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New Charges: Guatemala's Imprisoned Ex-President Allegedly Received Millions in Bribes

Otto Perez Molina resigned from the presidency in September because of a massive customs scam. He is now back in court accused of dirty deals behind a major construction project involving a Spanish firm.

by Jack Guy
May 6 2016, 9:30pm

Photo by Esteban Biba/EPA

A Guatemalan Court has charged former president Otto Pérez Molina and his vice president Roxana Baldest with fraud, receiving bribes, and money laundering in a case related to a massive government infrastructure contract.

The charges — revealed on Friday — come eight months after both were also charged in another corruption scandal rooted in a customs scam. That case, known as La Linea, forced Pérez Molina to resign from the presidency last September, following months of street protests.

Investigations into both cases have involved Guatemalan prosecutors and the UN-backed International Commission against Impunity in Guatemala, known as CICIG, which is supporting a wider drive against corruption and impunity in the country.

The CICIG was also involved in the Amatitlán case, in which Baldetti is accused of signing a fraudulent contract for what she called "a magic potion" that would clean a badly polluted lake, and which turned out to be salty water.

The new corruption case relates to a $255 million contract awarded to a Barcelona-based company for the construction and operation of a container terminal at the country's biggest port — Puerto Quetzal — on the Pacific coast.

Prosecutors allege that Pérez Molina and Baldetti received $4.2 million each in cash bribes from Grupo Marítim Terminal de Contenedores Barcelona (TCB) as a result of the contract, which was signed in April 2012. They allege that the total amount of "commissions" could have reached as much as $30 million.

"I didn't receive a single cent from that," Pérez Molina told reporters after the hearing in a Guatemala City court. He accused prosecutors of building a case based on "testimony rather than evidence."

Baldetti declined to speak to the press.

Related: Guatemala Opens Corruption Probe Into Ex-Vice President's 'Magic Solution' for Pollution

During the tense 10-day hearing that culminated with the charges on Friday, Pérez Molina could be seen with his head in his hands, before defiantly addressing the judge to protest his innocence. At one point Baldetti ignored Pérez Molina's attempt to greet her as she arrived in the courtroom, although the pair were later seen talking surreptitiously.

The prosecution case alleges that the former president and vice president headed a multi-tentacled criminal network designed to use the Guatemalan state as a vehicle for personal profit, in this case using the construction of the terminal at the port to extract bribes.

Baldetti's former private secretary Juan Carlos Monzón was allegedly influential in making arrangements between Guatemalan officials and the Spanish company. The court has listened to four hours of recorded testimony from Monzón, in which he describes the inner workings of the alleged scheme.

Monzón was also a state witness in the La Linea case, agreeing to provide information in return for lighter sentencing. Audio recordings of his testimony and that of other businessmen involved in the case were leaked to the press, sparking an investigation from prosecutors who allege that the safety of witnesses may have been compromised.

An auditor who worked for a company connected to the Puerto Quetzal case, named Carlos Aparicio Pisquiy, was shot as he drove through Guatemala City on April 18. Two motorcycle hitmen peppered Pisquiy's vehicle with bullets in the attack that he reportedly survived because he had dropped his mobile phone on the car's floor and was bending to pick it up as the shots were fired.

Sources close to the investigation allege the hit was ordered by broker Jonathan Chévez who they say helped launder the kickbacks received by the president and vice president through the purchase of land, houses, cars, boats, and planes. Chévez has been charged with money laundering and unlawful association.

Related: Jailed Former President of Guatemala Wants a TV

The Puerto Quetzal terminal at the heart of the new case was supported by World Bank financing to the tune of $61.3 million. Documents released as part of the investigation show that the World Bank also became a 15 percent shareholder in TCB. The project also went ahead despite a suit filed by the dock workers' union that alleged the project was legally and technically dubious.

Prosecutors have also asked for immunity to be withdrawn from a supreme court justice who they also want to investigate in the case. They say that Judge Douglas Charchal received an armored Range Rover in return for ruling that TCB did not have to pay for construction permits for the new terminal. Another serving supreme court justice, Vladimir Aguilar, could also be pulled into the scandal.

There are growing calls for Charchal to resign and activists are pressing for widespread reforms of a judicial system that they say has been politicized.

The inclusion of high-ranking judges among the suspects takes the fight against impunity in Guatemala one step further, according to Steven Dudley of InsightCrime, a foundation which studies organized crime in Latin America.

"These cases go beyond simple scheming and the occasional kickback," he wrote in an email exchange. "They indicate that the presidency of Otto Pérez Molina and Roxana Baldetti sought to systematically pilfer the government in every possible way they could."

Related: The Year Latin Americans Got Angry About Corruption

Álvaro Montenegro of the activist group Justicia Ya, or Justice Now, believes that the TCB case could be the most significant of all the major corruption cases so far precisely because it is finally reaching the judicial branch.

"This is the first time that there has been such a serious formal accusation made against a supreme court judge," he said. "It shows that government officials negotiated with the court to ensure that they would make decisions in their favor."

After the hearing, though before the judge announced the charges, former president Pérez Molina put on a brave face for the press. In total the former presidential pair are facing 17 charges in separate corruption cases and are being held in preventative custody.

"These cases which are built on tales and stories from star witnesses fall apart sooner or later," he told reporters. "What's happening is that the La Linea case isn't progressing, it's a weak case that was about to fall apart, so they needed to construct another."

Related: From Comic to President Under Pressure — Jimmy Morales Takes Office in Guatemala

Follow Jack Guy on Twitter: @JGuyGUA

money laundering
world bank
Otto Perez Molina
Roxana Baldetti
commission against impunity in guatemala
finance corporation
la linea case