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Dead Kidney Patients


Ground to a halt in Guatemala City's unrelenting morning traffic, a small team of government investigators began to worry they had lost their suspect.  

They had been tracking him for months, listening in on his calls and tailing his black Audi around the city. That day, on November 5, 2014, their intelligence suggested he was headed to a crucial meeting to seal the deal on a bribe worth over $2 million. 

The subject was Otto Molina Stalling, then an advisor for the financial branch of the Guatemalan Institute of Social Security. Known locally by the acronym "IGSS" (Instituto Guatemalteco de Seguridad Social), it is the state body that provides healthcare and pensions to over a million working Guatemalans. Due to its size and varied portfolio, IGSS had become something of a lair of corruption, and Molina Stalling, investigators believed, was carrying on that tradition.  

*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.

Still, he was a tricky target. Molina Stalling had made a habit of escaping the investigators, for instance, by dipping in and out of shopping mall parking lots. And now, hidden among the thick traffic, he was once again out of sight.  

Luckily, from the intercepted phone conversations, the team knew he was heading to a place by the name of "Zürich" – possibly Pastelería Zürich, a tranquil Swiss chocolatier in one of Guatemala City's wealthiest districts. 

The team headed to the café and, after a hurried search, found Molina Stalling's Audi parked outside.  

Inside, the investigators grabbed a table while seniors sipped coffee and snacked on pastries against a backdrop of stone walls and earthy wooden décor. From there, they watched and took photos of the IGSS advisor who sat in a quiet corner. Soon, two others joined him. Investigators later identified one of them as a businessman representing a firm called Droguería Pisa de Guatemala (DPG) – a subsidiary of the Mexican pharmaceutical giant of the same name.  

Pisa was hoping to win a lucrative contract with IGSS worth around $15.3 million, and the investigators believed the meeting had been set to negotiate a hefty commission the company would be paying to finalize that deal. 

Although they were inside the café, the surveillance team could not hear what was discussed that morning. But just hours after the meeting, they checked Guatemala's state contract registry and saw that the IGSS executive board had approved the decision to award Pisa its contract. 

For the investigators, the uncanny timing reeked of another crooked deal approved by a Social Security Institute long plagued by corruption. What they didn't know, however, was the lengths to which the network had gone to protect itself. And what they couldn't see then was that there would be a trail of bodies left in the deal's wake. 

SEE ALSO: The Legacy of How Guatemala Destroyed its Own Anti-Corruption Crusade

IGSS: The “Petty Cash Department”  

It is hard to comprehend how and why a low-level government advisor like Molina Stalling could have, according to investigators, ended up negotiating a million-dollar bribe on behalf of the state without first understanding the behemoth that is IGSS.  

Founded in 1946 on the impulse of Guatemala's first democratically elected president, Dr. Juan José Arévalo, IGSS was designed to guarantee public access to social security in all corners of the country. Today, it provides healthcare, pensions and compensation to over one million working Guatemalans whose salaries help bankroll a colossal budget reaching into the billions of dollars

It is these substantial resources and the need to constantly dish out lucrative contracts to healthcare providers that have gradually transformed IGSS into something corruption watchers refer to as the "petty cash" department. In other words, it is a tool for buying political favors from other state officials, politicians, judicial authorities and economic elites by handing them fruitful contracts, jobs or promises of both in the near future.  

Because of this leverage, top IGSS officials have become important political actors – many belonging to an elite bracket of society that for decades had been unaccustomed to meaningful scrutiny. But the sheer number of contracts up for grabs each year also opens the door for low-level operators like Molina Stalling to enter the fray. 

With the stakes so high, it is no coincidence that the executive board at IGSS – a six-member panel that is the final safeguard against poor service – is consistently staffed by members of Guatemala's political and economic elites, alongside highly-qualified medical professionals. 

Back in 2014, when Pisa was awarded its $15.3 million contract with IGSS, the executive board was led by an influential former military official-turned businessman, lawyer and politician named Juan de Dios de la Cruz Rodríguez López.  

