|Central American University - UCA
Number 253 | Agosto 2002
<i>La Guaca:</i> Treasure, Burial and Maturing
Guaca is a treasure hidden to avoid discovery; tracking it down gives cause for great celebration. Guacas were also our Pre-Colombian ancestors’ tombs. And a guaca is a hole in the ground where fruit is put to mature. Nicaragua has found a guaca, opened it, celebrated, and hopes to use it to bury the worst of its history and ensure a more mature future.
On August 7, after the media had spent four days whipping up expectations over the discovery of what President Enrique Bolaños had enticingly dubbed a "guaca," Bolaños launched the final offensive against predecessor Arnoldo Alemán and his iron circle, the prime targets in his war against corruption. Shifting from a political emphasis to a more political-judicial one, the President delivered a formal address to the nation over a nationwide radio and TV hookup after acting Attorney General Francisco Fiallos detailed how Alemán had orchestrated the theft of at least $100 million from a dozen state institutions. With the help of didactic visual aids, Fiallos traced how the money was then laundered through Panamanian banks, fake companies and lastly the PLC-linked Nicaraguan Democratic Fund before finding its way into the hands of Alemán and his relatives and cohorts.
This discovery of Alemán’s first hidden treasure caused a mixture of indignation and hope. Institutionally, legally, politically, socially, and of course ethically, August 7 was an historic date for Nicaragua.
For the first timeHow much Alemán had stashed away in his guaca and how he got it there has been the subject of allegations for years, including partial evidence published in the media thanks to the work of distinguished journalists and some courageous jurists. Comptroller General Agustín Jarquín was one of the first to dare go after him publicly, a pioneer attempt that cost him three months in prison. The FSLN was well aware that President Alemán was siphoning funds into his personal stash and conspired to hide it when negotiating its infamous pact with him shortly after he took office. The international community also knew about the former President’s insatiable tendency to increase his personal treasure and repudiated it; some countries even froze their aid to the country in the final years of his term.
Some investigators were already on the trail of Alemán’s guaca when Bolaños was passed the presidential sash in January of this year. And this is the historic, exemplary, moralizing part of the events so far: for the first time in Nicaraguan history, an elected government took office determined to act transparently, to demand clear and orderly accounts from the outgoing teams in each of the state institutions. And not only that. It was also determined to sanction any crimes detected.
This could not have happened in the convulsive and violent transition from the Somoza dictatorship to the revolutionary Sandinista government. In the unexpected transition from that government to the Chamorro one, other, more major issues took precedence. And when the Alemán government took office, there was simply not the slightest interest in it happening. Thus, the state-as-booty philosophy became ever more entrenched and more thickly encrusted with murky alliances, making the reign of impunity harder and harder to crack. The historical part then, is to find such a deeply rooted culture of corruption finally on trial.
A 10,000-piece jigsaw puzzleTapped to carry out such an unprecedented task, the Office of Attorney General (PGR)—the only state institution not tainted by the pact—almost immediately began receiving allegations, reports, account statements, evidence of unsupported money transfers and other tidbits. All were pieces of a single huge jigsaw puzzle whose design, while still very sketchy, hinted at colossal institutionalized corruption. On August 7, Fiallos explained that the Channel 6 swindle and the check scam, both made public in February, and the luxury vehicle scam, which came to light in April, were interlocking parts of the same puzzle. At the time of former government tax director Byron Jerez’s arrest for his leading role in the latter two cases, which was the first great climax in the anti-corruption struggle, it was still not known where they fit in the big picture, or even what that picture might look like. Starting with what it had, however, the PGR got down to work.
At first it did a lot of improvising, covering rugged terrain never before traveled by any state institution. Fiallos explained that, given the avalanche of puzzle pieces it was collecting, the PGR had reached a point where it had to take a break, sit back and outline a strategy, and even ask for help. This puzzle, in fact, would never have been pieced together as far as it has without the lifting of bank secrecy in Panama, the collaboration of Interpol, US government pressure on the Panamanian authorities and the European Union’s financing of the PGR. After seven months, the PGR had finally been able to present the puzzle’s general picture to the nation on August 7, and with enough pieces in place to prove a modus operandi in the corruption headed up by Alemán and Jerez.
