Presidential candidate Rodolfo Hernandez (photo: candidate)

Perhaps the biggest surprise was former mayor and business empresario Rodolfo Hernandez along with running mate Dr. Marelen Castillo taking second place over former Medellín Mayor Federico Gutierrez and running mate Dr. Rodrigo Lara. Gutierrez had very strong support in the important Antioquia region and was seen as the leading contender to unify conservative and centrist voters against Petro.

Hernandez, a civil engineer with a successful construction company that has a track record building affordable housing, was mayor of Bucaramanga from 2016-2019, resigning from the post a year before his term ended, with an 84% approval rating. As mayor he gained a reputation for battling corruption. Hernandez also has a reputation for being outside of Colombia’s traditional political machinery. It is not easy to pin a right-left label on Hernandez, though he could be called a socially liberal (or at least tolerant) pro-business candidate.

Unlike current president Ivan Duque, 3^rd place finisher Federico Gutierrez (nicknamed Fico) never belonged to Alvaro Uribe’s now unpopular Centro Democrático political machine. Still, his opponents, especially the campaign of Gustavo Petro successfully painted Fico as an extension of the “Uribistas,” supporters of former president and embattled Senator Alvaro Uribe and his Medellín power base.

Opposite histories

Rodolfo Hernandez is a victim of leftist guerilla violence. According to the candidate, his father was kidnapped and held for 135 days by the FARC communist rebels, and his own daughter was kidnapped and killed by the ELN, another communist rebel group that today functions primarily as a narcotics and extortion mafia. Despite this, Hernandez has come out in support of the peace process negotiated by former President Juan Manuel Santos, criticized current President Ivan Duque’s failure to implement the plan, and Hernandez has even said he wishes to negotiate a path for the ELN to disarm.

Gustavo Petro (photo:gustavopetro.com.co)

On the other hand, the former mayor of Bogotá, Gustavo Petro is himself a former leftist guerilla and member of the violent M-19 group that attacked the country’s justice ministry and raided the embassy of the Dominican Republic, both with fatal results. Petro served time in prison for illegal possession of firearms in connection with his M-19 activities.

Though Petro’s term as mayor of Bogotá was something of a fiasco, he is buoyed by wide dissatisfaction and even disgust with the leadership, or lack thereof, of current President Ivan Duque and his political godfather, Alvaro Uribe. Duque has failed to connect on any emotional level with regular Colombians, has refused to implement or comply with the peace agreement negotiated with the former FARC rebels, has been hapless against resurgent rebel groups and criminal cartels in Colombia, and is seen as so weak that these groups have even taken potshots at his helicopter. On the right, Duque’s incompetency is seen as potentially handing the country over to Petro, who would be Colombia’s first far-left president.

Diverse vice-presidential candidates

Despite its large population of African and mixed descendants, Colombia has only had one president with a “black” phenotype, José Nieto Gil, recognized and honored by former President Juan Manuel Santos after shadowy attempts to erase him from the history books. Unlike México with its Zapotec President Benito Juarez, widely recognized as the Mesoamerican country’s national hero, Colombia has never had a head of state with an indigenous phenotype. But barring an unforeseen shock, Colombia’s next vice president will be a black woman.

Of the eight vice-presidential candidates in last Sunday’s runoff, five are black and three are black women. There is also wide diversity in socioeconomic background. While Petro’s running mate Francia Marquez is herself a firebrand activist and protest leader who worked her way through law school as a maid, Hernandez’s Marelen Castillo is career professor with a PhD from Nova Southeastern University in the US, and rector of one of Colombia’s Catholic universities. Castillo also holds degrees in biology, chemistry, and a master’s degree in industrial engineering.

Luis Gilberto Murillo was the Minister of the Environment and Sustainable Development under former President Juan Manuel Santos

Of the vice-presidential candidates that didn’t make it to the runoff, Luis Gilberto Murillo was moderate left candidate Sergio Fajardo’s running mate. Murillo is the former governor of Colombia’s Chocó department on the Pacific coast and has lived in both Washington DC where he worked as a senior policy analyst, and Moscow, where he earned a master’s degree in mining engineering. He is certified as a Russian language instructor. Murillo was also a victim of kidnapping in 2000, which is what prompted him to seek refuge in the US until the security situation improved.

Ceferino Mosquera was running mate of Luis Perez, a former governor of Antioquia and former mayor of Medellín. Mosquera is a lawyer and former law professor and was once on city council in the Pacific coastal city of Buenaventura.

Sandra de las Lajas Torres Paz was running mate of John Milton Rodriguez, and hails from the small Pacific coastal city of Tumaco, Nariño. After her family lost everything to a tidal wave, she emigrated to the city of Cali at the age of 14. Torres holds several master’s degrees and has had a career spanning several government positions with a focus on battling discrimination and racism.

Click to enlarge results:

Image: Registraduria Nacionál de Colombia

Finance Colombia has repeatedly offered the mayor an opportunity for an interview, or even to comment, but through his press secretary, he has always declined. City council member Daniel Carvalho has not in the past been aligned with any of the groups traditionally opposed to the mayor, such as traditional political parties or the Antioquia region’s traditional business elite. Still, the independent councilman and civil engineer has said enough is enough, and that the mayor’s mismanagement is putting Colombia’s second largest enterprise and Medellín’s single largest municipal revenue source at grave risk.

Carvalho was kind enough to sit down with Finance Colombia’s executive editor Loren Moss for an in-depth interview, below. The video interview is conducted in Spanish, English transcript follows below:

Finance Colombia: The situation we have with the metropolitan government, the City Hall and EPM. There is a huge concern on what’s happening, and I want to understand your point of view. We’ve had four managers in the last year, and the investors ask us if EPM is in danger or not, if EPM has the capacity to respond for their bonds and debts and I want your opinion the uncertainty, not only on the management, but we also had SINPRO here in our interviews, but what is happening with Hidroituango. As a councilman of Medellin, I want your opinion on the biggest concern of the situation here, between EPM and the city of Medellin, its owner.

