Taiwan Calls for Reforms in Central American Bank after OCCRP Revelations

Published: 01 November 2023

cabei-dante-mossi-2CABEI’s outgoing executive president, Dante Mossi speaks at a news conference in El Salvador last year. (Photo: REUTERS/Jose Cabezas)


Taiwan’s Finance Ministry said it has been demanding reforms at the Central American Bank for Economic Integration (CABEI), which was exposed by OCCRP for funding projects that facilitated corruption and authoritarianism.

Taiwan was one of the first non-regional members from outside Central America to join CABEI, which says it accounts for close to half the development finance in Central America, one of the poorest parts of the Western hemisphere.

The bank’s mission is to promote “balanced economic and social development” in Central America. But an investigation by OCCRP and partners found it has funded projects that led to environmental destruction, and others where loans were diverted for corrupt practices or used to fund the pet projects of dictators.

The financial institution has also faced criticism for lending billions of dollars to authoritarian governments accused of widespread rights abuses in Central America.

Taiwan’s Finance Ministry is “actively overseeing the approval of loans from the Central American Bank, continuously demanding increased transparency and strengthening bank governance to ensure the bank complies with international standards,” the ministry said in a statement responding to “today's media reports accusing the Central American Bank (CABEI) of fostering corruption and authoritarianism.”

The statement noted that the bank’s current president, Dante Mossi, would be stepping down at the end of this month and said there were hopes a new leader “can encourage reforms within the bank, improve the loan approval process, and enhance the bank's governance system.”

CABEI’s board of directors passed a reform plan this year focused on the institution’s governance, administration management, credit, and finance, it added.

“We also urge enhanced transparency of loan flows to ensure that the post-approval use of funds aligns with the bank's mission,” the Ministry said.

After investigating CABEI for over a year, OCCRP and 10 partners found evidence the bank had ignored red flags when investing in projects, including lending money for hydroelectric dams even after violent crackdowns on protesters. The institution has also disbursed loans that were later used to pay bribes, the investigation reveals.

In a separate case, reporters found a loan to support small businesses in El Salvador through the pandemic was diverted to fund the president’s failed plan to make Bitcoin a national currency.

CABEI’s communications department did not respond to OCCRP’s repeated requests for comment before the publication of its investigation. However, the outgoing president Mossi defended the bank’s track record, while noting that some projects undertaken before he joined CABEI in 2018 had been poorly conceived.