Former Guatemalan President Alvaro Colom and 11 of his officials face charges of fraud and embezzlement for allegedly participating in a complex corruption scheme involving public transportation, the Prosecutor’s Office said Friday.
Seated in Guatemala’s First Criminal Court, Special Prosecutor Against Impunity Juan Francisco Sandoval began the first day of trial, grilling a dozen ex-ministers for their alleged participation in the embezzlement of US$35 million.
According to investigators, the former officials allegedly bypassed regulations in order to approve a multi-million business contract with the Association of Urban Bus Companies to implement a prepaid transportation system, violating the State Purchasing and Contracting Law.
A series of standard procedures would normally have prevented the deal from proceeding by sending the request to various officials for prior approval. However, these precautionary measures were overlooked as a company offering an automated payment system was introduced by the former secretary general of the presidency, Gustavo Alejos Cambara, to ‘facilitate’ federal transactions.
Alejos was responsible for coordinating federal spending with the Public Transport Strengthening and Modernization Commission and allegedly the transition to automatic transactions facilitated the embezzlement of thousands of dollars, allowing federal funds to fall quietly aside, and get lost in a sea of financial records.
According to ministry officials, a total of US$264 thousand dollars were “lost” during a series of automated payments to the third party company. During all this time, then Minister of Finance Juan Alberto Fuentes Knight neglected to raise alarm despite the absence of suitability and analytical reports to substantiate the business contract.
"As rector of the Ministry of Finance, he was responsible for complying with and enforcing all aspects of the tax regime, administering, controlling and supervising matters related to the contribution of economic resources," Sandoval said.
However, the bulk of responsibility falls on the former President Colom, prosecutor Sandoval said, who “knowingly” betrayed the public’s trust by allowing the project to continue, facilitating the procedure and approving the business transaction despite its glaring indiscretions.
All twelve officials, including former ministers and governors, have been held in pre-trial detention since their arrest on Feb. 13. According to investigators, a total of US$1.3 million of the US$35 million has been returned to the Guatemalan banking system, while US$13.9 million were used to purchase machinery that was stored in an abandoned warehouse and a final US$6 million were used to pay various expenses.