Daniel: EPM, as you know, it’s said that EPM is the crown jewel of Medellin, right? It means that it’s a public company that is very successful and provides resources to Medellin. It’s not very common, you know that the last forty years, the trend to the neoliberalism was about that if public sector is not being efficient for managing companies and services, sell it to the private sector, right? That’s the story in the west. EPM didn’t do that. It wasn’t sold to the private sector, it was kept as public and achieved success, but why?

I think that is why I tell you this story, because EPM allowed the private sector to teach the company how to work efficiently. That learning, that rule on how to make a public company be successful and not driven by the political interests of the moment, is what we call the corporate governance, those are the game rules, the company should work in a determined way, not what the mayor in charge orders, and that’s what we’ve been building for 50 or 60 years in EPM, and it has become  the second largest public company in Colombia after Ecopetrol, and I think that EPM is one of the exemplar public companies of Latin America. I don’t have reference of another one that is equal to it.

Finance Colombia has repeatedly offered the mayor an opportunity for an interview, or even to comment, but through his press secretary, he has always declined

So, the successful story of EPM has been based on mostly in the comprehension of the fact that being public it can’t be managed as the politicians often do. Besides, in the last 20 years, EPM has had a big expansion in the international market, so before EPM technically provided services to each municipality, it has grown in Colombia. We already have Aguas de Urabá, we have a lot of other subsidiaries. We just acquired Electricaribe, but we have also grown as a multinational. That has been interesting, and at least a third of the profits of EPM comes from businesses abroad, so we can see a history of success in EPM.

Now, when one jumps to the international market, and you go to make business, sometimes you win, sometimes you lose. Every job requires effort, nothing guarantees success in investment. There are examples in Panama, in Mexico for bad investments, also in Chile, there are mistakes, but it’s also part of the game of investing. I invest, that’s how it is.

Many years ago the idea came of ​​doing Hidroituango, a project that had been on the plate for 40-50 years, and just 15 years ago was when it’s started. The concession was given 10 years ago. It’s the biggest project in Colombia, providing 15-20% of the energy that Colombia needs, and everything was doing great, until such thing happened, right?

Who’s responsible? I don’t know. I’ve no idea. I’m a civil engineer, I was there before and after the internal failure, so I don’t know, the paperwork [investigation] is being done, right? Despite that, the problem of Hidroituango arrived in a very particular moment. Three years ago, during the presidential campaign, immediately it became an issue of interest for the political debate, because a bunch of politicians from Antioquia had ties to EPM. I mean Sergio Fajardo, Anibal Gaviria; so it became a political thing, and when things become too political, they stop being transparent.

That political earthquake was beneficial for some people to say that EPM was carrying 20 years of bad management, corruption, and blaming people, starting with Daniel Quintero, who used it to build and idea, so the people were upset for the collapse of the Hidroituango tunnel, so they felt that speech made by Daniel Quintero called them out in a very unfair way. He never presented data, he just accused them of corruption.

I asked the management of EPM, and there is no single complaint of corruption. In 10 years, there isn’t, so [Quintero] created a campaign on it, and after winning, he keeps the same speech about EPM being badly managed and that he will arrive and save it. That’s what he says. What I think is behind it and it’s different, is that in the last 20 years, in Medellin there was a political coup. I mean, the parties that were used to being in power; a different style arrived, much more technocratic, transparent, more citizen-oriented, and that was the base for what we know as the Medellin Miracle, the physical and social transformation, partly financed by EPM’s money.

That movement removed the people who were on top before, for example Luis Perez, who was the mayor before Fajardo, and had a number of scandals in EPM. We hadn’t seen such a season at EPM since Luis Perez, so those political and economic groups who were substituted in Medellin kept growing in the rest of Antioquia, and now with Daniel Quintero, supporting them in disguise, because they know a traditional politician doesn’t win in Medellin, who wins is a young independent politician, so they supported Daniel Quintero, and since he won, now they want to go for the revenge.

“Lucky for us, EPM is such a solid company, loved and respected, with a committed staff that has continued to protect the company from the government…”

They want to destroy what was done in 20 years, not only today, but in retrospect destroy the story that was built in Medellin and the world, on how we left the barbarian age of the 90’s. So it’s also a political, economic and historic struggle to rewrite the success story of the city and EPM, so they’re behind. According to me, there is a revenge and a big opportunity to take over the power again of such a big profitable company that manages huge resources, and particularly, the Hidroituango project, which demands billions and billions of pesos, so there is a lot of money, and it must be such a project of interest, so according to me that’s what they want, recover this and get their revenge.

Lucky for us, EPM is such a solid company, loved and respected, with a committed staff that has continued to protect the company from the government, and as you said, in a year and a half it has had four managers already, if their intentions aren’t the most reliable ones, then it’s also because they are not good managers. They pretend to blame the opposition, but we have to remember is that the first manager was appointed and dumped by him [Quintero], and the manager is suing today, so it’s supposed to be our fault, Fajardo’s fault, the opposition’s fault, He [Quintero] creates the problems himself, I call him the pyro bomber.

Finance Colombia: Something I want to ask, EPM is a multi-billion-dollar company, and in general, even though the city owns it, the board of EPM, the managers have been professionals, engineers, experts in electric energy, or public service, but something I saw when the board was replaced, there were many people, I guess they are honorable, but just a few seem qualified for corporate management. If you criticize his decision, he says you must be controlled by Group Antioquia. I personally don’t know anyone there.

Daniel: And you’re compromised by Bancolombia!

Finance Colombia: I don’t have any leverage with them, I wish! If they want to come to us and advertise or something, that would be good, but we have no ties to anyone. We’ve contacted the mayor many times, as well as with you, with SINPRO as well, where Olga Lucia Arango gave her point of view. But what concerns me is that the last person who resigned was only experienced running a micro-business, he was in charge of some small positions here and there but he didn’t have enough experience in leadership of any company, so how would he deal with a multinational company?

Now the new person appointed as his replacement, I think he is also someone of respect, at least he is a civil engineer, but I think he has a lot of connections inside the government, he’s had many positions in the government, but I don’t see a lot of experience as a leader, as an executive. The board, I mean there are kindergarten teachers, and I come from a family of teachers, which is good and respectable, but what I don’t see is any qualified people with a resume of being executive leaders of any big companies, from Medellin or any other parts of the country. In general, big companies, should have people who know what they’re doing. So I want your opinion there, if we have as we say in English, checks and balances, to maintain the independence of EPM if that’s the case, why? And if not, what can we do?

