Guatemalan President Was 'Number One' in Graft Scheme: Officials

Guatemalan President Was 'Number One' in Graft Scheme: Officials

File Photo: People demonstrate in demand of the resignation of Guatemalan President Otto Perez in Guatemala City on May 16, 2015. (AFP)

Guatemala City: Prosecutors accused Guatemalan President Otto Perez on Friday of being one of the ringleaders of a corruption scandal shaking the country, as police arrested his former vice president.

With just over two weeks to go to general elections, prosecutors and officials from a UN investigative commission said they had uncovered extensive evidence implicating Perez and ex-vice president Roxana Baldetti in a massive, highly organized scheme to reduce importers' customs duties in exchange for bribes.

The multimillion-dollar fraud case has upended Guatemalan politics since it erupted in April, felling numerous high-ranking officials, forcing Baldetti's resignation and now reaching the country's highest office.

"We have found the very regrettable participation of the president of the republic and Mrs Roxana Baldetti at every level of the organization" behind the corruption, said Ivan Velasquez of the UN commission.

The allegations come as Guatemala prepares for general elections on September 6.

Perez, a conservative whose term ends in January, cannot run for re-election.

The investigation is based on some 86,000 wire-tapped phone calls that uncovered a scheme dubbed "La Linea" (the line), named for the hotline used by businesses to contact the corrupt network of customs officers.

Velasquez said the taped calls included references to "Number One" and "Number Two," which investigators had determined to be Perez and Baldetti.

"We have evidence that goes beyond the phone calls," he said at a joint press conference with local prosecutors.

Fallen VP

Hours earlier, police arrested Baldetti, 53, at a private hospital where she had been undergoing treatment for gastrointestinal and heart problems.

Her arrest came one day after investigators searched her home.

The judge in the case had already ordered her bank accounts frozen and slapped injunctions on 11 properties belonging to her and her husband.

Baldetti resigned as vice president on May 8 after one of her top aides, Juan Carlos Monzon, was accused of running the bribery scheme.

Monzon is still at large.

Perez, a 64-year-old retired general, has so far vowed to serve out his term despite the spiralling scandal.

A congressional investigative committee called for his presidential immunity to be lifted, but lawmakers rejected the measure earlier this month.

The leading candidate to succeed him is Manuel Baldizon of the right-wing Democratic Liberty party.

But his running mate, Edgar Barquin, has also been caught up in a corruption scandal over money-laundering allegations.

Fed up with corruption

Perez faces an increasingly vocal protest movement calling for him to resign.

Protesters gathered outside the hospital where Baldetti was arrested to cheer the news, and passing drivers honked their horns in celebration.

The UN commission - officially called the International Commission Against Impunity in Guatemala (CICIG)-- was set up to fight high-level graft and launched its investigation in May last year.

The probe has already netted the head of Guatemala's tax administration, his predecessor and several dozen other agency officials.

The heads of the central bank and social security administration were also arrested in May over a separate corruption case also uncovered by the CICIG.

Central bank chief Julio Suarez and Juan de Dios Rodriguez, the president of the Guatemalan Social Security Institute, are accused of fraud in a $14.5 million contract for dialysis services for patients covered by IGSS health insurance.

Rodriguez had previously been the president's personal secretary.

Violence and poverty still plague Guatemala, the scene of a long civil war from 1960 to 1996.

It is not the only Central American country hit by corruption: recent scandals have also engulfed Honduran President Juan Orlando Hernandez, El Salvador's former president Francisco Flores and Panama's former president Ricardo Martinelli.