On July 5, 2019, one of Guatemala's deadliest and most infamous corruption cases landed in the murky world of the country's appellate court.
The case had started four years earlier when the Guatemalan Social Security Institute (Instituto Guatemalteco de Seguridad Social – IGSS) hired a pharmaceutical firm called Droguería Pisa de Guatemala (DPG) to provide a delicate treatment to high-risk kidney patients, despite what a lower court had declared was a fundamental lack of infrastructure to do so, and after it had allegedly paid a million-dollar bribe to secure the contract.
The scandal that followed – at least 150 patients reportedly fell ill, and over 50 died between the time Pisa began treating them in early 2015 and mid-2018 – would lead to the historic arrest and eventual conviction of a host of political and economic elites, including the former president of IGSS, business and banking leaders, and the son of a powerful Supreme Court judge, who herself faced charges in a separate case for trying to subvert the investigation.
*This investigation looks at a contentious deal between a major pharmaceutical firm and the Guatemalan Social Security Institute (IGSS). Following this deal, dozens of patients died and scores of others were infected. The case reached the highest courts where those implicated had bought what some said was an insurance policy to make sure they would never be prosecuted. Read the full investigation here.
Determined to overturn the ruling, the guilty parties now looked to the appellate courts. It was a good place to look: The appellate courts had long been targeted by influential political and criminal operators seeking to stack the courts with their allies, transforming them into a wall of impunity run by judges capable of throwing out even the most solid cases with the flimsiest of justifications.
And as the accused entered the court that July day – a dingy, dimly-lit tribunal inside the imposing concrete courthouse building in downtown Guatemala City – there was reason to be upbeat. Of the three judges who would decide their fate, at least one had been handpicked by operatives linked to the former president of the IGSS executive board; another was closely tied to several important allies.
Indeed, in some ways, the results had been rigged before the case had even begun.
SEE ALSO: Why CentAm Social Security Agencies Generate Corruption, Crime
Rigging Guatemala’s High Courts
In late September 2014, just two months before Pisa was awarded its contract with IGSS, a dozen magistrates who were up for election in Guatemala's high courts attended a brunch at a luxurious hotel overlooking Guatemala City's urban sprawl. The meeting was an audition of sorts, a time to glad-hand the backroom patrons who'd gotten them that far in the process.
One of those who allegedly hosted the magistrates at the brunch was Juan de Dios Rodríguez. Rodríguez was a trim, muscular man with high cheekbones, a chiseled jaw, piercing eyes and neatly combed grey hair. He was also the president of the executive board at IGSS.
Rodríguez had risen to political prominence through Guatemala's highly-influential military. After a decorated career in the field, in the early 1990s, he'd joined a notorious branch of the army's intelligence services, known as the D-2. Led by an ambitious and savvy officer named Otto Pérez Molina, the D-2 was a place where careers were made both inside the military and in civilian life thereafter. And over time, Rodríguez had purportedly gained the confidence of the D-2 chief, which would later help propel him to the upper echelons of power.
After the war ended in 1996, Pérez Molina went into politics. Rodríguez remained in state intelligence and later went into business, his construction company winning almost $400,000 in state contracts in the early 2010s. The pair never strayed far from one another, and Rodríguez continued to illustrate his fealty to his former boss. In 2008, for instance, when Pérez Molina came under scrutiny for possibly embezzling government funds when he was a congressman, Rodríguez reportedly covered for him. According to an investigation by elPeriódico, Rodríguez bought land from his former boss, providing him with a handy alibi for a suspect transaction that saw Pérez Molina return almost $90,000 to Guatemalan authorities.
Four years later, when Pérez Molina became president, he picked Rodríguez as his private secretary. Then, in April 2013, he appointed him to head the executive board at IGSS, putting Rodríguez in charge of thousands of lucrative state contracts and, as a result, making him one of the most powerful figures in the country.
IGSS is one of the government's largest institutions. It procures medicines, contracts companies to perform medical procedures and rebuild health facilities, among other jobs. Its bulky portfolio also makes it ripe for corruption. It was in that context that Rodríguez allegedly took on an unofficial but complementary role as the chief lobbyist for Pérez Molina's Patriot Party (Partido Patriota – PP) in the battle to engineer the country's Supreme Court and its appellate courts.
