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Guatemalan President Resigns in Wake of Massive Corruption Scandal

Perez Molina's resignation is the culmination of a year-long investigation into a major tax fraud operation that is estimated to have stolen $120 million from the country.
September 3, 2015, 3:25pm
Photo by Esteban Biba/EPA

An exultant protest movement in Guatemala is cheering the news Thursday morning that the country's president, Otto Perez Molina, has resigned. The development follows a unanimous vote by national legislators on Wednesday to strip him of immunity from prosecution for corruption charges related to a customs fraud scandal that has rocked the country for months.

He is the first president in the country's history to be stripped of immunity from prosecution.

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Guatemala's Congress is expected to hold an emergency session early on Thursday to hand power to Vice President Alejandro Maldonado, whom Congress selected to replace Perez Molina's original vice president, Roxana Baldetti, after the scandal forced her to resign in May. Maldonado will serve out the remainder of the outgoing president's term.

The country's attorney general announced that a judge had issued a warrant for Perez Molina's arrest for allegedly taking part in a scheme in which importers paid bribes to officials to avoid paying customs duties. He has denied the charges, and had earlier insisted that he would not resign.

Related: Guatemalans Celebrate as President Faces Possible Corruption and War Crimes Charges

Thousands of protesters had been calling for Perez Molina to leave his post for months after details emerged of the so-called "La Linea" scandal — a huge customs tax fraud operation involving dozens of public officials that has stolen an estimated $120 million dollars from Guatemalan taxpayers.

The development has been cheered as a blow to entrenched corruption in Guatemala — a state of affairs that had long been regarded as unavoidable before the latest scandal catalyzed the public's outrage as never before.

His resignation plunges the country into chaos three days before an election of a new president is due to take place — an election in which he is constitutionally ineligible to run.

It also marks the undoing of a former military general who was deeply involved in Guatemala's civil war. He was a commander in the special forces known as the Kaibiles before serving as the country's director of military intelligence, and denied accusations of having ordered his soldiers to commit atrocities during the "dirty war" against leftist guerrillas, which included extrajudicial executions and the burning and looting of villages.

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Perez Molina had billed himself as a conservative "law and order" president and was elected in part on a promise to fight crime with an iron fist.

The La Linea revelations are the result of a joint investigation by the Guatemalan Public Ministry (MP) and the UN-backed International Commission Against Impunity in Guatemala (CICIG), an independent body established in 2006 on the request of the country's government "to eradicate illegal groups and clandestine security structures that operate in Guatemala."

The CICIG and MP officially filed charges against the president on August 19.

The La Linea scam saw public officials fraudulently lower the customs tax rate for certain importers by around 60 percent in return for bribes. At least 64 people were involved, according to investigators, together earning around $328,000 per week.

Related: Rural and Urban Voices Are Banding Together in Movement to End Corruption in Guatemala

Besides Perez Molina's former vice president, more than three dozen high-ranking public officials have already been arrested or forced to resign because of the scandal, including the minister of the interior and the minister of defense, who recently fled to the Dominican Republic. The country has been gripped by 20 weeks of protests, with thousands of demonstrators using the rallying cry "Renuncia Ya" — "Resign Already" — to call for Perez Molina to leave office.

Throughout the crisis, Perez Molina has maintained his innocence and denied any connection to the scandal. He stated on multiple occasions that he would not resign, and said during a press conference on Monday that he intended to vote in the upcoming presidential election, which is scheduled for September 6.

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The development has been cheered as a blow to entrenched corruption in Guatemala — a state of affairs that had long been regarded as unavoidable before the latest scandal catalyzed the public's outrage as never before.

Protesters in Guatemala City waited outside the country's Congressional building in torrential rains for news on the vote in Congress. The crowd erupted in joy upon the announcement that it had stripped the president of his immunity. Some present cried in joy at the news.

"It made me tearful to see so many people unified," Maryam Chavez told VICE News.

Other protesters celebrated the decision, but were cautious given the history of impunity in Guatemala.

"Finally they have all the pieces to prosecute this war criminal," Sal Figueroa, a Guatemalan citizen who has participated in the protests since April, told VICE News. "However, the justice system in this country is weak. If they do manage to judge him, it will be a whole new chapter in our history."

Though La Linea and pervasive corruption have inspired outrage in Guatemala, it's far from certain that Perez Molina will end up in jail. CICIG is collaborating with Guatemalan prosecutors, and the country's justice system is widely viewed as just as compromised by graft and malfeasance as the country's government. Skeptics of the courts note that even ex-dictator Efrain Rios Montt's 2013 conviction for genocide and crimes against humanity was later overturned on a technicality.

Reporting contributed from Guatemala by Jeff Abbott.
Reuters contributed to this report.