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Breaking democracy: illegal political finance and organized crime in Guatemala

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Abstract

Guatemala has been struggling in its road towards consolidated democracy since the mid-80s when its first democratic government was elected. Internal conflict is no rare occurrence in a country which civil war ended relatively recently, in 1996, and lasted over 30 years. Today, while Guatemala’s economy is the largest of Central America, inequality, poverty and social exclusion – particularly of indigenous people, are rife. Organized crime is also a prevalent concern and an imminent threat to the rule of law. Criminal investigations have evidenced how public institutions and policies are compromised by a rotten political finance system with pervasive links with drug trafficking structures. This paper (1) analyzes the legislative framework (and its implementation) for political financing in Guatemala; (2) identifies how organized crime uses those gaps to filter dirty money in politics, and, more generally, in public life; and (3) pinpoints priority areas for sustainable reform.

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Notes

  1. There are some exceptions to this as evidenced, for example, in the publications of Casas-Zamora [7], Schulte-Bockholt [8], Santano [9] and Thoumi [10].

  2. International Narcotics Control Strategy Report [13].

  3. The attempts to shorten the term of office of Claudia Paz y Paz (former Prosecutor General 2010–2014) in 2014, the decision to bar Thelma Aldana (former Prosecutor General 2014–2018) from running as a presidential candidate in the 2019 elections, the recent dismissals and transfers in the leadership of civil police force in 2019, or the decision not to extend the CICIGs mandate, are illustrative examples in this respect.

  4. The reasons behind the homicides drop could be manifold and a comprehensive study on the matter is yet to be carried out. Thus, some link the improvement to the positive CICIG contribution in bolstering investigation and prosecution capacities, e.g. creation of witness protection programs, development of bullet ballistics and forensic DNA capacities, better methods of financial investigation and inter-institutional collaboration, etc. Others talk about better local governance, improved emergency services (which increase victims’ survival rates), deployment of security resources to hot spots, shifting gang dynamics, etc.

  5. The methodology applied by GRECO combines theory and practice by contrasting material fonts with in situ interviews where governmental and non-governmental sources are consulted. A standard evaluation questionnaire guides all discussions and the analytical work which follows thereafter. The questionnaire for GRECO’s Third Evaluation Round on Transparency of Party Funding develops the principles laid out in Recommendation Rec(2003)4 on Common Rules against Corruption in the Funding of Political Parties and Electoral Campaigns, as well as the Guidelines on Financing political parties and election campaigns of the Council of Europe. Briefly stated, the main issues to evaluate a political financing system according to these principles are transparency of candidates’ and parties’ accounts, effective supervision, and proportionate and dissuasive sanctions. The methodological tool adopted by GRECO that we use in this paper is thus a very useful one to identify major problems of corruption in political financing. GRECO also appointed scientific experts to support its work in this domain, notably, Ingrid van Biezen, Yves-Marie Doublet, Patricia Peña and Marcin Walecki. The present paper is construed on the basis of the aforementioned questionnaire and, although the review is mainly theoretical (it has not be complemented by an on-site visit to Guatemala), it does pay considerable attention to implementation challenges, as they have been experienced in the past and as they may occur in the future.

  6. Although the social and institutional roots of organized crime are not the focus of this paper, there is a long and very interesting body of literature that makes patently evident the strong connection between social exclusion, violence and the pervasiveness of organized crime in many Latin-American countries. For instance, it has been said that limited access to inclusive education and comprehensive health care, together with gaps in access to justice, leave many individuals in these societies in a situation of social exclusion and leads them to enter in criminal activities and structural violence problems [18]. Pearce and Perea [19] sustain that, in order to build peace in these societies, we should focus much more on understanding the roots of structural violence, as caused by social exclusion, than on war itself. As the process of urbanization grows relentlessly in the region, Moser and McIlwaine [20] underline how violence, poverty and inequality are a particularly urban phenomenon causing a high degree of fear and insecurity that should be faced in a complex manner including reducing, managing and contesting violence and conflict from its structural roots. With particular reference to the fight against the phenomenon of organized crime, some authors have reflected on how certain public policies have paradoxically reinforced criminal organizations as, for example, when the police uses violence against people from low-income communities and particularly against youth from a disadvantaged background, in a context of a fragile rule of law and a weak State [21]. Some very interesting case studies, such as the one on the Brazilian PCC [22], have shown the transnational connections of many of these criminal organizations and how they pose a very alarming threat to peace building in Latin-American societies.

  7. Indigenous peoples roughly amount to 39% of the total population of Guatemala, according to the estimates of the National Statistics Institute, 2019.

  8. The latest TI index (2019) places Guatemala among the 50 most corrupt nations in the world (out of 180 countries). In Latin America, it ranks third, together with Honduras, in the worst perception of government corruption, just behind Nicaragua and Venezuela.

