Guatemala’s top prosecutors say that President Otto Perez Molina was involved in a massive customs fraud scandal, the same day that former Vice President Roxana Baldetti was arrested for her alleged role in the network. 

Baldetti was placed under arrest while staying at one of Guatemala’s largest hospitals, where she checked in on August 16, reported elPeriodico

She was arrested on several charges related to a massive customs fraud scandal known as La Linea. Baldetti’s private secretary, Juan Carlos Monzon, is accused of heading the criminal network, which primarily involved Guatemala’s customs agency and dozens of collaborators. 

Ivan Velasquez, the head of Guatemala anti-impunity commission the CICIG, commented that he believed a congressional grand jury was warranted, in order to determine if there is enough evidence to remove Perez Molina’s presidential immunity. 

Investigations unveiled that repeated references to alias “number one” and “number two” in wiretapped conversations between La Linea participants were likely alluding to Perez Molina and Baldetti respectively, Velasquez and Attorney General Thelma Aldana said during a August 21 press conference. 

Specifically, the prosecutors said that the leader of La Linea — Baldetti’s private secretary — answered to them.

“On top of Juan Carlos Monzon, we found in the structure of La Linea the President — Perez Molina — and Roxana Baldetti — the former Vice President,” Aldana said

When the press asked the president about the possibility of a congressional grand jury, he replied simply, “We have to see what this is all about.” 

Asked if he would resign, Perez Molina said, “We are facing up to this.”

The president has already faced one bid to strip him of his political immunity, which failed. His term ends in January 2016. 

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After a nearly yearlong investigation spearheaded by the CICIG and the Attorney General’s Office (known in Guatemala as the Public Ministry), authorities made the first wave of arrests in connection to La Linea in April. Public outcry about corruption in the country led to several massive anti-government protests, leading up to Baldetti’s resignation in May.

Since then, with few exceptions, she has mostly remained silent about the investigation, aside from denying the accusations leveled against her. 

InSight Crime Analysis

The news comes just weeks before the first round of presidential elections, which remain a tightly fought three-way race. The second round run-off would be at the end of October, should no candidate reach the 50 percent threshold on September 6.

If Perez Molina survives through the end of his term, his successor — no matter the winner — will have a difficult time rebuilding public confidence in the government, given how high this scandal has reached. 

It remains to be seen whether Baldetti still has the connections and the friends in high places needed to favorably influence the outcome of her case. She may also use her knowledge to take down the president, in order to try and save herself. Nevertheless, it’s also possible that Guatemala’s shadowy network of corrupt elites view coming to Baldetti’s aid — and possibly at this point, Perez Molina’s — as too risky a move. 

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In some ways, Baldetti’s downfall may have been inevitable, given the accusations of corruption and shady dealings that have dogged her throughout her political career. Nonetheless, her arrest undeniably further shakes up the status quo in Guatemala, which has been rocked by one corruption scandal after another thus far this year. 

Guatemala has long struggled with corrupt networks that have arguably turned the country into something like a mafia state. Notably, those involved in this most recent customs fraud scandal were practicing something very similiar to a previous crime ring, known as the Moreno network. Active from the 1970s until the 1990s, the Moreno group — made up of corrupt military, police, and other government officials — would steal contraband shipments and force their owners to pay a fee to get their goods back. As outlined in a 2003 report by the Washington Office on Latin America (WOLA), the Moreno group likely had connections to other corrupt cells of military officers — known as CIACS by their Spanish acronym — one of which may have involved Perez Molina. 


La Linea followed a similar modus operandi, except instead of stealing goods, they colluded with importers. In exchange for a bribe, they allowed importers to dodge the requisite taxes. It’s estimated that those involved in La Linea earned hundreds of thousands of dollars per week this way. 

In some ways, La Linea operated similarly to the CIACS, except instead of corrupt security officers, the ring involved Guatemala’s top economic and political influence peddlers. By pushing the Linea investigation to the highest levels of power, not only are investigators setting an important precedent for judicial independence, they are essentially unraveling the mafia-like networks that have sucked Guatemala dry for decades.

While Guatemala’s justice system has previously proven incapable of resisting political influence during high-profile trials, it may yet be that the case against Baldetti — and whatever subsequent probe into Perez Molina — could set a new standard for rule of law in the country. 

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