Expectations of more The Attorney General’s Office revealed only one of Alemán’s stashes on August 7 but announced that it is hot on the trail of others, from which "staggering results" can be expected. Attorney General Fiallos said his office is investigating over 10,000 checks that cover the entire Alemán period, from January 1997 to January 2001.
In this first stash alone, the state was swindled out of the equivalent of the country’s entire annual health budget in a procedure that Fiallos described as having "mafia characteristics." The money was siphoned off in transfers of various kinds from state institutions to the presidency, private individuals and a whole array of businesses in Nicaragua and abroad registered to Jerez, Alemán and other members of both families. The money was then funneled into the Nicaraguan Democratic Foundation account and from there plowed into family businesses, salary bonuses for top Alemán officials, phantom or real individuals who were only conduits and the purchase of luxury real estate and no end of high-ticket pleasures and baubles.
Pain, shame and indignationThe complex web through which the money came and went, moving from one account to another, is the clear expression of an attempt to cover all tracks. That alone is sufficient proof that we are talking about a classic money-laundering operation. Nicaragua has neither the experience nor the capacity to successfully follow such a web’s complicated threads. "Without the help of friendly governments it would have been impossible to track this money," acknowledged Fiallos, who ended his presentation by reporting to Bolaños and the nation: "Mission commenced and in progress. We will only say mission completed when we bring all this money back to the people."
Bolaños then delivered his speech, in which he very convincingly acknowledged the "pain" that presenting such an accusation to the country caused him. "Arnoldo, I am sad and disillusioned," he said. "I never imagined you would betray your people like this…. These facts fill us with shame and indignation…. One of the factors that have most caused and maintained our poverty is corruption…. We must make a break with this degrading tradition right now…."
Bolaños thus fulfilled a mission of his own that night. As a President with a vocation for statesmanship, he did a good job of laundering his own tarnished or at least questioned term as Alemán’s Vice-President.
Money laundering: Arnoldo Alemán and 13 of his partners in crime, including a good many relatives, are the first Nicaraguans ever to be accused of money laundering. Law 419, which reforms Nicaragua’s 123-year-old Penal Code by introducing new crimes linked to corruption—illicit enrichment, influence peddling, embezzlement of public funds, cover-ups and money laundering—only went into effect on June 28. Up to then, judges, Supreme Court justices and other officials argued that their hands were tied, even in the face of overwhelming evidence, because if a crime is not classified it does not exist. Now the country has a new institutional tool with which to battle corruption.
First suspects of a new crime
The PGR formally filed its accusation of money laundering and four other related crimes against Alemán and the others in court on August 7. The other 13 are his sister Amelia, daughter María Dolores, brother Álvaro, sister-in-law Mayra and nephew Arnoldo, Byron Jerez, Jerez’s wife Ethel, daughter Valeria and two of his assistants; plus three top officials of the Alemán government who are already fugitives from justice—former Treasury Minister Esteban Duquestrada, former ENITEL Director Jorge Solís and Alemán’s private secretary Alfredo Fernández.
The PGR requested an arrest warrant for them, plus warrants to search their homes, prevent their migration, embargo or sequester their belongings, freeze their bank accounts, lift tax and bank secrecy on their accounts and sequester the books and records of all the involved entities and businesses of which they are partners. The much needed symbolism of seeing all these people captured by the police and testifying in court is impossible for the moment, however: 11 are already outside of Nicaragua, Alemán and his daughter enjoy parliamentary immunity in any case and Amelia is hospitalized. A national poll conducted days before the guaca was revealed showed 81.5% wanting Bolaños to take the fight against corruption "all the way, no matter who falls" and 70.7% believing Alemán "should go to prison."
Counterattack and confessionNot surprisingly, Alemán and PLC leaders loyal to him lashed out angrily the day after the revelations about the guaca, but their statements were self-incriminating. Alemán claimed that Bolaños, like other top officials during Alemán’s administration, had benefited from the "booty" through extra-budgetary salary bonuses that Alemán paid in cash and in his office. While the intent was to tar Bolaños with his own brush, it was in fact a confession of criminal irregularities and proof of the strong-boss style Alemán uses with his subordinates. The PLC also reported that it had used the money detected in the stash’s "funnel" for the party’s "operational, political and financial activities," especially during the electoral campaigns. While the intent there was to deflect the notion that the money ended up in individual pockets, it was actually a confession of a crime newly classified in the Electoral Law and other crimes related to state-party fusion.
