As Guatemala gears up to select new Supreme Court Justices and appellate court judges, InSight Crime is investigating how organized crime influences the selection process. This story explores the role of Roberto Lopez Villatoro, a.k.a. "The Tennis Shoe King," a businessman and lawyer who has become one of the most influential figures in these selection processes.
Like him or not, Carlos Castresana is a charismatic person. The Spanish judge has a flair for the dramatic and a showman's sensibility. In his public presentations, he speaks with an authority that makes everyone around him shrink in fear that he might point at them next and accuse them of some sort of transgression against humanity.
His fearless -- and some say, insolent -- nature led him to take on corruption in the beloved Real Madrid football club; to try to prosecute Augusto Pinochet and former Argentine military officials for human rights violations; and to become the first head of the United Nations International Commission Against Impunity in Guatemala.
Known by its Spanish acronym CICIG, the commission was supposed to root out what are known as "parallel" criminal structures. These networks co-opt state agencies, from the customs houses to the police to the courts.
The courts were of particular concern for Castresana and his 120-strong team of mostly foreign prosecutors, who had first arrived in Guatemala in 2007. Specifically, the commission put its substantial resources towards investigating the process by which the country selects its high court judges.
That process is led by what are known as postulation commissions. These commissions are a mix of civilian lawyers, law school deans and high court judges that, in the case of the high court judges, gather every five years to select the final list of candidates from which Congress chooses the country's judges. The commissions are supposed to be independent, depoliticized bodies that select judges based on experience, age and certain hard-to-define qualities such as honor.
In October 2009, just days after the postulation commissions had finished their work and Congress had selected high court judges, Castresana was ready to present the results of the CICIG's investigation to the Guatemalan people. And Guatemala was ready to listen. Since arriving two years earlier, Castresana had accumulated a lot of political capital, even if the CICIG itself had not actually prosecuted that many cases.
Castresana knew how to draw a crowd: with the Spanish judge there was always the strong possibility there would be some good headlines. After a short preamble justifying the commission's interest in the process, he launched into the meat of his presentation.
"There are six people that we don't think should be [in the Supreme Court]," he said, the press feverishly scribbling his every word in their notebooks. As expected, he then named them and shamed them, before turning to the man allegedly behind the whole scandal.
"There is an investigation that is attempting to establish criminal responsibility of at least one person [for this situation]," Castresana added, pausing for effect. "The businessman, Sergio Roberto Lopez Villatoro."
"We don't think these are the isolated actions of this person."
Lopez Villatoro, a.k.a. "The Tennis Shoe King," was the chief operator who had corrupted the selection process for the postulation commissions, Castresana said. He then accused Lopez Villatoro of pulling the necessary puppet strings to ensure that 26 of his picks – out of a total of 54 people – sat on the two commission boards that would select the final judges for Guatemala's highest courts.
"We don't think these are the isolated actions of this person," Castresana added, a PowerPoint presentation glowing behind him. "These actions are coordinated with the interests of parallel structures."
Castresana went on to say these "parallel structures" were illegal adoption rings, drug trafficking interests, military officials connected to human rights abuses and corrupt politicians. Lopez Villatoro, the Spanish judge insinuated, was engineering the courts for these criminal interests.
Roberto Lopez Villatoro says that he first sold tennis shoes out of the back of his car. He was in college and his girlfriend at the time was pregnant. He needed the money and answered an ad in the newspaper. The shoes were cheap knockoffs, but there were few laws about falsified merchandise or breaking patents back then. He did not ask questions about the origin of the shoes, and when it came up, the owner said he got them from Panama.
It was hardly an issue. In Huehuetenango, Lopez Villatoro's home province along the Mexico border, "contraband" is a way of life. The porous border where Lopez Villatoro grew up is flooded with cheap merchandise that skirts customs. Entire businesses emerge around these goods; legendary criminals often get their start by moving contraband.
Besides, by selling shoes that may or may not have been contraband, Lopez Villatoro says he could pay the bills for his young family. Soon Lopez Villatoro was looking to strike out on his own. With a neighbor who used her house as collateral, he says he took out a $10,000 loan from a bank. A friend got another $10,000 as an advance from a cardamom farmer in the Alta Verapaz province, and the two opened up their first shoe store in the province's capital, Coban. Soon after, they opened another store in Huehuetenango.
