Top Bukele Official Embezzled $1.6 Million in Covid-19 Emergency Food Supplies
A criminal investigation in El Salvador found evidence that Bukele’s vice minister of justice and Bureau of Prisons director, Osiris Luna, embezzled $1.6 million worth of food between September and November of 2020 from the Public Health Emergency Program (PES), a government storehouse of goods purchased during the pandemic to feed affected families.
Then, with the help of his own mother as negotiator, Luna resold these goods to a merchant criminally accused twice of selling contraband.
Also responsible, prosecutors allege, were at least two other members of Bukele’s cabinet: María Chichilco, minister of local development, and Franklin Alberto Castro Rodríguez, former vice minister of governance and territorial development, who at the time of the alleged crimes was the coordinator of PES. Prosecutors labeled Chichilco and Castro as “direct authors” of the embezzlement for allowing Luna to take control of government goods that they administered.
Prosecutors determined that Luna was a “necessary accomplice” to the crime of embezzlement because he was an “intermediary for the acquisition” of a total of 38,500 bottles of oil and 43,000 sacks of rice, sugar, and beans property of the government, which were sold to a third party rather than delivered to families affected by the coronavirus.
In the darkest days of the pandemic, President Bukele announced on Twitter five measures to “protect employment and the economy.” One of them was the delivery of food. “No one is going to die of hunger in El Salvador,” Bukele tweeted on May 18. When El Salvador’s Attorney General’s Office sought information about PES operations from the government, it found no paper trail of protocols or manuals showing that the program exists.
Instead, prosecutors used wire taps and other investigative methods to understand the inner workings of the emergency food program. They found that Xavi Zablah Bukele, the cousin of President Bukele and president of the Nuevas Ideas Party, acted as “de facto coordinator” of PES, prosecutors wrote, even though he doesn’t have an official post in the administration.
These findings come from Operation Cathedral, an extensive case file of the Attorney General’s Office detailing investigations into illicit emergency spending during the pandemic and documenting the Bukele administration’s covert negotiations with gangs. El Faro reviewed part of the case file, including audits of PES food deliveries, summaries of wiretapped conversations, and records of undercover surveillance of the trucks used to transport the stolen goods.
Former Attorney General Raúl Melara assigned Operation Cathedral to a unit of four prosecutors, called the Special Anti-Mafia Group. On May 1, 2021, the Nuevas Ideas-controlled Assembly illegally removed Melara from office and replaced him with Rodolfo Delgado. Shortly after taking office, Delgado dismantled the Special Anti-Mafia Group.
El Faro obtained information requests submitted by prosecutors to the administration, pictures of the trucks as they offloaded the food, and warehouse inventories. Interviews with employees from the Bureau of Prisons, which Vice Minister Luna directs, and records from the Vehicle Registry and Center of Judicial Documentation — conducted and obtained by El Faro independently of Operation Cathedral — confirm prosecutors’ findings.
At the beginning of July, the U.S. State Department included Luna in the ‘Engel List,’ targeted sanctions against individuals from El Salvador, Guatemala, and Honduras who the department believes to have undermined democracy or engaged in significant acts of corruption.
As Bureau of Prisons director, Luna oversaw the Bukele administration’s covert negotiations with all three of El Salvador’s gangs for electoral support and a reduction in homicides, as first revealed by El Faro one year ago, and as further substantiated by Operation Cathedral.
He was also one of the first Bukele officials whose corruption was reported in the press. In January of 2020, he violated government prohibitions on emoluments by traveling to Mexico on a chartered flight paid for by a company seeking a security contract with the Salvadoran government, and whose owner has personal ties to President Bukele. In the first ten months of the Bukele administration, evidence emerged that Luna illegally and opaquely spent $8.5 million in funds from the Bureau of Prisons commissary.
