Guatemala Elite Accused of Coopting Govt to Run Huge Fraud Ring

Guatemalan prosecutors began presenting evidence Tuesday to bring charges against over 50 defendants, including former President Otto Perez Molina and former Vice President Roxana Baldetti, for a massive multi-million dollar government corruption scandal involving a slew of crimes including money laundering, bribery, and illegal campaign financing.

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The trial, which kicked off Monday, continues the probe into government fraud that picked up speed last year as investigators unravelled an intricate customs fraud network, known as La Linea, in the country’s Tax Authority.

Perez Molina and Baldetti, who both stepped down last year under massive social movement pressure, are accused of heading the corruption ring that allegedly stole more than US$1 million. Fraud in other institutions, including bribes for contracts, and illegal campaign financing swept up as much as over US$100 million more.

Roxana Baldetti and Otto Perez Molina appear in court, June 13, 2016.

According to the public prosecutor’s office, evidence in the case referred to as State Cooptation suggests that Perez Molina’s right-wing Patriotic Party “came to executive power in order to co-opt the Guatemalan state to achieve its goal of appropriating institutions, from which it formed a machine to launder millions.”

The party is also accused of illegal campaign financing in the 2007 and 2001 elections under the former president and vice president’s leadership.

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Perez Molina, a former general and chief of military intelligence during Guatemala’s bloody civil war, was elected president in 2012 alongside Baldetti, with whom he founded the neoliberal Patriotic Party a decade earlier. He was Guatemala’s first head of state to stand accused while still in his post as president.

Evidence in the case involves thousands of wiretaps and documents that have helped prosecutors untangle the structure of high-level government fraud. The International Commission Against Impunity in Guatemala, known as CICIG, has also played a key role over the past year in the campaign to root out corruption.

The 51 other defendants in the case include current and former government officials, contractors, business people, and other individuals linked to the corruption scandal. The accused have been divided into categories based on their connection to the case, including financiers, launderers, and contractors.

Both Perez Molina and Baldetti have been held in remand while the investigation continues. Authorities arrested 25 of the other suspects in raids earlier this month.

The trial is set to continue on Wednesday.