Guatemala Elites Exploited Health Sector to Pocket Millions: Prosecutors

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Prosecutors in Guatemala are investigating a multimillion-dollar graft scheme within the country’s Public Health Ministry, in just the latest example of officials and business elites raiding the coffers of Latin America’s health systems for personal gain. 

Prosecutors from the anti-impunity unit of the Attorney General’s Office and the United Nations-backed International Commission Against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala – CICIG) are investigating more than 50 people — including government officials — for allegedly partaking in the scheme, which raked in millions of dollars in kickbacks between 2012 and 2014, according to a July 16 press release.

Among the accused is Jorge Villavicencio Álvarez, the country’s health minister at that time. Prosecutors say he devised the scheme in which members allegedly received payments from companies contracted to build new hospitals and refurbish damaged ones after a 2012 earthquake off Guatemala’s Pacific coast impacted the country’s hospitals and other infrastructure.

SEE ALSO: Guatemala News and Profiles

Prosecutors say that the kickbacks for repairs totaled at least 17 million quetzales (around $2.2 million), while those received as part of the construction of new hospitals amounted to 36 million quetzales (around $4.7 million).

The network also purchased unnecessary medical equipment in exchange for bribes, and dolled out 450 jobs as “political favors.” About 100 of these jobs, however, were “ghost” positions. Officials merely picked up paychecks without ever carrying out any work, according to authorities.

As health minister, Villavicencio Álvarez allegedly devised the scheme with his daughter, Cándida Saraí Villavicencio Delgado, and maintained it with former presidential candidate Luis Fernando Pérez Martínez. All three have yet to be arrested.

Authorities, however, have arrested 19 people, issued 29 arrest warrants and ordered 84 others to appear in court.

“What for Guatemalans meant tragedy and losses, such as the earthquake of November 2012, for the criminal structure it meant an opportunity for illicit businesses,” the news release states.

InSight Crime Analysis

Latin America’s health systems have been a frequent target of some of the region’s most corrupt public officials, who illicitly enrich themselves and their allies while endangering citizens. 

In Guatemala’s Northern Triangle neighbor of Honduras, authorities uncovered a massive corruption scandal of their own within the country’s Social Security Institute (Instituto Hondureño de Seguridad Social – IHSS) that saw citizens receive tainted medicine and improper treatment.

Authorities began investigating the institute in 2013. Eventually, they uncovered an intricate scheme composed of 10 so-called ghost companies that allegedly embezzled some $330 million. In 2015, President Juan Orlando Hernández admitted that companies linked to the “institutionalized corruption” within the IHSS contributed $150,000 to his successful 2013 presidential campaign.

Others estimate much more was funneled into the National Party and used in part for Hernández’s 2013 election run. Former IHSS Director Mario Zelaya, the mastermind of the graft scheme, was sentenced to more than 50 years in jail. The scandal also implicated a number of other elites.

SEE ALSO: InDepth Coverage of Elites and Organized Crime

Corrupt officials at the state level in Mexico have also enriched themselves through the country’s health system. 

The disgraced former governor of the Gulf state of Veracruz, Javier Duarte, oversaw a corrupt public health system that allegedly “used fake medication to treat kids with cancer and knowingly bought” as many as 70,000 counterfeit HIV tests.

“They all gave out negative test results; they were detected in time and never reached the population, but eight million pesos (around $420,000) were spent with the knowledge that they were fake,” Antonio Nemi, who was Duarte’s health secretary between March 2013 and October 2014, told El Pais in 2017.

After six months on the run, Duarte, who transformed Veracruz into a “state of terror,” was arrested in April 2017 for numerous charges related to organized crime, corruption and embezzlement.

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