In the first year of the pandemic, the Bukele administration refused to submit its emergency spending to Legislative Assembly auditors. In May 2020, the Ministry of Agriculture sealed off all documents on pandemic spending for two years. When the Attorney General’s Office raided the Ministries of Health and the Treasury in November, after finding that two-thirds of purchases of pandemic-related medical supplies showed signs of corruption, the National Civil Police obstructed the raid by attempting to bar prosecutors’ entry to Ministry of Health facilities.
On May 5, 2021, just four days after the swearing-in of the new legislature two-thirds controlled by the president’s party, a new law granted retroactive immunity from civil and criminal suits for the pandemic-related spending of government officials and external contractors.
El Faro emailed both Luna directly and the Bureau of Prisons communications office to request an interview. When an employee asked for the questions in advance, El Faro replied that newsroom policy is to withhold questions prior to interview, but that the topic of discussion would be wiretaps, photographs, and documents from the Attorney General’s Office showing that Luna sold PES supplies on the private market. At press time there was no response.
While Luna hasn’t broached this investigation, he publicly supports making sure the window for pressing charges for corruption never expires. “With this legal tool, the corrupt will be behind bars,” he tweeted in July 2021, when the Salvadoran government proposed eliminating the statute of limitations for these crimes.
The Vice Minister’s Mother
The Operation Cathedral Case file reconstructs in great detail the embezzlement of the food supplies. Prosecutors report that on September 29, 2020, Bureau of Prisons Director Osiris Luna made a phone call to Minister María Chichilco and asked her for sacks of rice. A judge had approved a wiretap on Luna’s phone, so prosecutors heard as the minister promised to check how many sacks were available in storage. They agreed that she would give him 500 sacks.
Chichilco had control over large quantities of food purchased during the pandemic. In April of that year, in her role as director of the Social Investment Fund for Local Development (FISDL), she signed an agreement with the Ministry of Governance to allot funds from her budget to purchase white corn, red beans, white rice, cooking oil, brown sugar, iodized salt, and spaghetti. The Ministry of Governance committed, in return, to coordinate the delivery of the food, in free packets, to families affected by the pandemic.
Hours after the conversation between Luna and Chichilco, prosecutors recorded another call in which Alma Yanira Meza Olivares, former candidate for alternate deputy in 2012 for the Grand Alliance of National Unity (GANA), the party with which Bukele won the presidency, offered to sell the rice “in bulk” to a potential buyer. Meza Olivares is Osiris Luna’s mother.
Prosecutors allege that Vice Minister Luna’s mother is part of a de facto hiring and contract procurement structure within the Bureau of Prisons. “She directly coordinates with Prison Bureau personnel,” reads an Operation Cathedral report. Sources from within the Prison Bureau confirmed to El Faro that this structure exists and that Luna’s mother participates in it.
The buyer negotiating with Meza Olivares over the phone was Ismael Oliverio Martínez Arévalo, a 38-year-old motorist charged twice, in 2003 and 2008, with smuggling contraband — in particular, rice — from Honduras. On both occasions he was acquitted.
According to a summary of the wiretaps, Meza Olivares and Martínez Arévalo agreed to meet on September 30 in a restaurant in Colonia Layco in San Salvador, where the merchant would make an up-front payment for the sacks of rice. The summary did not state how much Martínez Arévalo paid to Meza Olivares.
Two days after Luna’s phone call with Minister Chichilco, Martínez Arévalo made four trips to a Bureau of Prisons storehouse to collect the rice. The Cathedral case file states that the merchant used a truck that had the space for only 150 bags, requiring him to make multiple trips. Prosecutors allege that the man tasked with delivering the rice to Martínez Arévalo was Wilfredo Ostorga Molina, an employee who Luna trusted. In exchange for the rice, Ostorga Molina received a payment of $9,000, prosecutors allege.
