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State Department Accuses Four Senior Bukele Officials of Corruption

Through the long-awaited ‘Engel List,’ the State Department has publicly sanctioned Bukele’s chief of cabinet, legal advisor, minister of labor, director of prisons, and the former ministers of security and agriculture. Although the list of corrupt officials also includes former presidents Colom, of Guatemala, and Lobo, of Honduras, El Salvador is the only country in the Northern Triangle in which the State Department accused sitting administration officials. Sources within the Biden administration claim that the list, published today, is preliminary and will be regularly expanded with new sanctions designations.

José Luis Sanz y Nelson Rauda

 
 

The United States claims to have evidence that at least four senior officials and two former ministers from the Bukele administration have been responsible for or involved in acts of corruption: the president’s legal advisor, Conan Castro; the chief of the cabinet of ministers, Carolina Recinos; Labor Minister Rolando Castro; Director of Prisons Osiris Luna; and former security and agriculture ministers Rogelio Rivas and Pablo Anliker.

Each of these officials are or have been part of President Nayib Bukele’s inner circle of trust. In the past year and a half, El Faro and other Salvadoran news outlets had already reported cases of influence peddling, nepotism, or illicit negotiations involving some of them.

Their names appear in the section on El Salvador of the Engel List, a State Department report to the U.S. Congress on public figures and private citizens found to be involved in corruption or the undermining of democratic institutions in Guatemala, Honduras, and El Salvador. Also on the list are Walter Araujo, former Nuevas Ideas Assembly candidate and unofficial party spokesman; former deputies Carlos Reyes (from the ARENA party) and Sigfrido Reyes (from the FMLN); Supreme Electoral Tribunal magistrate Guillermo Wellman; businessmen Adolfo “Fito” Salume and Enrique Rais; and former mayor of La Unión Ezequiel Milla, also from ARENA, but close to the Bukele administration in recent months.

In Guatemala, the list accuses former president Álvaro Colom and legislators Gustavo Alejos, Felipe Alejos, and Alejandro Sinibaldi. In Honduras, the most notable appearances on the list are former president Pepe Lobo, whom the United States has accused of accepting bribes from the Los Cachiros drug cartel, and his wife Rosa Elena Bonilla, who was sentenced to 58 years in prison for misappropriation of public funds until her conviction was annulled. Also on the list are 18 current and former members of the Honduran Congress, most of whom were at one point investigated by the now-defunct OAS Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH). Of the 21 Honduran officials included in the list, only six had appeared in previous similar sanctions lists.

Altogether, the Engel List is a damning portrait of the political elite in northern Central America, at a time when backsliding in the fight against corruption, impunity, as well as attacks against democratic institutions from the region’s legislatures and executive branches, are rousing constant condemnations from civil society, multilateral organizations, and the international community.

“This list’s message to the region is that if there are people who clearly participated in acts of corruption, governments should avoid putting them in positions of responsibility,” a State Department source in Washington, who is directly involved in crafting U.S. policy in Central America, told El Faro. “The purpose of the list is to affect people’s behavior. In fact, one of the desired effects is to complicate these people’s interactions not only with the United States, but with other international actors.” 

The United States government will immediately sanction the individuals included on the list by barring entry to the United States, revoking visas, and, in some cases, the Treasury Department will consider freezing their assets in the United States and other measures against them or their families, according to the State Department source. The various agencies of the U.S. government will also limit their interactions and working relationships with Central American officials on the list.

In the past five years, according to the embassy in San Salvador, more than 300 Salvadoran citizens have had their U.S. visas revoked for ties to corruption, gangs, and criminal activities. The difference is that those sanctions were kept private. That the Engel List was made public points to the new political dimension of the sanctions and the U.S. strategy in the region.

The State Department source told El Faro that the Engel List will continue to grow this year. “It’s an incomplete list, but it should be viewed as an initial version. As we get more information, we’ll use it. New names will appear on the list with a certain regularity,” the source claimed.

“The publication of the Engel List is a tool to help Salvadorans construct a prosperous future,” said interim U.S. ambassador Jean Manes, hours before the publication of the list. “This vision of prosperity is only possible if we fight corruption at its root. Corruption corrodes public trust, obstructs effective governance, and impedes the necessary investment and development to allow citizens to prosper,” she continued. “The Engel List allows for immediate action against actors abusing their power for personal gain.”

