El Salvador / Corruption

Company of Bukele's Brothers Received $118K in Secret from FMLN Government

Marvin Recinos
Marvin Recinos

Tuesday, October 31, 2023
Efren Lemus and Gabriela Cáceres

Leer en español

A company administered by two brothers of Salvadoran President Nayib Bukele, Global Motors S.A. de C.V., received 16 checks from Banco Hipotecario, a state-owned bank, totaling $118,143.23 USD. The funds came from the ‘black budget,’ or secret presidential fund, of Bukele’s predecessor, Salvador Sánchez Cerén (2014-2019).

The Bukele brothers’ company received the money from two accounts registered to the Presidency of the Republic and the State Intelligence Organism (OIE) between Jan. 27, 2017, and May 13, 2019. During this period, Bukele transitioned from office as mayor of San Salvador (2015-2018) with the FMLN —Sánchez Cerén’s party— and won the February 2019 presidential elections with the GANA party.

A second company, Starlight S.A. de C.V., founded by employees of the Bukele family and, at the time, administered by two officials in the current government, received another $420,688 from the black budget of Sánchez Cerén between January 2015 and December 2018. Starlight is the commercial entity that owns the Salvadoran television station TVX.

According to documents obtained by El Faro, President Bukele’s legal secretary Conan Castro informed the Attorney General’s Office in April 2020 that the Presidency of the Republic has no record of contracts or any other documents registering the payments between the Sánchez Cerén administration and the TV station.

El Faro documented four account numbers at Banco Hipotecario that issued checks to Global Motors and Starlight, for a combined total of $528,831.31. One of the accounts is registered to Francisco Rodríguez Arteaga, a former financial director of Casa Presidencial who was sentenced to five years in prison for corruption, for his handling of the black budget of former President Antonio Saca (2004-2009) of the Arena party. A second account is registered to Operational Expenses of the Presidency; the third, to the Presidency of the Republic; and the fourth, to the OIE. These accounts received public funds from an account “subsidiary to the Public Treasury of the Presidency of the Republic.”

Karim Bukele accompanies his brother, President-Elect Nayib Bukele, on Feb. 15, 2019 to receive the credentials certifying his electoral victory two weeks earlier. Photo Víctor Peña
Karim Bukele accompanies his brother, President-Elect Nayib Bukele, on Feb. 15, 2019 to receive the credentials certifying his electoral victory two weeks earlier. Photo Víctor Peña

Sánchez Cerén received asylum in Nicaragua two years ago from the dictatorship of Daniel Ortega, claiming political persecution. He and another 14 employees of Casa Presidencial stand accused in El Salvador of siphoning funds from the Reserved Expenses budget, totaling over $183.86 million. The numbers of the checks obtained by El Faro indicate that more than half a million dollars of that money was transferred to the accounts of Global Motors and Starlight.

These findings are the result of an array of official documents and testimony. The primary information in this report came from a document from the Attorney General’s Office, and was contrasted with information from the Treasury Ministry and Registry of Commerce. A former employee of the Attorney General’s Office provided the 43-page document; two other former employees of the institution corroborated its authenticity. A cross-reference of this document with the list of administrators, governing board members, and account details that the companies submitted to the Registry of Commerce not only offered confirmation but, in some cases, added more details to the information leaked by one of these sources.

All of the sources —who directly participated in the investigation of former president Sánchez Cerén— requested that El Faro protect their anonymity, citing their safety. The prosecutors opened the case in 2019 under Attorney General Raúl Melara, who was illegally removed in May 2021 by the Bukele-controlled legislature. At the time Melara’s office, among other cases, was carrying out Operation Cathedral, a probe that included the Bukele administration’s negotiations with El Salvador’s three major gangs, as well as various corruption cases involving sitting government officials.

The Anti-Impunity Group (GCI) within the Attorney General’s Office also handled the investigation into which individuals and companies received funds from the black budget of Sánchez Cerén. During the probe, the GCI found that the embezzlement mechanism was identical to the one used by Saca, of Arena, and by Mauricio Funes, the FMLN’s first president (2009-2014). One of the commonalities is that the checks were issued by Jorge Alberto Herrera, head of the Treasury of the Presidency; Francisco Rodríguez Arteaga, a financial director of Casa Presidencial; and Pablo Gómez, a former financial assistant. These three employees of the Presidency were convicted for the Saca affair and face two other trials for alleged money laundering during the two FMLN governments.

