Call it a tale of two countries. Two would-be Latin American powerhouses, both with populations surpassing 100 million people – and both with weak presidents who are beset by corruption problems. Both, in other words, are severely underperforming countries, whose chronic inability to live up to their potential continues to undermine growth, stability, and hope for the future.
Begin just south of the United States border in Mexico, a one-time success story, which has been reeling for months. The trouble began in late September, when 43 students were kidnapped and murdered in Iguala. An appalling and grizzly atrocity to be sure, made worse by the alleged involvement of local law enforcement and even the mayor of Iguala. Local authorities in the southern state of Guerrero (home of Iguala) are evidently horrifically corrupt – they have been bought off by the local drug cartels. Unsurprisingly, Mexico has been rocked by weeks of protests as a result of the slayings.
But it’s not only local governments that bear the stench of corruption; in tandem, a corruption scandal has played out at the upper echelons of Mexico’s government. Last month, it was revealed that President Enrique Pena Nieto’s wife had purchased a multi-million dollar mansion from a company that had received major public works contracts from Pena Nieto when he was a state governor, and later from the central government. (A “real family home,” the First Lady said of the opulent $7 million property.) In fact, this year, a subsidiary of the company in question was part of a consortium that won a nearly $4 billion contract to construct a high-speed rail line. Indeed, there was only one bid – other companies claim they were not given enough time to bid on the project. The mansion flap points to a far too cozy relationship between certain companies and the Mexican government – the kind of classic corruption that has bedeviled the country for far too long. This news too sparked an outcry.
Unlike the leader of his neighbor to the north (President Obama is nothing if not very shrewd at playing politics), Mexico’s Pena Nieto has something of a political tin ear. To wit, in the midst of major anti-corruption protests, the president decided to travel some 7,000 miles away from home. While protests raged in Mexico, Pena Nieto elected to visit China and Australia. This was, suffice it to say, not a savvy political move, and his approval ratings suffered. That’s a shame, because Pena Nieto needs all the political capital he can get, as he continues on a bold reform agenda; he’s already opened up Mexico’s telecommunications market, as well abolished the country’s oil monopoly. But he wants to do more.
Now, Pena Nieto is in full damage control mode. His wife cancelled her mansion purchase. And, more seriously, Pena Nieto has announced an anti-corruption reform plan that will, among other steps, allow the central government to dissolve local police forces that have been infiltrated by drug cartels. “Mexico cannot go on like this," the 48-year old president said in announcing the plans, "After Iguala, Mexico must change." He’s right – though it remains to be seen whether fundamental change is possible in a country with such a rich and long history of endemic corruption.
Further south, Brazil has similar problems – a major corruption scandal involving the state-backed energy giant Petrobras is raging. The Brazilian Federal Police are currently conducting “Operation Car Wash,” and what they are finding is astounding. Executives at Petrobras, the world’s sixth largest energy company, are alleged to have paid bribes to Brazilian government officials totaling as much as $1.6 billion in exchange for lucrative government contracts. The bribe money was allegedly siphoned off of company profits. Senior executives at the company have been arrested, as have bosses of construction and engineering companies who work with Petrobras. More heads are sure to fall as the case develops.
IRS lawyers ought to enjoy themselves this holiday weekend because, as the Washington Examiner's Mark Tapscott reports, "they'll be busier than normal next week." IRS counsel will make two separate appearances next week in court to explain and defend the agency's handling of Lois Lerner's
The Republican party's best chance to win a statewide office in California for the first time since 2006 all started with a check for $800. Pete Peterson’s wife Gina is graphic designer in Santa Monica who owns her own business, a limited liability company. Last year, she was getting ready to pay her company's annual $800 licensing tax to the secretary of state’s office, which oversees business licensing. Only in California are LLCs taxed so much just to keep a license. In Delaware, the annual tax is just $300, and in Missouri, it’s just a one-time $50 free.
We hear a lot, these days, about how President Obama is not like Lyndon Johnson and thanks be to heaven for that small mercy. The point seems to be that the president doesn't know how to arm twist, sweet talk, bribe, and emasculate both friend and enemy (of which he truly had neither) in order to further his agenda. Since many among the chattering class believe, still, in that agenda, his is generally regarded as an excellent presidency. Never mind that more than half a century after Johnson declared war on poverty ... poverty is still winning.
Caribbean-based company ICSSI had seen its lucrative contract to X-ray the cargo entering the Dominican Republic languish for years when, in 2011, it began searching for an investor with political pull. Perhaps someone with the right connections would be able to pressure the Dominicans into enforcing the contract, which was valued at somewhere between $500 million and $1 billion over 20 years. And that special someone, it seemed, was Salomon E.
A newly released study by Transparency International finds the United States less corrupt now than it was in 2011. According to the survey's rankings, the U.S. is the 19th least corrupt country in the world this year; in 2011, the U.S. ranked 24th.
From my amateur vantage point there are three kinds of politi-cians. The first are the “process” types. They may have gone into politics for idealistic reasons or for the opportunities, but in the end, especially if they are long-serving, the process becomes the whole game, and they find themselves gobbled up by it. The result has been bigger and bigger government.