Daniel: What I really see them doing is destroying that balance. When the board was changed, let’s remember they resigned, which was appointed by the mayor, then they put in a whole new board. The vice-presidents of EPM, who are solid, have also been starting to change, so I think they are dismantling what had been done with the corporate governance: how to manage certain things, how to choose a board. I think they are dismantling what had allowed EPM to be successful, and be an efficient public company, which is odd nowadays, they are deleting what we had achieved.

What did the mayor say when he fired the manager, his friend? He said “I need a manager that is more according to my orders,” so that applies for the vice-presidents as well, which becomes…We go backwards, without corporate governance, where the politician is the most powerful and the one that does it all. Now, what can we do and what are we doing? First, from the political matter, you see, the latest manager, why did he have to leave? Because the political oversight proved that he was lying on his resume, which is related to the political oversight in telling the mayor: “you can’t do anything you want here,” and on the other hand, there is citizen oversight, where a lot of people investigate, for instance SINPRO, the union; who knows better the inside of EPM than the union? So I think that bad actions of Daniel Quintero in general and in EPM have awakened the citizens.

Finally, I must say it as well, EPM has a story, institutional knowledge and public servants that help guarantee the respect and continuity of the good practices. I hope, and I’m convinced that EPM will survive this bad moment, but in order to achieve that it’s the work of all of us to tell the mayor to be careful, telling the mayor he can’t do what he wants.

Finance Colombia: When we scheduled this interview, it was all before the recent events of the last month, nationally. And we have a situation, there is a polarization in politics today. I, as a North American have seen this happening as well, but also in the Americas. In Peru we have from the right wing against another from the left wing, and so on. Now that the people rejected this tax reform, obviously the country is facing a deficit, a void, a problem that is putting Colombia’s international credit in danger, and there are many Colombians out in the streets that don’t understand what that implicates for the Peso. To look beyond financing, it will also be more expensive to buy goods.

So my question is, what can the government do in Medellin, in the international field as well, we have elections next year—I’ve seen as you said on Twitter, a change in the attitude, obviously a change in the police as well, but what can the national government? Because Colombia has to prepare a tax package one way or another, so what can be done to clarify the situation and advance forward?

Daniel: The first thing we have to know is that these protests are not only because of the tax reform, let’s remember that you were here in 2019 when there were protests already, in the beginning of 2020 as well, and the only thing that tamped it down was Coronavirus. So I think the tax reform was just a lighting up of what was coming already, so the people are in the streets because of a lot of things, right? The people feel bad about the government, they feel the inequity in Colombia is huge, nowadays people are more educated, cooperative, demanding. Look, an easy example: I was born in 1979 in the very dangerous Medellin. When I was young, before moving to France, I never went to a protest, we were afraid of being murdered. This generation is not afraid anymore. So we are using our citizenship that wasn’t being utilized before. I just want you to understand that the protests are not only because of the tax reform, and what has been happening has only increased the rage!

“When I was young, before moving to France, I never went to a protest, we were afraid of being murdered. This generation is not afraid anymore.”

I think there are 70 missing people, 20 or 30 deaths, that isn’t because of the tax reform, it’s because of the bad management. What can the government do? I understand the need for the reform. This would be the third reform in three years, so it’s like: We can understand the need of the reform, but when they tell you that you have to give more, but on the other hand you see the money flying away, you don’t feel it’s right. Besides, they announced a billion-dollar purchase of war elements, 10-12 million in aircraft, people are starving, the health crisis, there are not enough vaccines, businesses are closing, people are losing their jobs, buying 10 billion pesos in war material is necessary?

People won’t understand how it is more important to buy a warplane than propose aid to the people. The government has that problem, and besides they don’t have full legitimacy and just one year left. I think they have to make a call to a reform, maybe not so ambitious, but that generates consensus, followed by austerity measures, not towards social investment, but the functioning expense, because people don’t understand either that a senator makes 30 million pesos a month. There is a lot of waste, so the solution is not only technical or economical, is a technical and political solution, it has to count on the support of political forces so the people can be calmed, knowing it’s necessary and it’s fair.

Finance Colombia: And they haven’t done that until now. When they try to sell it they screw up talking about $1,800 peso (40 cents US) eggs.

Daniel: It’s been dumb. The egg thing has become the symbol of the people’s disagreement. If you don’t know how much an egg is worth!

Finance Colombia: How can you put that on people?

Daniel: The people are right by being upset, and the worst is that they withdrew the reform, and the president showed up yesterday calling his allied forces to discuss this. Same with the same. We’re walking towards the same mistake, and the people will remain upset.

Finance Colombia: The opposite, I think we have the same problem in the US. In the las 2-3 administrations, it was like “that was Trump’s fault, that was Obama’s fault” but when you go back to Reagan, who was a Republican, and Tip O’Neill who was In the Congress, they were opponents but were able to negotiate everything, and close deals without being friends. So, what they have to do is negotiate with their opponents.

Daniel: That’s politics, talk to the people who think differently.

Finance Colombia: That leads me to my other question, here, you are very well known, but for our readers; we have 30% in Colombia, but mostly abroad, they are investors in  Colombian companies, in EPM, sovereign bonds, they look for opportunities here in Medellin. Who is Daniel Carvalho? Tell us so the readers and the people abroad understand your position on city council and your story, and political affiliations: He is with Quintero, or with Petro, or with Uribe? So the people understand your point of view and who you are.

Daniel: I’m Daniel Carvalho Mejia, I’m 42 years old, born and raised in Medellin, I got a civil engineering degree. After that I moved to Paris, where I studied a specialization in urbanism and sustainable development, and after 8 years there, I came back to Medellin, precisely because urbanism was emerging here.

I arrived in…I was never interested in politics, but when I returned to Colombia, I understood that Medellin had transformed thanks to the political will. So I got the importance of politics, I got involved into a bunch of causes, since today politics is more about causes than ideologies; I got involved into environmental causes, sports and culture as well. So that, plus my academic profile gave me recognition in the city, which made me realize that those causes I stood up for had no representation in the local political field, no one was speaking about it, so I said, why not?