  9. Velásquez: Nivel de impunidad en el país supera el 97%. La Hora. 14 March 2016.

  10. The murder in February 2007 of three Salvadoran representatives to the Central American Parliament (PARLACEN), carried out by four Guatemalan policemen, evidenced the extent to which criminal networks had infiltrated the Guatemalan security apparatus. In response, the Minister of the Interior and the National Police Chief were fired, alongside 1900 police officers suspected of links with organized crime.

  11. The model of the CICIG has inspired similar structures in Honduras, El Salvador and Ecuador. Their effective performance is yet to be secured.

  12. Battle against graft in Guatemala is at risk. New York Times. 30 May 2019.

  13. In the run-up to the 2019 elections, the Chief of the Prosecutor’s Office Specialized on Electoral Offences, had to leave the country for security reasons after receiving tangible life threats against him and his family.

  14. President Morales, a newcomer to the political arena (a former television comedian), who campaigned as a reformer with his motto “neither corrupt, nor a thief”, switched sides once he and his family had been charged with corruption offences, including illegal party funding.

  15. The legislative package newly introduced in 2016 comprises: Decree 26–2016 amending the Law on Elections and Political Parties, as well as Agreements 273–2016 amending the Regulation implementing the Law on Elections and Political Parties, 274–2016 on Out-of-Country Voting, 306–2016 on the Control and Auditing of the Funding of Political Organizations, 307–2016 on the Specialized Unit on the Media and Opinion Polls of the TSE.

  16. Motions have been filed by the Chamber of Journalism, the Chamber of Mass Media, the Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations, etc. See also: Diecinueve impugnaciones ensombrecen el proceso electoral 2019. República, 8 November 2018.

  17. This percentage has subsequently been reduced because of on-going criminal charges being brought against deputies (including corruption, money laundering, illicit enrichment, influence peddling and attempted homicide charges) and the requirement for them to step down from the post.

  18. The notion of “taxi parties” refers to the phenomenon or political parties being (i) vehicles used by individual actors to get from point A (postulating candidates) to point B (a parcel of power), (ii) true partisans are so few in number that they fit in a taxicab.

  19. To deal with this practice, a new provision was introduced in the LEPP (2016) banning re-election in Congress of deputies who have switched parties in the last 3 years. The reform further requires members to wait until they are no longer in the office before they can officially run under the banner of a new party.

  20. El 44% de los diputados son tránsfugas. Prensa Libre. 13 April 2016.

  21. This has, at least, been the general pattern in Guatemala to date. The 2019 elections may be bringing in new experience in this area because of the change of rules, but also the entrance into the political game of new parties, such as for example, Movimiento Semilla or the People’s Liberation Movement (Movimiento para la Liberación de los Pueblos).

  22. Related persons are two or more individuals or corporate entities that are independent from the political organization, which receive, channel, manage or grant any type of financing to it, having a direct or indirect relationship between them as a result of property relations, management or any other type of links as defined by the Supreme Electoral Tribunal. Linked persons are individuals or corporate entities that are linked to the political organization, the political financer or any members of its permanent or management and control bodies or its candidates, as a result of property relations, management or any other type of links as defined by the Supreme Electoral Tribunal.

  23. Following amendments to the Penal Code, in 2018, liability now lies, instead, with the person who authorizes or receives the moneys.

  24. Constitutional Court, File No. 2951–2017.

  25. Around 20 election-related murders occurred during the campaign period of 2015.

  26. Corazón Nueva Nación (CNN); Compromiso, Renovación y Orden (Creo), Libertad Democrática Renovada (Líder), Partido Patriota (PP), Partido de Avanzada Nacional (PAN), Todos, Partido Republicano Institucional (PRI), Unión del Cambio Nacional (UCN), Unidad Nacional de la Esperanza (UNE), Unionista (PU) and Victoria were suspended. Libertad Democrática Renovada (LIDER) and Partido Patriota (PP) were cancelled.

  27. Drug cartels’ ties in spotlight as Guatemala votes. Reuters, 14 June 2019.

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Acknowledgments

A previous version of this paper was presented at the last annual meeting of IPSA RC20 “Political financing and Political Corruption” on 1 July 2019 in Curitiba (Brazil). The authors would like to thank participants’ comments on that draft. Fernando Jiménez-Sánchez would also like to thank the financial support of the Spanish Ministry of Science through the research grant CSO2016-78258-R. We are also very thankful for three anonymous reviewers’ comments and criticisms.

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  1. Group of States against Corruption (GRECO), Council of Europe, Strasbourg, France

    Laura Sanz-Levia

  2. University of Murcia, Murcia, Spain

    Fernando Jiménez-Sánchez

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  1. Laura Sanz-Levia
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Correspondence to Fernando Jiménez-Sánchez.

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Sanz-Levia, L., Jiménez-Sánchez, F. Breaking democracy: illegal political finance and organized crime in Guatemala. Crime Law Soc Change 75, 21–43 (2021). https://doi.org/10.1007/s10611-020-09918-x

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