One of the prosecutors explains that the information on Global Motors and Starlight “emerged when we were investigating the use of funds from the black budget of the 2014-2019 period [of Sánchez Cerén].” Starlight —whose legal representative is José Mauricio Cortez Avelar, the primary lawyer of the Alba conglomerate— received 12 checks from Banco Hipotecario accounts with funds from the “Subsidiary Institutional Checking Account of the Public Treasury of the Presidency of the Republic,” according to the document from the Attorney General’s Office. This opened the line of investigation that led to the discovery that the second business tied to the Bukele family, Global Motors, also received money from the same source.

In January 2015, when Starlight received the first check from the black budget of Sánchez Cerén, Bukele was mayor of Nuevo Cuscatlán with the FMLN, the ruling party at the time. Two years later, in October 2017, the party expelled Bukele and he began to prepare a presidential bid criticizing the corruption of traditional parties, specifically referencing the use of black budgets as a focal point of corruption that he promised to eliminate. Global Motors and Starlight received checks before, during, and after his presidential campaign.

“Our country is tired of corruption and impunity. These two problems are the source of most of the problems that our people face every day (...), so we have two concrete proposals that will eliminate the great majority of corruption that exists in our country, getting to the root. Proposal eight: We will eliminate the black budget,” Bukele wrote on Twitter on Aug. 21, 2018, while companies of his family still received money from the fund. A week after he announced his candidacy, as he also promised to install the now-defunct International Commission against Impunity in El Salvador (CICIES), Starlight received check number 7102, issued from account number 280181522 of Banco Hipotecario. The money came from the secret fund Bukele pledged to eliminate.

Between Jan. 27 and Sep. 10, 2017, the same two accounts issued five of the 16 checks written to Global Motors, the Bukele brothers’ company, for a total of $24,479.09. At the time the firm received the money, it was directed by Karim Alberto and Ibrajim Antonio Bukele Ortez (Karim left the company in Ibrajim’s control in July 2017). While they do not hold formal posts in the Bukele government, the president’s brothers make relevant decisions in Salvadoran politics and the economy.

That same year, 2017, Nayib Bukele —then mayor of San Salvador— declared $10,825.75 in earnings to the Treasury Ministry for “non-employee services” to Global Motors; he was paid for services by business that, in part, had been nourished by the Sánchez Cerén black budget. El Faro obtained a copy of this declaration to the Treasury Ministry and others that he filed between 2007 and 2018 from a source in the same ministry.

This is not the only time that the Bukele brothers and other senior officials appear in an investigation by the Attorney General’s Office. From 2020 to 2021, when the Special Anti-Mafia Group in charge of Operation Cathedral built a flow chart of government corruption on the basis of wiretaps of government officials and employees, they placed Karim, Ibrajim, and Yusef Bukele as the “center of power” making decisions on government policy without the consent of cabinet ministers, as well as decisions relating to the ruling party Nuevas Ideas.

In parallel to Operation Cathedral, the Anti-Impunity Group found payments from the Sánchez Cerén black budget to companies tied to the Bukele family. A source from the investigation said that before Attorney General Melara’s dismissal “the investigation was almost ready, but we still lacked analysis relating to participation, and as to whom we had enough evidence against.” The prosecutors who led both investigations —Cathedral and the Sánchez Cerén black budget— were exiled in January 2022 when Melara’s successor, Rodolfo Delgado, ordered internal raids on their offices to determine who revealed the prosecutors’ records revealing the government’s negotiations with gangs and acts of corruption committed by Bukele officials.

El Faro requested comment from President Bukele on October 26 at an email address that he provided to the Treasury Ministry to receive notifications, but he did not respond. The outlet also sent an institutional email, left written messages, and called the number of presidential press secretary Ernesto Sanabria, but there was no reply. The Attorney General’s Office did not return a request for an interview made on October 30.

Black Budget and State Contracts

On Sep. 27, 1996, businessmen Jorge Zedán and Virgilio Portal created a company called Corporación Árabe. It came into possession of the Bukele family in 2005 and changed its name to Global Motors. According to the Commercial Registry, the company sells cars, motorcycles, parts, and accessories.