Alemán accused Bolaños of "violating this country’s code of political ethics," not by falsely accusing his close relatives, but simply by accusing them at all, which could be interpreted as an implicit confession that they were indeed participants in his crimes but should be covered by his same blanket of immunity-impunity. He also accused Bolaños of "breaking the institutional order" by not involving the Offices of Comptroller General and Public Prosecutor, which anyone who knows this country would recognize as a tacit admission that he still depends on both institutions to guarantee his impunity. Alemán called Bolaños a "little dictator" and the PLC repudiated his government, withdrawing its recognition of Bolaños’ shift of party affiliation from the Conservatives. For months now, but all day long on August 8, the pro-Alemán radio station "La Poderosa," whose frequency belongs to the Archdiocese of Managua, called Bolaños a "perverse old man," "murderer," "two-legged rat," "evil old man," "crazy," "senile" and much more, calling for his impeachment and even death by firing squad.
Byron Jerez was the first to be accused in the guaca case and thus to declare in court. In doing so on August 9, he demonstrated his affinity with Alemán in both political interests and arguments. Jerez did not respond to any of the questions put to him by the court, but brazenly used his platform to explain the salary bonuses that Alemán paid during his government to those who also now hold posts in the Bolaños government, beginning with Bolaños himself. Jerez claimed that Bolaños had won the elections "with disguised money." "Sure our government was corrupt," said Jerez, but they benefited from the corruption." He then asked the judge to investigate all the officials he named as accomplices in the money laundering.
Strategy in tattersPresident Bolaños’ political strategy upon taking office was to rescue the PLC from Alemán’s caudillista power and weaken the caudillo himself on the national political stage. The main obstacle in his way had been put there by the FSLN. The lifelong legislative seat Daniel Ortega conceded to Alemán through the pact allowed the latter to set himself up at the head of a National Assembly with a Liberal majority, surrounded by representatives handpicked precisely so they would never strip him of the immunity that protects him.
Alemán’s strategy of challenging an executive branch he doesn’t control from a legislative branch that he does, with occasional complicity from the FSLN bench, was carefully calculated to maintain control of the PLC, project himself as the next presidential candidate and guarantee his impunity. Part of that calculation included weighing down Bolaños with an unrealizable budget for which there is no financing, to make sure he would never "take off" in the economic terrain.
Bolaños’ obstinate and occasionally opportunistic performance, which grows out of both political pragmatism and a moral decision to confront corruption, a cancer that is devouring the national economy at a faster rate than the devastating neoliberal model, has been eroding Alemán’s strategy. And while no one could have imagined it, the shifts in US foreign policy after the collapse of the Twin Towers are contributing to the erosion.
If Alemán had correctly interpreted the various signs and evidence, he would have thrown in the towel before the final offensive was unleashed against him; but he failed to do so. Counting on the unconditional loyalty of a group of leaders within the party structures, the explicit sympathy of an important sector of the Catholic hierarchy and most of all a captive grassroots base that has embraced him as its anti-Sandinista caudillo since 1990, Alemán decided to tough it out. It was the same arrogantly suicidal attitude that characterizes so many alcoholics and megalomaniacs of various stripes. With the top now off the guaca, he may have just dug his political grave.
Is Alemán politically buried?Alemán will only be buried politically if Bolaños somehow gets the votes to have him removed as National Assembly president and forces him to respond in the courts, stripped of the "underskirts of immunity beneath which he is hiding," to use Bolaños’ latest metaphor. And that will happen only if two factors end up functioning in tandem: the United States and national legislation.
The first factor is already on Bolaños’ side. The United States has withdrawn the support it gave Alemán for years to shunt the FSLN. The discovery of Alemán’s mega-stash, which would have been unthinkable had the US government not given Bolaños both the technical support to find it and the green light to open it, is a clear sign that it has found in him a more reliable alternative. Washington expects good governance and stability from Bolaños and his wing of the PLC, and from there successive Liberal victories in the coming electoral races.
The second factor is far from assured. The National Assembly holds the institutional key to the first step, which is to strip Alemán of his immunity so he can be tried. It also holds the key to the second, which is the absolute elimination of presidential reelection under any circumstances. As it stands, the Constitution now only prohibits consecutive reelection. Even with the guaca opened for all to see, when a better man would be feeling some shame and a wiser one would be ducking for cover, Alemán has not stopped strutting about like the Liberals’ sure-fire presidential candidate for 2006. Both of these legislative steps, unfortunately, depend on the volatile, ambiguous and pact-riddled parliamentarians.