Along the way, Lopez Villatoro met a shoe distributor who, for security reasons, was trying to leave Guatemala. The two negotiated a deal for the man's remaining merchandise, and Lopez Villatoro began selling wholesale to the shoe stores all over the country. It was just the beginning.
At the time, his foreign provider would sell him shoes for an average of $12 a pair that he brought from China through Panama. Eventually, he began to import directly from China via a Chinese woman he'd met in California. The difference, he says, was significant. In addition to getting most shoes for an average of $5 a pair, he could get specialized shoes for significantly less.
One style, which he called "yellow boots," was particularly popular. His old provider used to sell these to him for $20 a pair. His new provider sold them at $9.80 a pair, and he sold them to the stores for $35 each.
"[The shoes] aren't falsified. They are replicas."
"I made $170,000 in one day," he told InSight Crime.
Were they legal?
"They are not 'falsified,'" he explained, a smile crossing his face. "They are 'replicas.'"
Replicas, as the government's ombudsman said in a later investigation into Lopez Villatoro's businesses, meant "old models."
Lopez Villatoro expanded, selling shoes in Nicaragua and the Dominican Republic, among other countries. At the height of his shoe business in 1999, Lopez Villatoro says his various distribution companies sold 10 million shoes.
"I had no competition," he told InSight Crime.
Still, Lopez Villatoro says he mostly kept a low profile in those first few years. Few in Huehuetenango even realized that he had become wealthy, he says.
Birth of 'The Tennis Shoe King'
The same year Lopez Villatoro sold 10 million shoes in Central America and the Caribbean, he married Zury Rios. Zury is the daughter of retired General Efrain Rios Montt. Rios Montt is arguably the most famous retired military officer in Guatemala, even including current retired general and now President Otto Perez Molina.
Rios Montt's fame comes largely from a short stint in which he held power between March 1982 and August 1983. It was the height of the war in Guatemala. A loose coalition of leftist guerrillas had grown steadily in the countryside and the cities during the previous years, and Rios Montt took power in a military coup. His job was straightforward: destroy the insurgency.
Interpreting just how Rios Montt achieved this goal remains a divisive subject in Guatemala. For some, he saved the country from communism, even if he killed thousands of innocents and displaced thousands of others during the short time he held power. For others, he committed genocide.
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Rios Montt's divisive role extended to politics as well. He ran for president in 1974, and was beaten in what many believe to this day was a fraudulent election. In the late 1980s, he created his own party, the Guatemalan Republican Front (Frente Republicano Guatemalteco - FRG).
Drawing from some of the conservative, war-torn areas that Rios Montt himself had targeted during his time running the government in the 1980s, the FRG had won a majority in Congress by 1999. Rios Montt became the president of Congress and his daughter Zury became a congressional representative.
As the unofficial first son-in-law of Congress, Lopez Villatoro began to move in government circles on a more regular basis. He fraternized with ministers, diplomats, congressmen, judges, prosecutors, and even President Alfonso Portillo.
Inevitably, things changed for Lopez Villatoro. His anonymity was gone, and suddenly he faced a flood of requests from both his home state, Huehuetenango, and his adopted home, Guatemala City. Some people asked for political favors. Others wanted money. He says he frequently obliged on both counts.
The marriage also opened him up to scrutiny. In 2001, Sylvia Gereda Valenzuela, a journalist and editor for elPeriodico, baptized him "El Rey del Tenis," or "The Tennis Shoe King," a reference to his skills moving and selling what she said were fake Fila and Vans, among other brand name shoes.
His defenders say Gereda Valenzuela was angry because Lopez Villatoro had beaten her husband in a bid to sell the government masses of cheap rubber boots. But in reality, Gereda Valenzuela's article had followed a front-page account from Prensa Libre, which called into question Lopez Villatoro's import of tennis shoes and used tires. Both articles were damning accounts and included tabloid-like references to his marriage with Zury Rios.
"The Rios Montt family causes a stir once again," Prensa Libre wrote, before delineating what it deemed the "illegal" business dealings of Congress' first son-in-law.
However, an ombudsman's report later exonerated Lopez Villatoro and questioned the newspapers' reporting.
"What Mrs. Gereda Valenzuela said in respect to the falsification of shoe brands is not true," the report said, before adding that a search of the Lopez Villatoro distribution warehouse "turned up no Fila shoes" at all.