Rodríguez became president of IGSS in 2013, having previously served as private secretary for then-president Otto Pérez Molina (2012-2015), a political alliance forged during the pair's joint time in Guatemala's elite military intelligence corps

He was the president's right-hand man and had landed the top job at IGSS after Pérez Molina controversially fired the incumbent IGSS director. The president quickly tasked his ally, Rodríguez, with "clearing out corruption" within the Social Security Institute. Instead, Rodríguez stacked it with allies: He hired over 300 advisors, including officials with links to corruption and the children of prominent state officials – one of them Molina Stalling. 

The executive board also included economic elites like Julio Suárez, then president of Guatemala's national bank, and Max Quirin, a wealthy businessman and a member of the country's most important chamber of commerce, the so-called Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations (Comité Coordinador de Asociaciones Agrícolas, Comerciales, Industriales y Financieras – CACIF).  

Quirin was no stranger to high-level public service. He'd previously served on the national bank's monetary board and later joined the executive board at IGSS, first as a representative of the national bank and then as the CACIF's nominee to speak for Guatemala's highly influential private sector. 

There was also Jesús Arnulfo Oliva Leal, the former dean of medicine at the San Carlos University (Universidad de San Carlos – USAC). USAC is Guatemala's largest and oldest university with outsized influence in politics. He was joined by another doctor, Erwin Raul Castañeda Pineda, who represented the country’s College of Doctors and Surgeons (Colegio de Medicos y Cirujanos de Guatemala). Finally, there was Julia Amparo Lotán Garzona, representing the country's labor sector. 

This setup is designed to ensure that IGSS' hefty expenditure is guided with the greatest administrative and medical proficiency that Guatemala has to offer. But with Rodríguez at the helm and the hiring of Molina Stalling in June 2013, it did not take long for things to go awry.   

The Mother-Son Connection   

Otto Molina Stalling was an auditor by trade. An ambitious young professional with a slim figure and neat black hair, he had a penchant for pricy cars, something seemingly at odds with his government service. Molina Stalling had made a career in public administration before joining IGSS, including two stints at the agency responsible for flagging potential misspending from government accounts. 

Part of his wealth could be explained by the fact that he came from an influential family. His father, Julio Molina Avilés, was a military colonel who served as health minister under former president Alfonso Portillo (2000-2004). His mother, Blanca Stalling Dávila, was an influential Supreme Court magistrate with connections to high-level politicians and strong ties to the military.  

Otto Molina Stalling. Photo: Soy502

One of those connections was to the IGSS executive board president, Juan de Dios Rodríguez. In 2014, both had allegedly taken part in a dubious plot aimed at stacking Guatemala's high courts with judges loyal to the incumbent Patriot Party (Partido Patriota – PP) and their political allies, according to an Attorney General's Office investigation and media reports. Rodríguez was one of the PP's main operators in that scheme, while Blanca Stalling was one of its presumed beneficiaries: She subsequently ended up on the Supreme Court.  

That connection may have had played a part in Molina Stalling's arrival at IGSS. Speaking to Plaza Pública in 2014, Blanca Stalling said that her son had met Rodríguez when he was still working in a government accounting office and was later offered a job by the president of the IGSS executive board. She insisted, however, that her relationship with Rodríguez began after Molina Stalling was given the job. In an interview with InSight Crime years later, Rodríguez played down any connection to Molina Stalling, saying he did not know him prior to the latter's arrival at IGSS.

In line with his past experience, Molina Stalling was hired as an advisor within the IGSS financial branch, the body overseeing how the Social Security Institute spends its money. Despite a relatively healthy salary – around $4,000 a month, according to Nómada – his position did not grant him any authority to influence IGSS' tenders. 

But once he was on the inside, Molina Stalling began tracking several IGSS contracts. Using a notepad later confiscated by authorities, he jotted down reference numbers and the names of multiple suppliers that would go on to win public tenders. 

That discovery may help explain why Molina Stalling was interested in Pisa, a company seeking a contract to provide a kidney treatment known as peritoneal dialysis to 530 IGSS patients.  

The company had previously won state contracts, mostly for providing medication, but never for kidney treatment. A highly delicate procedure requiring pristine hygiene, whether at home or in a clinic, peritoneal dialysis uses a set of different solutions and tubes inserted into the abdominal cavity to remove waste products from the blood when the kidneys can no longer do so. 