Is the pact politically buried?Non-reelection must be the concrete slab on top of Alemán’s political tomb. It would also take a lot of the steam out of Daniel Ortega’s political ambitions. The pact, which Alemán boasts of so much and Ortega so strongly denies the existence of when he is not justifying, forgetting or opportunistically camouflaging it, explains many of the dead ends and shady areas clouding Nicaragua’s future right now. The pact polarized and thus paralyzed, and it left almost the entire institutional terrain a minefield for Bolaños or for any other project aimed at transforming the national political scene. If Bolaños turns out to be incapable of quickly deactivating the pact’s principal mines, all tendencies suggest that the bipartisan polarization could be perpetuated until we find ourselves in another presidential race between Alemán and Ortega.
Both the Great Constitutionalist Liberal Party Convention of July 11, a show dominated by Alemán loyalists, and the July 19 celebration of the 1979 Sandinista revolution were chronicles of this tragedy itching to be foretold. Both events were geared to deifying their respective caudillos and abusing the poor with repetitive populist rhetoric. Both parties have the knack for such rhetoric in a Nicaragua that is getting poorer and adding more citizens to the ranks of the poor, and seem to milk profit from its use even though neither party is offering any project to combat the poverty.
There are other points of coincidence between the two parties as well, only some of them made explicit by the pact. With the guaca newly opened, many followers of the Alemán band and some from the Ortega band suggested the same "political project." The allegation that "laundered"—hence illegal—money was used in the PLC electoral campaign must be investigated, goes their argument, and Bolaños and Vice President Rizo—who threaten Alemán by wanting to build an alternative PLC—must be impeached if it turns out they won their posts illegally. And what comes next, in this line of thinking, in addition to the instability that such institutional chaos would provoke? The election of a Constituent Assembly? Allying to test the possibility of this scenario, the pact-controlled Office of Public Prosecutor requested the similarly controlled Office of Comptroller General to conduct such an investigation, which the latter agreed to do "out of responsibility," having sidestepped ever investigating Alemán on the same grounds.
Caudillismo is alive and wellThe unveiling of Alemán’s stash was preceded by a rapid and more acrid increase in the pro-Alemán/pro-Bolaños divisions within the PLC. The fight against corruption that has divided Liberals could help democratize the PLC, freeing it from the clutches of Alemán and his circle. The same goal is equally urgent in the FSLN, since the democratization of the political parties is a basic condition for the democratization of Nicaragua, but the Sandinista party is showing no visible signs of moving in this direction. This is particularly regrettable at a moment like this one, which requires the nation to reflect on the risks born of political patronage and a state based on such patronage.
Víctor Hugo Tinoco, a dissident intellectual within the FSLN, acknowledged recently that "both the FSLN and the PLC share the same political culture and we are all experiencing the same problems: caciquismo, caudillismo, dominant tendencies of personal loyalties, orders to stay away from people with a critical spirit, intolerance…." Despite this awareness, however, which is widely felt within Sandinismo, the FSLN continues to be hostage to Ortega and his people. The fight against Alemán’s corruption seems to have closed Sandinista ranks around the FSLN and its pro-Ortega line based on "ideological scruples" about being accomplices of the neoliberal Bolaños or, worse yet, expectations that Alemán’s burial would guarantee the FSLN’s resurrection and even Ortega’s victory in the next elections.
Another July 19thFor the July 19th celebration, the chameleon-like ease with which the FSLN shed its sunrise pink campaign color and slogans about the "promised land" from last year’s ineffective electoral race was rather disquieting. Back in vogue were the red and black symbols, the old rallying songs and the strong anti-imperialist rhetoric, speeding us down the time tunnel back to the eighties. In his speech, Daniel Ortega barely attempted any of the expected definitions of the current political dynamic. Instead, he began by haranguing about the war of the eighties then invited people to participate in a preposterous proposal "to solve Nicaragua’s foreign and domestic debt." How? By demanding that the US government pay Nicaragua US$17 billion in war damages in response to the 1986 decision of the International Court of Justice at The Hague condemning US participation in the contra war. Never mind that the United States never respected the court’s ruling in favor of Nicaragua or that the court never set any sum for reparations (the $17 billion was the Sandinista government’s assessment of losses submitted to the court). And never mind that in 1991 Nicaragua’s National Assembly passed a resolution submitted by the Chamorro government making The Hague decision a dead letter.
