As the known involvement in corruption of a number of high-profile public officials in Paraguay, former and current, has returned to the fore, pressure is growing on the administration of President Mario Abdo Benítez to crack down on the crime, with the US being particularly vocal on the matter.
International anti-corruption day, on 9 December, provided an opportunity for Paraguay’s national anti-corruption secretariat, Senac, to reaffirm its commitment to transparency. The next day, the US State Department designated two former Paraguayan officials for “their involvement in significant corruption”: Oscar González Daher, a former senator who was head of the jury for prosecution for magistrates for the ruling Associación Nacional Republicana-Partido Colorado (ANR-PC), and Francisco Javier Díaz Verón, a former attorney general.
González Daher resigned in 2018 after congress launched impeachment proceedings against him for his alleged involvement in an influence trafficking scandal involving the judiciary. He and his son Oscar González Chaves face proceedings for money laundering, illicit enrichment and tax evasion. Díaz Verón and his wife, María Selva Morínigo, are currently under house arrest for money laundering and illicit enrichment. Both men, as well as members of their respective close families, are now ineligible for entry to the US.
The US ambassador to Paraguay, Lee McClenny, noted that this move was made under the US’s commitment to fighting corruption by holding those responsible for the crime to account, and that it reinforces the US and Paraguay’s joint efforts in this area. It is the first time that Paraguayan nationals have had such measures taken against them by the US, but McClenny told journalists that he had no doubt more would follow.
Paraguay’s anti-corruption minister, René Fernández, has said that the government is taking the US’s measure as a sign that Paraguay must deepen its efforts to fight organised crime and corruption. Abdo Benítez took over the presidency in August 2018 promising to take on corruption and impunity in Paraguay, but, almost a year and a half into his term, many criminal investigations against those in power remain stuck.
“The chamber of deputies closes a year of impunity,” the national daily ABC Color declared in a piece on 23 December 2019, in which it lists ten deputies who are tainted by scandal. One, Ulises Quintana from Abdo Benítez’s own Añetete faction of the ANR-PC, is under preventative arrest. Two are under investigation, three have been accused, two have been charged and two have been cleared, all for various forms of wrongdoing including influence trafficking and money laundering. All remain in their posts.
Amongst the multiple corruption investigations against current and former public officials which have been dragged back into the public eye recently, the most high-profile is that against former president Horacio Cartes (2013-2018). Cartes’ links to the black-market money dealer (‘doleiro’) Dario Messer made him a man of interest in Brazil’s ‘Lava Jato’ (Car Wash) corruption investigation, and on 19 November 2019 a Brazilian judge issued a preventative arrest warrant against Cartes following accusations that he had helped Messer evade justice (Messer was arrested in Brazil in July last year after over a year on the run).
The warrant was annulled by a higher court in Brazil a few weeks later, before Paraguayan authorities had made a move against Cartes. But then, on 20 December, Rio de Janeiro’s public prosecutor’s office (MPF-RJ) accused Cartes, Messer and 17 others of forming part of a criminal network dedicated to money laundering and other criminal activities since 2000. Cartes specifically stands accused of being part of the group’s “political nucleus” and faces charges for criminal association.
Cartes is from the same ANR-PC party as Abdo Benítez, although he represents the dissident Cartista faction, and these latest developments have caused political waves in Paraguay. But they have also drawn attention to the fact that Cartes continues to enjoy impunity amid multiple suspicions and investigations. A bicameral congressional commission of inquiry (CBI) in Paraguay had earlier in 2019 submitted a report outlining the suspected existence of a transnational criminal network in which Cartes and Messer played significant roles. Yet Cartes has not been questioned, let alone prosecuted. This, as well as Paraguayan prosecutors’ slow reaction to the accusations from Brazil, has been questioned by the press and the opposition and held up as contributing to damaging Paraguay’s image and reputation on combatting white collar crimes.
- Political repercussions
The fight against corruption in Paraguay is politically charged, as it concerns a number of politicians from the ruling ANR-PC, from both President Abdo Benítez’s Añetete faction and the dissident Cartista faction supporting former president Cartes. Accusations formulated against Cartes by Brazilian prosecutors caused a furore in Paraguay, with Cartistas saying it was a plot to discredit their leader devised by his in-party detractors. But allies of Abdo Benítez have been implicated also, with former interior minister and now-chief-of-staff Juan Ernesto Villamayor, understood to be close to the president, mentioned in the Brazilian prosecutors’ report. This increases the pressure on Abdo Benítez to be seen as impartial and unyielding in his efforts to crack down on corruption.
US-Paraguay security collaboration
The US State Department notes that it aids Paraguay in combatting corruption, and this issue was reported as one of the topics to be discussed during a bilateral meeting between US President Donald Trump and Paraguay’s President Mario Abdo Benítez, which took place in Washington DC on 13 December 2019.
As it is, the joint statement by the two heads of state expressed their commitment to upholding the rule of law and outlined areas in which the US will assist Paraguay on defence and security. Abdo Benítez spoke of the need for help in reforming his country’s police and penitentiary system, while Trump announced that the US will offer two Special Forces Joint Combined Exchange Training events in 2020 and 2021, and that the US Southern Command will execute a regional crisis response exercise in Paraguay in 2021.
In November 2019, the Financial Action Group of Latin America (Gafilat) began an evaluation of Paraguay’s efforts to fight money laundering and terrorism financing, with the final report on the issue due to be published in December 2020. Gafilat’s last mutual evaluation of Paraguay in 2008 had left the country on the ‘grey list’ of jurisdictions with deficient anti-money laundering regimes. Paraguay was removed from the grey list after a follow-up report in 2012, and the Abdo Benítez administration will be keen to maintain this position. There are concerns that the implementation of approved measures against money laundering will be deemed deficient by the Gafilat evaluation.