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Corruption and Its Reach in Latin America The organization hopes to contribute to an understanding of the problem and act as a watchdog group "capable of keeping the topic of corruption on a public agenda that also must grapple with financial instability, rampant violence and natural disasters, among other realities, with the potential to channel public outrage toward attitudes and actions that will no longer tolerate corruption." The report, entitled "Latin American Corruption: The Most Outstanding Cases of 2001," highlights cases in Paraguay, Nicaragua, Guatemala, Panama, Peru, Argentina, El Salvador and Mexico. The examples selected for each country were the ones that received the most attention in the leading print media. Nevertheless, the report makes the point that corruption is increasingly a transnational problem. Local actors use ties in other countries to carry out drug and arms trafficking, terrorism and money laundering. This last phenomenon is the focus of two cases in the region. In Nicaragua, checks for up to half a million dollars issued by the state oil company (PETRONIC) to cover tax payments were used to buy dollars at a foreign currency exchange. These went toward paying the debt of a real estate company that included among its shareholders former President Arnoldo Alemán, his relatives and close associates. And in Paraguay, the parties responsible for liquidating two of the country's banks transferred $16 million to accounts in the United States to finance operations linked to money laundering. The transfer was authorized by the banking superintendent, Carlos Pecci, by order of the president's brother, Judge José González Macchi. To conceal the transfer, the group created private foundations whose leaders included Pecci, a member of the Central Bank board of directors and the president's sister. The investigation traced the money to seven accounts in New York, and several of the participants in the scheme were convicted. It also spurred an unsuccessful motion to impeach Paraguay's president. Political corruption has penetrated the region's judicial institutions, as well. Clear examples of this problem are supplied by Argentina and Peru. Recently, the report states, "in the popular protests that were held daily in Argentina's largest cities, one of the main demands was the resignation of the members of the Supreme Court. The public questioned the justices' impartiality and accused them of protecting the impunity of individuals who committed crimes and destroyed the country's economy over the last decade. All of the court's members have complaints in effect against them, for different reasons, but as of the end of 2001 none had been considered seriously by Congress, the only body empowered by the constitution to hear such cases and decide whether a justice must step down." The report also notes that former President Carlos Menem named personal friends to federal judgeships. During his administration, five of the nine members of the Supreme Court were promoted, including its president, Julio Nazareno-a partner in Menem's law firm in his native province of La Rioja. In Peru, agents of the National Intelligence Service (directed by Vladimir Montesinos, the top advisor of former President Alberto Fujimori), infiltrated the judicial branch by using pre-existing networks of corruption led by high-ranking judges. The press denounced former Supreme Court justice Alejandro Rodríguez Medrano as among those responsible, and he is now behind bars. The legislative branch of government, too, has not been immune from corruption. In Argentina, several senators were accused of taking bribes of between $50,000 and $80,000 from the executive branch to buy their vote on a new labor code. Ultimately, not enough evidence was found to prosecute, although the scandal "brought the resignation of then Vice President Carlos Alvarez, the break-up of the governing alliance and the end of the new government's efforts to create an image of transparency and probity during the election campaign, which was undoubtedly one of the elements of its platform that attracted more votes and support." Other cases of corruption have spread as far as the presidency. In Nicaragua, for example, close to the end of President Alemán's term the press discovered that he had built a helicopter landing pad at his hacienda 20 kilometers from Managua. The project was financed with funds set aside for the confidential use of the president's office. The president of Nicaragua's Controller's Office, Guillermo Argüello Poessy, confirmed that the heliport was built with state funds. Of course, corruption has also affected the private sector. The report cites the case of numerous businessmen and bankers who benefited from corrupt ties to the government in Mexico. A leading example is Carlos Cabal Penich, director of Banco Cremi-Unión, who is accused of helping to finance the campaigns of PRI presidential candidates, among them Luis Donaldo Colosio (who was later assassinated) and Ernesto Zedillo. It cost Mexican taxpayers $7.9 billion to rescue the bank and liquidate its assets. Cabal was extradited to Mexico in September 2001, but he was released when a court decided that he was a mere employee of the bank and that not enough evidence existed to link him to any criminal activity. The Probidad report uses the journalistic record to build a convincing case of the extent of corruption in Latin America, providing evidence that could prove useful in combating it. Many of the cases it reports are old and the offenders have gone unpunished, increasing public distrust of politicians, the justice system and government institutions. Nevertheless, this project is one more example of the positive role the media has played in keeping corruption in the public eye. With civil society support, these types of efforts could represent an important source of pressure to combat a problem that has been chipping away at the rule of law in the region. http://www.probidad.org/regional/memorias/2001
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