Lacking any realistic, alternative and collective proposal and uninterested in discussing one even if it existed, the FSLN currently stands for nothing more than the sum of its leaders’ personal projects. The July 19th event demonstrated the sad strategy left to those who are controlling the FSLN during these difficult years, while Bolaños is in office building himself an authentic, statesmanlike national leadership. With nothing to offer, the FSLN can only fall back on the rhetoric from better times ("The people united will never be divided! We are struggling against the Yanki, enemy of humanity!") to reassure its loyal grass roots that the power group with which almost everything must now be negotiated is the "opposition."
The FSLN no longer needs active subjects; it only needs passive voters, and what ensures these voters are the symbols, slogans and songs, the nostalgia. Setting impossible goals against neoliberalism or outdated ones against the empire of the North, presenting them as nationalist and grassroots utopias, guarantees a certain cohesion. To feed this strategy, the FSLN needs to ride the universal waves of rejection of the US government for its unpresentable international policy and enslaving economic imperialism, today undermined by a chain of mega-corruption cases. There is nothing easier for the FSLN than to blame all the nation’s problems, including those caused by its own leaders’ corrupt actions, on imperialism and the international financial institutions.
A "little pact" between Neither the extravagance of the July 19th celebration nor its inconsistency was subjected to much serious analysis. Cardinal Obando remarked that the FSLN had "gotten a second wind" and that Ortega looked "at his best," suggesting that the FSLN could win the next elections. Far from flattery, this was an expedient subliminal message to those who live in terror of such an idea: Alemán must be supported—no matter what he may have done during his government—because only he can defeat Ortega.
Bolaños and Ortega?
Alemán is using precisely the specter of this electoral possibility to keep his own base glued together and encourage his backers to help him undermine Bolaños and the anti-corruption fight against him on the grounds that it strengthens the FSLN and Ortega. "Bolaños is throwing himself into the arms of those who destroyed Nicaragua"; "Bolaños is making a little pact with Ortega"; "Ortega is trying to entice Bolaños to slip up so Nicaragua will fall into chaos." In repeating this incredibly tiresome discourse, Alemán is aided by any number of images to feed the imagination. Immediately before and after the discovery of the guaca, Bolaños met with Daniel Ortega half a dozen times. Photo ops and friendly declarations from a number of bilateral breakfasts or lunches have shocked the sensibilities of many people who are counting on Bolaños’ proven anti-Sandinista credentials.
Images aside, the reality is that both leaders are crafty politicians; they know each other well, know each other’s nexuses and are carefully measuring each centimeter of rapprochement or distancing. Bolaños needs the FSLN bench’s votes in the Assembly, but Ortega isn’t holding him hostage, as Alemán would have us believe. Regrettably, the FSLN is still holding Sandinismo hostage, which is what is debilitating it at a moment whose novelty demands creativity.
The other laundryIn the midst of such a new and thus confusing dynamic, the US government felt the need to give a "clarifying" sign. After denying entry visas to Alemán’s partners Byron Jerez and Jorge Solís on suspicion of money laundering and to Alemán’s sister Amelia on the assumption she was thinking of skipping to the United States, the US switched sides. On July 26, it canceled the entry visa of historic Sandinista leader, businessman and National Assembly representative Bayardo Arce, also on suspicion of money laundering.
It based its move on what the US Patriotic Law, passed after the September 11 attack, establishes for individuals suspected of laundering, having laundered or planning to launder money in the United States. Days earlier, Arce was detained for several hours in Miami airport, long enough to miss his connecting flight to Europe. Legislators from both the FSLN and PLC benches publicly protested. On his return to Managua, Arce angrily imputed the detention to being on a "black list" of Sandinistas who oppose "the impositions of the US government." This was denied by US business attaché in Managua, Paul Saxton, who claimed that the US government’s problem was with Arce, not the FSLN.