Several judicial inquiries have been launched into Lopez Villatoro since, but Lopez Villatoro has never been charged with any criminal activity.
The Power of the Bar Association
Despite the lack of formal charges, the nickname, and Lopez Villatoro's reputation as an importer of contraband, stuck. This is perhaps because it was during this time that Lopez Villatoro became the unofficial lobbyist for the FRG in all matters concerning the judicial system. As he tells it, he fell into this role almost by accident. It began when a small group of lawyers in the Bar Association of Guatemala, known by its acronym CANG, asked him to participate in the association's internal elections.
The bar association's internal elections are important for plenty of reasons. They're seen as an entry point for lawyers hoping to some day earn posts in high courts and in government ministries. These elections also play a direct role in the postulation commissions that nominate the final candidates for not only the high court judges, but also the Attorney General, the comptroller, and the Supreme Electoral Tribunal.
The private sector gained more control over the selection ofGuatemala's most important judicial functionaries.
By law, the CANG has a certain number of representatives on these commissions. That number depends on the position in question. For the selection of appellate and Supreme Court judges going on now, the CANG has 11 of 34 positions on the commission.
The rise in the CANG's importance forms part of a larger story in Guatemala – a story about how, since the end of the war, the state has steadily become an appendage of special interest groups. In 1993, following a failed "technical coup" by then-President Jorge Serrano, in which the president tried to dissolve Congress and the Supreme Court, the government passed a series of reforms that gave the CANG and the universities more seats in the postulation commissions. What this meant in practice is complicated, but can be boiled down in one phrase: the private sector gained more control over the selection of Guatemala's most important judicial functionaries.
"This gave the lawyers closest to the private sector a hegemony over the Supreme Court, the appellate courts and the Attorney General's Office," the news website Nomada wrote in its superb overview of these selection processes.
This hegemony was clear to Lopez Villatoro, who also saw that the country's most powerful lawyers represented but a small, Guatemala City-based elite who controlled the elections via the CANG. To be sure, the provincial backgrounds of the lawyers who first approached him asking for favors stirred personal sentiments about the way class plays a role in determining standing in Guatemala.
Lopez Villatoro also pitied these small-town lawyers. Their first push for a seat on the CANG was destroyed by a well-oiled machine: the Guatemala City lawyers who were backed by more traditional elite interests. These "vacas sagradas," or "sacred cows," as they were called, had a lock on these CANG posts, Lopez Villatoro noted, as long as CANG held its elections in the capital city.
The 'Emerging' vs. Traditional Elite
Lopez Villatoro's ire reminded him of his childhood in Huehuetenango. He says he was about 10 years old when he realized that he did not like "the rich people." He was in school, and the wealthier kids -- those whose families owned large coffee farms or flour mills -- picked on him. The teasing turned into fistfights, and Lopez Villatoro says he eventually switched schools in part because of the tensions with his classmates.
Lopez Villatoro is quick to mention that he was not poor; nor was he particularly rich. He says his father owned the largest store in his small border village, Cuilco. From a young age, Lopez Villatoro worked in the store doing things like packaging the sugar into the one-pound plastic sacks the family sold in Cuilco, especially on the weekends. His father paid for his education, but Lopez Villatoro insists that he and his family were almost always working.
As an example, he says that while he was selling his first tennis shoes, one of his older brothers was selling coffee from Huehuetenango in the big cities. That brother, Julio Cesar, has since become a congressman.
Together, the two have become poster boys for what they call the "emerging" elite in Guatemala. These emerging elites have new income streams, often from non-traditional imports and exports, such as tennis shoes. The new elites also often benefit from their relationship to the government. Congressmen, mayors and military officers alike are also frequently classified as "emerging" elites due to their rising commercial interests, land-holdings and businesses they have obtained in recent decades. Some of these emerging elites have used corruption, contraband, and illicit gains to foster their economic growth. They have solidified these holdings by financing political campaigns and eventually, as was the case of Rios Montt, creating their own political vehicles.
These elites have used all forms of legal and illegal measures at their disposal to maintain this control.
