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  • Guatemalan President Jimmy Morales under suspicion for fraud for bypassing contract laws to buy 2 aircraft from Argentina

    Guatemalan President Jimmy Morales under suspicion for fraud for bypassing contract laws to buy 2 aircraft from Argentina | Photo: Reuters

Published 7 July 2019

Legislators and the national auditor say President Morales may have committed fraud for signing to buy deal two aircraft from Argentina that was not legally budgeted.

Days after Guatemalan President Jimmy Morales publicly signed off on the purchase of two reconnaissance aircraft from Argentina, Congress has called the ministers of defense and finance to testify in what legislators and national auditors say is a shady deal.

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Legislators and the national auditor say Morales may have committed fraud for signing off on the deal that wasn't budgeted. The Guatemalan leader may also have bypassed the Contracting Law in order to make the government purchase.

The nation’s comptroller says it needs to verify what procedures the president took to approve the purchase and how the administration plans to pay for the two planes that add up to US$28 million in total. 

July 3, President Morales met with his Argentine counterpart, Mauricio Macri, at the Buenos Aires airport to seal the deal for the two vessels manufactured by the Argentine Airplane Factory in what was the company’s first export. That same day, Defense Minister Luis Ralda released a social media video, saying the two ‘Pampa III’ aircrafts will be used to fight “drug trafficking,” particularly at the nation’s borders. 

However, the transaction was immediately questioned by presidential candidates as well as Congress.

Testifying in front of legislators Friday, Finance Minister Victor Martinez said he was asked by the defense department June 24 to verify if there were sufficient funds to acquire the aircraft. Martinez said his office is still evaluating finance availability.

"We continue to prepare the file so that the formal request for budget allocation can be made," the minister told members of Congress July 5.

Carlos Chavarria, head of the Renovation and Order Commitment (Creo) coalition said the purchases were "absurd and ridiculous," considering, he said, there are "so many needs in the country such as education and nutrition."

During the Friday hearing, Gustavo Mendez of the defense ministry told Congress there was no budget portfolio to buy the planes, but that they are “necessary” to fight drug trafficking because the army doesn’t currently have such equipment.

Guatemalan legislators are suspicious that the executive bypassed the nations Contracts Law in order to make the purchases that, as of Friday, was still being denied by Vice President Jafeth Cabrera even though they had been widely publicized on social media by the presidents of both Guatemala and Argentina. 

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Local media suggests government officials from both countries modified their mutual Scientific and Technical Cooperation Agreement (STCA) signed nearly 40 years ago in order to seal the major deal. Legislator Carlos Barreda says that if this is the case, the alteration should have been the job of Guatemala’s foreign ministry that would have had to also officially publish the change on behalf of the government.

Sub-director of the state comptroller, Cesar Elias, said his office will review the army’s file his office requested and release a statement by Wednesday of next week in order to determine if any laws were broken.

"The comptroller is very clear that under the agreement it is not possible to acquire two aircraft, but we need to have that file in view to know if they are suddenly invoking other legal norms or treaties to give an official position, but the Contracting Law needs to be adhered to," Elias said.

Some legislators during the hearing said that Morales flagrantly violated the Organic Budget Law simply by publicly announcing the purchases if indeed there were no funds legally set aside for the aircraft. 

Also Friday, The Guatemalan chapter of Transparency Internacional made a formal charge of fraud against the president for the plane purchases to a federal peace court.

The lawsuit accuses the president and the defense minister of "fraud for the process of acquiring and purchasing two Pampa III".

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