To get around this, Pisa had signed a private contract with a separate firm called Medicina Corporativa, with the former company effectively subcontracting the latter to provide the physical clinics and personnel to provide the treatment, according to a later official investigation into the case.  

The arrangement, reached just one day before the deadline to submit the contract bid to IGSS and despite subcontracting reportedly being forbidden under the tender's conditions, would become central to the case against IGSS officials. According to two government investigators that worked on the case, it allowed Pisa to meet the bid's basic requirements by declaring physical infrastructure that the company, in reality, did not own or directly operate. In fact, many of these services were never provided, investigators told InSight Crime, meaning many patients who might suffer complications would find little to no assistance when seeking help from Pisa.  

For its part, Pisa never faced questions concerning the contract. And prior to the publication of this series, Pisa, referring to itself by its acronym DPG, sent InSight Crime a detailed response to the charges, declaring, in short, it was the only one of the two bidders who "complied with all the requisites of the tender," and that "all of the contracting of DPG to provide its services was absolutely legal."

However, investigators also found that the IGSS executive board and another board responsible for reviewing contract bids did not note Pisa's lack of infrastructure. Exactly whose responsibility this was would later become a major bone of contention, with members of the executive board, such as Juan de Dios Rodríguez and Max Quirin, vehemently denying that the IGSS directors were liable for reviewing the technical capacity of companies bidding for state contracts with the Social Security Institute. 

Still, in early October 2014, Pisa won the bid. But to the firm's frustration, the company it had beaten out was appealing the decision; it had flagged the contentious subcontracting agreement presented in Pisa's bid and claimed there was no clear evidence that the company possessed the necessary infrastructure to meet the tender's basic requirements. What's more, the deal was yet to be approved by the IGSS executive board. Pisa needed one more push to get over the finish line. 

A Party and a Contract 

Later that month, on October 31, in what may have been the first time Molina Stalling caught wind of the bid, he found himself at a graduation party where he spoke to an IGSS kidney specialist with apparent knowledge of Pisa's predicament. 

"So, we were there talking about a few projects and [a doctor] told me that Pisa had won a bid for peritoneal dialysis," Molina Stalling told an associate in an intercepted phone call just hours after the graduation party. "But it hasn't been awarded yet... there's an appeal."  

That associate was Herbert García-Granados Reyes, an operator working outside the IGSS apparatus but who allegedly enjoyed privileged connections to Pisa executives. In the week following the graduation party, the pair traded frequent calls with the aim of inviting Pisa to secure the deal by paying a hefty commission of over $2 million, according to government investigators. In a written response to InSight Crime's investigation, one of Molina Stalling's lawyers, Douglas Morataya, strongly denied the allegations, arguing that his client then an advisor for the IGSS financial branch – did not have the incidence or faculty to influence the outcome of a state tender. He added there is no evidence that Molina Stalling ever received the alleged bribe.

Otto Molina Stalling and Herbert García-Granados Reyes. Photo: Soy502

But that would require additional help. Government investigators say the duo needed inside information and assurance from within IGSS that the appeals would not cause trouble and that the required officials would give Pisa's deal the green light.  

To that end, Molina Stalling had already spoken to the IGSS kidney specialist from the graduation party. And, thanks to his mother, Molina Stalling would also enjoy a direct line to the top of the IGSS hierarchy. 

That came via a former notary and legal advisor named Ricardo Grijalva. Grijalva had worked for Blanca Stalling when she headed Guatemala's Institute of Public Criminal Defense (Instituto de la Defensa Publica Penal – IDPP). He was also an alleged confidante of Juan de Dios Rodríguez and occasionally attended meetings of the IGSS executive board as an advisor, according to a government investigator close to the case.  

Once inside IGSS, Molina Stalling worked on Grijalva's command, the same investigator told InSight Crime. And when the IGSS advisor needed information from the upper IGSS hierarchy, he could seemingly reach out to Grijalva to get it, according to intercepted communications between Molina Stalling and his associates compiled in a government investigation and accessed by InSight Crime. Grijalva was never accused of any crimes related to the investigations into IGSS' deal with Pisa. 

