Ex-Guatemalan President, Oxfam Official Arrested for Fraud

Former Guatemalan president Alvaro Colom, and nine former ministers were arrested in early morning raids under suspicion of financial fraud, the New York Times reported Tuesday.

Álvaro Colom Caballeros - World Economic Forum on Latin America 2010Álvaro Colom Caballeros (Source: World Economic Forum, CC BY 2.0)Among those arrested is former finance minister Juan Alberto Fuentes Knight, who is currently the Chairman of Oxfam International.  

The arrests are the latest in a corruption crackdown led by a UN-backed anti-corruption body in Guatemala. The investigation found that US$35million of government funds were paid to private bus companies in charge of the Transurbano bus system in the capital, without legal oversight. Some of the money went to equipment that was never used, and about two-thirds are unaccounted for, according to the New York Times.

Colom denies any illegality in the deal. Knight claims to have advised against the payments, but had no knowledge of wrongdoing.

The arrest of Knight comes at an inconvenient time for Oxfam, as evidence of sexual misconduct by aid workers in Haiti during the 2011 post-earthquake relief has questioned their legitimacy in aid missions. Similar allegations arose when the same country director was present in Chad in 2006.

Oxfam on Tuesday announced that Knight had stepped down from his position at the charity to “devote his time now to vigorously contest these charges.”

Colom and Knight are far from the first to be implicated in the joint investigation between the attorney general’s office and the UN body. The probe has implicated two Guatemalan presidents, including the current President Jimmy Morales.