Prosecutors allege that Luna, director of the Bureau of Prisons, did not sign a cooperation agreement with the Ministry of Local Development, headed by Chichilco. No official documents even registered the delivery. Prosecutors reviewed the delivery records of the FISDL warehouse in Zapotitán, La Libertad, where the sacks of rice were at the time of the call between Luna and Chichilco, and the warehouse’s “waybill,” or record of official vehicle use, and found no evidence of a delivery from the Ministry of Local Development to the Bureau of Prisons.
Warehouse records, though, show evidence of missing rice. According to the contract, the FISDL purchased 6,925 quintals of rice. Between June 20, 2020 and February 20, 2021, FISDL delivered 5,812 quintals, mainly to the Ministry of Governance — a shortfall of 60 metric tons of rice, according to the documents reviewed by El Faro.
Prosecutors wrote that “Mrs. Alma Yanira Meza Olivares, the mother of the vice minister of justice, was an unnecessary accomplice given that she was the third to benefit from the misappropriation, clearly demonstrated in the sale of the rice.”
When El Faro called Alma Yanira Meza Olivares for comment, she listened to the findings of this investigation before ending the call: “I don’t speak with journalists because they have a hidden agenda. So don’t waste your time, keep on investigating.” She hung up. El Faro also visited Minister Chichilco’s office, left a voicemail, and messaged her over WhatsApp outlining the findings of the investigation and requesting an interview. By press time she didn’t reply.
El Faro also placed multiple calls and wrote messages to Wilfredo Ostorga, who works for Osiris Luna, but received no reply.
Following the Trucks
This wasn’t the only case of embezzlement of food that the Attorney General’s Office attributes to Vice Minister Osiris Luna: last year the Ministry of Agriculture, the wing of the administration tasked with purchasing food on the international market to create emergency relief packets during the pandemic, signed 22 agreements with state institutions for the distribution of the food. One of those institutions was the Bureau of Prisons, which received 40,313 baskets.
According to prosecutors’ records obtained by El Faro, not all of these baskets arrived at their destination. Wiretaps from Operation Cathedral reveal that a network overseen by Osiris Luna sold part of the food to the highest bidder.
On Monday, October 19, 2020, prosecutors recorded calls between Osiris Luna, his employee Wilfredo Ostorga, and merchant Ismael Martínez Arévalo, in which they agreed to meet at Martínez Arévalo’s house. The next day, the group met at the Bureau of Prisons offices and traveled to the prison facilities serving as food storehouses in Santa Ana and the Center for Juvenile Detention (CDM) in Mariona.
Ostorga coordinated the transfer of food to Mariona on October 21 with two individuals identified by prosecutors as “JC” and “Tony.” The transfer was delayed by the arrival of 25 trucks with PES logos to transfer food to families affected by the pandemic, prosecutors noted, but Ostorga had the newly arrived trucks wait outside while they loaded up Martínez Arévalo’s shipment. El Faro obtained nine pictures of the food delivery. In one of the photos, taken in the afternoon on October 21, a red and white trailer backs into the Mariona prison facility.
Both in the Mariona and Santa Ana prisons, DGME had food for people affected by the pandemic in two forms: stored in cardboard boxes or in white plastic bags, both with logos of PES and the government. The investigation by the Attorney General’s Office indicates that the Osiris Luna network again used trusted inmates to transfer food to sacks without any government logo.
According to the description by the Attorney General’s Office, Ostorga wanted to eliminate traces of his operation in that warehouse and asked the employees “that there were no bags (with government logos) and that they sweep everything well.” The trucks left Mariona at 6:30 p.m. on October 21, 2020. At that time, another call was registered between Martínez and Ostorga in which they talked about the money and in which “Ostorga expressed that his boss (Osiris Luna) asked if he could arrive that same day for the payment,” according to the document from the Attorney General’s Office. Martínez responded that it was better to arrive the next day and he took the chance to complain about 3,000 bags that didn’t have oil. Ostorga promised to verify what had happened.
The two trucks left Mariona and the investigators from the Attorney General’s Office followed them to a warehouse on 37th Street and 7th Ave, near the Luz del Mundo Church in San Salvador. Photographs document the arrival of the trucks there. The food was unloaded at a house on the corner with a white, brick wall.