“Diplomatic gamesmanship” affected who made the list and who didn’t, says Wilson Sandoval, coordinator at the Center for Anti-Corruption Legal Counsel (ALAC) in El Salvador. “It’s what we expected. It’s a comprehensive list containing all of the political parties, meaning that there’s no way to discredit it on those grounds.” Sandoval says that expectations to see the names of officials like Health Minister Francisco Alabí, or those involved in the May 1 judicial coup, should be taken in stride. “More names are likely to come, but it’s not a phonebook. Its purpose is to let the governments take action now.”

The list is “a good start,” according to Adriana Beltrán, director for citizen security at the Washington Office on Latin America, who has authored multiple publications on the fight against corruption in Central America. “In Guatemala, for example, the list sends a clear political message to members of the political elite, legislators, and former officials who are part of networks of corruption and have sought out impunity,” she opined.

She applauded that the Guatemala list included “various of the operatives, like Ricardo Méndez Ruiz, Raúl Amilcar Falla, or Moisés Galindo” of the non-profit Foundation against Terrorism (FCT), which the United States has accused of obstructing investigations into the military and covering up intimidation against Guatemalan anticorruption prosecutors.

A Blow to the Bukele Administration

The U.S. House Foreign Relations Committee ordered the State Department to create the list with bipartisan support. It’s a pressure tactic against three governments under intense scrutiny for covering up multimillion-dollar corruption scandals, and which the United States suspects have ties to or negotiate with organized crime. Since Joe Biden took the White House, the United States has insisted on labeling corruption as a structural force driving migration from Central America. White House officials have repeatedly stated that fighting corruption will be a core plank of their policy toward the region.

It’s unclear what effect this most recent move will have. A similar list was revealed in May with fewer names, but including Bukele’s chief of cabinet Carolina Recinos and his legislative ally Guillermo Gallegos. Bukele shrugged off the accusations and took no action to look into or remove Recinos, though she largely stopped making public appearances and press statements.

The Engel List marks the first U.S. accusation against legal advisor Conan Castro, part of Nayib Bukele’s inner circle of trust and second only to Bukele’s brothers in terms of access to the president. Castro “undermined democratic processes or institutions by assisting in the inappropriate removal of five Supreme Court Magistrates and the Attorney General” on May 1, wrote the State Department.

In the same category, that of undermining democratic institutions, the United States named Labor Minster Rolando Castro and Walter Araujo. The list accuses Minister Castro of obstructing investigations into corruption and says that he “undermined democratic processes or institutions in efforts to damage his political opponents. Last October, the Ministry of Labor shuttered the offices where Court of Accounts auditors were reviewing $500 million in government pandemic spending, arguing that there were insufficient Covid-19 protections for ministry staff. The minister also used his office to actively campaign against the reelection of former San Salvador mayor Ernesto Muyshondt. The post ultimately went to Mario Durán, Bukele’s former minister of governance.

As for Araujo, the report states that he “called for an insurrection against the Legislative Assembly and repeatedly threatened political candidates.” Araujo, a former legislator and president of ARENA who is now an informal spokesperson and former Assembly candidate for Nuevas Ideas, tried to convene a protest in front of the Assembly a week after President Bukele militarized the legislature and threatened to dissolve it on February 9, 2020.

Carolina Recinos, chief of Bukele’s cabinet of ministers, appeared in the State Department’s list of corrupt officials issued weeks ago as a precursor to the Engel List. Recinos “engaged in significant acts of corruption during her term in office,” wrote the department in May. Now the Engel List reiterates those allegations, asserting that Recinos “misused public funds for personal benefit” and “participated in a significant money laundering scheme.”

In June of 2020 El Faro revealed that the Bukele administration gave favors to four of Recinos’s siblings, hiring three of them and issuing a public bank loan to the fourth, despite internal conflict-of-interest warnings at the bank. Alba Petróleos — the Salvadoran public subsidiary of Venezuela’s state-owned petroleum company — also filed a civil suit against Recinos, a former FMLN official, to collect a debt of $227,000.

