Former president Elías Antonio Saca was sentenced to 10 years in prison this week after agreeing to plead guilty to misappropriating public funds for his own enrichment and that of several cabinet members, money laundering, and illegal payments to public relations agencies during his administration between 2005 and 2009.
The former president was ordered to return more than 260 million dollars, which the prosecution said he used to buy property, build a family mansion, and make illegal payments to former officials and advertising agencies.
“Today history was made in El Salvador. This is a historic precedent in the investigation of corruption. I reaffirm my commitment to continue to fight against crime and corruption in the country,” Attorney General Douglas Menéndez responded minutes after the former president was sentenced by three judges in the Salvadoran capital.
Saca became the first Salvadoran ex-president to be sent to prison for the crimes of corruption and misappropriation of public funds after the Attorney General’s office began several investigations in cases that involve two other former presidents and former high-ranking government officials who took advantage of lax controls to embezzle millions of government dollars.
“I think it was a good agreement; in this way everyone wins. The Attorney General came out good because for the first time a former president was convicted, but it’s obvious Saca will be out in a couple of years, since his sentence could be reduced for good conduct or something similar. And in the end, this sentence will be turn out to be a farce for the country,” said criminal attorney Jackeline Munguía.
During his testimony at his corruption trial in mid-August, Saca admitted to having diverted more than 300 million dollars from the public coffers to his personal accounts. He also admitted to having created an executive agreement approving the internal regulation of public funds to evade scrutiny from the Court of Accounts [charged with investigating public officials and entities.]
“These expenses were used for other purposes and under my direction bank accounts were used to transfer funds to people at my discretion,” the former president told the Court on August 10.
He also declared that funds were transferred to recipients “through publicity contracts and other payments.” This scheme enabled the misappropriation of reserved funds from the presidential office.
Moreover, the former president stated that more than 400 million dollars of the total public funds misappropriated during his administration were transferred to ARENA party accounts. According to his former private secretary, who also was convicted, public funds were also used to finance the electoral campaigns of mayoral and deputy candidates in 2006.
Convicted along with Saca were Julio Rank, former secretary of communications; César Funes, former secretary of youth and also ex-president of ANDA, the state water company; Elmer Charlaix, former private secretary to the president; and government employees Pablo Gómez, Francisco Rodríguez, and Alberto Herrera.
According to the Attorney General, these former government officials and ex-employees were sentenced to between five and 16 years in prison and ordered to pay millions to recoup the funds diverted through a scheme Saca had specifically created to defraud the Salvadoran state during his administration.
Although the sentence imposed on Saca was the first of its type, the public is not entirely convinced that it is a fair one.
“Out in the country if you steal a chicken they give you ten years in jail, but this former president stole millions of dollars and he only receives a minimum sentence. Monseñor Romero was right when he would say that justice [is like a snake]. It only bites the feet of those who go barefoot. I don’t think this sentence was fair. With all the money that Saca stole they could have done a lot to benefit the country,” said Alberto Alarcón, a taxi driver in the Salvadoran capital.
“For many Salvadorans justice in our country is a joke. Ten years in prison is nothing for all that Saca stole,” Ana María de Cabrera, a worker in San Salvador told the Americas Program. “This kind of looting from the public coffers prevents us from advancing as a society because it’s money that could have been invested in health, education, and infrastructure.”
Proceedings against other former presidents
The Attorney General has also set his sights on other former presidents. Mauricio Funes, Saca’s successor, was condemned in a civil trial for corruption, money laundering 351 million dollars, and engaging in a cover-up of these illegal acts during his administration. This week the Attorney General said they are investigating the diversion of more than 30 million dollars in donations from the government of Taiwan to the office of the president. He told the media that former president Funes authorized the use of this money for family travel, cosmetic surgery for his current partner, and also for the purchase of property in the name of third parties
Funes has been in self-imposed exile in Nicaragua since 2016 and constantly declares on his social media that he is innocent. A warrant has been issued for his arrest in connection with criminal proceedings for these same charges. However, Nicaragua and El Salvador do not have an extradition treaty and former president Funes says he has been hired by the government of Daniel Ortega as an advisor.
Francisco Flores, Saca’s predecessor, died in January 2016 before he could be sentenced. Nevertheless, his reputation will forever be tainted by corruption and he will be remembered as the president who diverted more than 15 million dollars in donations from Taiwan for victims of the 2001 earthquake to accounts of the rightist ARENA party.
A system created for corruption
Saca confessed to the Court: “On July 1, 2004, I issued the “Internal Operational Regulation for the Management, Control and Inspection of Public Funds, Reserved and Secret Spending of the Presidency of the Republic (“Reglamento Interno de Funcionamiento para el Manejo, Control y Fiscalización de los Fondos Públicos, Gastos Reservados y Secretos de la Presidencia de la República).”
