Financial Crime World

Guatemala’s Former President and Vice President Entangled in Four High-Profile Corruption Cases

Amid a flurry of corruption scandals, Guatemala’s ex-President Otto Pérez Molina and his Vice President Roxana Baldetti have found themselves at the center of a storm of investigations. In this article, we disentangle the intricate web of allegations against the pair, shedding light on the most significant cases.

‘La Línea’

The customs fraud scandal, known as ‘La Línea,’ emerged as the first major investigation targeting Pérez Molina’s administration. In April 2015, nearly two-dozen officials, including the heads of Guatemala’s customs agency, were arrested in connection to a network that offered tax discounts in exchange for financial kickbacks.

  • The scheme reportedly earned around $328,000 weekly.
  • Juan Carlos Monzón, former Vice President Baldetti’s private secretary, was suspected of leading the network.
  • However, evidence from wiretaps suggested that Pérez Molina and Baldetti were the true masterminds.
  • Baldetti was arrested in August 2015, followed by Pérez Molina’s resignation in early September after losing immunity.
  • Monzón, who had been on the run for five months, finally turned himself in to authorities in October, revealing that Pérez Molina and Baldetti had reportedly earned about 21.25% each of the illicit proceeds.

Quetzal Port

Prosecutors uncovered a money-laundering scheme relating to a Spanish container port construction company, Terminal de Contenedores Quetzal (TCQ), in April 2016.

  • Pérez Molina and Baldetti had appointed collaborators to high-ranking roles in the state company managing Guatemala’s Quetzal Port.
  • In 2012, they secured a 25-year concession contract worth $255 million for TCQ in exchange for bribes.
  • Investigators estimate that each leader received approximately $4.2 million.

Cooptación del Estado

Formal money laundering and corruption charges were filed in June 2016 against Pérez Molina and Baldetti for an alleged government-contracting and illegal campaign finance network, known as “Cooptación del Estado.”

  • The illicit activities were said to have raised around $38 million between 2012 and 2015.
  • The pair reportedly used the funds to finance their 2011 presidential campaign, with contractors expecting preferential treatment for state contracts.

La Cooperacha

The latest corruption case, ‘La Cooperacha’ or ‘Kick-In,’ emerged in June 2016 when Attorney General Thelma Aldana announced new charges against five ministers and other high-ranking officials.

  • The case pertains to the alleged spending of over $4.7 million on luxury gifts for Pérez Molina, including a powerboat, a beach house, and a helicopter, as well as a vacation home for Baldetti in Honduras.
  • Much of the money used to purchase the gifts is believed to have originated from public funds.

Conclusion

Taken together, the cases highlight an administration deeply enmeshed in corruption, employing ill-gotten funds to win elections, launder bribes, and buy luxury gifts for those in power.