Vale la pena preguntarle al Alcalde cuánto están poniendo sus amigos para la cultura.
¿Cuánto puso Luis Pérez y Cesar Gaviria?
Cuánta de la plata que está cogiendo la Reforestadora el Líbano se está devolviendo para la cultura de la ciudad.

— Daniel Carvalho (@davalho) June 22, 2021

Why not me? So, since I never had had any party affiliation, I got into an independent movement, I ran the cheapest campaign, collected signatures. I spent 10 million pesos ($3500 USD), a social media-based campaign. I won 6 years ago, and I won a second time, what I’ve done is to take the technical knowledge as a street activist to the Council, let’s say I have an interesting profile because it combines—I mean, it’s weird that people have this hair, yes, but I also have a diploma from the University of Paris. It’s a street and academic mix in me, and if I had to define myself ideologically, I’d say I’m a centrist person. I don’t fall into extreme positions because I think they cause huge damage, they produce violence, so I consider myself a centrist ideologically. That’s my quick resume.

Finance Colombia: Excellent, so, you won a seat for specific district?

Daniel: In Medellin we work for the whole city, there are no districts.

Finance Colombia: Alright.

Daniel: What do I do? I focus on specific issues, those like sustainability, cultural creativity, diversity, gender equity…and football issues.

Finance Colombia: (the two football clubs based in Medellín) Nacionál or Medellin?

Daniel: Medellin!

Finance Colombia: We won’t tell my (Nacionál super-fan) mother-in-law then! Thanks a lot for your time, I hope this isn’t your last time in Finance Colombia.

Photos courtesy Daniel Carvalho

According to Human Rights Watch, the current administration of President Ivan Duque is intentionally neglecting to protect human rights defenders, and the former General’s words came after Judge Perez forwarded a tweet regarding Colombia’s Peace Tribunal upping the count of “disappeared” victims of Colombia’s armed conflict from 2,000 to over 6,000 cases.

“No more defense of the murderous rats that today pose as human rights defenders, no more defense of evil and criminality with ornate writings”—General (ret) Luis Humberto Poveda.

Many supporters of current President Ivan Duque, and his political patron Alvaro Uribe choose to ignore the security crisis facing human rights activists in the country or attempt to characterize the activists as sympathizers with current or former communist insurgent groups, while in most cases, the opposite is true; the human rights defenders are resisting organized crime, whether from left-wing insurgents, right-wing paramilitary groups, or apolitical mafia groups.

President Duque has gone so far as to deny recent massacres in Colombia, euphemizing them with the novel term “Collective Homicides.”

En respuesta a este mensaje quien fuera Director de Protección de @PoliciaColombia hasta Mayo de 2020 el General Luis Humberto Poveda en mensaje de WhatsApp afirma que los defensores de derechos humanos somos “ratas asesinas” y “la voz de los criminales” ¿ Quién los forma ? https://t.co/zjHVorJEDM pic.twitter.com/hudQhjlvYZ

— Luis Guillermo Pérez (@LuisGPerezCasas) March 6, 2021

Here in Colombia, Cartagena has had a notoriously corrupt city administration. Newly elected Mayor William Dau was voted in on an anti-corruption platform and has quickly made some very powerful enemies taking on criminal structures. Bogotá’s political/civic culture can be described as “battle royale” where it is everyone against everyone: Private sector vs. public sector, north side vs. south side; each new administration seems to try to undo and reverse everything that was done before. Many remember former mayor and now Senator Gustavo Petro’s garbage fiasco where trash piled up on the streets of Bogotá in 2012 as Petro unilaterally canceled contracts with sanitation contractors—without a viable plan to replace them. Corrupt contractors are still in jail over the “Carrusel de Contratos” scandal where politicians and corporate thieves conspired to rob millions during the construction of Avenida El Dorado, the main thoroughfare leading to Bogotá’s international airport. Petro kept the fares on Bogotá’s Transmilenio bus system artificially low to buy popularity, creating an operating deficit and financial crisis that the following administration would have to fix, and automatically vilifying whoever would follow and have to make unpopular, drastic corrections.

On multiple occasions, Finance Colombia has reached out to Mayor Daniel Quintero for comment (on various issues), who through his press secretary has refused comment or reply.

On the other hand, Medellín’s professionally managed metro runs on-time, is clean and safe, and used by riders of almost every socioeconomic stratum. Medellín has continued to win international accolades throughout the years, hosting the World Economic Forum’s Latin America event in 2016, several UN events, and many delegations from foreign municipal governments to learn best practices. Many visit the city’s Ruta-N business and entrepreneurship incubator that can be credited, along with ACI (Agencia de Cooperación Internacionál), the city’s investment promotion agency with bringing countless jobs and investment to the Aburrá Valley; home to Medellin and its immediate suburbs like Envigado, Sabaneta, Itaguí, and Bello.

The city is home to several multinationals: Bancolombia, Colombia’s largest Bank; Grupo Sura, an insurance, investment & health care giant; Cementos Argos, which as a cement producer is the 4^th largest in the United States and exports to 27 countries; Nutresa, which is like a Latin American Unilever or Nestle, and newer companies like Viva Air. More precisely in the Medellín Suburb of Rionegro, the low-cost airline operates routes throughout Colombia & Peru, to and from the US, and is currently in expansion mode despite the COVID-19 Pandemic.

EPM Headquarters Building in Medellín’s Plaza Mayor

Another multinational with a very unusual business model is EPM, Empresas Públicas de Medellín. The public utility is responsible for sanitation, sewers, water, electricity, and natural gas in Medellín and much of the surrounding suburbs and rural areas. In a joint venture with global telecommunications provider Millicom called Tigo Une, it provides faster residential internet service than is available in many US cities. Earlier this year, they purchased the formerly insolvent utility networks of much of Colombia’s Caribbean coastal region. EPM already owns utility operations outside of Colombia, with assets of the multibillion-dollar company stretching from Chile to Mexico. EPM, though it does issue debt on international markets is not a publicly traded company. Neither is it a municipal utility. It is a separate company with professional management and (up until now) a board of directors to provide corporate governance, but with the city of Medellín as the sole shareholder. In the form of dividends, EPM provides almost 30% of Medellín’s municipal budget, but the key to this arrangement has been that it operates as a separate entity, expressly not part of the municipal administration, but of course with the city’s input. The mayor by statute is the chairman of EPM’s board of directors and has prerogative to appoint the CEO. As shareholder, the city also appoints board members.