Once his visa was revoked, Arce insisted again that it was because he was "a revolutionary" and had strongly criticized the Bush government following his detention in Miami. He claimed he had neither companies nor business deals nor so much as a bank account in the United States. "The last place it would occur to me to launder money is in the United States," he argued ironically. Saxton responded that it is not necessary to live or have businesses in the United States to launder money there, recalling that all bank transfers made electronically in Latin America go through US banks. While the FSLN expressed its "total backing for Arce," he did not insist further on his version. Days later, the US government canceled the visa of Liberal banker Haroldo Montealegre.
The timing could not have been more significant. Although President Bolaños’ anti-corruption strategy cannot be "all or none" much less "all at the same time," his strategy has ambiguously included both the investigation of the Interbank collapse and a "two bands" dialogue with Daniel Ortega. The United States did not want it forgotten that sooner or later the anti-corruption strategy most also work "on two bands" and find other stashes.
We’re not "a country Bolaños’ prioritization of corrupt PLC members in government has generated huge divisions within his party and is forcing a profound political recomposition of the country, erasing old boundaries and creating new alliances. One expression of this was the consensual Message to the International Community signed on July 31, a week before the guaca was opened, by 90 prestigious personalities with very different ideological origins and political and social practices. The text was the first step of what Bolaños called a "unity of national consciousness."
in a normal situation"
In the message, publicly read in the presidential offices before the diplomatic corps and the media, the 90 appealed to the international community to "demonstrate its backing for the struggle against corruption on which our future depends by granting our country special emergency treatment" so that as long as the struggle continues "external resources already pledged and those being contracted will flow without delays. To aim to subject Nicaragua to the requirements and deadlines of a country in a normal situation would in no way be just and would only benefit those who, being responsible for the current situation, want to continue anchoring themselves in the desperation and chaos that they sowed. Leaving us alone would mean encouraging the corrupt; and if this struggle fails due to lack of international support it would create a terrible precedent not only in Nicaragua but also in other Latin American countries."
The message’s signers were presented in alphabetical order by category. We mention here only those best known internationally: Former heads of state: Violeta Barrios, Alfonso Callejas, Virgilio Godoy, Moisés Hassan, Sergio Ramírez and Alfonso Robelo. (Daniel Ortega wanted to sign, but several signers said they would withdraw if he did.) Former state institution officials: José Antonio Alvarado, Pablo Ayón, Joaquín Cuadra, Agustín Jarquín, Dora María Téllez and Víctor Hugo Tinoco. Former members of branches of the state: Miriam Argüello, Mariano Fiallos, Ray Hooker and Víctor Manuel Talavera. Business leaders: Duilio Baltodano, Enrique Dreyfus, Ernesto Fernández Holmann, Manuel Ignacio Lacayo and Carlos Mántica. Media people: Carlos Briceño (Channel 8), Cristiana Chamorro (La Prensa), Xavier Chamorro (El Nuevo Diario) and Marta Pasos (Channel 2). Universities: Mirna Cunningham, Adrián Meza and Carlos Tünnermann. Intellectuals and artists: Gioconda Belli, Carlos Mejía Godoy, Luis Enrique Mejía Godoy, León Núñez and Xavier Zavala. Civil society leaders: Rafael Córdoba, Álvaro Fiallos, Armando Incer Barquero, Vidaluz Meneses, Vilma Núñez de Escorcia and Brooklyn Rivera.
Alemán followers disqualified the document because no "member of the Catholic Church" had signed. Carlos Tünnermann responded that "many of us who signed are practicing Catholics. The Church includes us all, not just its hierarchy."
The basket and the guacaThe IMF was the main target of the message’s request for benevolence. Days before it was delivered, a delegation of European Social Democratic parliamentarians visited Nicaragua and assured that "as a voice from Europe we are going to ask the IMF for a little flexibility for Nicaragua." In fact, both the guaca and the IMF are entangled in a pitched battle around two government tax reform bills designed to balance the country’s unsustainable fiscal deficit.
The IMF is requiring the government to establish fiscal order and formalize it in a law that the Assembly is being asked to give urgent passage. After having sent some partial reforms to the National Assembly in June that were still being digested, the government sent another tax package, which included adjustments to those first reforms. In this second round, the IMF recommended that the government tax all 53 products of the basic market basket, but the government decided only to add 11 more to the 24 already taxed.
