A corruption scandal has hit the family of Guatemalan President Jimmy Morales like a tsunami, with his son and brother both investigated for possible corruption during the previous, disgraced administration. Nómada provides a detailed look at the complex legal panorama with the potential to bring down the second consecutive executive in the scandal-ridden nation.
As is often the case with corruption investigations in Guatemala, the clues from one case can lead to an even bigger investigation. For instance, telephone calls about customs fraud during the "La Linea" (The Line) investigation in 2015 helped uncover the "Cooptación del Estado" (Co-optation of the State) structure, both of which were allegedly run by former President Otto Pérez Molina and his vice president, Roxana Baldetti. Both were forced to resign and are in jail facing multiple charges.
Now, a part of the "Registro de la Propiedad como Botín" (Property Registry as Booty) case is reaching into the most intimate circle of President Morales. His eldest son, Juan Manuel Morales; the president's brother and business partner, Sammy Morales; and his close friend, congressman Gilmar Othmar Sánchez, are all under investigation. They are the latest high profile targets of the United Nations-backed International Commission against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala - CICIG) and the Attorney General's Office (Ministerio Público - MP).
The investigation of Guatemala's land registry revolves around Anabella de León, the bizarre registrar who is a stalwart of former President Pérez Molina's Patriotic Party (Partido Patriota - PP). De León is accused of pillaging the registry's budget in numerous ways, including: contracts appointing politically connected individuals to "phantom" positions in the agency, improper contracts for technological services and contracts funding events that never occurred. The case involving the president's family falls under the third category.
Jimmy and Sammy Morales have been partners their entire lives. They grew up together and became successful businessmen through their acting company, which produced programs for television and theatrical works presented in the restaurant Fulanos y Meganos. Before assuming office, President Morales declared assets totaling just over $1 million, without providing details.
It now appears, according to investigators, that some of the family's assets could result from corrupt business dealings with the government or from tax evasion that would permit them to furnish the land registry with false receipts.
The False Documents
The case allegedly involves a common form of government corruption. A process of gathering three price quotes is faked for the acquisition of a product valued at under 90,000 quetzales (roughly $11,400 at 2012 exchange rates), above which a formal bidding process is required. In this case, the Property Registry said it was going to sponsor a meeting at Fulanos y Menganos restaurant, including breakfast and Christmas gift baskets, "to evaluate the work of its employees in 2013." The registry also claimed chair rental for the event despite the fact that the restaurant is equipped with seating, submitting another bill for 90,000 quetzales.
But investigators say there was no breakfast, no meeting and no Christmas baskets. It was all a fabrication.
Two judicial sources told Nómada that in order to conceal the theft, Jimmy's son asked his uncle Sammy to provide him with falsified paperwork that made it appear as if three businesses had submitted bids to host the event, and that Fulanos y Menganos' bid won. Falsifying government purchases and furnishing false documents is a crime.
Although the allegations against the president's son and brother involve only 180,000 quetzales, investigators have documented that Fulanos y Meganos has provided the government with 18 million quetzales in services, and the audiovisual production companies owned by the president and his brother billed the government for 1 million quetzales.
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In a two-minute video featuring Morales and his wife that was made public on September 13, the president said his son, who was studying outside of Guatemala, found out "from the media" that he could be implicated in the Property Registry case, and that President Morales had asked his son to return to the country and present himself to the Attorney General's Office.
José Manuel Morales voluntarily presented himself to authorities on September 7, and his uncle, Sammy Morales, "voluntarily presented himself to give a statement" to prosecutors a week later on the day before President Morales went public with his video.
Second Case of Questionable Accounting
Fulanos y Menganos is not just any business. It is the restaurant where Jimmy Morales launched his presidential campaign in April 2015 and is where he gave interviews to the press. It is the restaurant where the president acted in plays alongside his brother Sammy. And it is owned by Gilmar Othmar Sánchez, who is a congressional representative with Morales' National Convergence Front (Frente de Convergencia Nacional - FCN) and also a friend of the president.
El Periódico has reported that Jimmy and Sammy are business partners in Fulanos y Menganos, although the media outlet has not offered documentary proof. What has been corroborated is that the brothers, as part of another government contract during the administration of President Álvaro Colom (2008-2012) to make movie about the murdered bishop and human rights defender Juan Gerardi, split up contracts in order to avoid a bidding process, a maneuver allegedly used in the Property Registry case. Restaurant owner Othmar Sánchez was also involved in the movie deal.
During an October 2015 interview with Nómada about President Morales' electoral victory and the government contracts the brothers were awarded during the Colom administration, Sammy Morales said the issue would eventually be cleared up, adding that "everything must be investigated and no one is above the law." When asked about the splitting up of the contracts for the Gerardi movie and allegations of falsified documents, Sammy Morales declined to comment.
The Drug Trafficker and the Vice President
If the authorities prove that members of the president's family committed crimes that involved corruption within the Patriotic Party, President Morales would be left with even less room to maneuver and move his administration forward.
He can no longer count on his inner circle of military advisers; Armando Melgar abandoned the administration following a scandal that involved spying on opposition figures in order to join congress and gain immunity. Edgar Ovalle, who is co-founder of Morales' political party and has been a top advisor to the president, is on the verge of losing his own congressional immunity in connection with massacres carried out in the 1980s that the United Nations has equated with genocide against Guatemala's indigenous population. Eight other congessional representatives for Morales' FCN party have been accused of racism and abuse of authority for allegedly trying to bully the indigenous governor of Alta Verapaz into relinquishing to them control of the department's development agenda.
On top of his family troubles, Morales is dogged by claims by a major drug trafficker that he gave $500,000 to Morales' vice presidential candidate, Jafeth Cabrera, during their 2015 campaign. Sources told Nomada that trafficker and former military officer Marlon Francesco Monroy Meoño, alias "El Fantasma" (The Ghost), was also approached by mafia figures who wanted him to assassinate Guatemala's attorney general. Monroy is currently in jail awaiting extradition to the United States. The same sources said the vice president is being investigated by the Attorney General's Office, the CICIG, and the US Embassy.
Given the legal panorama, it appears that President Morales and Vice President Cabrera are facing an increasingly uphill battle to make it to January 14, 2017, their one-year anniversary in office.
*This article was originally published by Nómada. It was translated, edited for clarity and reposted with permission. See the original article here. This article does not necessarily represent the views of InSight Crime.