The supposed purpose of the “internal regulation” was to provide funding for intelligence activities that had to remain secret for reasons of state security, but in reality it was to disguise the movement of public funds.
To carry out the scheme the former president named his private secretary, Elmer Charlaix, to handle all requests for funds before the finance ministry, so that everything would seem transparent.
In addition, the scheme allowed him to legally authorize Charlaix to open bank accounts in his name for the transfer of public funds and thereby disguise illegal payments, including the transfer of funds to the right-wing party and individual cabinet members who were secretly paid between five and ten thousand dollars on a regular basis.
These “bonuses” were paid in cash from the president’s office secret fund and, according to Saca, handled as “compensatory expenses” for state security.
“It was my opinion that this order provided [his private secretary] with the appearance of legality with respect to handling public funds and using them for purposes other than those established in the presidential office budget, appropriating them for personal benefit and the benefit of others, thereby evading requirements established by the Organic Law of the of Financial Administration of the State (Ley Orgánica de la Administración Financiero del Estado),” the former president declared.
Other funds were diverted to four advertising agencies that helped transfer money from the presidential office to broadcasting companies belonging to Saca. These four firms received 20 percent of 100,000 dollars that the office of the president would pay for non-existent contracts. The remaining 80,000 dollars would then be transferred to accounts belonging to Saca’s companies for services never provided.
In addition, during his term in office the former president ordered the payment of more than ten thousand dollars a month to his wife, Ana Ligia Mixco de Saca, despite the fact that Salvadoran law prohibits compensating the president’s wife for her duties as first lady.
Moreover, that was not the only “expense” paid to the wife of the former president with public funds. Government money was also used to pay off her credit card debt and personal expenses during non-official travel.
Media complicit in corruption
The Saca corruption scandal also involved the media. The former president admitted to having set aside monthly payments of 10,000 dollars to journalist and former television anchor Jorge Hernández, a close friend, in exchange for interviews and favorable coverage on one of the nation’s largest television networks: Tele Corporación Salvadoreña, known as TCS.
The former president used public funds to bring Jorge Hernández and a driver on several official trips. To generate favorable publicity for his administration he brought the journalist to Iraq in 2005 to curry favor with the United States, since Saca was the only president in the region to authorize the deployment of troops in support of the U.S. military.
A life of luxury
Saca also confessed that with the money transferred from public funds he bought property for his family and built a luxurious mansion with a gymnasium, private chapel, beauty salon for the former first lady, soccer field, and even coffee plantations
After the property located in an exclusive residential zone on the slopes of the San Salvador volcano was confiscated, Attorney General Douglas Menéndez said, “It’s a luxury mansion like nothing I’ve ever seen. It is so luxurious that it seems like the mansion of an emir. It shows that they had no qualms in spending the people’s money.”
During raids on the properties of the former president, the Attorney General’s office also reported that several luxury cars were seized on site. Corruption in the Saca government also extended to the private banking sector, which never objected or made any effort to impede the transfer of public funds to personal accounts disguised with the names of government projects.
The banks never reported suspicious activity when Saca’s former private secretary opened 16 accounts in several institutions where funds from the office of the president were deposited without authorization from the finance ministry.
Several bank employees who testified during the trial said that the president of their bank knew about transactions carried out by the former secretary and other presidential office employees, but never reported it. As of this writing, there has been no investigation of the banks or their employees in the presidential corruption cases.
“What former president Saca did was use employees to transfer money. Employees of the presidential office were only following orders; this means of using public funds was operationalized. Employees of the president’s office will no longer want to continue operating in this matter, because an example has been made of them. But they have been punished more harshly than those who were truly
responsible for the misappropriation of public money,” explained Roberto Claros, defense attorney for a former employee of the Salvadoran office of the presidency.
On several occasions the United States has exerted pressure on the Salvadoran government to come up with a plan for an international commission such as Guatemala’s CICIG to fight against corruption. Nevertheless, the political parties have refused to support the creation of an independent, anti-corruption entity, considering it an interference with state sovereignty.
Last year the Instituto Universitario de Opinión Pública de la UCA (IUDOP), released the results of a public survey on the creation of a commission like the CICIG. According to the results, 96.6% of Salvadorans who expressed an opinion said they agreed with the creation of a commission to investigate corruption and that the government should support it.
The creation of such an entity is one of the conditions the United States has placed on El Salvador to continue receiving funds from the Alliance for Progress and other sources.
Given the refusal of the Salvadoran government and political parties to create an anti-corruption commission, the United States and the European Union countries that provide financial aid to El Salvador have shown unconditional support for the Salvadoran Attorney General, without referring to the creation of an entity like the CICIG.