A breath of fresh air?

Many in Medellín were pleased to see Daniel Quintero elected last year as a “breath of fresh air” and change from the traditional power families that have controlled politics, especially as he defeated Alfredo Ramos, son of a former governor and member of Centro Democrático, the party of “Uribistas,” personal acolytes of former President (now under house arrest for witness-tampering charges) Alvaro Uribe. With Medellín & surrounding Antioquia Uribe’s home turf (he was both mayor of Medellín & governor of Antioquia before becoming president of Colombia), it was something of a surprise that this local who was raised by a single mother who died when he was just 14 in a mostly poor neighborhood (Tricentenario) won the election. As a youth, Quintero worked as a street vendor struggling to put himself through college. No one knew quite what to make of him.

Quintero had politicked at different times as a member of Colombia’s Liberal Party, Conservative Party, and Green Party before establishing the “Tomato Party” as a publicity stunt to get himself noticed (see the headline photo). He gained attention by throwing tomatoes at pictures of politicians and people he didn’t like, such as Alvaro Uribe and then President Juan Manuel Santos, though he decided to support Santos’ re-election in 2014. He was then rewarded with the political appointment of running InnPulsa, Colombia’s national entrepreneurship promotion agency, then becoming vice-minister for ICT (Information & Communication Technologies) under Santos. In the last presidential election, Quintero initially supported mainstream liberal candidate & peace negotiator Humberto De La Calle, before switching his support to controversial former mayor of Bogotá Gustavo Petro’s (mentioned above) candidacy.

So no one knew what to expect, though it is clear they wanted more of the vice-minister of technology or InnPulsa director than the tomato throwing stunt man who once handed former EPM general manager Jorge Londoño a chunk of cheese (nonverbally calling him a rat).

A whiff of Limburger—stinky cheese.

Finance Colombia being primarily a business and finance publication rather than a political journal, heard some low intensity criticism of appointments that Quintero had been making in the city administration and the way he was making them, but did not actively pursue the stories at the time. Quintero made some other moves that seemed politically silly, such as writing the Cuban government to ask for doctors to help with the COVID-19 pandemic. Regardless of the merits of Cuban medical missions (which are very dubious), it is inconceivable that the current national government would permit such activity, and the action could only embarrass the mayor, which it did. Finance Colombia chalked it up to benign political inexperience.

The mayor also fought back a scandal where he was accused on social media of inappropriate sexual conduct before he was mayor, but even more ominous was his reaction to the press, which brought condemnation from Colombia’s Foundation for Press Liberty, FLIP:

“FLIP was able to document that Quintero personally pressured media executives and pointed out journalists as being opponents of his administration as a way to avoid questions about matters on which he must be held accountable…In events related to this situation, administration officials tried to force national and local media to improve the image of the mayor in exchange for advertising. Telemedellín (City government’s official TV channel) officials asked W Radio to rectify a truthful publication and also that the media agree to subscribe and publish a joint statement with Telemedellín to disseminate as true a situation that did not correspond to reality,” said the journalism rights defense group.

In other words, “I will buy advertising with your paper if you help me bury this scandal.” FLIP also denounced the mayor for pressuring newspaper El Espectador to block coverage of the scandal. According to FLIP, and El Espectador’s own account of the misdeeds, the publisher, Fidel Cano, responded by sending the questions to the mayor that his reporters had been trying to ask. “The mayor of Medellín assured the director of the newspaper that he would take legal action if the publication affected his reputation” (he never did).

All this so far and the mayor has served only his first 8 months of a 4-year term.

The mayor’s official press conference, canceled at the last minute, crowing “Why Medellin is the world’s standard in the assertive management of Covid-19” as cases in the city began to skyrocket

On June 27, the Quintero administration scheduled a press conference titled “Why Medellín has one of the lowest contagion and mortality rates in Latin America?” scheduled for July 2^nd, and led by Daniel Quintero himself, backed by Andree Uribe, Medellin’s Secretary of Health, Alejandro Arias, Medellín’s Secretary of Economic Development, and Eleonora Betancur, the director of ACI Medellin. The day before the press conference, it was abruptly canceled. It seemed the mayor wanted to take credit for good news but avoid bad news. The headlines that day in El Colombiano, Medellín’s largest daily? “100,000 cases of Coronavirus in Colombia, Where are we going?” and with 40% of ICU units full, “Doctors of Antioqua appeal for total & obligatory quarantine.”  The last weekend of August the ICUs are now 70.79% full. The day the press conference was to be held, a headline in El Colombiano announced a coronavirus outbreak with 36 infected in the La Paz prison in Medellín’s southern suburb of Itaguí.

The cases—and deaths were just beginning to skyrocket and two months later Colombia has one of the world’s worst mortality rates on a trailing 7 day average. According to the Colombian government, Antioquia department (Medellín is the only large city in Antioquia) alone has had 77,709 cases so far. Colombia now has over 18,000 deaths from COVID-19, most within the past two months. 1,603 in Medellín & surrounding Antioquia.

Last month, EPM general manager Álvaro Guillermo Rendón announced a memorandum of understanding with InnPulsa, the same national government agency formerly run by Quintero himself, that would, if more than just talk, “convert EPM into a laboratory of smart cities, the 4^th industrial revolution, and the orange economy.” All well and good (maybe, but that doesn’t sound like the function of a utility), but what the public did not know was that this fundamental change in corporate strategy and negotiations with the national government were worked out without the knowledge, discussion or approval of the company’s board of directors. EPM was being treated not as a separate entity but part of the municipal administration.

