Not happy.

Photographer: Orlando Sierra/AFP/Getty Images

The Scandal That May Save Guatemala

Mac Margolis writes about Latin America for Bloomberg View. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”
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For the last 20 Saturdays, Guatemalans have streaked their faces in blue and white, grabbed their vuvuzelas and flooded the central plaza of Guatemala City. The protesters have demanded the immediate resignation of President Otto Perez Molina, who has been named by prosecutors in a multimillion-dollar tax fraud scam that allegedly lined the pockets of government higher-ups while helping favored businesses evade a fortune in import duties.

From a distance, the revolt, which put 70,000 demonstrators in the capital city's central plaza on Aug. 27, might seem tempestuous. National elections are slated for Sept. 6, and since sitting presidents can't seek consecutive terms -- a constitutional speed bump to tyrants in the rough -- Perez Molina will soon be gone, anyway.

But this nation of 14.6 million people, with Central America's richest economy, seems indisposed to wait out the political calendar, much less look the other way at thieves in palaces. And the civic choler is good news in a region where corruption scandals on top of a sharp economic downturn are putting parlous democracies to the test.

At the height of the commodities bonanza, Latin Americans seemed willing to shrug at officials with sticky hands. Now tolerance is thinning as regional gross domestic product is expected to expand by just 0.4 percent this year, the worst performance since 2009.

Brazilian President Dilma Rousseff is mired in a political payola scheme that has pillaged the state oil company, sent a rogues gallery of moguls and politicians to prison and put her own job on the line. Street protests and a widening probe into crooked campaign financing have Chile's Michelle Bachelet in a corner, and if not for indulgent investigators, Mexico's Enrique Pena Nieto might already have succumbed to a widening graft and influence peddling scandal that has tainted the president, his wife, the finance minister and government contractors.

And yet of all the Latin leaders under scrutiny, Perez Molina seems closest to the brink. By last weekend, five of his cabinet ministers and the ambassador to the United Nations had resigned over the customs scheme, which comptrollers believe defrauded Guatemala of more than $300,000 a month. His vice president is in jail. Prosecutors, industrial leaders, a giant fried chicken franchise and even the Roman Catholic bishops conference have urged the president to go.

With the blessings of the Supreme Court and a green light from a parliamentary committee, the full congress this week will weigh stripping Perez Molina of his executive immunity, which could land him in a court of common law.

What happens from there is less certain in Guatemala's lopsided justice system, where political manipulation and powerful interests often prevail, at times threatening to convert the country into "practically a mafia state," as Insight Crime reported.

Consider generalissimo Efrain Rios Montt, the former dictator who was condemned for genocide by a special court in 2013, saw that verdict overturned on a technicality days later and now has been ruled mentally unfit to be sentenced in an eventual retrial.

Perez Molina, a respected former general, made no secret of his distaste for the prosecution of Rios Montt, whom he served during the bloody Guatemalan civil war and credited with rescuing the country from chaos. Still, he had taken care to avoid interfering directly in court decisions.

Faith in his impartiality was shaken last year when the constitutional court ruled abruptly to shorten the mandate of attorney general Claudia Paz y Paz, a combative prosecutor who was key to bringing his former comandante to justice.

Whatever lingering prestige Perez Molina might have enjoyed, it now has evaporated in the heat of the customs scandal.

To appreciate the official fall from grace, go no further than Perez Molina's own Facebook page, where every bright post of official accomplishment draws a tide of cyber derision. "Good morning, we start the agenda of the National Security Council," the president announced last week. "Council of thieves," one follower volleyed.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author on this story:
Mac Margolis at mmargolis14@bloomberg.net

To contact the editor on this story:
James Gibney at jgibney5@bloomberg.net