It permeates every sector of society. Public institutions are riddled by it, and in the private sector, it is regarded as the cost of doing business. It is corruption, and it’s more than Colombia’s ruling elite using their power and influence to skim off the top to enrich themselves — it threatens the country’s peace process, foreign investment, the well-being of vulnerable children, and faith in democracy.
Corruption at the state level is so rampant that it could lead to budget deficits. The practice costs Colombia $7.5 billion USD annually, or nearly 10% of the federal government’s budget, according to a 2016 report from the inspector general’s office.
Others put the cost of corruption much higher — by nearly double. Colombia’s comptroller, General Edgardo Maya Villazón, has put the cost of the free-for-all greed-fest that is Colombian corruption at as much as $14 billion USD per year. And research conducted by the Colombian think tank Dejusticia found that, on average, a staggering 50 trillion pesos ($16.6 billion USD) are lost to corruption annually.
Colombians are increasingly fed up with the pervasive corruption present from the highest halls of power all the way down to the street. Some 30% of Colombians said they have had to bribe health officials, public utilities, or police in order to access basic services, according to a report released by Transparency International, a Germany-based NGO that tracks global corruption trends.
Colombia also ranks 90th on Transparency International’s Corruption Perceptions Index, an annual report that catalogs the world most and least corrupt countries based on the perceptions of their citizens. Out of 176 nations surveyed, Denmark topped the list as the least corrupt, while Somalia came in last.
Looking at the vast sums involved and poor perception offers a broad overlook of the scourge of corruption in Colombia. The following presents a run-down of seven of the most significant home-grown and international corruption scandals that have implicated Colombian politicians and businessmen — and sent many of them to prison.
1. El Cartel de la Toga (The Cartel of Robes)
After Colombia’s top corruption-fighting official was arrested on, well, corruption charges in July, it set off a chain-reaction that shook the credibility of the nation’s judicial systems to its foundations. In early June, according to law enforcement officials, former anti-corruption chief Luis Gustavo Moreno and an associate made a series of trips to Miami, where they met with Alejandro Lyons, the former governor of Cordoba province. Lyons, who a resident of Miami, was under surveillance by the U.S. Drug Enforcement Agency (DEA), when Moreno allegedly took a $10,000 USD bribe from Lyons, and he also bribed the second man for some $130,000, in exchange for disrupting the criminal corruption case Lyons faces in Colombia.
Moreno now sits behind bars pending trial. Since then, he has reportedly agreed to demands to name names in the vast web of corruption in the Colombian court system in exchange for a guarantee he will not be extradited to the United States, where he also is wanted for taking bribes and extortion. And what he has revealed has triggered a crisis of confidence even in a country where the bar is set so low.
Among the subsequent revelations is that five sitting and former Supreme Court justices may have accepted bribes from senators and other politicians to drop charges or render favorable verdicts in cases they faced. Additionally, at least 10 Colombian senators allegedly bribed the justices, including Musa Besaile, who confessed to bribing Justice Leonidas Bustos with more than $600,000 USD to obstruct an investigation into his alleged ties to paramilitary death squads.
The case has been dubbed “El Cartel de la Toga” (The Cartel of Robes) by the Colombian press, referring to the black robes worn by judges. Despite Moreno turning state’s evidence and implicating more than two dozen judges, senators, mayors, and governors, it’s anyone’s guess as to whether they will be prosecuted. Both the judicial and legislative branches are so riddled by corruption that there is no untainted government body that necessarily retains the legitimacy to carry out judicial proceedings.
2. Odebrecht Bribery
The Brazilian construction giant’s name has become synonymous with corruption. For years, the conglomerate has bribed public and private officials of at least a dozen Latin American countries, and other nations across the world, to secure around 100 infrastructure projects, generating $3.3 billion USD in shady deals.
In Colombia, between 2001 and 2016, about $11.1 million USD in bribes were paid, according to settlement documents from the U.S. Department of Justice. The illicit funds were used mainly to win the two public works contracts for the paving of the Ruta del Sol highway and to extend the Ocaña-Gamarra highway.