Molina Stalling had everything he needed to set up a bribe, investigators would later claim. And with the appeals against the bid rejected, all that was left was to meet with Pisa in Cafetería Zürich on that morning in November 2014 and seal the deal. The investigators' account would later be vehemently denied by one of Molina Stalling's lawyers, Douglas Morataya, who in a written response to InSight Crime's investigation acknowledged the meeting took place but said that no audio recording exposing what was discussed that day had ever been presented during legal proceedings. He added that attending a meeting in a café does not constitute a crime under Guatemalan law.

When the IGSS executive board's decision to green-light Pisa's contract was uploaded to Guatemala's state contract portal, it seemed everything had gone to plan. That was until Pisa actually started administering the treatment.  

SEE ALSO: Why CentAm Social Security Agencies Generate Corruption, Crime

‘They’re Going to Die Sooner or Later’ 

Strung out on a hospital bed and barely able to walk, Miriam Ramos knew her husband was in serious trouble.  

"Give me a kiss," he told her, "Because I can't take anymore."  

He then rolled onto his side, leaving a despairing Miriam with little to do but turn around and leave the building. 

It was March 1, 2015, just weeks after Pisa had started administering peritoneal dialysis to 530 IGSS patients, among them Miriam's 55-year-old husband, Gustavo Mota Ixtamer, a municipal employee from a small town on the southern cusp of Guatemala's highlands.  

The problems had started right away. The equipment the company had given her husband to remove waste products from his blood had instead given him stomach pain. They sought help from Pisa in Guatemala City but were told his body needed time to get used to the new supplies. Unconvinced but with no alternative, they headed home, and her husband worked through the pain. 

A few days later, his stomach in agony, Gustavo headed to mass at a nearby church. There, he drank a cup of tea and began vomiting profusely. When Miriam came to pick him up, it was clear he was severely ill. 

They looked for a spot at a hospital in Guatemala City. But there was no room, they were told. The clinics were teeming with kidney patients who had contracted infections after using Pisa's equipment, some of them sprawled out on the floor.  
Instead, her husband was sent to a hospital near Guatemala's Pacific coastline. The heat was unbearable. Even worse, the hospital lacked a specialist to treat him. His pain worsened.  

That was when Miriam had comforted him, and Gustavo had told her that he could not take any more pain. But minutes after she had kissed her husband goodbye that day, Miriam was called back to the hospital. She came running, but when she arrived, he was already in intensive care. 

The next day, when she could see him again, he was hooked up to various machines, which beeped and hummed at a steady but disconcerting pace. By that time, he could no longer talk. He had had a heart attack, she was told, and although they stabilized him, he was fighting for his life. Miriam was in tears. 

On her way to the hospital the following day, a friend called her, stunned. Her husband had just died. She was left alone with two children, aged seven and twelve, who wondered where their father had gone.  

The story was one of many, piling up like the patients in the Guatemala City hospital. A steadily growing number of kidney patients were winding up in intensive care or, worse, dead.  

Complaints of poor treatment from patients and their families were also starting to flood into Guatemala's Human Rights Ombudsman (Procurador de los Derechos Humanos – PDH), sparking an investigation. After the PDH inspected Pisa's clinics in central Guatemala City, they declared that the company "lacked the necessary infrastructure, staff, equipment and supplies" to treat the patients they had been contracted to care for.  

The PDH later compiled their findings in a damning report: Pisa's clinics were too small; the company had not hired enough kidney specialists; the patients complained the kits they were given to administer the treatment at home were unclean. One patient had even found an insect inside a sealed dialysis bag. 

Worse, the catheters Pisa had provided the IGSS patients were not compatible with those of the previous supplier, meaning all of the patients had to undergo the delicate process of changing the tubes that transfer solutions in and out of their abdomens, further exposing them to infection, according to the PDH. 

The findings came in stark contrast to an internal IGSS investigation commissioned by the executive board in early 2015, which concluded the service provided by Pisa was better than that of the previous provider, according to former board member Max Quirin. What's more, in its letter to InSight Crime, Pisa said that a later investigation by Guatemala's national forensic institute, known by its Spanish acronym INACIF, had determined, "There was no negligence on the part of DPG nor its employees."

But for those who were suffering following the treatments, the casualties spoke for themselves. When the PDH published its report in May 2015, it concluded that Pisa's deficiencies had already provoked infections in 57 IGSS patients. There had also been seven deaths in the short time Pisa had been providing the treatment, presumably "as a consequence of the change in service provider which provoked the infections," according to the report. Many patients were now too scared to undergo a treatment that they needed to stay alive.