The economic and political power of the emerging elites has caused them to butt heads with the more traditional elites. In the simplest terms, these traditional elites are landowners, bankers, industrial and exporters of things like coffee and cotton. The core of this group runs the CACIF, a multi-layered business association that has served as the parallel government of this country for decades. Like the elites it represents, CACIF's economic portfolio ranges from the traditional agribusiness to the banking sector.
See the adjoining story in this special investigation: Justice and the Creation of a Mafia State in Guatemala
These elites have used all forms of legal and illegal measures at their disposal to maintain this control. In the 1980s, as chronicled by a recent Plaza Publica article, they helped finance the counterinsurgency campaign waged by Rios Montt and other generals, sometimes loaning their own infrastructure to the military's anti-communist crusade that included razing and massacring entire villages.
Most notably, the CACIF has maintained an iron grip on the government's finances. Guatemala's tax collection, measured in terms of a percentage of GDP, ranks among the lowest in the region. Any effort to alter this tax regime has met with staunch opposition. And while it is not as monolithic as it once was, the CACIF's nucleus of leaders, who are referred to as the G-8, remain highly influential in the government and still have tremendous access to the most powerful politicians and government officials, including the president, congressmen, judges and prosecutors.
The pent-up rancor against these elites helps explain nicknames like "sacred cows," applied to the traditional elites' lawyers in the country's bar association. But by the time Lopez Villatoro was tapped to help the group of provincial lawyers gain more of a footing in the CANG, the sacred cows were beginning to lose their grip on power.
By the early 2000s, President Portillo and president of Congress Rios Montt were directly challenging this traditional elite's economic power base. The two moved to change the tax code, which included increased taxes on alcohol sales. Portillo, meanwhile, liberalized trade rules by presidential decree, opening up the traditional economic powers to more competition in the chicken, cement and beverage sectors.
There was also an attempt at judicial reform. Congress introduced a bill meant to change how the CANG operated, decentralizing the election process and opening it up to more provincial influences. After two years of lobbying, cajoling, and trading favors, Congress passed the "Colegiacion Obligatoria" bill. Portillo signed it into law in 2001. The CACIF's hegemony over the CANG was over, and its tight control over the government's tax and tariff systems was in the balance.
But the battle for control of the judicial system had only just begun.
Not everything was going according to plan for Lopez Villatoro in the early 2000s. Congress, at the behest of established economic groups and the United States, introduced a bill to regulate contraband. The bill smacked at the heart of Lopez Villatoro's business. Adding to his dismay, it was backed by his father-in-law's party, the FRG. Fuming, Lopez Villatoro organized a protest with the street sellers who regularly hawked his tennis shoes from their makeshift stalls along Sixth Avenue in Guatemala City. The bill passed anyway.
Lopez Villatoro was also going through some personal turmoil at the time. Just as Rios Montt was leaving Congress, Lopez Villatoro divorced Zury, his wife. The two remain cordial, he says, and he still has contact with "el viejo," his former father-in-law.
The lesson was clear: you can control Congress and even the presidency, but to fight the traditional elites, you need more control of the judicial system.
Rios Montt and Portillo faced their own problems, which stemmed from their inability to control the courts. After the Constitutional Court ruled that Rios Montt could not run for president since he had participated in a coup, non-governmental groups in Guatemala and abroad clamored for the retired general to be prosecuted for human rights violations committed during the war. For his part, Portillo faced embezzlement charges that would eventually land him in a United States prison cell.
Both Rios Montt and Portillo viewed these efforts to prosecute them as part of the class war playing out in Guatemala. The lesson was clear: you can control Congress and even the presidency, but to fight the traditional elites, you need more control of the judicial system.
To obtain that control, they returned to Lopez Villatoro, who was mobilizing his troops inside the CANG. He created a quasi-political coalition, or "planilla" as they are known, called Justice for Change (Justicia para el Cambio). Money, parties, lobbying, and backroom deals followed. In a report in 2009 (PDF), the UN's CICIG described the process as a virtual "electoral" campaign.
"These negotiations take place via political lobbying, the hosting of events, lunches, classes and campaigns that bear the tinge of an election, with the intention of winning favors and winning the groups linked to the interests of each sector of the interest groups with the judiciary," the UN group wrote. "That is how some lawyers, jurists and businessmen have begun to function as intermediaries between the interests of some and the work done by others, within the political realm."
