Less than 48 hours before a new attorney general takes office, prosecutors in Guatemala have added another and perhaps the strongest layer of accusations against President Jimmy Morales for illegally financing his 2015 presidential campaign, heightening tensions between the presidency and the justice system and implicating some of the country’s most powerful business interests.
The new allegations were released May 15, two days before Attorney General Thelma Aldana leaves office, in a dramatic press conference by outgoing official alongside the joint prosecutor, the International Commission Against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala - CICIG). The allegations, which are not formal criminal charges against Morales, were based on declarations, emails and documents provided to prosecutors by administrative staff of Novaservicios, a marketing and communications firm.
Investigators said that beginning in August 2015, the firm channeled at least 8 million quetzales ($1,075,000) from various top-level businesses to Jimmy Morales' campaign, ostensibly to pay for election observers, or what are known as "fiscales de mesa." Morales' party, the National Convergence Front (Frente de Convergencia Nacional – FCN), only reported 103,706 quetzals in spending on the observers, one of several transgressions prosecutors say they have found in the party's accounting of its victorious campaign.
Prosecutors did not specify if Morales had committed a crime in this part of the process, but during the questions following the presentation of the case, Aldana stated that the Attorney General's Office has "abundant elements" to argue, for a second time in less than a year, that Congress should strip the president of his immunity in order to allow the probe to move forward.
That decision to ask Congress, however, will not be up to Aldana. Her term ends May 17.
President Morales, who is finishing up a state visit to Israel, did not comment publicly on the latest accusations. In the past, he has said that neither he nor his campaign committed any crimes.
This is the third phase of the case. Phase one -- presented in August 2017 along with the request to strip the president of his immunity -- claimed that the FCN simply stopped accounting and reporting campaign contributions in August 2015, some four months before the end of the campaign. When the party realized that it was being investigated in late 2015, it tried to reconstruct a financial narrative that prosecutors say does not hold up to scrutiny.
Phase two, which was announced in April 2018, focused on contributions given to the party by powerful businessmen to allegedly pay for observers at the voting centers. The contributions were not reported to the Supreme Electoral Tribunal (Tribunal Supremo Electoral - TSE), the government body tasked with monitoring campaign spending.
Phase three appears to be an extension of phase two, adding to the list of businessmen who claim they were helping the party keep watch over a contentious election. Those newly implicated include Felipe Bosch, José Fraterno Vila, José Guillermo Castillo Villacorta, José Miguel Torrebiarte and Salvador Paíz. Their names and their companies are well known, having been in the center of political and economic power for decades.
As if to put an exclamation mark on this aspect, Aldana and CICIG Commissioner Iván Velásquez showed to the packed Attorney General's Office press briefing room facsimiles of signed checks and other proof provided by these businessmen, all of whom have been called to testify on June 1.
Their motives the businessmen had for supporting Morales, however, are less clear. While they claim to have been interested in safeguarding democracy, investigators speaking to InSight Crime on the condition of anonymity said the businessmen found themselves without an ally.
At the time they made their arrangement with the FCN, one candidate had rejected their overtures while the other was simply unappetizing. The result, investigators say, was an alliance with FCN operators, who investigators hinted may have benefitted personally from the unreported transactions.
"When the rules around campaign financing are weak and permissive, the consequences are that there is no or little transparency regarding politics or money ... and illicit enrichment," the prosecutors' report said.
See the entire CICIG presentation in PDF format below:
InSight Crime Analysis
There are three important things to keep in mind while analyzing these latest, explosive accusations.
First, these accusations come from the most important businessmen in the country who are themselves now the key witnesses against a sitting president. These businessmen appear to be sending a message to both Morales and other politicians that support the president, and this may sway Congress, which has so far protected the president by not removing his immunity, to change its position.
Second, the announcement comes just hours before Aldana gives up her position as the country’s attorney general, making it more difficult for incoming Attorney General Maria Consuelo Porras to ignore or bury the case.
Third, the evidence is the strongest yet that the president and his party committed serious violations of campaign finance law. Portions of what was presented, for instance, appear to come from what prosecutors told InSight Crime are original documents and records of the contributions that the businessmen provided to them.
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The next few days will be tense and determinant for President Morales. He has spent the last few months trying to establish a strong coalition of varied interests, all of whom have something in common: They want to see the multiple investigations into their alleged transgressions halted.
To this end, they have been working on both the domestic and the international front. On the domestic front, Morales replaced his interior minister with an ally, shutting down cooperation between the CICIG and the police; he has developed a strong set of allies in Congress; he has asked for the removal of Swedish Ambassador Anders Kompass, a vocal and financial supporter of the CICIG and its investigations; and in Porras he has named a new attorney general who he hopes will be a strong supporter of the president.
Meanwhile, in Washington, several US Senators have declared they plan to put a hold on $6 million in funding for the CICIG, which they say is undermining justice in a case against a Russian family. A US businessman and a prominent columnist have also taken up the cause of what is popularly known in Guatemala as the "Corrupt Pact." And the government has made common cause with the Israeli government in its bid to make Jerusalem its capital.
In other words, the battle is at its inflexion point.