Beyond Guatemala, U.S. Anti-Graft Efforts Could Encounter Resistance

7 MINS READOct 25, 2015 | 13:25 GMT
A group of some 20 men arrested for alleged smuggling and tax fraud sit in a security cell during a court hearing in Guatemala City.

Guatemalan voters will elect a new president Oct. 25. This is a crucial second-round election after an unprecedented U.S.-backed corruption investigation forced the country's former president and vice president to resign. Given that corruption is deeply ingrained in Guatemala's institutions, the next president will have to be cautious to avoid the fate of imprisoned former President Otto Perez Molina.

The United States' primary interests in Guatemala are countering narcotics and human smuggling and enabling the development of credible state institutions. For these reasons, the United States will continue to influence the new Guatemalan government through the use of international anti-corruption commissions such as the International Commission Against Impunity in Guatemala (CICIG). It was a CICIG-led investigation that brought down Perez Molina in September. However, despite the commission's success in Guatemala, any attempt Washington makes to replicate CICIG's model in Honduras and El Salvador will face resistance from the political elite in those countries.

In the Oct. 25 election, voters will choose between former first lady Sandra Torres of the National Unity for Hope party and comedian-turned-politician Jimmy Morales of the National Convergence Front party. Whoever wins the presidential election will take office with trepidation after the CICIG brought down Perez Molina on corruption charges.

The CICIG's Emergence

Corruption in Guatemala is nothing new. Since colonial times, the country's leaders have never been able to centralize Guatemala's rural population. As a result, patronage linkages were established and centralization efforts were abandoned in favor of strong local rulers. Corruption became ingrained within the state's institutions. This legacy of corruption, combined with an institutional inability to prosecute corrupt public officials, led then-President Oscar Berger to request legal and institutional assistance from the United Nations in 2006. The result was the foreign-backed CICIG.

The anti-corruption commission began operating in 2007. During its first five years, its investigations were more reactive than proactive; the CICIG only dealt with cases that Guatemala's judicial system failed to resolve. But the commission's focus and assertiveness changed with the arrival of U.N.-appointed Commissioner Ivan Velasquez from Colombia in late 2013. In Colombia, Velasquez had substantial experience managing high-risk cases, including investigating and prosecuting powerful politicians who had ties to paramilitary groups. Under Velasquez's leadership, the CICIG investigations and prosecutions eventually led to the resignation of Guatemalan Vice President Roxana Baldetti in May 2015 and Perez Molina in September.

The circumstances leading to Perez Molina's resignation and imprisonment are important to bear in mind. Originally, the former president did not want to extend the commission's tenure, which was due to expire April 23 (the CICIG's extension is biennial and must be ratified by the president). Likely concerned that he could be indicted, Perez Molina accused the foreign-backed commission of meddling in Guatemalan domestic affairs and vowed to end its mandate. However, on April 16, the commission uncovered an unprecedented corruption case: a tax fraud scheme involving Baldetti. The vice president resigned in May in the wake of the revelation.

As the noose tightened around Perez Molina, large street protests erupted the day after CICIG uncovered the scandal. The U.S. State Department and U.S. ambassador to Guatemala threatened to withdraw aid and potentially investigate the president's alleged personal ties to organized crime if Perez Molina did not renew the commission's mandate. In the end, Perez Molina yielded to the protesters' and U.S. demands to renew CICIG's mandate, extending it until 2017. After more than 20 consecutive weeks of large protests, Perez Molina was forced to resign Sept. 2. He was imprisoned the next day.

The United States is CICIG's main donor and supporter. Out of the commission's annual budget of $15 million, the United States has given $7.16 million this year and has contributed a total of approximately $36 million since 2008. U.S. interests in Guatemala primarily involve combating drug trafficking and illegal immigration while empowering public institutions to fight corruption; thus, U.S. support for CICIG has been an important investment in safeguarding and advocating Washington's interests.

Moreover, a surge in unaccompanied minors emigrating illegally to the United States — from October 2013 to August 2014, more than 63,000 unaccompanied child migrants arrived at the U.S. southern border — led the United States to reinforce its support for credible state institutions. According to Washington's rationale, with strong state institutions and effective jurisdictional courts, Guatemala's future governments will improve security conditions, which will lead to better economic opportunities for the general population and therefore reduce illegal migration. As a result, in January the United States proposed a $1 billion aid package to address security, economic and governance concerns in Central America. The package would include Guatemala, El Salvador and Honduras. However, it will be implemented only when these countries empower their own institutions by fighting internal corruption. 

A Colder Reception for Anti-Graft Efforts

In Guatemala (and in Central America overall), U.S. foreign policy has taken the shape of economic and security aid ($143 million worth since 2012). However, CICIG's implementation has been the most effective way of bringing about change in Guatemala's public institutions. Even if CICIG has been successful, it is doubtful that the model is exportable to neighboring countries Honduras and El Salvador. These two countries are key targets for anti-corruption commissions not only because of ingrained corruption but also because their weak institutions have not been able to reduce violence (the region has an average of more than 50 violent deaths per 100,000 people).

The Organization of American States announced in September that it would set up an anti-corruption commission called the Mission to Support the Fight Against Corruption and Impunity in Honduras. The month after the commission was established, the U.S. Treasury and U.S. Justice Department indicted members of the Rosenthal family, one of the wealthiest families in Honduras, for money laundering. This was a shock for the Honduran business and political elite because the Rosenthal family is one of the most historically prominent and powerful oligarchic business groups in the country. Moreover, Honduran public institutions did nothing to uncover these activities or to jeopardize the Rosenthals' impunity and clout. This high-profile case will give the United States another strong argument for the establishment of anti-corruption commissions in Central America's Northern Triangle. However, even under the threat of aid withdrawal, Honduras — which took several years to ratify a drug trafficking extradition treaty with the United States — will be reluctant to accept and implement the OAS-led commission's recommendations on fighting corruption.

Demonstrations in Honduras — though not of the same magnitude as those in Guatemala — called for the establishment of an anti-corruption commission for the country. However, the Honduras commission will not have the same autonomy as CICIG; its role will be limited to that of an advisory group for Honduras' government and legal institutions rather than that of an autonomous prosecution force.

El Salvador has not had a high-impact corruption case as Guatemala and Honduras have, and no anti-corruption commission has been established or even proposed for El Salvador. Nonetheless, the country has endured long-running gang violence that has contributed to illegal migration to the United States. Violent deaths have surged from 3,900 in 2014 to 5,040 between January and September 2015. Even though Salvadoran institutions have not been able to reduce violence, because it has not had a high-profile corruption case, in the short term El Salvador will remain only a candidate for an anti-corruption commission.

Even if the United States wants to export the CICIG model to Honduras and El Salvador, in the short term Washington will be constrained — particularly in El Salvador. Like the CICIG, anti-corruption commissions in Honduras and El Salvador would require governmental approval, and the Honduran and Salvadoran political elite will reject a body such as CICIG. However, to safeguard its interests in the region, the United States will attach conditions to its economic and security aid to these countries in a bid to develop institutional legitimacy in Central America. In the long term, Hondurans could demand that the recently created OAS commission be given more autonomy to prosecute and investigate. In the short term, however, even if the United States establishes commissions such as CICIG in the rest of the region, human and drug smuggling and the region's geopolitical realities, such as inequality, will not disappear. 

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