Around 20 former Colombian cabinet ministers, senators, and businesspeople have been implicated in the corruption scandal. On November 15, the Public Prosecutor’s office opened an investigation into the alleged involvement of eight additional congressmen.
Previously, Colombian President Juan Manuel Santos and his rival in the 2014 presidential election, Oscar Ivan Zuluaga were both accused of receiving campaign contributions from Odebrecht of $1 million USD and $1.6 million USD, respectively. Both politicians denied knowing the source of those large contributions.
3. The Panama Papers
The unprecedented leak of 11.5 million documents from a Panamanian law firm in May 2016 revealed the extent to which the rich, famous, and powerful move their assets to tax havens around the world. The release of the massive trove of documents — which dwarfed even the biggest-ever leak from WikiLeaks — showed how the Panama City-based law firm Mossack Fonseca set up a web of shell companies to shelter money and property of hundreds of thousands of people around the world, including heads of state, politicians, public figures, actors, and sports stars like Argentinian footballer Lionel Messi.
While offshore business entities are legal, teams of journalists in more than 80 countries who poured over the documents found that Mossack Fonseca shell corporations were also at times used for illegal purposes, including fraud, tax evasion, and evading international sanctions. The names of 1,245 Colombians appear in the Panama Papers.
Though relatively little legal fallout initially resulted from the Panama Papers in Colombia, 14 businesspeople in the country were recently arrested in October, including high-profile businesswoman Luz Mary Guerrero, a legal representative of the payment service company Efecty; Sara Guavita, legal counsel for the courier firm Servientrega; and Juan Esteban Arellano Rumazo, a Mossack Fonseca lawyer in Colombia. All three have been detained awaiting trial, and they face a long list of charges ranging from falsifying documents to illegally sheltering millions of dollars in taxable income, which carry penalties of up to 12 years in prison.
On December 5, the Public Prosecutor’s office announced that another 24 people would face charges related to information gleaned from the Panama Papers, including lawyers, accountants, and auditors of seven Colombian companies. So far, a total of 44 Colombians have been indicted on charges ranging from falsifying documents to money laundering since prosecutors began their investigations in October 2016.
4. Reficar Oil Refinery
The Reficar oil refinery in Cartagena is the biggest in South America. A giant modernization project kicked off in 2007, with the aim of doubling the refinery’s output. The projected cost of the project was $3.3 billion USD, but it ended up costing more than $8 billion USD.
After the story was made public, Colombian Attorney General Néstor Humberto Martínez opened an investigation into the massive overspending of taxpayer money at the refinery. They discovered that the main contractor, a U.S.-based infrastructure firm called CB&I, treated Colombian state funds like a limitless treasure-trove and work was subcontracted out to a total of 2,460 third parties.
Bills for labor and materials were sometimes submitted multiple times, and in other instances, the wrong type of materials or equipment were purchased instead of what was required. Colombian taxpayers also footed the bill so that Reficar executives could drink and throw lavish parties, and $16 million was alleged to have been spent on prostitutes.
In April this year, six Reficar executives and two CB&I officials were indicted on charges including embezzlement, fraud, bribery, and misappropriation of funds, among others. All eight have pleaded not guilty to the charges. Prosecutor Martínez is seeking jail time for all of the accused. Investigations are ongoing.
5. Carrusel de la Contratación (Contract Carousel)
The so-called Carrusel de la Contratación (Contract Carousel) corruption scandal, which first came to light in June 2010, involved officials funneling money earmarked for Bogotá’s TransMilenio transit system through a series of fictitious companies and consultancies. Each layer was said to skim off about 6% of the funds they received, which was considered their “commission,” but the fake companies didn’t do any actual work.
A series of investigations revealed just how deep the rabbit hole went — implicating former Bogotá mayor Samuel Moreno, his brother, city comptroller Miguel Ángel Moralesrussi, the head of the city’s Urban Development Institute (IDU) Liliana Pardo, and at least 11 other senators and businesspeople.
