Anti-Corruption Efforts Taking Center Stage in Central America

In late 2015 and early 2016, Central American countries such as Panama, Guatemala, and Honduras have seen a sharp rise in anti-corruption sentiment, and in turn, investigation and enforcement. 

In these and other Central American countries, public outrage over alleged graft, bribery, and abuses of power at the highest levels of government has all but forced control of and accountability for corruption to the forefront of national agendas, and by all indications, the news and attention that anti-corruption issues have received in Central America will remain high for the foreseeable future. In Panama, for instance, former President Ricardo Martinelli was accused of inflating contracts worth $45 million to purchase dehydrated food for a government social program, using public funds to run an illegal political espionage ring, and accepting kickbacks from foreign military contractors. After the allegations surfaced, Panamanian labor union members marched on the presidential palace in Panama City, the Panamanian Electoral Tribunal stripped Martinelli of his constitutional immunity, and the Panamanian Supreme Court appointed a special prosecutor to investigate the allegations. Although Martinelli fled the country shortly after the allegations surfaced, he now faces charges related to the political espionage allegations. Allegations of a different scheme reaching to the highest levels of government was the focus of investigations in Guatemala, where Attorney General Thelma Aldana's partnership with the UN-backed International Commission Against Impunity in Guatemala (CICIG) forced now-former President Otto Perez Molina, Vice President Roxana Baldetti, and other high-ranking members of the government to address accusations that they had been accepting bribes from businesses in exchange for reduced taxes and customs tariffs. The scandal, nicknamed "La Linea," spurred tens of thousands of protesters to take to the streets demanding the president's resignation. After more than five months of public protests; the resignation, arrest, and incarceration of the Vice President and other government ministers; Congress's decisions to form an investigative commission and strip Perez Molina of his executive immunity, and the Supreme Court's refusal to nullify Congress's actions, Perez Molina was forced to succumb to protester's demands and resigned his office. Perez Molina was later jailed in Guatemala's Matamoros Prison. Although Honduran President Juan Orlando Hernandez has thus far survived protesters' demands to resign due to allegations that he benefited from a $200 million fraud and graft scheme that crippled the Honduran Social Security Institute, the protesters' voices have not fallen on deaf ears there either. Hernandez has not been directly implicated in the scheme, but he was forced to admit his party accepted $90 million that flowed through inactive shell companies in support of his 2013 election campaign. This admission was insufficient to quell public uproar, however, as Honduran citizens continued to press for an independent investigation into government graft akin to that facilitated by the CICIG in Guatemala. In response, the Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH) was created. In all of these cases, public focus on questions of public corruption required the government to take aggressive action against high-ranking political elites. The results in Panama, Guatemala, and Honduras show the impact that public attention and prosecutorial independence can have on investigations of public corruption. And while public officials often receive the bulk of attention, many of these corruption schemes also involve corporate actors willingly playing support roles. With new anti-corruption programs constantly being initiated in Central America, including more recently a U.S.-financed pilot program to help fight corruption in El Salvador, anti-corruption and compliance efforts will remain a focus of officials and corporations alike.