Organizational forms of corruption networks: the Odebrecht-Toledo case

Abstract

Actors in grand corruption schemes often conspire and deliberately create sophisticated networks to extract huge amounts of public resources from government systems. They hide such conspiracies behind hybrid formal/informal arrangements. Using a mixed methods approach, this study investigates the corruption scheme initiated by former Peruvian President Alejandro Toledo and the Brazilian construction giant Odebrecht Group. We argue that separating the networks of the client (Odebrecht) and the agent (Toledo) sides provides analytical leverage for studying complex corrupt arrangements. We found that the organizational forms designed by corrupt actors on either side were essential to ensuring the secret and safe operation of the network. Introducing the concept of organizational form into corruption research helps better understand the nature of these networks. We also found that different parts of the networks are shaped by different types of corruption. The article concludes with implications for practice.

Acknowledgments

The authors would like to thank Jonathan Wexler for his valuable comments and suggestions.

Disclosure statement

On behalf of all authors, the corresponding author states that there are no conflicts of interest.

Additional information

Notes on contributors

David Jancsics

David Jancsics is an Associate Professor in the School of Public Affairs at San Diego State University. His research agenda focuses on social and organizational aspects of corruption and informal practices.

Jacopo Costa

Jacopo Costa is Senior Research Fellow at the Basel Institute on Governance. His research interests address topics in informal networks, illegal wildlife trade and the nexus between corruption and money laundering.