Who Finance Politics Now?: Campaign Finance and Unintended Consequences of Lava Jato

The Operation Car Wash – also known as Lava Jato – provides a compelling setting for analysing the promises and perils of the fight against corruption. This scandal certainly laid bare the murky system of party finance, politics and infrastructure kickbacks in Latin America and beyond. It presents an exemplary use of punitive actions by prosecuting grand corruption of heads of state and businesspeople– frying the ‘biggest fish’ – which reveal that malfeasances are being sanctioned, and thus reducing impunity. However, evidence suggests that holding corrupt elites accountable may have unforeseen consequences. Drawing upon the legal mobilisation for transformation and accountability theory by Gloppen, I propose an analytical framework to assess the material, symbolic and political effects of prosecuting grand-corruption in the Lava Jato case. The first dimension refers to changes in jurisprudence and institutional reform, such as the reform of campaign finance legislation. The second dimension relates to the symbolic or ideational transformation through discourses and ideas. Holding head of states accountable for corruption created an atmosphere of perceived justice and the idea that no one is beyond the law. Ending impunity in a situation wherein immunity was the rule is expected to impact in social and political arenas. Finally, the third dimension refers to the political effects understood in a broader sense. Since grand-corruption involves a series of actors and work in different loci, a series of changes are expected in the business-politics relations considering the Lava Jato case. This paper draws upon a multi-method approach with primary (elite interviews) and secondary data (opinion surveys) from Peru and Brazil. By comparing evidence of the Brazilian and Peruvian case, I critically examine the transformative effects of Lava Jato. Assessing the legal and political reforms stemming from this probe reveal that there are unintended consequences that need to be addressed before prompting a further political crisis similar to the Operation Clean Hands in Italy, which included the collapse of the political elites or the rise of a neo-populist leader like Silvio Berlusconi.