At the heart of this effort was the painstaking task of negotiating who ends up on the highly-coveted "postulation commissions," which put forward the final list of candidates for the high court vote. There are two separate commissions for the Supreme Court and appellate court elections, each with 34 seats. The more seats you control, the more aspiring magistrates you can get on the candidate list, and the better chance your chosen finalists have of being voted in by congress, which has the final say.

The idea is to separate the commissioners from high-level political interests to select candidates based purely on merit. In reality, the jostling for seats has long been a highly politicized affair, dominated by operators like Rodríguez. They splash hundreds of thousands of dollars in their efforts to position allies on the commissions. It is a minor investment considering the potential return: the chance to make millions of dollars raiding state coffers while guaranteeing your own impunity.
In the run-up to high court elections in 2014, Rodríguez purportedly met with lawyers and politicians to negotiate who would sit on the commissions and how they would vote. Rodríguez would later contest this in an interview with InSight Crime, saying the allegations were "not worth comment." Regardless, by late September 2014, the so-called "interest blocs" were in a position to execute those votes, according to a previous investigation by InSight Crime.
That was when the brunch occurred. The guests were candidates for the Supreme Court. In many ways, it was the ultimate insurance policy. The judges not only had the last word on many important cases, but they also had widespread influence on other judges' careers and deep-seated political contacts that had helped them reach those posts.
Similar meetings were held around the appellate court selections. By then, the aspiring magistrates for both the appellate and the Supreme Courts had spent weeks telling the postulation commissions they were independent, impartial officials of the law and the country's constitution. They had also refreshed and submitted their CVs and answered questions in a survey of what amounted to a kind of judicial final exam.

But the process, which was designed to ensure their independence, was riddled with corruption. In addition to efforts to rig the postulation commission, some magistrates had long lobbied for these posts. They understood that being a high court judge meant access to power, and power meant payoffs.
The payoffs were not just monetary but also favors – a job for an ally, a government contract for a relative, an assurance that tax authorities would not scrutinize unsubstantiated financial gains – and to that end, many of these judges had already met with the operators like Rodríguez.
In return, these operators expected loyalty and protection. And now, as congress was about to vote on the list of magistrates proposed by the postulation commissions, it was time to seal the pact between them.
"It was basically about an agreement among everyone, that if any [legal] situation arose, they should remember that those who had put them in their positions were the people in that meeting," Manuel Baldizón, one of those in attendance and at that time a leader of a prominent political party, Líder (Leader), would later say in a written statement to the Attorney General's Office.
Specifically, Baldizón said, they asked the magistrates to swear loyalty to President Pérez Molina and those in the meeting. The judges did so, and later that day, congress fulfilled its part of the deal, electing the candidates who'd brunched with Rodríguez to the country's highest court.
The Third Chamber of ‘Impunity’
When the time came to test the 2018 decision to convict those involved in the IGSS-Pisa case, the responsibility fell to
the Third Chamber of the appellate court (Sala Tercera de la Corte de Apelaciones del Ramo Penal, Narcoactividad y Delitos Contra el Ambiente).
All three of the Third Chamber's permanent judges had come through the 2014 high court elections, the same one that had, in part, been orchestrated by Rodríguez and other operators. To a certain extent, these backroom deals had already paid off. Prior to being handed the IGSS-Pisa case, the Third Chamber had proved to be a consistently inefficient criminal appellate court, resolving just four percent of its cases between 2015 and 2018, according to a report by Impunity Watch Guatemala.
The chamber was also accused of being one of the most corrupt. In 2015, it annulled a corruption conviction against two military officials. In 2018, the Third Chamber voted to uphold the immunity of a former president and mayor of Guatemala City investigated for allegedly using municipal coffers to fund his own political party.
Among those who also benefited from the Third Chamber's rulings in that time period was Blanca Stalling, the mother of Otto Molina Stalling. Molina Stalling was a former IGSS advisor who'd allegedly helped set up the deal between IGSS and Pisa. According to an investigation by Plaza Pública, Blanca Stalling was also part of Rodríguez's bloc of operators seeking to influence the 2014 high court elections. At the same time, she was up for a position on the Supreme Court.
"Blanca Stalling and Juan de Dios were key operators in naming [high court] magistrates," Alejandro Rodríguez, justice program coordinator at Impunity Watch Guatemala, told InSight Crime. "A lot of judges owe them favors."
