Brazil’s Anti-Bribery Law took effect in May of 2014 and has added more force to São Paulo’s already existing efforts to identify and eliminate corruption. However, even before the law -which imposes strict civil and administrative liability on legal entities for the corrupt activity of their employees or agents – São Paulo had already taken the initiative.
São Paulo’s Anti-Corruption Agency
In May of 2013, São Paulo established the Office of the Municipal Comptroller General (CGM) with the specific purpose of strengthening the city’s capacity to fight corruption. The CGM is staffed with a technical team that specializes in anti-corruption efforts. Many of the employees were even recruited from the Office of the Federal Comptroller General.
With a limited budget of only US$ 1.4 million, the CGM has already made an impact. It has uncovered a US$ 266 million fraud and corruption scheme relating to the municipal services tax and the issuance of construction permits. Additionally, 11 public employees have been arrested and charged with corruption.
Corruption Detection Is Going High Tech
One of the most powerful tools the CGM has is data analytics. By analyzing available data, government officials can discover inconsistencies that shine a light on possible corrupt activities.
In one investigation, the CGM compared a list of 160,000 city employees against the city’s real estate property tax database. By doing this, the CGM found that more than 800 city employees were living lifestyles that they could not possibly support based on their official salaries. In a few highlighted cases, the employees would have had to work for decades without spending any money to have been able to purchase the assets they had accumulated.
Increased Transparency
Following the lead of the national government, São Paulo created a Transparency Portal. The Portal allows anyone to access detailed information about how the government is spending money. Since January of 2014, all contracts signed by the city can be downloaded by the general public. The Portal had an average of 13,950 visits per month during the first three months of 2014.
The Exchange of Information Is Increasing
Perhaps one of the most powerful of São Paulo’s initiatives is its efforts to increase the exchange of information among local authorities. In 2013, by working closely with local police and prosecutors, the CGM carried out five special operations to make corruption-related arrests. These joint efforts were publicized and the information was shared with authorities from the United States.
For foreigners seeking to do business in Brazil, these developments should come as a welcomed change in how Brazil deals with corruption.