Between 2013 and 2019, during the FMLN governments, Global Motors won contracts with state institutions like the Supreme Court of Justice, the Mayor’s Office of Antiguo Cuscatlán, the Autonomous Executive Port Commission (CEPA), the Salvadoran Social Security Institute (ISSS), the Ministry of Health, and others, totaling $706,263.71. According to accounting records submitted to the Commercial Registry, between 2016 and 2019 the company’s accounts moved between $8.2 and $10.4 million annually.

In November of 2012 Nayib Bukele attended the FMLN general assembly in San Salvador
In November of 2012 Nayib Bukele attended the FMLN general assembly in San Salvador's Cuscatlán Stadium. The attendees ratified the presidential candidacy of former guerrilla commander Salvador Sánchez Cerén, who would go on to govern from 2014 to 2019. Photo: El Faro Archive

In 2016, Global Motors was one of the five companies that economically sustained Bukele after he renounced his salary as mayor of Nuevo Cuscatlán (2012-2015) and San Salvador (2015-2018). That year, the company won contracts with the ISSS, Ministry of the Environment and National Resources, and other institutions for more than $33,000. At the end of the year, the firm paid him $22,285.79 for “non-employee professional services,” according to his income declaration.

When Global Motors paid Nayib Bukele that money, the secretary of the firm was Héctor Manuel Velásquez, a Bukele family employee and founder and shareholder of Starlight. By that point, this second company had already received 11 checks from Jan. 20, 2015 to June 6, 2016 worth $250,416. At least two of those checks were issued from the account registered to Francisco Rodríguez Arteaga, the former head financial officer of the Presidency who was later convicted to five years’ prison for the Saca affair.

In addition to his position as secretary of Global Motors, Velásquez was the legal representative of Arrendadora del Sur S.A de C.V, a company that also paid Bukele $108,000 in 2016 for non-employee services and “payment for accreditation or utilities to partners.” Bukele declared $160,731.33 in income that year.

In 2017, when Karim Bukele transferred the presidency of Global Motors to his brother Ibrajim, Velásquez stayed on as secretary. Others who now hold posts in the Bukele administration joined the company board, including Edgar Romeo Rodríguez Herrera, the current minister of public works. That year, Nayib Bukele reported $10,285.75 in income from his brother’s company for non-employee services.

When Global Motors paid him this sum in 2017, the business reported $8.6 million in net worth, in part owing to contracts won in CEPA and the state development bank Bandesal, among other state institutions. What was left out of public record is that between Jan. 27 and Sep. 10, 2017, the company also received five checks from Banco Hipotecario (numbers 6114, 6322, 6406, 6488 y 6650) from the Presidency of the Republic and the OIE worth a total of $24,497.09 — money from the black budget.

On Oct. 17, 2017, the FMLN expelled Bukele. Politically, the party and the San Salvador mayor had parted ways, but economically the Bukele family’s businesses stayed their course: They continued to win state contracts and receive checks from the Presidency and OIE.

From 2018 to 2019, Global Motors won bids from institutions including the Solidarity Fund for Health (Fosalud), CEPA, the Supreme Court, and others; in those years it also received another 11 checks from the black budget, worth a combined $93,646.14. The Banco Hipotecario checks that Global Motors received in 2018 included numbers 6771, 6881, 6976, 7143, 7216, 7258, and 7303. El Faro wrote to the business on October 26 of this year to request an explanation for those checks, but received no response.

The following year, as presidential candidate Bukele condemned the black budget and repeated his slogan, “Return what you stole”, the company received another four secret checks from the Sánchez Cerén administration: 7426, 7500, 7652, and 7815. This latter note, totaling $1,401.88, was issued on May 13, 2019, under three weeks before Bukele was sworn-in as president.

The Company of Nayib, without Nayib

Two employees of the Bukele family, accountant Héctor Manuel Velásquex and Mario José Ricardo Rodríguez Fuentes, founded Starlight, the entity that owns the subscription television channel TVX, on July 14, 2010.