Both would find themselves in serious legal trouble in the months and years following the high court selections, with Rodríguez embroiled in a series of high-profile corruption scandals and convicted in the lower courts of fraud in the IGSS-Pisa case, and Stalling arrested in 2017 after allegedly trying to convince a judge to let her son out of jail during the first IGSS-Pisa trial.
This is precisely why they'd reportedly put their allies in the appellate courts. In 2017, the Third Chamber granted her house arrest, even though she'd tried to evade capture. For his part, Rodríguez had a direct connection to one of the judges presiding over the July 2019 IGSS-Pisa hearing. Jaime Amílcar González Dávila, the president of the Third Chamber, had garnered the third-highest number of votes from the Patriot Party-Líder bloc in congress when it came to the final vote for appellate court judges in 2014, according to local press.
Another magistrate in the Third Chamber, Beyla Estrada, had her own potential conflict of interest in the case. She was married to then-President Jimmy Morales' communications secretary, Alfredo Brito.
At a time, the Morales administration was doing everything in its power to discredit the international judicial body, the International Commission against Impunity in Guatemala (Comisión Internacional contra la Impunidad en Guatemala – CICIG), which had helped lead the IGSS-Pisa investigation.
It was a remarkable turnaround. Just four years earlier, the sweeping arrests of dozens involved in the IGSS-Pisa case had coincided with the start of a golden era in Guatemala's fight against corruption in which the CICIG helped expose over 80 criminal networks, implicating over 1,000 people, including top government officials and business elites.
And while the CICIG's joint efforts with the Attorney General's Office to curb impunity were backed by a vast majority of Guatemalans, its incursions into elite affairs quickly drew backlash from the people it was investigating. This included then-Guatemala President Jimmy Morales (2016-2020), whose political party came under investigation in 2017 for allegedly having received illegal campaign contributions from some of Guatemala's most prominent business elites and whose family was under CICIG investigation for corruption.
With Morales' presidential immunity under threat, the president declared all-out war on the commission, casting it as a foreign troublemaker and attempting to oust its president and staff from the country. In August 2018, Morales announced the end of CICIG's mandate, giving the commission one year to pack up and leave. A month later, at the United Nations General Assembly, the president slammed the CICIG, labeling the commission a "threat to peace" and accusing it of sowing "judicial terror" with "selective justice."
Estrada's husband was part of this public campaign and was also involved in the president's backdoor plans to derail the CICIG's work and its US backing, according to a 2018 investigation by Nómada.
But Estrada did not recuse herself when the court granted house arrest to the president's brother and son, after both had been investigated and detained by the CICIG for allegedly using government funds to bankroll political events. Nor did she recuse herself when the same chamber granted a close colleague of one of her siblings – himself connected to a corruption scam – house arrest, according to an investigation by Plaza Pública.
"Estrada has shown herself to be a judge of impunity," said Álvaro Montenegro, a founding member of Guatemalan advocacy group JusticiaYa (Justice Now).
The CICIG would eventually leave the country, but not before many of the cases it had helped successfully prosecute fell in the appellate courts, among them the IGSS-Pisa case.
SEE ALSO: Guatemala's New Anti-Corruption Body: a Mere Smokescreen?
Off the Hook
From the beginning, the IGSS-Pisa case had been one of the country's most emblematic and well-chronicled corruption cases. In contrast to many other cases, this one involved some of Guatemala's most untouchable figures. Prosecutors alleged that their negligence had led to IGSS contracting a company ill-prepared to provide a delicate kidney treatment to vulnerable patients. Dozens who had received the treatment died or became ill. They had been jailed for years awaiting trial. Their convictions in 2018 had sent similar shockwaves through the country.
Yet, as the case wended its way through the upper echelons of the Guatemalan justice system, it largely disappeared from public view. Part of this was fatigue. So many corruption cases had dragged on for years, it was hard to keep track and maintain the public's attention.
But it was also the system. The Guatemalan judicial system is slow on its own and often bogged down further by legal maneuvers such as injunctions or special petitions to change venues that are designed to break the will of even the most determined prosecutors.
In that way, it was fitting that the following big decisions of the IGSS-Pisa case were announced in nearly empty courtrooms. The first came on July 5, 2019. It was just nine months since the stunning guilty judgment against the defendants.