During the trip from Mariona to the new warehouse, Martínez Arévalo called his brother Samuel and another person only identified as “William” so they could prepare the unloading.
In the photographs, it’s difficult to recognize the plate numbers of all the vehicles that were used for the transfer of food, but El Faro has been able to document that the plate of one of the trailers (red cabin and white trailer) is C118-812, which El Faro confirmed with the Vehicle Registry is registered in the name of Susana del Carmen Arévalo de Martínez, mother of the Martínez Arévalo brothers.
Martínez Arévalo returned to Mariona the next day. The authorities recorded another phone call on October 22, which confirmed that he would pick up another 3,080 bags of food that day. And he still had more to buy.
On the morning of September 17, 2021, El Faro called the home phone number of the Martínez family, but the line was out of service. El Faro also wrote to Ismael Martínez over Facebook account, but by the publishing of this article, he hadn’t responded. El Faro also visited two of the warehouses which prosecutors allege were used to store stolen goods. However, on Saturday, September 18, both were closed. This newspaper left a letter explaining the details of the investigation and asked Mr. Martínez to contact the cell phone of one of the reporters.
Baskets of Food
Only four days later, in a conversation recorded by the Attorney General’s Office on October 26, 2020, the then national coordinator of PES, Franklin Castro Rodríguez, promised Osiris Luna to deliver 80,000 more baskets of food, valued by the Attorney General’s Office at three million dollars.
In theory, this food (rice, maize, beans, flour, powdered milk and oil) were for families of inmates, but the conversation recorded by the Attorney General’s Office exposed that Castro didn’t care if the food arrived to those affected by the pandemic or not. According to a transcription from the Attorney General’s Office, Castro told Luna “to do whatever he wanted” with the packages. “He would give him 80,000 bags and (Osiris Luna) would give him 80,000 names and it was his business what he would do with them,” reads another part of the report by the investigator.
Former Vice Minister Castro now works in the Agricultural Rescue Plan within the MAG. On September 17, 2021, El Faro tried to contact him in two ways: through a direct message to his Twitter account and through an official interview request with the MAG communications office. A MAG press officer asked that the request be sent through email. By the time of publication, Castro had not responded to either of these interview requests.
The packages arrived at the Mariona prison the same day. Once more, inmates transferred part of them to sacks without government logos.
It was, according to the description by the investigators, a long night because the buyer Ismael Martínez made two trips: two trucks first arrived at Mariona and then to the prison in Santa Ana. “Osiris Luna and Wilfredo Ostorga traveled late at night to the Santa Ana Prison and waited for Ismael Martínez and his brother Samuel to arrive before dawn and load the two trailers with sacks full of food products belonging to the State,” indicated the investigator’s document obtained by El Faro.
That night, the Attorney General’s Office recorded a call between Samuel Martínez Arévalo, the brother of the purchaser of the food, and Wilfredo Ostorga, employee of Osiris Luna, in which he confirmed that he was bringing 800 bags: 300 of rice, 60 of sugar, 40 of beans, and the rest of other products, such as flour and powdered milk. The network of the DGME director charged, according to the Attorney General’s Office, $12,500 for that shipment. The money, according to the official investigation, was delivered by the merchant Ismael Martínez to Wilfredo Ostorga on October 27, 2020.
That day, the merchant Ismael Martínez returned with the trucks to the Santa Ana prison to bring 38,500 bottles of oil and 15,000 more sacks of food. This was his last documented visit at that warehouse.
The next month, in November 2020, Martínez arrived at the Mariona prison another three times to pick up food. The Attorney General’s Office documented that on November 4, 2020 he took 61 quintals of sugar and 874 sacks of other food. On November 7, he spoke on the phone to coordinate the pickup of some barrels of oil, although he did not specify the amount. His last visit to Mariona was reported on November 24, 2020. That day, he took another 1,394 sacks of food from the PES program.