Justice for Change was not alone. All the special interest groups -- which included traditional and rival "emerging" elites, such as one run by President Colom's own sister-in-law, Gloria Torres -- spent money on these elections, in the hope of influencing the postulation commissions. Lopez Villatoro says his group simply did it better and had a more appealing platform, which is why, by 2009, they controlled 40 percent of the CANG delegates on the commissions.
Lopez Villatoro's reach did not end there. He also sought to influence the universities, the other major non-governmental presence on the postulation commissions. According to Guatemalan law, all law school deans must have a seat on these selection committees.
This is where the politicking surrounding the commissions is perhaps most evident. To counter the shifting sands with regards to who controlled the commissioners from the bar association, some special interests simply created new law schools. Since 1995, the number of law schools has gone from four to eleven. According to Nomada, three of these law schools currently have less than ten students and two of them have yet to graduate any students at all. No matter. Like the CANG, law school deans currently represent 11 votes in the postulation commissions for appellate and Supreme Court judges, or about a third of the votes.
The only interest group to wield more control over this selection process are the judges themselves: the appellate court sends 12 delegates to the commission selecting Supreme Court Justices; the Supreme Court sends 12 delegates for the commission selecting the appellate court judges.
All parties vie for influence with these commissioners, through the bar association, the universities and the political power blocs. As Nomada pointed out in a recent article, numerous judges have multiple "jobs," some of which do not require the judges to even show up at work.
It was this type of "exchange" that CICIG head Carlos Castresana latched onto when he vilified Lopez Villatoro in October 2009, just days after Congress had selected the high court judges. Specifically, Castresana said Lopez Villatoro bought at least 13 judges and lawyers' influence by paying for them to do post-graduate studies in Spain prior to the 2009 postulation commissions that selected the high court judges. Of these, three became members of the commissions, Castresana said; others became candidates for high-court posts.
Castresana also made references to what he called "Terna X," a mysterious three-person coalition within the postulation commission for the Supreme Court. This coalition had engineered the voting so as to ensure that four of the six judges considered "unsuitable" had become magistrates for the court.
Castresana said these Supreme Court judges were "tainted" by conflicts of interest. They had issued questionable decisions regarding criminal and corruption cases, among other professional matters. In the end, he said, they lacked the "honor" that the posts required and that the law demanded.
Even worse, Castresana believed that these decisions were part of a long-time and widespread pattern in Guatemala.
"I don't think that this is a 2009 problem with these postulation commissions," the Spanish judge said. "I get the feeling that this is a much older problem, and one that greatly affects the Public Ministry, the National Police, the judiciary and even the penitentiary system, but I'm referring to the clandestine security apparatuses."
Although Castresana offered little proof, the toxic environment that followed his press conference led to an unprecedented political upheaval. And days later, the government removed three judges from their posts, in some cases without any investigative follow-up by judicial authorities or Congress.
For his part, Lopez Villatoro was reeling. His coalition vilified, he went on the offensive, filing a formal complaint to the human rights ombudsman's office and attacking Castresana for being a shill for the traditional elites. He went to the Attorney General's Office and offered to testify in any and all cases against him.
Regarding the courses in Spain, he told the ombudsman that he, and several others, had pooled money to pay for the 13 judges and lawyers because they were having trouble moving money into Euros. When InSight Crime inquired directly about his CANG coalition's connection to criminal interests -- including illegal adoption rings, drug trafficking, human rights abusers, and corrupt politicians -- he said that he had dealings with a lot of people, and that he could not control who his coalition interacted with.
His analysis: the traditional elites used Castresana to vilify him, and they had won. In the end, he says the "unsuitable" judges that were removed were replaced with pro-traditional elite judges.
His enemies, meanwhile, crowed. A headline in elPeriodico of a story written by Gereda Valenzuela read: "The 'Tennis Shoe King's' Empire Has Fallen."
The Making of a Gentleman Lobbyist
Following the 2009 process, Lopez Villatoro says he tried to quit politics. He says he was a tired, beaten man and was all but ready to give it up when he started hearing whispers in the CANG about how "the king is dead." Pride, and a good dose of capital from some of his old friends, pushed him back into the game. Only this time, he said he had a different strategy: ensuring that the politicking that surrounded the postulation commissions happened more openly.
