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corruption triangle | Foreign Affairs

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This year marks the bicentenary of Central America’s independence from Spain and the birth of five small states: Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica. The milestone, however, comes at a time when the region has little to celebrate. Anti-democratic kleptocracies dominate the isthmus and Nicaragua has become a veritable dictatorship. Slow economic growth and rampant corruption and violence are pushing a flood of Central American migrants to the United States.

Over the past several decades, the influence of the United States in the region has weakened as China and Russia have made inroads in Latin America by concluding trade, military and diplomatic agreements. The United States, however, remains an economic superpower and the main trading partner of all countries in the region. The Biden administration can and should harness American influence to promote the rule of law in Central America.

A culture of violence, impunity and corruption

A complex network of influential merchants reigns over most of Central America. Kleptocratic leaders use their positions in government to enrich themselves. Organized criminal networks, such as the Zetas in Guatemala, operate smuggling, narcotics and human trafficking networks. Predatory economic elites pay and collect bribes, evade taxes, and generally exercise unfair trade advantages. These actors devote considerable social, political and financial capital to maintaining the status quo and avoiding accountability and have shaped political systems which, with the exception of relatively stable Costa Rica, can no longer be classified as representative democracies.

Nicaraguan President Daniel Ortega won a fourth term just this month after jailing some three dozen opposition leaders, including rival presidential candidates. Salvadoran President Nayib Buckele recently withdrew the five judges of the Supreme Court; their replacements allowed him to run for a second term in 2024, contrary to the long-standing constitutional ban on presidents serving consecutive terms. It comes after Buckele sent soldiers carrying assault weapons to Congress last year, in a bid to intimidate lawmakers into approving a plan to fight crime. These steps have fueled concerns that the country could follow Nicaragua’s lead and fall into dictatorship. Honduran President Juan Orlando Hernández, meanwhile, was accused of accepting bribes from major drug traffickers.

Things are no better in Guatemala, where the president Alejandro Giammattei sacked anti-corruption prosecutor Juan Francisco Sandoval after Sandoval began investigating how the Guatemalan government paid a Russian company for shipments of COVID-19 vaccines that never arrived. Sandoval and former prosecutors and judges like myself who pushed for the corruption investigation were forced to seek refuge in the United States. after the Guatemalan government threatened to arrest.

The United States cannot treat these states as if they were democracies. The Biden administration must use sanctions, criminal prosecution, business regulation and support for judicial reform to force change in Central America.

Promising signs and more to do

The Biden administration recently announced the creation of two task forces that could fight corruption in the region. US Department of Justice to lead new anti-corruption task force with input from the State Department; it will investigate and prosecute cases in Guatemala, Honduras and El Salvador, the three countries that make up the so-called Northern Triangle. Meanwhile, Joint Task Force Alpha, a new partnership between the Department of Justice and the Department of Homeland Security, will help dismantle transnational human trafficking networks in the region.

The US government also recently launched a “naming and shaming” campaign in Central America. In July, the US State Department released a list of “corrupt and undemocratic actors,”Sanctioning public officials in all branches of government in the Northern Triangle. In early November, the US Congress passed, with bipartisan support, the Strengthening Nicaraguan Membership of Electoral Reform Terms Act (RENACER), which will force the executive to monitor and sanction the corrupt government more closely. from Ortega. The Magnitsky Law, the Engel List (the United States-Northern Triangle Enhanced Engagement Act), and the Office of Foreign Assets Control (OFAC) economic sanctions also provide ways to punish corrupt officials and their enablers.

The United States cannot treat these countries as if they were democracies.

But while sanctions are valuable tools, they will not be enough to restore democracy in the region. Legal systems designed to allow impunity must be reformed in every country in Central America. Bad actors must be prosecuted, both to remove them from their positions of power and to dissuade those who are tempted to emulate their example.

The United States has the power to prosecute these individuals. Like 2021 Global Financial Integrity Report on Financial Crimes in Latin America and the Caribbean underlines, financial crimes and criminal activities are cross-border, and therefore multi-jurisdictional. For corrupt and criminal networks in Central America, the United States is often a destination for illicit assets. Many corrupt officials have bank accounts or property in the United States; this places at least some of their crimes under the jurisdiction of the United States. The US government must trace illicit assets that are funneled into US sectors such as real estate. (Buying property in the United States is a common way for Central American kleptocrats to launder their money.) Perpetrators and their enablers must be punished for creating a region where the law is obeyed.

The United States can also deter crime and corruption in Central America through trade deals. Currently, the seaports and airports of the Northern Triangle are inundated with narcotics, weapons and other illegal goods. Washington is expected to expand its container security initiative, developed after the 9/11 attacks, to pre-filter containers entering and leaving Central American ports. The United States should also review the Dominican Republic-Central America Free Trade Agreement (CAFTA): the pact contains anti-corruption provisions but does not provide mechanisms to ensure compliance. The United States could renegotiate the treaty to correct this shortcoming and possibly add provisions conditioning access to American markets on respect for the rule of law.

The US government is already taking steps to harness trade as a way to strengthen Central American democracies. The The RENACER law, for example, proposes to consider whether Nicaragua should be allowed to remain in CAFTA. The Biden administration is expected to determine whether other states should be excluded from the pact because of their governments’ failing commitments to democracy. Forcing governments to demonstrate their respect for the rule of law in order to maintain free trade privileges with the United States, their largest trading partner, is a powerful tool in promoting democracy.

Here is the judge

A priority of any US foreign policy strategy for the region should be to help Central Americans ensure the independence of their justice systems. Time and time again, corrupt politicians have thwarted judges and prosecutors who have tried to root out embezzlement. The Biden administration has already proposed a regional anti-corruption commission for Central America. It should get to work as soon as possible and seek to foster collaboration on criminal investigations that cross borders. It is not possible for small countries to confront transnational criminal networks on their own. A regional commission might also have the opportunity to promote stronger institutions in its member states, which are in desperate need of modernizing their laws regulating the civil service, budgets, taxes and financial industries.

Finally, it is important to recognize that the countries of Central America are almost all post-conflict zones, home to deeply inequitable societies. In places like Guatemala, it has become impossible to speak of a social contract between the state and the citizens. In addition to the reforms that the Biden administration might advocate, it’s important to encourage a cross-section of Central Americans to work together to create lasting peace in their countries. Entrepreneurs, indigenous leaders, journalists, religious figures and academics would all benefit from the rule of law. The United States could play a mediating role to facilitate dialogue and enable these representatives to work for systematic change. This effort, which could help replace crime and corruption with peace and prosperity, would have beneficial effects far beyond Central America.

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