The next day, November 25, Franklin Castro, presented his resignation as the national coordinator of PES before the National Commision of Civil Protection. He cited his “multiple responsibilities” as vice minister of interior affairs, especially because the minister, Mario Durán, was campaigning to become the mayor of San Salvador and he had been left in charge of the office.
The Attorney General’s Office labeled Castro the “direct author” of the embezzlement “for having given the opportunity to another to commit the act of appropriation of goods that were under his administration.”
That same day, November 25, the National Commision of Civil Protection elected Castro's replacement: Juan Carlos Bidegain Hanania, son of Carla Evelyn Hanania de Varela, minister of education for the Bukele and member of the Commision. Bidegain never held the post, but was named Interior Minister in April 2021.
A Ghost Program
On April 24, 2020, as the economic impact of the pandemic became clear, President Bukele announced on Twitter five measures to help “our families endure the Covid-19 pandemic.” One was the delivery of 1.7 million food packages. A month before the presidential announcement, on March 14 2020, the Agricultural Minister issued an agreement to buy food and contract call centers for the amount of $237 million. The agreement, called the Food Assistance Program (PES), would be coordinated, in theory, by the Secretary of Commerce and Investment and the Presidential Commissioner for Operations and Cabinet, Carolina Recinos.
It didn’t happen like that. The main purchases of the program that the government called PES were made by MAG and the distribution was entrusted to other government institutions.
Because of media reports that detailed anomalies in the purchases, the Attorney General’s Office opened an investigation and asked MAG for a certification of PES. The program, however, only existed in the president’s tweets and the tweets from his press office. In official letter 353/2021, the Attorney General asked MAG to detail the norms for the creation of PES, the manuals, the objectives, the participating institutions, and above all, how it executed and administered its million-dollar project. On February 8, 2021, MAG, then led by minister Pablo Anlíker, responded: “This ministry doesn’t have the stated documentation given that this is a project of the Presidency.”
The Attorney General’s Office then sent a second letter, 767/2021, to the Judicial Secretary of the Presidency. This branch did not have the details of PES either, which is why it sent the inquiry to MAG. Cornered by the petition by the Attorney General’s Office and the Presidency, MAG tried to correct its response: “This ministry doesn’t have such a document, given that [PES] is the project’s name from a communications standpoint, and that the program is called the Nutritional Security Program (Programa de Seguridad Alimentaria).” In other words, PES is an alternate name for a preexisting program.
“During the course of the intervention, it was found that the PES has no formal existence,” say prosecutors’ records reviewed by El Faro. The same document says that Franklin Alberto Castro Rodríguez was named national PES coordinator on October 5, 2020, on orders from Xavi Zablah Bukele, the cousin of President Bukele and president of the Nuevas Ideas party. Prosecutors profiled Zablah Bukele as one of the people in charge of PES, even though he doesn’t have an official position. The Attorney General’s Office says that Zablah Bukele was the “de facto coordinator” of PES.
Sources in the executive branch consulted by El Faro on condition of anonymity for fear of losing their jobs, also confirmed the leading role of Zablah Bukele in PES and explained that in the cabinet meetings of President Bukele, his cousin and the head of the Nuevas Ideas party virtually participated in decision making.
The delivery of food packages intensified between September 2020 and February 2021, in the months prior to legislative elections, leading some opposition candidates to denounce the electoral use of the Government’s program to favor Nuevas Ideas. On February 3, 2021, President Bukele’s party claimed a staggering victory, gaining an overwhelming majority in the Legislative Assembly and winning 149 of the 262 mayor’s offices.
On September 17, 2021, El Faro asked the new Attorney General’s Office for the status of investigations into illicit government spending during the pandemic. A spokesperson responded: “According to Article 76 of the Penal Code, all investigations are sealed, so the prosecutors cannot share information about a case that hasn’t been brought to trial.”
*English version by Roman Gressier
FI name: September 2021