OFFICIAL STATISTICS: As of August 28th, Antioquia had 77,709 total COVID-19 cases, 1.603 deaths and hospital intensive care wards were over 70% of capacity over 80% of Antioquia’s cases are from metro Medellín.

The $2.7 billion dollar WTF

On August 10, EPM sent out a press release (and the mayor tweeted) that EPM would be initiating legal proceedings in the amount of  approximately $2,7 billion US dollars against the consortiums responsible for construction of EPM’s troubled Hidroituango dam that suffered catastrophic setbacks due to unexpected flooding in 2018 and design flaws that were thus revealed. Whether such legal action is a good idea is debatable: On one hand there certainly were defects that have cost the company millions and delayed the project by over a year. On the other hand, litigation could potentially bring the project to a halt, as EPM is still depending upon the parties it is suing to complete the project before certain deadlines, or it faces economic penalties in power generation commitments of over $150 million USD. It is also far from certain that EPM would prevail in its legal crusade against all the parties named, some of which have nothing to do with the construction defects that led to a tunnel blockage during construction.

The shocking thing is that Mayor Quintero along with Rendon and Alexander Sánchez Pérez, EPM’s vice president for legal affairs, declared this multibillion dollar action without discussion, input or even knowledge of the company’s board of directors!

The next day, the entire board of directors, except for Quintero himself, resigned.

Soon Quintero tried to justify his actions saying “there was no time” and he had to act, but he had already been mayor for 8 months and ran on a campaign of rectifying the Hidroituango situation (remember his cheese stunt with the former general manager?) and so was aware of the situation. If not, he had 8 months to be brought up to speed. At any rate, without board ratification, such actions have dubious legal force, and as bad or worse, prove a lack of corporate governance at EPM and direct political control. CEO Rendón clearly answers not to the board of directors but to a politician.

One day after the board of directors of EPM resigned, the entire board of directors of Medellín’s storied Ruta-N also resigned, along with its executive director, Juan Andrés Vásquez. Ruta N was already under its third executive director in Quintero’s 8 month old administration. Vásquez learned that Quintero was replacing him after Quintero announced Trump-style, in the media, saying he “had drifted away from the administration.” Like EPM, Ruta-N is not a city agency directly under the administration, but a public-private partnership with professionalized management and governance, and internal merit-based personnel policies.  Sources inside Ruta-N say that Quintero had been trying to circumvent the qualifications-based hiring of the business incubator to install friends and supporters into sinecures. People inside both organizations indicate that morale is at bottom.

Beverage giant Postobón rescinded its financial support of a health initiative spearheaded by Ruta-N saying it no longer had confidence in the entity’s governance. Postobón had already spent $4 billion pesos on the initiative to build respirators for coronavirus patients but said it would continue to donate, just elsewhere after the board resignation.

That same week, in reaction to what it called “a deterioration of corporate governance controls at the company,” global ratings firm Fitch downgraded EPM’s credit as a bond issuer to one notch above junk bond status. In a statement, the foreign, independent agency stated:

“Fitch believes recent actions taken by the company are contrary to the Governability Agreement, signed on April 23, 2007, between the City of Medellin and EPM’s management, in which the municipality agreed to respect the autonomy of EPM as an industrial and commercial enterprise of the state and to act exclusively through the board of directors.”

Flailing about

The mayor scrambled to assemble a new board of directors for EPM, which as an issuer of debt in the international capital markets, must answer to institutional bondholders. Over the ensuing days, Quintero variously announced that Claro Colombia CEO Juan Carlos Archila would join EPM’s board (creating a conflict since Claro competes with Tigo Une), Grupo Santo Domingo’s Alberto Preciado,  Luis Fernando Rico, formerly of Isagen, another Colombian utility, and Sandra Suarez, the former general manager of newsweekly Semana all rejected Quintero’s oddly public nominations. Did he not confirm with them beforehand if they would accept the appointments, or did they publicly reject the nominations as a rebuke to the mayor?

Meanwhile, EPM’s board representative to Tigo Une, Federico Arango Toro also resigned in a public letter saying he wanted no part of Quintero’s administration.

Banks and insurers are already turning their back on EPM, citing a lack of control at the organization. EPM had to admit that certain loans and lines of credit had been shut off after the board resignations. An internal document seen by Finance Colombia stated that the firm may have difficulty finding or renewing certain insurance coverages.

In the midst of all this, Colombia’s human rights tribunal set up as part of the 2016 Peace Accords, the JEP (Special Jurisdiction for Peace) has subpoenaed general manager Rendón under threat of arrest for ignoring during his 8 months as the utility’s legal representative, a year old subpoena for documents regarding possible obstruction of the search for the remains of victims of violence during the construction of Hidroituango, before Rendón’s appointment.

Medellín’s city council is on scheduled recess, but they have publicly asked the mayor to reconvene a session to discuss the governance crisis. Under law, (article 23, law 136 of 1994), they can only formally convene during a recess at the mayor’s request.

Labor unions & business community united

EPM’s largest labor union, SINPRO has called for a protest on Wednesday, September 2nd, for everyone in the city to turn out their lights for 30 minutes at 8pm, and for workers and the public to gather outside of the company’s headquarters in Plaza Mayor at that time for a rally in defense of EPM.

“When Medellín turns off, we hope that our leaders will understand that this is everyone’s problem, and that a city shut down doesn’t serve anyone. If EPM is in crisis, it doesn’t just shut down the city, it shuts down the country,” said union President Olga Lucia Arango.

The union is also demanding explanation of EPM general manager Rendon’s alleged private gym and luxury remodel during a time the company is under self-imposed austerity orders.

Civic leaders, executives, and nonprofits from across the region have begun to organize in reaction to the mayor, forming on August 25, a veeduría, or citizen’s oversight group ”made up of people with no particular economic interests in either EPM or the mayoralty that will work to take care of the heritage of the city and the interests of all Medellinenses.”

The initiative, called “Todos por Medellín” (Everyone for Medellín) is backed by over 40 groups, including the Chamber of Commerce of Medellin (in Colombia, chambers of commerce perform a quasigovernmental function, for example, as the registry of corporate and nonprofit organizations, and their articles of incorporation), the Intergremial committee (a grémio is a trade group or business association), and Proantioquia, the region’s primary civic benevolent foundation.