Pablo Salvador Anliker’s management of the Ministry of Agriculture (MAG) is already under investigation by the Court of Accounts and the Attorney General’s Office, the latter of which was run by Raúl Melara until he was removed from office on May 1 by the Nuevas Ideas-controlled Legislative Assembly. Anliker was included on the list for “misappropriating public funds for his personal benefit.”

From February to August 2020, MAG spent $265 million on its program to distribute baskets of food. In July 2020, then-Treasury Minister Nelson Fuentes admitted that MAG diverted public pandemic-related funds without the consent of the Legislative Assembly. The president of the Court of Accounts denounced MAG’s unwillingness to cooperate with audits of millions of dollars that were appropriated to and spent by the Ministry. In December of 2020, Anliker appeared before a legislative commission investigating the use of the funds.

The questions surrounding Anliker were not new to Bukele, who accepted his resignation on April 6 and named him vice minister of agriculture on the same day. He lasted less than two months in his new position before he was removed on May 28.

Vice Minister of Security, Osiris Luna, who was previously a deputy with the GANA party, was one of the first Bukele administration officials to face public scrutiny, after photos surfaced of him riding in a private jet on an official trip to Mexico. El Faro revealed in February 2020 that the trip in which he rode in the jet was paid for by a Mexican security company, contravening the government’s rules of ethics. Despite the controversy, he remains in his position. He has “engaged in significant corruption related to government contracts and bribery during his term in office,” according to the list. In August, 2020, Revista Factum published an investigation that claimed Luna illegally used $8.5 million dollars in funds meant for prison commissaries

Former Minister of Security Rogelio Rivas had already appeared on the State Department's list in May. The Engel list claimed that he “engaged in significant corruption by misappropriating public funds for personal benefit.” In July 2020, El Faro revealed that a business in which Rivas had served as the executive won 212 no-bid contracts with Bukele, then mayor on San Salvador. Rivas, at the time, was an advisor to Bukele. In April of 2021, El Faro also revealed that a government intelligence report accused Rivas of using public funds to prepare a presidential campaign. Bukele fired him from his position, but no official investigation was opened into his actions. 

José Luis Merino, one of the leaders of the FMLN and close to the Bukele administration, has been a target of U.S. investigations for years. He was cited in the list for having “engaged in significant corruption during his term in office through bribery. He also participated in a money laundering scheme.” Merino ran Alba Petróleos, a company that the attorney general opened a money-laundering case against in 2019, though it never made it to court. Merino partnered with Bukele to launch the television channel, TVX. 

The State Department also accused two Salvadorans of committing illegal acts to facilitate Chinese influence in the political and economic affairs of El Salvador. Ex-mayor of La Unión, with the ARENA party, Ezequiel Milla, is named in the list for having “engaged in significant corruption by abusing his authority as mayor in the sale of Perico Island to agents of the People’s Republic of China in exchange for personal benefit.” In September of 2018, El Faro revealed that Milla acted as a real estate agent in the transaction. As for a current magistrate of Supreme Electoral Tribunal, Luis Guillermo Wellman, the State Department cited him for having allowed “Chinese malign influence during the Salvadoran elections” as well as undermined “causing serious and unnecessary delays in election preparations and results tabulation” in exchange, according to the list, for “his personal benefit.”

There are two fugitives from justice on the list. Businessman Enrique Rais, who the United States accused of having bribed officials, stands accused in the courts for his role in currently incarcerated former Attorney General Luis Martínez’s plot to sell justice. Sigfrido Reyes, former president of the Legislative Assembly with the FMLN, is also a fugitive of justice who was given asylum in Mexico. In El Salvador he has been accused of money laundering, misappropriation of funds, and fraud.

About deputy Carlos Reyes, of the ARENA party, the list says that he “obstructed investigations into corruption by inappropriately influencing the Supreme Court Magistrate selection process,” though it does not specify which election. In 2015, El Faro published an article, based on his personal financial statements, about the rise in Reyes’s fortune.

Last, the Engel list points to flour magnate Adolfo Salume for allegedly “bribing a Supreme Court Magistrate to avoid paying a fine.” In 2016, as part of the Panama Papers investigation, El Faro published that Salume managed to avoid paying thousands of dollars in taxes.