Among those convicted was Rodríguez, the former president of the executive board of the IGSS. To this day, Rodríguez denies any wrongdoing in the IGSS-Pisa case, telling InSight Crime the executive board's decision to award Pisa its contract was a "clean process" and that "there was no cure" for the kidney patients that received the company's treatment. There was also Max Quirin, a prominent coffee producer, who was on that board at the time, and Otto Molina Stalling, an IGSS advisor who prosecutors claimed had openly spoken with a Pisa representative to arrange for the bribe that prosecutors said had led to the IGSS contract. Each had been sentenced to six-plus years in prison.
On this day, however, there were no prosecutors in attendance; no victims or relatives of victims, and few members of the press. Instead, there was a just smattering of attendees gathered in a stuffy room, a wooden fence separating the audience from a raised platform where the trio of judges sat overlooking the courtroom, the court's president González Dávila flanked by Estrada and one other colleague, a solitary Guatemalan flag draped behind them. A small group of defendants – minus Rodríguez, who was in jail pending additional charges – were ushered in and seated.
The verdict was unanimous.
In the eyes of the court, Rodríguez and his executive board – originally convicted of fraud – had acted in line with their functions when approving Pisa's contract. Any mistakes made in the bidding process could be chalked up to administrative errors, not criminal intent.
According to the Third Chamber, there was also no evidence that Rodríguez and the executive board had acted deceitfully when approving Pisa's contract – a prerequisite for proving fraud under the Guatemala criminal code. This came as a relief for members of the executive board and their lawyers, who had played down any potential anomalies in the process of awarding Pisa its contract from the start.
It did not matter that IGSS had handed Pisa its contract even after the company had, according to the Attorney General's Office, violated the conditions of the tender when it signed a subcontracting agreement with a separate company to provide the clinics and staff required for the treatment. Nor did it matter that Pisa did not appear to have any experience in providing the treatment.
In a letter to InSight Crime prior to publication of this series, Pisa strongly disputed this contention. It noted its over 20-year history in Guatemala, during which it said it had acted with "transparency, quality and expertise in the pharmaceutical industry without receiving any sanction or judgment, including in the case you reference in your communication."
As it was in the lower courts, the presiding judges made no mention of the heavy human toll. Instead, they framed the incident as an administrative glitch.
"There were no anomalies in the provision of service," former executive board member Max Quirin told InSight Crime, echoing the appellate court verdict. "If we made a mistake, it was an administrative one, not a criminal offense."
Molina Stalling was also in the clear. The court overturned his conviction while making no mention of the alleged bribe that he had been convicted for in the first place.
Again, the judges homed in on administrative details. As an IGSS advisor, Molina Stalling did not qualify as a fully-fledged public official, meaning he could not be judged for negotiating bribes on behalf of the state, the Third Chamber ruled.
The ruling was contentious, considering Molina Stalling was reportedly paid around $4,000 per month while on the roster of IGSS advisors. Those advisors had been hired by the former IGSS president, Juan de Dios Rodríguez. What's more, his own phone conversations showed he was in frequent contact with IGSS officials in the days and weeks before Pisa was awarded its contract.
To be sure, in a written response to InSight Crime’s investigation, one of Molina Stalling’s lawyers, Douglas Morataya, vehemently denied that his client had solicited a bribe from Pisa, saying there is no evidence the former IGSS advisor ever received the alleged commission. He added Molina Stalling was never heard on the wiretaps offering a bribe in exchange for Pisa’s contract.
One Last Court
In July 2019, just months before the CICIG left the country, it issued a report on the postulation commissions. Its main argument was that outside actors had skewed the process of selecting high court judges and other judicial officials. It was an appropriate bookend to the CICIG's time in Guatemala: One of the first reports the CICIG had ever done was also about the postulation commissions.
In between, the CICIG had helped build cases against what it called the "clientelist system," undermining the rule of law in Guatemala. It called the cases the "Parallel Commissions." In the second rollout of charges against people it said had illegally subverted the 2014 selection process, the investigators detailed the numerous office meetings, breakfasts and dinners the potential Supreme Court candidates had with political operators.