The mayor gets combative

Last Thursday, Mayor Quintero showed no contrition, but tried to dismiss the concerns as political machinations. “The oversight is fine, but we need oversight agencies to see everything. They didn’t see a lot of things, for example, $17 trillion of debt in the last 15 years. How come they didn’t see Orbitel, UNE, Antofagasta, Porce III and Hidroituango? A mayor appears to them who responds, has character, then a lot of politicians come out to do oversight. The veeduría is welcome but we are going to review everything. That the mayor is the one who manages the networks and they govern? No!” he said in a press conference.

Taking a page from the playbook of his preferred presidential candidate and apparent ally Gustavo Petro, who had a disastrous term as mayor of Bogotá and was temporarily removed from office by the national government, Quintero frames it all as a nefarious plot against him (does he think international ratings firm Fitch is in on the plot?)

“There are some groups full of politicians who want to carry out processes to revoke the mayor, that have been moving for a long time, we are ready, we have no problems in showing results and what we have done. They are worried because a long time ago they did not meet an independent mayor, a mayor who is not beholden to politicians or businessmen, but to the people,” said Quintero.

Navegamos entre fuerzas oscuras que se resisten al cambio. Con fe y sin miedo seguiremos adelante con transparencia, honestidad y contra la corrupción y la politiquería.

— Daniel Quintero Calle (@QuinteroCalle) August 26, 2020

CAPED CRUSADER? Quintero seems to fancy himself a hero navigating “between dark forces that resist change. With faith and without fear we will continue forward with transparency, honesty, and against the corruption and politicking” he tweeted last week after learning of the group Todos por Medellín.

Analysis

Quintero’s plan seems to be to blame his woes not on his own actions, but on former President Alvaro Uribe. Uribe’s reputation has steadily declined since his presidency, and where he was once seen as the man who rescued Colombia from communist rebels and drug cartels, his legacy has steadily soured as an avalanche of allegations and evidence piles up that tie him directly to paramilitary death squads during his time as governor, and indirectly to narcotraffickers and civilian massacres committed during his presidency. As if that were not enough, he is currently under arrest and confined to his northern Colombia ranch on charges of witness tampering, attempting to frame leftist senator Ivan Cépeda, a nemesis of Uribe in the Colombian senate.

Quintero wants to blame Uribe & his Centro Democrático for his woes, but since Uribe founded the party in 2013 it has never won a mayoral election in Medellín. The last Uribe supporter to hold the office was Luis Pérez from 2001-2004. Perez later abandoned Uribe for President Santos, working in 2015 as his regional campaign coordinator to defeat Uribe’s chosen presidential candidate Ivan Zuluaga.

Blaming the Uribe bogeyman may be a good tactic after the damage that has been done, but those aghast at recent developments extend far outside Uribe’s sphere of influence. Uribe did tweet support for the citizens movement, and Petro in support of Quintero, but opponents of Uribismo are also speaking out against Quintero. Former mayor of Medellín (2004-2008) and governor of Antioquia Sergio Fajardo immediately wrote a letter of concern, on August 12, admonishing Quintero’s actions.

Medellín’s previous mayor, Federico Gutierrez, nicknamed Fico, surprisingly upset Uribe’s candidate Juan Carlos Vélez to win the mayoralty in 2016. His letter, also dated August 12 is even more blunt. “EPM & Medellin are in danger.”

Letter from former Medellín Mayor Federico Gutierrez: “EPM & Medellín Are In Danger”

“The discourse of Quintero is based on lies. He talks of social struggle, of a class struggle, the same ideas of Gustavo Petro, who furthermore was the first to celebrate and support the mayor’s decision to deinstitutionalize EPM, which obliged the board’s renunciation. But look at the contradictions: What kind of social struggle destroys the motors of progress? EPM is that very thing, an incalculable help for the most vulnerable communities, a tool to breach social divides.” – excerpt from Federico Gutierrez’s letter.

Paisas, as people from Medellín & Antioquia call themselves tend center to right on the political spectrum and have less appetite for the far-left adventurism much more popular in Bogotá. Marxist talk like “class struggle” doesn’t go over so well here. Before this editor started Finance Colombia or even moved to Colombia, representatives from the city (going back to before 2013) would call and extend invitations: “Come to Medellín, let us show you what we are doing” with genuine pride. At the time, this editor was an analyst covering the Latin American services sector for a Connecticut-based research firm. “Look, we want to show you the good things we are doing!” Apparently with no other motivation beyond civic pride and attracting investment and positive attention. “We are building the Metrocable system” a network of cable cars extending far up into low income hillside neighborhoods on the valley walls. “We are building it so everyone can participate in our economic growth,” they said, beaming with pride. Not politicians or political appointees, but entry-to mid-level civil servants.

After moving to Colombia, first to Bogotá and launching Finance Colombia, the outreach didn’t stop. Medellín kept calling. “Come see what we are doing!” In 2015, Finance Colombia published “Social Inclusion: The Secret Sauce To Medellín’s Incredible Renaissance.”

They were going about it pragmatically, person to person, neighborhood to neighborhood, but without any ideological polemics or Marxist-Leninist babbling. There was no talk of class struggle, no attack on the city’s beloved institutions, whether well-established like EPM or new innovations like Ruta-N. Generally, each succeeding administration handed the keys over to the next politely, and with decorum.

One thing that unites Paisas, especially those in Medellín is the progress the city has made, going in less than 3 decades from one of the most dangerous on earth to an international showcase. Startups and international businesses have entered Colombia by first setting up operations in Ruta-N then moving out into larger spaces as they gain a foothold in the country. Get in a taxi and instead of trying to rip you off like in some parts of the country, if the driver realizes you are a foreigner, they will inevitably ask “What do you think of Medellín?” and beam with pride like you just presented them their firstborn child if you have something nice to say.

When protesters rioted in Bogotá last November, partially destroying their own transportation infrastructure and battling with police, Paisas marched peacefully. A few vandals were quickly confronted by peaceful protesters, and students came to undo the defacing they caused.