A Finger to the Pulse of Central America?

The United States is aware that the publication of the Engel List could complicate its already fraught relationships with the administrations of Nayib Bukele, Alejandro Giammattei, and Juan Orlando Hernández. “We expect a negative reaction from the political classes of the three countries,” said the State Department source, who spoke with El Faro on condition of anonymity. “In the short term it complicates relations with the Northern Triangle, but in the long term it makes clear to the governments of the region that actions have consequences.”

The list is a U.S. play to regain influence in the region as the governments of Guatemala, El Salvador, Honduras, and Nicaragua appear willing to increasingly isolate themselves from the international community in order to stand tall before demands for increased transparency and respect for civil rights and the separation of powers.

“We’re not seeing success in changing the course (of the region),” admits the source, in reference to the objectives laid out by the department’s special envoy to the Northern Triangle, Ricardo Zúñiga, in an interview with El Faro in April

The clearest evidence of the international community’s current inability to reduce impunity and advance democracy in the region is Daniel Ortega in Nicaragua, who, according to sources in Washington, “is helping the other presidents in the region with his actions.”

“Not a step back,” Ortega said on June 23 in defense of his hunting down of political opponents, including five presidential primary candidates and a dozen politicians and journalists who are currently in prison or on trial. Presidents Giammattei and Bukele seem to have taken a similar tack in the face of international condemnation of their attacks against judicial independence, which has resulted in the cooptation of the constitutional courts in both countries. “We will never return to the past,” Bukele responded when Zúñiga proposed undoing the legislative coup of May 1. In response, USAID rescinded aid to governmental institutions and redirected it to civil society organizations

In the same vein, only two days after Vice President Kamala Harris’s visit to Guatemala, Néster Pimentel was seated as a magistrate in the Constitutional Court, despite the fact that the country’s attorney general’s office charged him with interfering with justice in collusion with Gustavo Alejos, the former presidential secretary. Alejos is named on the Engel list.

In El Salvador, just over 24 hours before the publication of the list, on the night of June 30, the Bukele-controlled Legislative Assembly elected five magistrates to the Supreme Court, among them a former employee of Casa Presidencial. In just a month, deputies have named 10 of 15 magistrates to the Supreme Court, despite the fact that the law stipulates only five magistrates can be appointed per legislative session. At five in the morning on July 1, Bukele announced a 20 percent increase in the minimum wage. Castro, the labor minister, who only fifteen days earlier announced that they “were not looking into the question of the minimum wage,” convened a press conference for 12:30 that afternoon to discuss the increase. After the publication of the list, at 9:30am in El Salvador, Castro canceled the conference.

At the same time it is announcing these sanctions, the United States is making a clear effort to show itself as an ally to Central American anti-corruption advocates and build bridges for dialogue — an exercise of diplomatic tight-rope. Harris’s recent visit to Guatemala was sold as a act of deference to the country, and at the end of June the United States announced a donation of 1.5 million vaccines to Honduras. A high-level delegation led by Victoria Nuland, the number three at the State Department, met in San Salvador with Bukele on the eve of the publication of the Engel list. During the visit, Jean Manes, the interim chargé d'affaires in El Salvador, sent off a Tweet praising the Bukele administration’s “successful management of the pandemic.”

The publication of the list is part of the United States – Northern Triangle Enhanced Engagement Act, which was passed on December 27, 2020. It’s referred to as the “list of corrupt and anti-democratic actors,” or the Engel List, following the tradition of naming laws after the officials who propose them. Eliot Engel, a Democrat serving as a member of Congress for 30 years until he lost his primary in 2020, was the leader of the House Foreign Relations Committee and a supporter of Bukele during his first months in office. In 2019, Engel motioned in favor of continuing economic support to Central America that the Trump administration had cut, but, a year later, he called out Bukele for his attacks against democracy and the independent press. The law calls for conditioning economic assistance on the publication of the list and a long-term strategy for the region. 

That strategy was supposed to be released at the same time as the list, but sources in the State Department and on Capitol Hill say that it will be delayed a week or two.

*Translated by Roman Gressier and John Washington


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