Even at that, the protest was immediate and nationwide. Messing with the basic basket triggers massive rejection: it is one of the few topics that most of the nation agrees on. Legislators from both the Sandinista and Liberal benches, organized civil society, the NGOs and the population in general spoke out against taxing the basket any further, which Bolaños and leaders of Nicaragua’s business community later criticized as populist opposition.
This was the context in which the Message from the Ninety appeared and in which President Bolaños decided to launch his big offensive against Alemán. In his message to the nation on August 7, he announced that he no longer had to tax the basic market basket because he had found an enormous guaca of money that could be used to "cover part of the tax adjustments that the Monetary Fund is asking of us." Nonetheless, the tax debate remained open, giving reason to suspect parliamentary alliances between the Alemán and Ortega benches on a subject that the government is still struggling to get a grip on.
The state has to increase its tax collection and create greater order in it by eliminating exonerations and privileges, precisely to build another dike against corruption. But in both essence and form, improvisation prevailed in both pieces of legislation and there was no dialogue with civil society to hammer out consensual positions. The result was that the initial consensus dissolved into wrangling over where the taxes should come from, with each potential target lobbying to have the bite come from elsewhere.
Judicial insurrectionOn July 17, exactly 23 years after the Somoza family boarded a plane and fled the Sandinista-led insurrection, various segments of civil society organized an homage to Judge Gertrudis Arias, who had filed the criminal suit against Alemán in April, and Alberto Novoa, special prosecuting attorney in the first two corruption trials. Arias and Novoa had become pioneering public servants in the anti-corruption struggle almost by accident, and both had the incorruptible courage and dignity to assume the role thrust upon them.
In his speech acknowledging the homage, Novoa, an attorney convinced of the transforming power of law, stressed that "a judicial insurrection" had begun in Nicaragua. In other Latin American countries, he explained, "we are seeing social mobilizations, grassroots protests. Here, no. In our small and unpredictable country, we are seeing and participating in something genuinely novel today: we Nicaraguans are transforming the laws into an instrument of struggle and for the first time in our history law is taking a seat at the table of power."
And not only that. For the first time in Nicaragua’s history, a struggle against corruption is being undertaken from the seat of power and people with power are being punished. An even more valuable aspect is that members of the party in government, who share its ideology, are being accused from the seat of power, rather than political adversaries or enemies. This is utterly without precedent in our history. For this reason, hope has also taken a seat at the table of power, together with national indignation over the discovery.
A long cultural, ethical struggleIn an interview in La Prensa, lawyer, penal expert and academic Sergio Cuarezma, the youngest of the candidates for a seat on the Supreme Court, offered his overview of what is ahead of us in the guaca trial. "The campaign against government corruption is bringing all the problems and weaknesses, the whole problematic of public administration out into the open. With all this on the table, it is possible to organize, structure and respond ethically to the problems we have been finding along the way. For example, the problem of the double salaries of public officials during the last government, which is ethically incorrect… During this trial, both the Attorney General’s Office and the defense will be subjected to a long, traumatic and exhausting process that could take between a year and a half and four years. The parties in the process and society itself must muster tremendous patience to be able to accompany this process right to the end. Such a transcendent trial provides an enormous ethical lesson for the country: that no one should ever rob again."
The struggle against corruption is not only the institutional police work of tracking down the guaca, or the economic job of quantifying the stash and repatriating it, or the political task of interring impunity and caudillismo, an outmoded political culture that prevents us from developing. It is also the struggle to begin to lay the groundwork and create controls so that we may never again feel the shame of being represented by thieves. For that reason, because the goal is not just to cure the disease in the social body but also to heal its spirit, this is also a cultural struggle.
This is the most difficult and slowest of the goals to achieve, the one requiring most time and the greatest dose of patience. It obliges all of us to examine the depth of our consciences to see in what way we have contributed to a system of corruption in which the guaca is only the most gigantic and perverse expression.
An opportunity to matureWe must put behind us conceptions such as the one that accompanied Arnoldo Alemán into the Managua mayor’s office and from there to the presidency of the Republic: "Sure he’s a crook, but he gets things done." We must also put behind us the fatalistic insistence of political and religious leaders during the Alemán years. "There has always been corruption in Nicaragua and there always will be." Behind us also the argument that the owners of the guaca are proffering today: "No one should be punished, because we are all corrupt."
