient decision-making power to appoint and dismiss.
"Without Lula's decision-making power, this scheme would be impossible" (Carwash Attorney-Deltan Dallagnol at a press conference). 37 What the legal narrative ignores is that corruption has its own mechanism of operation.
And that is to say that the top of the executive power pyramid does not necessarily mean being at the top of the corrupt system's power. Based on the set of material analyzed, it is possible to state that it is a systemic corruption whose governance structure is centrifugal and not centripetal. It is, therefore, a model of regulation of corrupt practices on a large scale, with strong fragmentation, a certain autonomy of the subnets and whose structure is polycentric. allow us to conclude that it is a centrifugal dynamic. The first aspect is the characteristic of the political environment. In a centripetal model there is relative stability and the parties organize themselves as "cartels" to control the political market and electoral financing, thus preventing other parties from making up the competition. 38 In the case of Brazil, what is observed is, on the contrary, a highly competitive political environment, supported by fragile alliances.
Political parties themselves are internally fragmented and organized according to "factions" with autonomy to create their own networks.
The second aspect is the mechanism adopted to regulate and control corrupt practices. In a centripetal model, there is clearly a recognized authority center whose role is coercive and whose function is to ensure that the rule of the game is fulfilled by the participating actors. In these conditions, there is a hierarchy between the actors and a center that regulates and punishes.
Authority resources are essential in the application of effective sanctions that guarantee cooperation.
What is observed in the Brazilian case is the lack of a center of authority capable of applying sanctions. The main mechanism that guarantees the execution of corruption in a centrifugal model is the internalization of values and codes of conduct, through socialization, and the incentives given to those who participate in the game. Thus, an employee who wants to become director of a large public company knows that he needs to be part of the game to receive the incentives.
His experience within the company made him internalize the set of rules and norms essential for professional advancement.
One last aspect that we can mention here is the power structure. In a centripetal dynamic it is hierarchical and centralized. On the contrary, in centrifugal dynamics it is horizontal and fragmented. There are several elements, in the Brazilian case, that demonstrate a network structured in a centrifugal dynamic. One of them is the capacity of autonomy of the subnets. This is the case, especially, of public agents who acquired autonomy and the ability to negotiate their own stay in their own networks. Under conditions of strong personalization and relative autonomy of networks in relation to party logic, political careers do not depend directly on the party, but on the capacity of public agents, especially in creating personal networks (founded on bonds of friendship, kinship, professionals) as source of your power. In this direction, from the Brazilian case, it is possible to demonstrate the organization of a corrupt polycentric system with a high capacity to develop autonomous networks.