Guatemala fires its top corruption prosecutor for being too effective

But the move also reflects broader resistance by Central American elites to United States support for democracy and rule of law. As in Afghanistan and Iraq, the United States must restructure a dysfunctional partnership.

The Fall

Guatemala’s firing on July 23 of the all-too effective corruption prosecutor Juan Francisco Sandoval spells the end of anti-corruption efforts in that country. It demonstrates kleptocratic control over almost all parts of the Guatemalan state. It foreshadows restrictions on the press and civil society, as well as additional political inroads by narco-trafficking groups. With the apparent encouragement of President Giammattei, Attorney General Consuelo Porras took the measure despite the United States’ strong insistence —including Vice President Harris’ statements in her June visit to Guatemala— that Sandoval continue to lead anti-corruption investigations that the United States views as critical to addressing growing migration to the United States. The firing not only removes a strong prosecutor. It also advances the unraveling of investigations into political corruption and warns other prosecutors and judges that certain politicians and crimes are off limits. It is a major red flag for foreign and local investment.

One reason Sandoval likely fell from grace was his investigation that led to the seizure in 2020 of about $20 million dollars in a house allegedly owned by former communications minister Benito (now a fugitive); another was his persistence in investigating alleged “pay to play” deals by congressional representatives in the State Subordination case. He had also shown interest in the Guatemalan government’s unaccountable failure to obtain most of the Sputnik COVID vaccines that it had inexplicably purchased through a Russian third party for nearly $80 million. These are immense sums for a country whose poverty motivates hundreds of thousands to migrate yearly to the north. Interlocking groups use corruption to dominate almost every part of the Guatemalan state. Their agenda is to undo corruption investigations, to secure judicial approval for new mining and hydro-electric projects in Indigenous areas with minimal local consultation (and minimal taxes), to use contracting and hiring authorities for their benefit and to control the 2023 election process. Expect even more migration to the United States as Guatemala moves closer to the kleptocracy models of Honduras and Nicaragua—or perhaps the authoritarian populism of El Salvador.

A challenge to the United States in the region

The firing is not just a slap in the face to United States policy in Central America, whose central premise is that the rule of law and reduced corruption are key to reinvigorating democracy and economic growth, reducing migration to the United States and avoiding authoritarian rule. The firing is also a symptom of a bigger challenge to the United States in Central America post 9/11: a perception that the United States is a paper tiger, that it can be played off against China or Russia, that it is not sufficiently bold, focused and nimble enough to use its law enforcement, economic, development and diplomatic advantages to attain its objectives. Neighboring countries will scrutinize the American response to see if there is an opening to exploit. In this sense, Guatemala joins the arc of countries in which the United States has found that its erstwhile partner government is also at times one of its adversaries. The United States faces a learning curve in dealing with this dysfunctional partnership, just as it did in Afghanistan and Iraq.

Why Giammattei and his backers challenge the United States

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There are four keys to understanding why Giammattei challenged the United States. The first is a conviction that the United States is unable to respond due to its perceived reliance upon Guatemala for cooperation on migration and narcotics trafficking, that Guatemala can play off the United States against China and that, in any case, additional American admonitions or visa cancellations are an acceptable price to pay. The second is that Sandoval’s corruption investigations threatened the use of a tool that many parts of the government and their allies rely upon. The third lies in the unstable nature of Guatemala’s evolving system of corruption mafias, in which growing indifference towards public opinion and administrative ineptness reinforce a “guardrails-are-down” race to score fortunes and political domination. The fourth lies in Giammattei’s own relentless pursuit of power, intolerance of disagreements or of criticism and sheer tenacity. As Ambassador, I once played in a charity soccer game with leading politicians, business leaders and reformed gang members. At the time, a discounted political candidate, Giammattei, who uses crutches, showed up to play goalkeeper, ignoring the looks of his peers. To his credit, he blocked several shots on goal—when he fell, he would get back up slowly on his crutches. (Ironically, years later, more of the politician and private sector players had run afoul of the law than the ex-gang members.)

The firing clarifies the United States’ understanding of the Guatemalan government, particularly of President Giammattei and Attorney General Porras. Guatemala’s Attorney General would never have taken this step with major implications for relations with the United States without the direction of President Giammattei. This is not a partner government that needs training, cooperation or a little nudging to counter corruption; it has chosen the corruption status quo over its relationship with the United States. Giammattei had already signaled his preferences this spring when, despite an appeal by President Biden, he secured a Constitutional Court less likely to support transparency, including one magistrate whom the United States placed on the Engels sanctions list in June. In 2020, the President formed a congressional alliance with the UCN party, whose leader and former presidential candidate the United States Department of Justice prosecuted for laundering drug trafficking money.

