The “Model” of Corruption and Impunity in Nicaragua

The winds of change are blowing from the Biden administration, in favor of the fight against corruption and impunity in Central America.

By Carlos F. Chamorro (Confidencial)

HAVANA TIMES – The latest report from Transparency International, on perceptions of corruption in the public sector, places Nicaragua among the most corrupt countries. It ranks 159th out of 180 countries, while in the Americas we are the third most corrupt country, only surpassed by Haiti and Venezuela.

This is one of the most costly and painful legacies of fourteen years of misrule by the Ortega dictatorship. In the massive theft and waste of state resources, which were destined to combat poverty and for national development, there are immense economic costs. But, in addition, there are intangible losses even more difficult to replace in the long term.

Ortega did not only dismantle all public institutions of control and accountability that existed. He turned them into accomplices in crime, confusing the public and private. Doing business and investing outside the law, without competition or transparency, but with the strongman’s endorsement.

It’s true that corruption in the public sector is a long-standing tradition and didn’t begin with Ortega. However, under his mandate it was perfected as a structural link of the “model” to govern between public and private power. From the failed megaprojects to welfare programs, the model included extensive bribes of the Judiciary, the Police and the state’s political operators.

Ortega’s original contribution consists in having institutionalized corruption. Dismantling it, and rebuilding control entities, will be a huge task that will demand the continuity of several governments and a genuine institutional revolution. However, the first step is a political change to get rid of the dictatorship.

The Transparency International Index is based on perceptions gathered by experts in governance and surveys carried out with international businesspeople. Therefore, it is also an indicator of the business climate that prevails in Nicaragua. A system that offers short-term incentives for “crony capitalism,” but discourages sustainable investment due to the lack of transparent rules, and the discretion of the state-party-family system.

On a scale of 1 to 100, where 100 means zero corruption and 0 more corruption, in the Transparency International Index the countries with the least corruption on the continent, such as Canada and Uruguay, obtain 77 and 71 points, respectively, while Nicaragua leads corruption in the Central American region with 22 points.

Under the Ortega regime, corruption has been part of a political and economic power system that punishes businesspeople who promote competition, and rewards accomplices, who take advantage of corruption to obtain economic advantages. But those most affected have always been the poorest.

The corruption amounts to massive theft of resources from the poor, for the benefit of the elites. A case in point was the misuse of more than 4 billion dollars from the Venezuelan state cooperation, to finance the private businesses of the presidential family and their partners.

Corruption has flourished due to the lack of democracy and public transparency and extends to all areas of the economy. These include energy distribution and its overpricing, infrastructure projects, real estate investments with funds from Social Security, and much more.

The state has turned a blind eye. What little we know about corruption and the effect it has produced on inequality, is the result of journalistic investigations by the independent press with the support of experts from of civil society.

Fortunately, the winds of change are blowing in favor of fighting corruption and impunity in Central America. The issue is being put on the international agenda by the new administration of President Joe Biden.

In his governing program, Biden proposed to create a regional commission to investigate and punish corruption in Central America. It would focus on the Northern Triangle of the region, where there is an institutional legacy of the reforms promoted by the International Commissions against Impunity (CICIG in Guatemala and MACCIH in Honduras), where the Public Ministry has autonomy to investigate and prosecute corruption.

In an interview with “El Faro,” Juan Gonzalez, President Biden’s advisor for Latin America in the National Security Council, said the objective is not to create a new regional institution, but rather a “task force” with the support of the US Department of Justice, to support the work of prosecutors from El Salvador, Honduras and Guatemala. He warned that “the leader who is not ready to fight corruption will not be an ally for the United States.”

In Nicaragua, under the protection of the dictatorship, corruption is much more serious than in these three countries. The Attorney General’s Office and the Judicial Power act as an official hit squad at the service of impunity. In the absence of a democratic state, it is up to civil society and the new leaders of the opposition to put the issue of corruption and impunity at the top of the agenda for political change.

Under a future democratic government in Nicaragua, it will be imperative to establish a Truth Commission, a Special Prosecutor’s Office, and a profound judicial reform, to investigate crimes against humanity and simultaneously investigate and punish corruption.

It is possible to create these new political control institutions, if Nicaragua gets international assistance, as has happened in recent years in Guatemala and Honduras.

And the only way to achieve that international support is by electing a new democratic government. One with strong majority support that gives it the unequivocal mandate to dismantle the structures of the dictatorship, fight corruption and impunity, and do justice.

But that won’t happen without credible elections. Likewise, if the opposition is divided and the political majority’s vote is dispersed. Under another period with Ortega, or with a weak government and Ortega “ruling from below,” corruption and impunity will go on and the poor will continue to be the big losers.

Read more by Carlos F. Chamorro here.