Medellín has built a strong credit rating in international markets for municipal debt, and EPM has enjoyed an investment grade credit and risk profile. There has been a level of peace between labor and employer, business and government rarely seen elsewhere in Latin America. Is it run by saints? Of course not. But that is precisely why the checks and balances of good governance are important, and Quintero seems to either not understand this, or have other priorities. EPM provides the city with more than electricity, water, and natural gas services. The international corporation provides almost 30% of the city’s revenue by way of operating profits. The fortunes of every residence and business in the Aburrá Valley (where Medellín is the largest city) are tied to EPM. The vitality of the city’s foreign investment attraction is tied to Ruta-N. Investors, both institutional and global-minded individuals are attracted by collaboration and progress, and repelled by scandal, conflict and controversy.

Being a crusader is easy. Throwing tomatoes at pictures is easy. A child can do it. Governing is complex and requires accountability. Medellín Mayor Daniel Quintero is sawing at the very foundations of Medellín’s success, by attacking its governance and institutionalism. It may very well be a good idea to take legal action against the consortiums that are (still) building the Hidroituango dam. But to launch a multibillion-dollar lawsuit behind the back of your own board of directors? No deliberation by the body designed to deliberate such fundamental issues? Are we seeing dictatorial tendencies, the likes of which one would expect from a Banana-Republic Caudillo?

When criticized, the new mayor goes into attack mode. Seeing everyone from the labor unions to civic leaders as a cabal “out to get him.” This editor remembers seeing such behavior at the beginnings of Chavismo in Venezuela. It is also Donald Trump’s style. Attack someone who is offering constructive criticism and they often will instinctively get sidetracked trying to defend the legitimacy of their criticism, allowing attention to be shifted from the original critique, no matter how legitimate.

“Ah, he’s going after the elites,” one more populist journalist friend said to this editor, when the conflict between former directors and the mayor became public. “Who the hell do you want running a multibillion-dollar international energy company?” this editor replied. “They had damn sure better be elite and know what they are doing!”

The former EPM board had directors like Javier Gutiérrez, who was former president of oil giant Ecopetrol, and general manager of energy company ISA; Manuel Mejia, former general manager of Colombiana de Comercio (distributor or manufacturer of brands in Colombia such as AKT motorcycles, Foton trucks, Castrol lubricants, Royal Enfield motorcycles, and Kalley appliances); Andrés Correa, formerly part of the insurance multinational SURA; and one of EPM’s own retired executives: Jesús Aristizábal Guevara, a civil engineer.

The new EPM board of directors is notable for having a preschool teacher, community activists, former politicians, lawyers, but no large company leadership experience. The mayor did nominate a few, but they all refused. Now, the mayor’s new board will have to navigate the $2 billion USD litigation that he unilaterally launched, and the war he has started with what seems the entire political, business, civic, and even labor community of Medellín. What do they know about international capital markets and the mechanics of bond pricing and currency risk? This editor wishes them luck. We want to see EPM succeed and Medellín do well. The only way this will happen is if they make drastic course corrections. It is not too late for the mayor.

On the other hand, we are only 8 months into a four-year mayoral term. This editor has never seen so many disparate people and institutions unite since the 9/11 attacks in the US. There, the population at least temporarily united behind then President Bush. In August, 2020, sectors from labor to enterprise are all uniting against Quintero. He is at a juncture in his mayoralty. He can attempt to reconcile, or he can take Gustavo Petro’s style book and fancy himself the martyr and class-struggler that everyone is out to get.

Mayor Quintero talks about making Medellín what he calls “software valley,” but foreign investors will not locate to a destination mired in conflict that can’t keep its lights on. He was elected without a power base, to some degree a rejection of the Uribista alternative. He clearly views the civic dissatisfactions with his moves as an Uribista plot. Surely they are included in his menagerie of new opponents, but they weren’t the ones who led to a loss of $30 million USD in EPM’s outstanding bond value in the space of 3 days. There were no Uribistas behind Wall Street firm Fitch deciding to lower the utility’s credit ratings. The only “forces of darkness” Fitch cited was Quintero’s “deterioration of corporate governance controls at the company.”

In this editorial, Finance Colombia calls on the mayor to rectify his course and work in a more collaborative, professional and transparent spirit with all the city’s stakeholders, or alternatively on Paisas to democratically and civilly protect the trajectory of amazing progress the city has made in the last two decades. Choose quiet progress over loud and bombastic stagnation. Cooperation over tomato-throwing confrontation.

Medellín Mayor Daniel Quintero (Photo courtesy Alcaldia de Medellín)

S&P Dow Jones also added Argonaut Gold Inc., Seabridge Gold Inc., and Teranga Gold Corp to its global gold index. And in addition to Continental Gold, the mining index added Argonaut Gold Inc., Dundee Precious Metals Inc., NexGen Energy Ltd., Seabridge Gold Inc., Silvercorp Metals Inc., Stornoway Diamond Corporation, and Teranga Gold Corp.

“The company continues to make positive strides in advancing its business initiatives, and its inclusion in both indices is a reflection of the hard work and dedication of our employees,” said Ari Sussman, CEO of Continental Gold.

The company’s stock has seen 170% returns so far this year, according to Bloomberg, opening at $1.57 CAD in January on the Toronto Stock Exchange and beginning today at $4.35 CAD. Its market cap stands at $610 million CAD.

Continental Gold also recently hosted an event in Buriticá, the municipality nearest to its largest mine in Colombia. The outing focused on its corporate social responsibility programs, including education, environmental, and infrastructure initiatives. Antioquia Governor Luis Perez and Buriticá Mayor Humberto Castaño both spoke during the presentation, as did Wilson Pardo, head of the department’s police force.

The Buriticá holding includes project area with 24 concessions that covering 29,812 hectares, with another 40 concession applications totaling 31,937 hectares. The company also has another mining project in Colombia nearby in Berlin.

It has high hopes for Buriticá. “On February 24, 2016, the company released the results of an independent feasibility study that indicates the Buriticá project will be a lowest quartile cost producer and an economically robust mine with modest initial capital expenditure,” says Continental Gold on its website. “Once in operation, the Buriticá project would approximately double the legal production of gold in the country and employ approximately 900 workers.”