Headlines, Latin America & the Caribbean

CORRUPTION-PARAGUAY: Incoming Gov’t Plans Clean-Up Coup

By Alejandro Sciscioli

ASUNCION, Jul 21 2003 (IPS) - Hopes run high that Paraguay’s president-elect, Nicanor Duarte Frutos, will make good on his promise to fight corruption – which costs this impoverished country 5.0 billion dollars annually – as changes occur in the leadership posts at key government ministries.

The Social Security Institute and the National Development Bank (BNF) were chosen by the current government of Luis González Macchi to help fellow Colorado Party member Duarte Frutos, who is to be sworn in as president Aug. 15, keep his campaign pledge.

The initial steps taken by the newly named officials caused a major media impact, as they revealed a network of employees within both agencies who have been involved in embezzling state funds through cheques stolen from the Social Security Institute, which were then paid out by BNF tellers.

To date, five people have been charged with defrauding the Paraguayan government of 3.0 billion guaraníes, the local currency, or the equivalent of a half-million dollars.

“Given the seriousness of the crimes uncovered in the two institutions, it was decided that the anti-corruption fight would begin precisely there,” vice-president-elect Luis Castiglioni told IPS, making it clear that the current and future governments are working together in the endeavour.

These measures “are precursors of the political philosophy that will be promoted by the Duarte Frutos administration in the fight against crime and impunity,” Castiglioni stated.

The judiciary and the Comptroller General’s Office will be asked to back the executive in actions against corruption, and a special Auditor’s Office will be set up to track government spending, said the politician, who until being on the winning presidential ticket had served as a legislative deputy.

Furthermore, the future government will work with citizen-led monitoring groups. “We want to maintain contact with those institutions to reinforce the actions of conscientious citizens, and we will ask them to accompany us in the task of oversight and to present denunciations,” said the vice-president-elect.

“What is important is that we see results, and we will obtain them by operating within the existing institutions. We are going to work institutionally as indicated by the constitution and laws,” Castiglioni said.

But fighting Paraguay’s deeply entrenched corruption will be a difficult undertaking.

Analysts and activists alike turn a sceptical eye on these announcements and gestures intended to combat the culture of fraud so deeply rooted in a country that has been governed since 1954 by the Colorado Party, officially named the National Republican Association.

A report presented in 1999 by then-comptroller general Daniel Fretes Ventre stated that the Paraguayan state lost some 5.0 billion dollars annually as a direct consequence of corruption in the national economy.

And the best example of this is, ironically, Fretes Ventre himself. He faces trial on charges for 18 crimes, including illicit enrichment and money laundering.

Another case that had a strong impact here involved former deputy and current senator Oscar González Daher, who was able to have government prosecutor Alejandro Nissen removed from his post when Nissen began investigating him for possession of a stolen vehicle.

González Daher achieved his objective thanks to his legislative post, in the previous parliament, of president of the committee that serves as a constitutional body for oversight of the judiciary.

At that time, very few people spoke out to complain or condemn the action, say experts, because Nissen – currently waiting for the Supreme Court to rule on the case – also had underway an investigation of President González Macchi and his wife Susana Galli for the same criminal charges.

Those and other accusations of corruption put the president in an impeachment trial in the Senate last January. In the end he was acquitted by a narrow margin.

But pending against González Macchi is another lawsuit for the alleged illegal diversion of 16 million dollars, taken from two banks under state intervention, and sent to the United States.

However, as of Aug. 15, he will no longer be president so another impeachment process is highly unlikely. It remains to be seen what legal actions might be taken against him once he is out of Paraguay’s highest political office.

State prosecutor for economic crimes Javier Contreras filed a complaint earlier this month about judge Hugo Sosa Pasmor’s delay in remitting to parliament the request for impeachment proceedings against the president.

“True power in this country lies with the mafia,” political scientist and economist Víctor Jacinto Flecha told IPS.

“The governmental, legislative and judicial structure of Paraguay is practically a façade inside which democracy is utilised by sectors of the mafia,” said Flecha, former professor at France’s Sorbonne University and current director of the non-governmental think-tank Coplanea.

According to the expert, the unknown variable is whether Duarte Frutos has sufficient political muscle “to confront that powerful machine,” made up three well-identified groups behind the Paraguayan government scenario.

One of these is the so-called “administrative mafia, also known as the ‘rosca’, the second is related to trafficking of drugs, lumber, cars, whatever, and which utilises the first, and the third is the one involved in falsifications in all their various forms,” explained Flecha.

In this context of lawlessness, both the discourse of the president-elect and the small signals being sent should be taken with a grain of salt, he added, noting that it might be a good idea to first investigate “whether his electoral campaign was backed by one of these mafias.”

In order to understand what the presence of the mafia groups really means in Paraguay, said Flecha, “it is essential to note that the state was held captive by the armed forces from 1936 to 1989.”

“The military’s long run of absolute power also enabled the emergence in the political arena, first of prebendary groups, and mafias later, in order to sustain itself in power.”

It was the contradictions of these mafias that led to the coup d’état and the fall of dictator Alfredo Stroessner (1954-1989), said the expert in his conversation with IPS.

Lawmakers are also protecting one another when faced with accusations of corruption, as occurred with the rejection earlier this year of a petition to strip Julián Sosa, deputy for the social democrat Authentic Radical Liberal Party (PLRA), of legal immunity so he would face trial for allegedly accepting a bribe from Brazilian farmers.

Sosa, who violently resisted arrest, had been filmed by a hidden camera as he accepted some 3,200 dollars in exchange for voting against a bill in the Chamber of Deputies that would have allowed the expropriation of lands from Brazilian settlers in the eastern Paraguayan department of Alto Paraná.

But as nothing in life lasts forever, the parliamentary period of Sosa came to an end with the latest legislative elections. Now he faces trial as a common citizen, judicial sources told IPS.

Parliamentary immunity had also protected Dionisio Chilavert from the courts on two occasions. But after losing his deputy seat he was sentenced to 10 years in prison for murdering his nephew.

“The first signals Duarte Frutos has sent are very encouraging, though keeping electoral promises and fighting corruption will not be an easy task,” says Sergio Britos, chief economist at the Paraguayan offices of the consultancy Price-WaterhouseCoopers.

Making any change difficult, he said, would be the strong clientelist culture among the entrepreneurs, contractors and suppliers of the government, importers and exporters, and even labour unionists, who are accustomed to using their connections in political power to obtain preferential treatment, according to Britos.

One of the few victories against corruption in Paraguay was the recent 18-year prison sentence handed down to former general Pablino González, found guilty of embezzling army funds through fake purchases for supplying 7,000 “ghost soldiers”.

In the latest study published by the non-governmental corruption watchdog Transparency International, Paraguay topped the list as the most corrupt country in Latin America and third most corrupt in the world.

Pilar Callizo, head of Transparency-Paraguay, explained in a conversation with IPS that the report is based on the public’s perception of the level of corruption in their country, and what the people of each nation interpret as constituting corruption can vary greatly.

A survey conducted last year by the local Centre for Information and Development Resources, with support from the U.S. Agency for International Development, found that 86 percent of the Paraguayans consulted felt “overwhelmed” by government corruption.