News out of Guatemala over the past year has been filled with details regarding various investigations into high-level corruption. InSight Crime breaks down the often overwhelming and confusing stream of information to offer a condensed briefing of the most high-profile cases.
In 2015, then Guatemalan President Otto Pérez Molina and his Vice President Roxana Baldetti were arrested following revelations into a customs fraud network they allegedly oversaw. Since then, the pair have been implicated in a number of other corruption cases in a process largely driven by the Guatemalan Attorney General’s Office and the United Nations-backed anti-impunity commission (Comisión Internacional Contra la Impunidad en Guatemala – CICIG), which have worked tirelessly to expose the nefarious dealings of an administration the CICIG likened to an organized crime syndicate.
Below, InSight Crime sorts through the often confusing and seemingly overlapping investigations to breakdown the four major corruption cases that involve the now disgraced former president and vice president.
Guatemala’s most prominent and well-known recent corruption case is that of “La Línea,” which was the first major investigation into the Pérez Molina administration. The customs scandal led directly to the president’s resignation and the jailing of both Pérez Molina and Baldetti.
The scandal broke in April 2015, when Guatemalan authorities arrested nearly two-dozen current and former government officials for customs fraud. This included the head and former head of Guatemala’s customs agency, the Superintendency of Tax Administration (Superintendencia de Administración Tributaria – SAT).
The arrests were the result of investigations initiated in May 2014 by the Guatemalan attorney general and CICIG into a fraud network — dubbed “La Línea” (The Line) — that lowered taxes on importers in exchange for financial kickbacks. From May 2014 to February 2015, the CICIG estimated the network earned roughly $328,000 per week.
Upwards of 60 people may have been involved in the network, although investigators believe it was actually composed of two subgroups with interaction limited to several intermediaries. One group consisted of at least 28 SAT officials, while the other was composed of individuals working outside the SAT, including importers and lawyers. (See a more detailed breakdown of how the La Línea scam functioned here)
Initially, La Línea’s presumed leader was Juan Carlos Monzón, the private secretary of former Vice President Baldetti, who resigned in May 2015 over her connections to the case. As more information became available, however, evidence gleaned from wiretaps seemed to indicate that Pérez Molina and Baldetti themselves actually oversaw the network’s operations. As a result, Baldetti was arrested in August 2015, and in early September Pérez Molina resigned and was arrested after being stripped of his immunity.
In late September 2015, Salvador Estuardo González Álvarez, alias “Eco,” an alleged top member of La Línea, testified that Pérez Molina and Baldetti earned the most in the kickback scheme, both receiving around 21.25 percent of all illicit proceeds. Monzón allegedly earned 5 percent, while González Álvarez earned 2.5 percent. In October, Monzón, a fugitive for five months, turned himself in to authorities.
Pérez Molina and Baldetti are currently in preventative custody as proceedings continue.
In April 2016, Guatemalan prosecutors revealed accusations that Pérez Molina and Baldetti created a structure for laundering bribe money received from a Spanish container port construction company, Terminal de Contenedores Quetzal (TCQ) — a subsidiary of Grup Terminal de Contenedores Barcelona (Grup TCB).
While in office, Pérez Molina and Baldetti appointed several collaborators to top positions within a state company that manages Guatemala’s Quetzal Port, the largest port on Guatemala’s Pacific coast. In 2012, these collaborators negotiated a 25-year operating concession with TCQ worth $255 million for building and managing a new terminal in Quetzal Port.
In order to secure the contract, however, the company allegedly had to pay up to $30 million in bribes. The Spanish company eventually made two payments, one in late 2013, and another in early 2014, for a total of just over $12 million. Investigators believe Pérez Molina and Baldetti each received about $4.2 million of this cash.
Baldetti’s personal secretary, Juan Carlos Monzón, allegedly played the role of messenger between the Spanish company and Guatemalan officials. He was also instrumental in arranging bribes for Quetzal Port union leaders in exchange for their collaboration.
Investigators named a total of 18 collaborators, including five who are based outside of Guatemala, and in June, Guatemalan officials seized TCQ’s assets.
‘Cooptación del Estado’
On June 2, officials from the Attorney General’s Office and CICIG announced accusations related to an illegal campaign finance and government-contracting network allegedly run by Pérez Molina and Baldetti. Formal money laundering and corruption charges followed on June 16.
Investigations into the case, dubbed “Cooptación del Estado” (Cooptation of the State), uncovered a criminal network organized and led by Pérez Molina and Baldetti that received illicit funds from a group of state contractors to help finance their 2011 presidential election campaign. Contractors provided these funds on the promise they would be given preferential treatment in winning state contracts should Pérez Molina be elected president.
Between taking office in January 2012 and April 2015 the pair then received an estimated $38 million in illicit kickbacks on around 70 state contracts. Pérez Molina and Baldetti put this money to personal use buying properties, vacations, and vanity items. Baldetti, for instance, allegedly spent $27,000 for liposuction treatment and over $11,000 on designer clothes in Miami, while Pérez Molina bought a farm in Zaragoza.
So far, investigators have implicated a total of 70 people in the case, including a number of former government ministers.
The most recent corruption case to surface is that of “La Cooperacha” (Kick-In), which was presented by Guatemalan Attorney General Thelma Aldana during a June 11 press conference when she outlined a new round of charges against top government officials.
The case involves at least five ministers, including the former heads of Guatemala’s Defense, Communications, Energy, and Interior Ministries, and the head of Guatemala’s Social Security Institute (IGSS) during Pérez Molina’s government. Those arrested included former Interior Minister Mauricio López Bonilla.
These officials are accused of spending over $4.7 million during a three-year period to buy Pérez Molina luxurious birthday gifts, including a powerboat in 2012, a luxury beach house in 2013, and a $3.5 million helicopter in 2014. The five ministers also contributed $100,000 each to buy Baldetti a vacation home on the Honduran island of Roatán.
Much of the money used to buy the gifts allegedly came from public funds, and Pérez Molina and Baldetti apparently organized the money collections for each other’s presents. Once again, Juan Carlos Monzón was responsible for retrieving the cash and arranging the purchases.
Taken as a whole, the cases illustrate an administration organized around corruption: allegedly using a corrupt campaign finance scheme to cheat its way into office, and using its influence and offices to steal money from an already impoverished nation, while collecting bribes from foreign and domestic government contractors and other businesses.
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