The Guatemalan government and anti-transparency advocates will attempt to put lipstick on this pig. “Help us build strong judicial institutions rather than having to depend just upon certain individuals;” “Sandoval wasn’t perfect, so help us find someone even better;” “this move won’t affect cooperation on narcotics and human trafficking (with the implied threat to end such cooperation);” “this is a matter of sovereignty” (usually from people who applaud the United States-led coup in 1954), or “there are faults on both sides, but with your help we can take (small, reversible) steps to improve.” Or perhaps the government will pin the blame on the Attorney General, as Giammattei signaled late July 27. But it’s all insincere, reminiscent of when Afghanistan’s President Karzai gamed the United States by promising to reduce regime-threatening corruption even as his officials looted Kabul Bank. Or when Iraqi Prime Minister Maliki pushed the Sunni population into the arms of the Islamic State. Or when the Salvadoran government promised to prosecute the Jesuit killings in 1989 even as it torpedoed the investigation. Any advances on rule of law now would be cosmetic and reversible; the United States has seen this movie before.

It’s an internal issue even more than a bilateral issue

To carry out corruption, Guatemala’s power brokers rely not just upon control of institutions, but also upon public apathy and fear of challenging authority. The current COVID crisis, however, and the Guatemalan government’s failure to procure enough vaccines have renewed citizens’ concerns about corruption, and Sandoval’s firing has energized this opposition. Civic protests over corruption forced a previous president to resign in 2015, and it is possible this government has underestimated public opinion. Ancestral Indigenous authorities and civic groups have convened a national strike for July 29. The Catholic Episcopal Conference declared Sandoval’s firing an “illegal and arbitrary” act that will cause “irreparable harm” to the nation. More ambiguous are the statements of the economic aristocracy, which disdains Giammattei, but fears that good governance could lead to a center-left government and/or to higher taxes (save Haiti, Guatemala has the hemisphere’s lowest tax to GDP ratio and one of the highest acute child malnutrition rates).

United States responses and actions

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United States reactions from Secretary of State Blinken, USAID Administrator Power and NSC Senior Director Gonzalez were prompt and sharply critical, and on July 27 the State Department declared it had lost confidence in Porras and had suspended cooperation with her office. The latter step is spot on: unless Guatemala reverses course, the essential tools for prosecuting cases of interest to the United States —wiretaps, aggressive and leak-proof investigations, and honest judges— will waste away as the dynamic of corruption requires ever more corruption and less transparency. A system that protects political corruption will inevitably fail to prosecute narcotics or human trafficking.

The United States should take additional actions. It should place key corruption operators or enablers in the current and previous executive, congressional and judicial branches, as well as in the private sector, under Magnitsky Act sanctions, as it did recently with Cuban officials; now-stalled Guatemalan corruption prosecutions and United States drug investigations provide many candidates. It should add to the Engels and Torres lists of corrupt officials, but to only take away visas would have insufficient impact. The United States should also ramp up its new Central American law enforcement task force to target Guatemalan money-laundering and corruption that violate American laws; two recent Department of Justice prosecutions accused members of the private sector elite. Again, Sandoval’s investigations provide a great target list. True, Magnitsky sanctions and investigations absorb considerable time, resources and attention of senior officials. This is justified, however, since the United States seeks to propose $4 billion to address the causes of Central American migration, and unabated corruption would neutralize development resources. The United States should also examine how it can support civil society and the media in the region. In addition, the United States should evaluate potential trade and other financial sanctions.

As it implements sanctions, the United States will find that the Guatemalan government and economic elites take it more seriously. It should propose the minimum steps needed —a new Attorney General, the reinstatement of Sandoval, the swearing in of magistrate Gloria Porras and other court appointments— to begin to restore the lost trust between the governments while keeping an eye on the corrupt mafias’ long term game plans. No options are risk-free. To continue the status quo with a now unreliable partner, however, is absolutely guaranteed to harm important United States foreign policy and national security interests, and to have devastating effects in Central America on democracy and on the lives of people weighing migration to the United States.