A New Inquiry, A Mea Culpa and Another Possible Crisis in Guatemala

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In an extraordinary admission of wrongdoing that could upend a process to select the new attorney general as well as various ongoing criminal investigations, Guatemala’s most powerful elites issued a statement apologizing for transgressions during the last presidential election, including their involvement in illicitly financing the current president’s campaign.  

“As Guatemalans, we are here showing our faces, assuming whatever responsibility there is and aware of the consequences of our personal decisions. We recognize, with humility, that mistakes were made without knowing it,” eight of the country’s top businessmen said in a statement obtained by InSight Crime and read aloud during a press conference.

The statement was released after a separate press conference in which top representatives of the Attorney General’s Office and its United Nations-backed appendage, the International Commission Against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala – CICIG), revealed the second phase of an investigation into alleged illicit campaign financing of this elite group of businessmen during the 2015 presidential bid of current President Jimmy Morales.

Some of the individuals who signed the letter are part of an influential group known as the “G8,” an elite within the elite who are thought to play a major role in backroom political decisions, including helping to appoint ministers and other top government officials. Several members of the G8 also play prominent roles within a huge, multilayered business association known as the Coordinating Committee of Agricultural, Commercial, Industrial, and Financial Associations (Comité de Asociaciones Agrícolas, Comerciales, Industriales y Financieras – CACIF).

SEE ALSO: Guatemala News and Profiles

According to a CICIG press release, the governing party to which Morales belongs, the National Convergence Front (Frente de Convergencia Nacional – FCN), reported to the Supreme Electoral Tribunal (Tribunal Supremo Electoral – TSE) that it spent 103,706 quetzales (around $14,000) during the campaign on electoral prosecutors, a position centered on verifying voter activities and tendencies.

However, prosecutors found that the FCN really spent a total of 7,119,300 quetzales (around $960,000) on electoral prosecutors, suggesting that the party failed to report to the TSE more than $900,000 in financing for Morales’ 2015 presidential campaign, which is required under Guatemalan law. At least a portion of that undeclared money came from these prominent businessmen, and in their letter, they claimed it was because the FCN did not have electoral observers “to safeguard their votes.”

In a public statement, President Morales fired back, denying all accusations of illicit campaign financing during his 2015 bid for the presidency and calling the investigations politically motivated.

“They’re trying to get me to give up,” he said in a fiery outburst April 20. “But they’re not going to make me give up.”

The accusation is the second in this case. The first came to light in August 2017 when the Attorney General’s Office and the CICIG alleged that the political party failed to report to the TSE other contributions it received during the 2015 presidential campaign. The findings kicked off a political crisis in Guatemala during which Morales attempted to expel CICIG Commissioner Ivan Velásquez from the country, though the Constitutional Court blocked the move.

The investigation into the FCN’s alleged illicit campaign financing stemmed from the so-called “Corruption and Construction” case, which alleges that former Guatemalan minister Alejandro Sinibaldi Aparicio received millions of dollars in bribes from private construction companies — funds that were funneled through shell companies — in exchange for preferential treatment related to public works and other government contracts.

Illicit campaign financing has been a priority for the Attorney General’s Office and the CICIG in recent years. The issue was at the heart of the “Cooptation of the State” case that implicated then-President Otto Pérez Molina and his Vice President Roxana Baldetti. They were later jailed and are being tried for this and other crimes.

Prosecutors have also launched an investigation into the country’s leftist political party, the National Unity of Hope (Unidad Nacional de Esperanza – UNE) and a now defunct political party known as Líder.

InSight Crime Analysis

A case like the one unfolding against President Morales and the FCN could upend the process of selecting the new attorney general and impact the numerous high-profile investigations against political and business elites alike. A committee of 15 lawyers have selected six candidates for the president, who will make the final selection in the coming days. Announcing the second part of the investigation of Morales’ campaign financing reminds the president of the legal jeopardy he faces.

Morales seems to be aware of this. In his first public statements since the announcement of the second part of the FCN case, Morales said there are still questions about whether the presence of the CICIG violates the constitution.

Due to his immunity as president, the case against Morales cannot advance further without congressional approval. But Guatemalan elites who have engaged in corruption are likely taking note of the aggressive way the Attorney General’s Office and the CICIG have pursued the investigation of Morales’ campaign financing.

As InSight Crime reported in a recent investigation, elite interests have already been maneuvering to influence the selection of the next attorney general in the hope of installing someone less disposed to going hard after high-level graft.

SEE ALSO: University Deans and Guatemala’s Convoluted Road to a New Attorney General

The Attorney General’s Office and the CICIG may present congress with a proposal to revoke Morales’ immunity, but it is unlikely that lawmakers would approve it. Just a few months ago, congress voted to preserve Morales’ immunity following the first round of allegations of corruption and illicit campaign financing in his political party.

Although the Attorney General’s Office and the CICIG aren’t able to continue investigating Morales, they can pursue cases against these businessmen, which include Felipe Bosch, the president of Guatemala’s most prominent business think tank, the Development Foundation (FUNDESA); Guillermo Castillo, the head of a Guatemalan brewer that was founded more than 100 years ago; and Jose Miguel Torrebiarte, the secretary of Cementos Progreso.

It’s not clear prosecutors will go in that direction, but the letter penned by these businessmen is a clear indicator that they are worried. Indeed, it may be simply a cynical ploy by corrupt interests to try to mitigate the fallout from any potential further investigations or even prosecutions against them.

While these individuals have publicly made it seem like they are acknowledging and apologizing for their wrongdoings, there are likely some very serious private conversations taking place behind closed doors that have the potential to dictate what direction Guatemala is headed in as the selection of the country’s next attorney general draws near and criminal investigations begin knocking on their doors.

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