They blamed Pisa, but the company's executives did not share their view.  

"They're going to die sooner or later," a spokesman for Pisa told Nómada that same month.  

By that time, the kidney patients healthy enough to do so had mobilized and held protests, accusing IGSS and Pisa of manslaughter. The story had also made national headlines. The ever-louder public outcry would light a fire under an investigation that had begun many months before.  

The Investigation 

The investigation into what eventually became known as the IGSS-Pisa case started with a tip and a phone number. A young male subject between 35 and 40 years old, "very close to the top of the IGSS hierarchy," was thought to be contacting potential IGSS suppliers and offering his influence in exchange for bribes. 

That information found its way to the International Commission against Impunity in Guatemala (Comisión Internacional contra la Impunidad en Guatemala – CICIG), a judicial body backed by the United Nations that worked in tandem with the country's Attorney General's Office to tackle high-level graft.  

At the time, the CICIG was investigating a range of possible corruption cases inside IGSS. Now, with the tip in hand, its investigators decided to pull on this new thread. 

Finding out who the phone number belonged to was not hard. With just a quick search online, they found the phone number on the e-exchange website OLX next to the name "Otto Molina." The same name and number appeared next to a Nissan SUV for sale on a different site. The number also came upon a public tender application under the name "Blanca Aída Stalling Dávila." 

That was enough information to get a wiretap on Molina Stalling's phone. And weeks later, they listened in, as he first mentioned Pisa to his associate García-Granados after the graduation party in late October 2014, just hours after calling his mother to complain that his phone had been hacked. 
His mother, ever watchful, responded in kind.  

"Be careful what you say on there, Otto. They're not going to catch you as a collaborative witness or an intermediary or something," she told him. 

Molina Stalling, however, failed to take his mother's advice. Instead, he proceeded to share intricate details of Pisa's contract over the phone, while CICIG's investigators listened in and built a case. 

Just hours after the graduation party, he had reached out to his mother's confidante, Ricardo Grijalva, to ask for concrete details on the peritoneal dialysis contract, according to a report later compiled by the CICIG investigators. 

Days later, when the plan was gaining speed, they listened in as Molina Stalling and García-Granados talked numbers for Pisa's commission. 

- "…now we need to show the seña [commission]…let him know that it's been confirmed… for the backhander we'll ask for 15," said Molina Stalling. 
- "Okay, I thought it was 16," García-Granados replied. 

Based on those figures, the alleged bribe would equate to between 15 and 16 percent of the contract's total value – around $2.4 million. CICIG was gaining ammunition. Then Molina Stalling and García-Granados shared the location, date and time of their meeting with Pisa over the phone. "Right, tomorrow we'll grab it by the balls, that's for sure," said García-Granados. 

- Right, okay. All good." 

- "Okay, man. 9:30. Alright? 
- "9:30. Where? 
- "In Zürich." 

Armed with that intelligence, the team of investigators would spend the next morning camped outside Molina Stalling's house, waiting for their man to set off for the meeting in Cafetería Zürich.  

Surveillance Photo of Otto Molina Stalling and company in Cafeteria Zürich. Photo: CICIG

They had figured out the bribe, and would later stumble upon the much bigger problem. Namely, that Pisa lacked the necessary medical equipment and staff to do the job, as the PDH's report, government investigators, and scores of infected patients would later declare.  

As the number of infected patients kept climbing, so did the pressure for CICIG to move on its case. And so, on May 20, 2015, Guatemalan authorities arrested the entire IGSS executive board, along with Molina Stalling and his associates from the meeting in Cafetería Zürich, Pisa company executives, along with a select group of other IGSS staff involved in awarding the contract. Days earlier, with 13 kidney patients having died in just under five months, IGSS rescinded its contract with Pisa. 

Otto Molina Stalling in handcuffs. Photo: Guatemalan Civil Police.

The image of a resigned Molina Stalling handcuffed next to police was a sign that he had swam out of his depth. And that, this time, the status quo of corruption and impunity might be about to change. 

*Mattia Fossati contributed reporting to this article 

*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.

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