Velásquez, who holds a degree in public accounting, was a student living in the San Salvador satellite city of Apopa when he founded the company. But according to Carlos Avelar —the legal representative of Master Communication, a company that leased TVX two frequencies and sued the TV station for the non-payment of half a million dollars— Velásquez was just a frontman. While on paper he is a founder and shareholder, according to Avelar, the person who signed a promissory note was President Bukele. “They used a frontman; I’ll put it that way,” said Avelar in January 2019.

According to financial information obtained by prosecutors, in its first two years Starlight was on the brink of “technical bankruptcy” until it was rescued by Alba Petróleos, a Salvadoran private petroleum conglomerate run by FMLN leaders and funded by FMLN mayor’s offices and the Venezuelan government. Millions in Alba money did not reach the founders or shareholders of Starlight, but rather Obermet, the publicity firm of the Bukele family, and directly to President Bukele, who officially had no relation to or position in the firm. An investigation by Revista Factum established that Nayib Bukele received $1.9 million from Alba Petróleos for the purchase of shares and investment of capital in Starlight in 2013.

“In 2012 I founded a television station that was called TVX… Well, it is still called that, because it is still operating, even though it’s no longer mine,” said President Bukele in a September 2019 press conference. “I later saw that the channel was incompatible with my political aspirations, because the other communications outlets could feel that I, too, was their competition. I said, ‘I will sell the channel, because that way I won’t be the competition.’ So we sold it to a company. That company is now being investigated and it turns out that it received money from Alba Petróleos.”

While President Bukele acknowledges that he founded TVX, the Registry of Commerce has no documents demonstrating it, because documents are in the names two employees. While he says he sold the channel, in his income statements from 2013, 2014, and 2017 he declared no earnings relating to his sale of TVX to Inversiones Valiosas, a company of Alba.

Nor did prosecutors find that all of the money from Alba entered Starlight. For example, on June 27, 2013, Bukele received a check from Inversiones Valiosas for $170,000 payable to Starlight. “Upon analyzing the capital and financial structure of Starlight S.A. de C.V., it cannot be determined in what form the $170,000 were incorporated, under which listing in the financial statements it is presented, or what the justification was for receiving said money,” wrote prosecutors in an analysis of the four Starlight bank accounts in Banco Promérica.

El Faro found no sign of the sale of TVX in Bukele’s income declarations to the Treasury Ministry. In 2013, the year when he received $1.9 million from Inversiones Valiosas, the subsidiary of Alba Petróleos, the president declared earnings of $100,987.09 for “professional services of a permanent nature” from the company 503 S.A. de C.V.

After the payments from the Alba group, Inversiones Valiosas became the majority shareholder in Starlight, and attorney José Mauricio Cortez Avelar was named legal representative on Mar. 15, 2015. Velásquez, the accountant working for the Bukele family, retained his shares.

“Regarding my professional role in that time period and the companies where I worked between 2011 and 2017: I was tasked with the corporate legal-formal control of around seven or eight corporations, assuming their legal representation and external and independent legal counsel, without any participation or involvement in administrative or operational affairs, but rather solely in the legal and formal ones,” Cortez Avelar told El Faro in an email. “I was never included in the salary records of any of them, nor was I ever charged with employees or functions.”

While TVX came into the hands of the Alba group, the station was administered by friends and advisors of President Bukele: Carolina Recinos, his chief of cabinet, was the general director and also took on responsibilities as coordinator of the press team. Federico Anliker, a friend of Bukele, was the vice president. Recinos has maintained a low profile since her sanctioning by the Tribunal of Ethics this year, while Anliker is president of CEPA.

According to prosecutors, an account belonging to Rodríguez Arteaga, the former Casa Presidencial financial director, wrote five checks to Starlight between Jan. 20 and Oct. 9, 2015, worth $70,013.50. When Starlight received its first check from Sánchez Cerén’s black budget —number 4463 from Banco Hipotecario, dated Jan. 20, 2015— Bukele was still mayor of Nuevo Cuscatlán and repeated the slogan: “There is enough money when nobody steals.”

In the ensuing three years, between Dec. 3, 2015 and Dec. 21, 2018, Starlight received another eight checks worth $108,480 from accounts of the Presidency of the Republic and OIE at Banco Hipotecario.

