Guatemalan Hospitals at the Center of Corruption Scheme

Rather than rebuilding hospitals damaged by the 2012 Guatemalan earthquake, public officials within the Ministry of Health embezzled nearly US$67.3 million from the public treasury, according to a UN report published on Tuesday. 

 

Villa Nuvea Hospital, one of the hospitals at the center of the investigation (Source: Facebook)Villa Nueva Hospital, one of the hospitals at the center of the investigation (Source: Facebook)The 100,000 page investigation alleges the organized crime ring, comprised of over 50 people, took kickbacks from construction and medical supply groups, and created jobs to keep the corruption scheme going. 

The masterminds of the operation include former presidential candidate, Luis Fernando Pérez Martínez and former Minister of Health Jorge Villavicencio Álvarez, who allegedly created the scheme with his daughter Cándida Saraí Villavicencio Delgado and kept it going during his tenure from 2012-2014. 

The three remain at large while police have arrested 19 others in connection to the investigation. 

“What for the Guatemalans meant a tragedy and losses, such as the earthquake of November 2012, for the criminal structure meant an opportunity for illicit businesses,” the report stated.

As part of the reconstruction plan for hospitals damaged by the earthquake, over 50 refurbishments have been undertaken. Five new hospitals were built, with each company working on the projects agreeing to pay a fee to those involved in the scheme.

The private secretary to the presidency, Juan de Dios Rodríguez, who insisted on being included in the reconstruction works, is currently in prison and is being charged with money laundering, fraud, trafficking of influence and illicit association.

The U.N.’s International Commission against Impunity in Guatemala (CICIG), which published the report, points out that the distribution of payments was controlled by people within the Ministry of Health responsible for making administrative and fiscal decisions.

Additionally, the group organized the purchase of often unnecessary medical equipment because Jaime Pérez Castillo, who is the nephew of former president Otto Pérez Molina and a medical equipment supplier, offered money back with the sale. 

It’s estimated the group collected $65,257.50 from the purchase of infusion pumps.

The group created 450 jobs within the Ministry of Health, with over 100 jobs given out as political favors and filled by like-minded people in management positions to keep the scheme going. Some of the seats were never filled and officials created ghosts in order to collect paychecks.

In total, CICIG and the Special Prosecutor’s Office have issued 29 arrest orders and 84 requests to appear in court.