They're Having A Corruption Summit In South America. South Florida Should Tune In.
Pedro Pablo Kuczynski resigned as president of Peru in March because of a corruption scandal – just a month before he was supposed to host the Summit of the Americas this week in Lima. But here’s the kicker: This time the theme of that gathering of the hemisphere’s heads of state is ... corruption.
Finally. Corruption is arguably Latin America’s worst plague – and the affair that forced Kuczynski to resign is an affliction of Biblical proportion. It involves the giant Brazilian construction firm Odebrecht, which has admitted paying almost a billion dollars in bribes to officials in a dozen countries, including Peru.
In his resignation speech, Kuczynski denied receiving Odebrecht cash. But three former Peruvian presidents are also accused or under investigation – and so are Peruvian businesspeople like insurance millionaire Gustavo Salazar.
Salazar faces charges of facilitating and laundering a multi-million-dollar bribe Odebrecht paid a Peruvian governor in return for a highway project. Public outrage is especially loud because the roadwork is now over budget by about $100 million.
But when Salazar declared his innocence to a Peruvian TV news show by Skype recently, he wasn’t in Peru. He’s living here, in the $1.5-million oceanfront condo he owns in Sunny Isles Beach. A Peruvian judge just issued a preliminary extradition order to bring Salazar back to Peru. But it could be a long time before that ever happens. If it happens.
And that situation bothers corruption experts like Jose Miguel Cruz.
“Miami and South Florida are seen as this paradise for those [allegedly] corrupt officials and executives,” says Cruz, who is director of research at Florida International University’s Latin American and Caribbean Center (LACC).
Here in Miami we don't seem prepared or willing to handle these corruption cases coming in from Latin America. We have tended to look the other way. – Jose Miguel Cruz
This Friday the LACC hosts a conference on Latin American corruption to coincide with the corruption summit in Peru. One point Cruz hopes to register is that the U.S. aids Latin American corruption by making it easy for suspects to take refuge in places like Miami with their allegedly dirty cash.
“We don’t seem prepared or willing to handle these corruption cases coming in from Latin America,” says Cruz. “Here in Miami, with the desire to contribute to the growth in real estate and different investments, we have tended to look the other way.”
Cases like Salazar’s are indeed common in South Florida. Among them: former Panamanian President Ricardo Martinelli, who was living in a Coral Gables mansion when he was arrested last year; the U.S. will decide if he should be extradited to Panama on corruption charges involving millions of dollars. (Martinelli denies the accusations.)
For his part, Salazar insists he’s a victim of shoddy investigative work by overzealous Peruvian prosecutors peddling assumptions, not facts. And he points out in Peru there’s no bail system – so if he does return he’ll have to sit in jail until his case is resolved, which could be years.
“We have repeatedly reached out to the prosecutor to explain what happened in this case,” says Salazar’s Miami attorney, Lilly Ann Sanchez.
“But unfortunately they don’t have the due process rights that we have in the United States. So of course [Salazar] is going to take the due process benefit of the country he’s in here.”
The concern about due process in Latin America is valid. Still, many Peruvians are angry Salazar is enjoying due process in such luxurious digs.
Salazar, a U.S. resident, bought his Jade Beach condo in Sunny Islands Beach six years ago. That’s when Odebrecht arranged the bribe Salazar is accused of expediting. And he acquired the condo anonymously – using a shell company whose officers are his wife and daughter.
“These structures are very commonly set up to hide the assets using family members,” says Annette Escobar, a Miami attorney at the Sequor Law firm specializing in international financial fraud.
Escobar notes federal officials did start a pilot program two years ago to make large property purchases like these more transparent. But she says much more is needed.
“It’s not overnight that you overcome a legacy like the one that Miami unfortunately has developed,” she says. “I think it would take congressional action and probably international cooperation.”
Latin American corruption suspects who take refuge here are under heavier scrutiny now. Former Guatemalan presidential candidate Manuel Baldizón is wanted back home in another massive Odebrecht case; U.S. officials arrested him in January and his extradition is pending.
“It’s very important that Mr. Baldizón return,” says Matías Ponce, spokesman for Guatemala’s International Commission Against Impunity (CICIG). “This is the most important corruption case in Guatemala.”
There may be more cases here to scrutinize – at least underwater. A high-level Odebrecht executive told investigators he had a laptop computer containing all the bribery data. But he said that last year during a visit to Miami he threw it into the ocean in a panic.
Meaning, lots of alleged corruption is probably lying at the bottom of Biscayne Bay.