One of his first candidates for the CANG post-2009 was Oscar Cruz, a relative unknown. Despite being about as charismatic as a tree, Cruz went on to win the CANG's presidency. The Cruz victory was a clear signal that Lopez Villatoro still had a lot of juice in the bar association and caused some to call for Cruz's resignation.
More organizing and back-scratching followed, as did more victories for the "Tennis King" in the CANG. By 2013, Lopez Villatoro's machine was back in full swing, electing members of the CANG's Board of Directors and helping to elect its president once more.
He also separated himself from his export-import business and founded his own law firm (calling it Lovi, which is pronounced "lobby" in Spanish, but stands for Lopez Villatoro). Ostensibly the firm manages real estate. Off the books, it is a lobbying operation. He re-tooled the political message of his coalition within the CANG and used words like impartiality, dignity and independence. The group has its own platform and a description of "suitable" candidates for the high courts. It is part of a re-branding of the "king" himself.
"What bothers him is inequality," Lopez Villatoro's sister, Clara de Paiz, told me when I met her in Lovi's packed office, just across the street from the US embassy in Guatemala City.
"That's why it looks like this were Mother Teresa's headquarters," she added. "He doesn't know how to say no."
Some might dispute this notion. Lopez Villatoro says he doesn't benefit much from this politicking, but his claims ring hollow. His former import-export business D'Lovi (which his younger brother now runs) has benefitted from state contracts to purchase large bundles of tennis shoes and boots. In 2009, CICIG counted more than $1.5 million in contracts benefitting Villatoro. (In his complaint to the human rights ombudsman, Lopez Villatoro claimed it was much less but did not specify by how much.)
What's more, Lopez Villatoro's political colleagues clearly gain by having influence and protection in the judicial system. In Guatemalan lingo, this would guarantee the earning of a "commission," a euphemism for a favor, a contract or a cash payment. At first, the the primary beneficiary of Lopez Villatoro's efforts was Rios Montt's political party the FRG. But that circle has expanded, accompanying the spread of Lopez Villatoro's influence.
Lopez Villatoro is now seen as one of the good guys.
His critics say that Lopez Villatoro's undue influence in the judicial system is evident. After his former father-in-law, Rios Montt, was convicted for genocide, the Constitutional Court overturned the conviction. And when Attorney General Claudia Paz y Paz, who brought the case against Rios Montt, tried to secure another four years as the nation's top prosecutor, Lopez Villatoro's critics say he played a hand in making sure that did not happen. To be sure, her replacement, Thelma Aldana, was one of the magistrates that Castresana had declared "unsuitable" for the Supreme Court. (Lopez Villatoro said he didn't participate in the process. "There was no room for me," he told InSight Crime.)
The postulation commission that blocked Paz y Paz was characterized by a new set of alliances. For perhaps the first time, the emerging elites and the traditional elites put aside their differences over tax laws, trade liberalization policies and who should make the most money from government corruption, and came together to fight a common enemy: Paz y Paz.
The meshing of the traditional and emerging elites has made this current process to select Supreme Court and appellate court judges harder to follow. The playing field is more complex and varied, and there is no one with a monopoly over the commissions like the one Castresana said Lopez Villatoro enjoyed in 2009. Lopez Villatoro is said to have about a third of the commissioners in each of the postulation commissions. He neither confirmed nor denied this assertion when InSight Crime inquired.
But his role is more nuanced now. Given some of the alternatives jockeying for position in the commissions, Lopez Villatoro is now seen as one of the good guys. It is a strange turn, especially for a man who was once painted by the ultimate judge as the ultimate villain. He meets with diplomats and members of the press. (He attended the US Embassy's 4th of July celebration this year.) He hosts "open house" parties where politicians hobnob with judges and other members of the judicial system. He negotiates with the various political parties and economic groups, including the CACIF, and he has offered to do the same with the civil society groups who have long vilified him.
"I have an opportunity to clear my name," he told InSight Crime.
"I am not what they say I am," he added. "I am not what Castresana said I am."
Yet he admits that this new image of his has much to do with increasing cynicism in Guatemala, where innocence or guilt is increasingly irrelevant. In Guatemala, only one thing seems to matter.
"I am not a saint," Lopez Villatoro told InSight Crime. "I have power now. Why? Because I won."
Correction: A previous version of this article stated Gloria Torres is the sister of former President Alvaro Colom. Gloria Torres is the sister of Colom's ex-wife, Sandra Torres.