Two names of magistrates that came up repeatedly for the 2014 selection of Supreme Court justices were Josué Felipe Baquiax and José Antonio Pineda Barales. Investigators said they were among those who had met with Rodriguez's network of operatives, including Manuel Baldizón, the aforementioned presidential candidate. Baldizón later identified the two as part of what he told investigators were his "preselected candidates."
Investigators noted that the congressional vote that later put Pineda Barales and Baquiax on the court took just over an hour. Throughout, party leaders from Rodríguez's Patriot Party were in constant communication with their deputies about the vote, ensuring their own preselected candidates were also going to populate the country's highest judicial body.
So it was perhaps with a touch of fatalism that the Attorney General's Office appealed the Third Chamber's ruling to overturn the IGSS-Pisa case with the Supreme Court. The case landed with the Criminal Chamber, previously headed by Molina Stalling's mother, Blanca Stalling. But now, it was led by Pineda Barales and Baquiax.
More recently, the two had also been linked to the next generation of court operators. In June 2021, the Attorney General's Office requested that both judges have their immunity stripped for possibly abusing their positions on the postulation commission for the appellate court. But the allegations did not stop them from presiding over the IGSS-Pisa case just months later.
This time, a group of defense lawyers stated their case at a public hearing in mid-August 2021, while plaintiffs from the Attorney General's Office, IGSS and the country's Human Rights Ombudsman (Procurador de los Derechos Humanos – PDH) opted to submit arguments in writing. Then, in mid-October, lawyers received word the Supreme Court had upheld the ruling, arguing there were no errors in the Third Chamber's interpretation of the law.
Though declared innocent in the IGSS-Pisa case, Rodríguez is still awaiting trial in other corruption suits, currently from a cell in a notorious Guatemala City prison housing the country's most infamous white-collar criminals. There, Rodríguez has become an evangelical pastor, shacked up in a small but comfortable apartment adorned with religious slogans. He now runs a nightly sermon in a deluxe chapel within the jail, fully equipped with a wooden altar, electric guitars, drums and amplifiers, as well as stony decor. When InSight Crime visited Rodríguez in November 2021, he said his six years in jail had been a "blessing" that had given purpose to his life and allowed him to devote himself to religion.

As for Otto Molina Stalling and his mother Blanca, both escaped more jail time on the Third Chamber's order. But their legal troubles are not over. The US State Department sanctioned both for their alleged involvement in serious corruption. Blanca Stalling is still awaiting trial in an obstruction of justice case that has stalled for over four years.
There is no definitive count of how many patients died between Pisa taking over the treatment and the time it took for the case to go through the courts. Some tallies made by the local press and a leader of the affected families consulted by InSight Crime estimate over 60 deaths. Many of these were gruesome and painful, with one victim losing all of their teeth and another going deaf before ultimately succumbing to their illness. Almost all those who lost their lives also left behind distraught relatives who have slowly tried to rebuild their lives.
For its part, Pisa, the company at the center of the case, has emerged practically unscathed. It was originally ordered to pay around $400,000 in reparations to the victims and their families. Still, the Third Chamber's ruling absolved the company of any civil responsibility in the case, including compensation. To be sure, Pisa faces no legal liability for the deaths.
In its letter to InSight Crime, the company proudly stated that it "never stopped working during the legal investigations, and never fired anyone connected to the case, given that it always believed in the quality of its services and the Guatemalan justice system."
Pisa is also winning state contracts. In 2021, the company has reportedly won over $1.8 million in government contracts. One of its main clients is IGSS.
*Mattia Fossati, Mark Wilson and Olivia de Gaudemar also contributed reporting to this investigation.
*This investigation looks at a contentious deal between a major pharmaceutical firm and the Guatemalan Social Security Institute (IGSS). Following this deal, dozens of patients died, and scores of others were infected. The case reached the highest courts where those implicated had bought what some said was an insurance policy to make sure they would never be prosecuted. Read the full investigation here.
**This article was updated to include a written response from one of Otto Molina Stalling's lawyers on December 7, 2021. Prior to publication, InSight Crime requested comment from Molina Stalling, but did not receive a response to a series of questions related to the investigation.
***A previous version of this article incorrectly stated there was no public hearing prior to the Supreme Court’s October 2021 decision to uphold the Third Chamber’s ruling in the IGSS-Pisa case. The article was amended on December 7, 2021, to reflect that there was a public hearing.