All but one were convicted of crimes including issuing contracts without legal compliance, undue interest in the conclusion of contracts, embezzlement, and bribery. The guilty parties were given prison sentences of various lengths, with the disgraced former mayor sentenced to a total of 24 years behind bars. The former IDU director and ex-comptroller were arrested earlier this year, and both are currently in prison awaiting sentencing. Collectively, the “Dirty 15” were also ordered to repay what they stole, to the tune of 17.5 billion pesos (roughly $58.8 million USD).
The wholesale plunder of public money meant that construction work on the Calle 26 TransMilenio Station came to a halt, and completion was delayed by nearly two years.
6. Ecopetrol and PetroTiger
Colombia’s state oil company has a long and storied history of corruption. In 2014, the company earmarked 30 billion pesos ($10 million USD) to invest in social development projects for communities in the company’s exploration zones in the departments of Meta, Putumayo, and Huila. Ecopetrol officials signed a series of contracts with a government-funded social development organization called Corporación País Rural.
But not one peso ever went to improving the conditions of people in the oil exploration zones — two Ecopetrol managers and two members of Corporación País Rural simply divided up the 30 billion pesos amongst themselves. It took prosecutors two years, but eventually all four were convicted of stealing the money and given prison sentences.
In 2012, former Ecopetrol official David Durán Flórez took $333,500 USD in bribes from the British Virgin Islands-based oil and gas company PetroTiger in exchange for a $39.6 million USD contract to be given to a PetroTiger partner company called Mansarovar Energy. The bribe was placed into a bank account in New York and then laundered through a shell company set up by Durán’s wife.
Colombian investigators, working with their U.S. counterparts, found evidence of illicit personal enrichment at the highest levels of both Ecopetrol and PetroTiger. In November last year, Durán and his wife pleaded guilty to a host of crimes that included corruption, accepting bribes, and money laundering. Durán was sentenced to 16 years in prison, and his wife, Elgui Hohanna Navarro Carvajal, was given seven years behind bars. Also last year, the now-former president of PetroTiger’s subsidiary in Colombia, Luis Francisco Guinard, was sentenced to six years’ house arrest for his role in the corruption and bribery scheme.
7. InterBolsa Manipulation
Founded in 1991, InterBolsa grew to become the biggest investment brokerage in Colombia and, at its peak, accounted for about 25% of all investments made in the country’s stock market.
Over a period of nine years, the firm dabbled in stock manipulation, tax evasion, money laundering, embezzlement, bribery, and other financial misdeeds that left the brokerage strapped for cash. In November 2012, the government liquefied InterBolsa after it defaulted on $11 million USD loan.
A slew of criminal investigations ensued, and authorities discovered that roughly 18,000 investors were swindled out of 300 billion pesos ($100 million USD). The now-defunct investment brokerage was ordered to partially pay back investors a total of $44 million USD.
Then-InterBolsa head Tomás Jaramillo and Juan Carlos Ortiz, founder of the firm’s “premium” investment fund, pleaded guilty to a host of financial crimes. In March, 2016, both men were sentenced to serve house arrest five years and nine month. Each was also ordered to pay a fine equivalent to 100 Colombian minimum wages, or 69 million pesos ($23,000 USD).
The Future: Fighting Corruption by Referendum?
Despite the very public cases mentioned above, corruption is a crime that mostly goes unpunished in Colombia. There are 1,100 mayors and governors in the country, but there has been more than 1,600 cases of malfeasance investigated and politicians sanctioned, meaning that many have committed multiple crimes, yet still hold public office. Only 359 of those charges were against officials involved in corruption — corrupt officials know they can just bribe their way out of those charges.
What’s more, the UN Committee for Economic, Social, and Cultural Rights has raised concerns about the problem. It found that between 2012 and 2016, a paltry 1.6% of Colombian corruption cases led to a conviction, according to research conducted by Vice Colombia.
For those looking for a silver lining in all this, we’ve found one for you. This year, a signature campaign organized by Colombian senator and anti-corruption activist Claudia López calling for tougher penalties against the corrupt managed to gather over four million citizen signatures — more than double the two million needed to push for reform. This initiative is the first step that could lead to a national referendum on the issue in 2018.
With the courts, legislature, and executive branch all ensnared in one scandal or another, it seems that the best hope for defeating the cancer that is corruption comes from the Colombian people themselves.