We can only hope that in these times of the hunt for ill-gotten buried treasures, we will also open other guacas in this insurrectionary and thus fertile land, into which we can put new political conceptions, new values and new civic behavior to mature.
Asterisks Along the Anti-Corruption Road
* US$11 million belonging to Byron Jerez in US and Panamanian bank accounts ($4 million and US$7 million respectively) were frozen in July at the request of the Nicaraguan government, which also requested the repatriation of that money. At the end of the month, the Florida State Attorney General’s Office announced that it was preparing a criminal suit against Byron Jerez for money laundering. In the investigation of Jerez and Alemán for money laundering in Panama, that country’s Office of Attorney General and its Anti-Drug Prosecutor’s Office initially detected $31 million laundered through Panamanian banks. Accounts belonging to Alemán and Jerez are being investigated all over Central America.
* Only days before the Attorney General’s Office lifted the lid on Alemán’s stash, his sister Amelia, who would also find herself on the list for that case, was called to answer in court on two other corruption cases filed by the state. One involved roughly US$7 million detected in a calf sale program run by the Rural Development Institute (IDR) in which Amelia, a cattle rancher and business administrator, had participated. The other was the "check scam" for which Byron Jerez is already serving his sentence, in which Amelia allegedly paid off some of the debts of GENINSA, the family’s business consortium which she legally represents, with one of those checks drawn on public funds. Amelia refused to appear in either case, alleging that she is too ill with cancer. She did, however, manage to struggle into court during those same days to charge the Office of Attorney General’s spokesperson with slander for having implicated her in the IDR case. On the last day of July, pressured by the judge for the third time, Amelia made her declaration in the GENINSA case from a Managua hospital, where she had been admitted the previous day. In the guaca case, the judge ordered house or hospital arrest for her.
* Throughout July, the mayors of both Nagarote and Ticuantepe repeatedly charged that Supreme Electoral Council president Roberto Rivas has gone years without paying the equivalent of some US$20,000 in property tax on his luxury residences in those two municipalities. After continual pressure through the media, Nagarote’s mayor got Rivas to pay at least part of his debts. The same mayor also reported that GENINSA, the Alemán family’s business consortium, had also failed to pay the taxes on a farm it owns in Nagarote. The taxes plus fines piled up over the years amount to about US$30,000. When Arnoldo Alemán’s sister Amelia, who is GENINSA’s legal representative, showed no willingness to honor the company’s debts, a judge embargoed the farm.
Rivas is under pressure for more than just tax evasion. The Comptroller General’s Office is investigating his irregular and presumably corrupt administration of both the CSE and COPROSA, an entity belonging to the Archdioceses of Managua. Rivas has left the country without explanation, and speculation is rife that he fled to avoid embarrassing findings by the auditors.
National Assembly Track Record This Month
Supreme Court Still Short Handed
Another month has gone by without the National Assembly electing the five new Supreme Court justices to replace those whose term has ended. The Court is currently functioning with only 11 of its 16 justices. The court’s announcement that the five departing justices will receive a lifetime pension of some 90,000 córdobas a month (equivalent to roughly US$7,500) triggered great criticism and anger among different sectors of public opinion. Such pensions are considered morally unjustifiable and economically unsustainable—as is the pact-originated decision to have 16 justices in the first place.
Public Officials Must Now Declare Probity
Days before amending the Penal Code in late June, the National Assembly passed the Probity Law for Public Servants, although the FSLN and Liberal benches first amended the bill to hobble citizens’ efforts to gain access to the probity declarations. Access is still theoretically guaranteed, but public officials must first give their permission, forcing the citizen to turn to the newly defined court that handles suits against the state, which has not yet begun to function. Various penal experts have proposed that all current officials make a new declaration of their personal patrimony so that it can be seen at the end of their stint in office whether they were guilty of the new crime of illicit enrichment.
Speaking of Double Salaries…
The office of Comptroller General recently investigated Noel Ramírez, president of the Central Bank during the Alemán administration and now a Liberal parliamentarian, based on charges by bank workers backed by ample documentation. The investigation concluded that Ramírez received a monthly salary of some US$27,000, assigning himself a US$1,500 "bonus for excellence," plus representation expenses through a credit card on which he spent nearly US$300,000 during the five years in his position. Rámirez also had 9 vehicles and 14 security guards assigned to him, all paid for with Central Bank funds.