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Latin America

From a convent stash to an exorbitant highway, the deep rooted corruption problem in Latin America

The financing of political parties and elections in Latin America that need urgent reforms to control corruption says Juan Jiménez Mayor, the former Peruvian prime minister who led an anti-corruption mission in Honduras.
15 Abr 2018 – 03:25 PM EDT
Former Argentine public works secretary José López, 2nd left, is escorted by police near Buenos Aires, Argentina, on June 14, 2016. López was discovered trying to hide $9 million dollars in a monastery. Crédito: AP/Natacha Pisarenko

In 2016, Argentine former public works minister, José López, was allegedly spotted by nuns at the Our Lady of the Rosary of Fatima convent near Buenos Aires throwing suitcases and bags containing $9 million over a wall into the garden in an apparent attempt to hide his stash.

Hilberto Mascarenhas, former director of the so-called 'bribery division' at disgraced Brazilian construction firm, Odebrecht, confessed to Brazilian prosecutors last year that he threw his laptop with all the illegal cash payment details into the sea during a visit to Miami.

Those are just a couple of recent examples of the shameless political corruption that continues to plague Latin America, at enormous politiical, economic and social cost to democracy.

It's also the central topic of a two-day regional heads of state meeting at the Summit of the Americas in Peru that ended Saturday.

Despite the enormity of problem, and a growing list ex-presidents and ministers behind bars, analysts don't have high expectations of political solutions - especially not from the political leaders attending the summit, several of whom have themselves been linked to corruption investigations.

"The big problem is the way political parties and elections are financed. That's the key," said Juan Jiménez, former Peruvian prime minister, addressing a corruption conference in Miami Friday.

"The big question is are we going to continue with the same rules of the game?"

In Guatemala, the names of private companies rarely appear in official party financial reports and gifts are usually made in kind. "They like to remainn anonymous," said Arturo Aguilar, director of the Seattle International Foundation which works in Central America to reduce poverty.

"You are not making a donation, you are making an investment," he added. "That's how it works, in my country, at least."

Jiménez was until recently head of the anti-corruption mission of the Organization of American States (OAS) in Honduras, known as MACCIH (The Mission to Support the Fight against Corruption and Impunity in Honduras). He doubts the summit will address political finance reform for the simple reason that politicians and the private sector have too much to gain from the current lack of rules.

In the case of the MACCIH, the Honduran Congress moved quickly earlier this year to block the efforts of Jiménez to investigate a parliamentary slush fund after he indicted five legislators. He resigned soon after complaining of lack of support from the OAS Secretary General Luis Almagro.

And even if the private sector was limited in its political contributions Jiménez fears a weak judicial system in Latin America would allow organized crime to step into the vaccum.

Despite that bleak picture, Jiménez sees some glimmers of hope, noting the recent prosecetions of ex-presidents and prime ministers, beginning with Alberto Fijimori in Peru in 2000.

"In the past no-one went to prison. There were just investigations that went nowhere," he said, reeling off a list of names from Alan Garcia in Peru to Fernando Collor de Mello in Brazil, Ernesto Samper in Colombia, and Abdalá Bucaram in Ecuador,

He put the difference down in part to journalism and a "revolution" in financial investigation and forensic accounting. That accounted for the partial success of the MACCIH in Honduras and the decade-long investigative work of the United Nations-backed CICIG (International Commission Against Impunity in Guatemala) which has uncovered widespread high-level corruption implicating several presidents along with dozens of other ministers, politicians, and businessman.

"We continue to go from scandal to scandal but at least now there is more public intolerance," he said, noting the spontaneous public marches of the "outraged" in places like Honduras, after a social security scandal in 2015, the 2017 anti-graft protests in Guatemala, and World Cup stadium contract protests in Brazil in 2014.

The public support for the MACCIH and the CICIG are proof of the popular desire for change despite traditional apathy towards corruption, according to Frank Mora, director of the Latin America and Caribbean Center (LACC) at Florida International University (FIU), organizer of the conference titled; 'The Corrosive Effects of Corruption: An Analysis of its Impact on Governance and Business'.

"For many people corruption is the number one issue in the region," he told the conference. "It is the achilles heel of most democracies in the Americas," he added.

Mora, who served as the top civilian at the Pentagon for Latin America and Caribbean under President Barack Obama from 2009-2013, highlighted the notorious hemisphere-wide Brazilian "car wash" scandal that implicated numerous governments in the region in multi-million dollar bribes paid by Odebrecht, including Peru, Brazil, Mexico, Venezuela, Panama, Colombia and the Dominican Republic.

A study by Transparency International in 2017 found that one if three people in Latin America said they had paid a bribe for public services, from police to schools. Another study by AmericasBarometro found that 61% of Latin Americans believe that most or all politicians are corrupt. Top of the list was Brazil, closely followed by Mexico, Peru, Colombia, and Venezuela, with Uruguay at the bottom.

Veteran journalist Tim Padgett with NPR affiilate WLRN in Miami describes the problem in chicken and egg terms. " There is a lack of institutions but the corruption prevents the institutions from being reform," he said.

Holding up a copies of the three volume Dictionary of Corruption in Venezuela, he noted the exhaustive study only went up to 1992, and did not include the two "catastrophically corrupt" decades of 'Chavismo' following the election in 1998 of Hugo Chávez.

Padgett also cited how the United States often serves as a refuge for officials accused of corruption. Former Panamanian president Ricardo Martinelli is currently languishing in jail in Miami awaiting extradition on charges that he siphoned off money for a school meals program to fund an illicit spy operation against his rivals.

Others are more fortunate. Peruvian insurance millionaire Gustavo Salazar is living in $1.5-million oceanfront condo on Miami Beach while he faces charges of facilitating and laundering a multi-million-dollar bribe Odebrecht paid a Peruvian governor in return for a highway project. To make matters worse, Padgett notes that the roadwork is now over budget by about $100 million.

In Argentina, the case of Lopez turned out to be only the tip of the iceberg of corruption during the 12 year huband and wife presidency of Néstor Kirchner and his wife Cristina Fernández de Kirchner.

He is one of 18 former officials in jail and another 30 awaiting sentencing, among the Kirschner's former 'super minister' Julio De Vido.