A figure so protected he was long thought to be unassailable, former Paraguay president Horacio Cartes is suddenly facing severe threats at home and abroad.
On July 22, the United States denounced Cartes for alleged “involvement in significant corruption.” In a press statement, US Secretary of State Antony Blinken made serious allegations against Cartes, including that he “obstructed a major international investigation into transnational crime” to protect himself and an unspecified associate. And according to Blinken, Cartes had “recently documented involvement with foreign terrorist organizations.”
Cartes, as well as three of his children, Juan Pablo Cartes Montaña, Sofía Cartes Montaña, and María Sol Cartes Montaña, are all barred from receiving US visas.
This was the second blow taken by Cartes in under a week, with the last one landing closer to home.
On July 18, Paraguay’s President Mario Abdo signed the Protocol to Eliminate Illicit Trade in Tobacco Products after years of stagnation in the country. Writing on Twitter, the president said this reaffirmed Paraguay’s commitment to fighting this “global problem for public health.”
However, ratifying the Protocol was readily seen by Paraguay observers as a direct threat to Cartes, a bitter political enemy of Abdo.
The former president is one of the country’s wealthiest men, with much of his fortune coming from tobacco. He is the owner of Tabacalera del Este, a vast cigarette-producer and exporter.
But the company has been constantly accused for being responsible for the extensive production of contraband cigarettes, which are smuggled to numerous Latin American countries. Cigarettes traced back to Tabacalera del Este have been found being moved and sold by Latin America’s foremost criminal groups, including Colombia’s now-demobilized Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia - FARC), Brazil’s First Capital Command (Primeiro Comando da Capital – PCC), and Mexico’s Zetas and Sinaloa Cartel.
It may seem unlikely that these two steps came the same week by coincidence, according to Arnaldo Giuzzio, Paraguay’s former interior minister (2021-2022), who oversaw the most recent money-laundering investigation against Cartes in Paraguay.
"What the US State Department did...was not just revoking visas or forbidding entry to these people...it was a message to our country," he told InSight Crime.
Cartes has stringently denied any allegations of criminal activity. “We are and will always be committed to offering all assistance and information…which authorities need to clear up these matters,” he said in an official response to the US State Department, adding that the accusations were “unfounded and unjust.”
InSight Crime Analysis
Horacio Cartes has dodged a raft of criminal allegations, far outdating his involvement in politics. And while this week’s actions mark the most direct step taken against Cartes to date, he has been on Washington’s radar for years.
A moneychanger, bank owner, cigarette kingpin, and overall business mogul, he has had many questionable links to money launderers and drug traffickers.
Although Horacio Cartes' connections to organized crime predate his 2013 election as president, none of the legal investigations against him have advanced. Yet the United States' decision to blacklist Cartes for "significant" corruption and alleged “ties to terrorist groups” could provide the impetus Mario Abdo's government needs to prosecute Cartes prior to the 2023 presidential election.
Cartes is a longstanding moneychanger turned bank owner, business mogul, and the key figure of a cigarette smuggling empire in the triple border area. His many questionable links with the region's leading money launderers and drug traffickers have been extensively documented for years.
In the late 2000s, the US singled out a bank owned by Cartes, Banco Amambay, as a money-laundering center, with a US embassy staffer claiming that the bank was responsible for up to 80 percent of money laundering in Paraguay, in a US State Department cable which was later published by WikiLeaks,
In 2010, a separate cable alleged that Cartes ran a “money laundering enterprise,” which laundered large quantities of US dollars from the “sale of narcotics.”
InSight Crime has also reported extensively on Cartes’ highly dubious connections to Dario Messer, believed to be one of the region’s largest-ever money launderers. Wanted in Brazil, Messer sought shelter in Paraguay, which Cartes was only too keen to provide. The two men are believed to have run an extensive money-laundering operation together. In 2019, Brazil’s Attorney-General’s Office took the extraordinary step of sending Paraguay an extradition request for Cartes, although it was later dropped.
SEE ALSO: Chasing Brazil’s Premier Money Launderer
And therein lies the problem. Cartes’ influence over government officials, the judiciary, and the ruling Colorado Party has allowed him to maintain complete impunity, according to Arnaldo Giuzzio, Paraguay’s former interior minister (2021-2022), who oversaw the most recent money-laundering investigation against Cartes in Paraguay. Just this week, opposition lawmakers accused Paraguay's attorney general, Sandra Quiñónez, of seeking to protect Cartes.
During a presentation in January 2022 to Paraguay’s anti-money-laundering secretariat (Secretaría de Prevención de Lavado de Dinero o Bienes – SEPRELAD), Giuzzio stated that there were “strong suspicions” linking Cartes to money laundering and contraband.
“From my perspective, he (Cartes) does not only operate for him…he also operates for other organizations who use his network…Cartes’ operations are a sort of regional hub for money-laundering operations,” Giuzzio told InSight Crime. Giuzzio himself was dismissed from his position as interior minister in February 2022, due to alleged links to a known drug trafficker, although he has denied all allegations.
However, Giuzzio said the government of Mario Abdo is running out of time to prosecute Cartes, with presidential elections set for April 2023. Should a Cartes-backed candidate win, the former president would gain a fresh layer of impunity.