In order to confirm that the checks from the black budget of Sánchez Cerén were related to an acquisition made by the Presidency with Starlight, prosecutors requested contractual information and data on past governments from the Bukele administration. “We received a written response on Apr. 23, 2020 by Conan Tonathiu Castro, legal secretary of the Presidency, expressing that ‘no record exists of any contractual relationship or acquisition with the corporation in question,” prosecutors wrote in the document obtained by El Faro. This means that, according to the Bukele administration, the government has no documents certifying that Starlight offered any services to the Salvadoran state.

This reply from the Bukele administration squares with prosecutors’ accusation against the administration of Sánchez Cerén: “The implicated stand accused of forming a complex web of corruption inside Casa Presidencial in order to take money from the budget of Reserved Funds toward individuals and companies that had no commercial relationship with that state entity,” wrote the Attorney General’s Office on its website in August 2022.

Sánchez Cerén’s former secretary of communications, Eugenio Chicas, asserts that the Presidency signed contracts to place ads with TVX, but that he never learned from which accounts they paid for them. Chicas says that as part of the ad payments TVX invited him to give interviews on government affairs and that, upon finishing the program, Anliker —the former vice president of the channel and current president of CEPA— would invite him to meet privately to coordinate ad payments. Anliker is now also the secretary of the ruling party Nuevas Ideas.

Salvadoran President Nayib Bukele arrives at the Supreme Electoral Tribunal headquarters to register as a presidential candidate on Oct. 26, 2023. Photo Marvin Recinos/AFP
Salvadoran President Nayib Bukele arrives at the Supreme Electoral Tribunal headquarters to register as a presidential candidate on Oct. 26, 2023. Photo Marvin Recinos/AFP

Chicas recounts: “All of the media outlets had the norm of inviting me to their programs to talk about government activities, but in addition —and this was all of the outlets— when the interview ended they would say, ‘Let’s have coffee, we want to talk.’ And it was to weigh the scale, as we say. To charge whatever it was that we owed, because the government is always behind on its payments. It was Mr. Anliker who administered TVX. He would take me to one of their lower floors and tell me, ‘Look, we’re concerned, because you know that there’s an unpaid debt. We’ve run all the publicity that you ordered, that was contracted. The contract is signed, but you haven’t paid.’ So they were paid just as was agreed to with all the outlets.”

“And why did you pay for ads from the black budget?” El Faro asked Chicas.

“I don’t know where the money came from for the payments, because the Secretariat [of Communications] never made a payment. The Secretariat wrote the contracts, administered the ads, determined the strategies, the content. But the Secretariat wasn’t in charge of the payments; rather, it was the administrative area of the Presidency.”

The man in charge of the ad payments to media outlets, according to Chicas, was Carlos Ernesto Guerrero Ventura, financial director of Casa Presidencial and one of the people charged by the Attorney General’s Office. Guerrero Ventura is on the run.

El Faro submitted written questions to TVX on October 26 asking why they received money from the Sánchez Cerén black budget but received no reply.

The document from the Attorney General’s Office confirms that when Starlight received money from the secret budget its shareholders were Velásquez, the accountant and employee of the Bukele family; Inversiones Valiosas, the Alba subsidiary; and German Recinos Bernal, son of chief of cabinet Carolina Recinos. The document says that Recinos Bernal became a shareholder in 2015, with shares worth $66,893.20.

On Oct. 30, 2017, the executive board of Starlight chose as the firm’s administrator Marlon Alberto García Torres, the former financial director of TVX. In 2021, García Torres worked as director of territorial development in the Ministry of Governance of the current administration.

The Attorney General’s Office pressed for more information on Starlight’s finances —including information from the Treasury Ministry including a list of partners, shareholders, clients, creditors, and debtors— to conclude that the company received money from the secret fund without justification. In a list of eight clients from June 1, 2014 to May 31, 2014, they listed “ALBA PETRÓLEOS DE EL SALVADOR, S.E.M. DE  C.V” with a total of $422,683.58. But the list excluded the Presidency, prosecutors noted: “This does not reflect the carrying out of sales to the Presidency of the Republic or any other state institutions to justify the presented payments received” (sic).

“The tax income in each of the fiscal years is less than costs and expenses, which is unreasonable given that they represent 168.66 and 509.46 percent [respectively] of the income,” wrote the prosecutors. “A business cannot function for long without generating sufficient income to cover at least its costs and administrative expenses.”

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