About as Corrupt as It Gets

The president found himself in the middle of a stolen-car caper, which is an embarrassingly nickel-and-dime crime to have attached to your name when you’re a head of state.

The vehicle in question was an armor-plated, silver BMW that had disappeared from a parking space hundreds of miles away in Sao Paulo, Brazil. Somehow, it ended up in this steamy South American capital -- with President Luis Gonzalez Macchi holding the keys. Then, a stolen Mercedes-Benz was linked to the first lady.

Few Paraguayans were surprised by the case of the first couple and the hot cars. Like other top officials here, Gonzalez Macchi had been accused of misdeeds more commensurate with his stature, including allegedly aiding in the embezzlement of $16 million in public funds. Now, he faces an impeachment trial in the Senate on charges related to both the stolen car and embezzlement.

Turn over the slimy rock of crime big and small in Paraguay and you stand a good chance of finding a politician, military officer or bureaucrat underneath. Now, the nation’s leading thinkers are saying the time has come to accept a label bestowed on this nation of nearly 6 million people by outsiders: the champion of Latin American corruption.

“It’s true and it hurts us,” said Martin Almada, one of the nation’s most respected human rights activists. “And it hurts more because we feel impotent to fight against this mafia that’s running the country, a mafia that wears the cloak of democracy.”

In few places from the Rio Grande to Tierra del Fuego are bribery and official rule-breaking so blatant as they are in Paraguay. For two years running, the country has finished dead last among Latin American countries in a worldwide survey of corruption by Transparency International, a Berlin-based watchdog group. Only Nigeria and Bangladesh received more damning scores in this year’s report.

Asuncion, a city of 1.2 million with an impoverished majority, boasts a large fleet of stolen luxury vehicles. They are conspicuous symbols of the kleptocracy that has continued to reign here since the 1989 overthrow of Alfredo Stroessner, a dictator who ruled Paraguay for 35 years as a kleptocrat par excellence.

In the local slang, the vehicles are called autos mau, a term apparently derived from the stealthy Mau Mau rebels of 1950s Kenya. No one has been prosecuted in the case of the most famous auto mau in Paraguay, Gonzalez Macchi’s BMW, including the person or persons who stole the car, fabricated documents for it and then transported it across the border and sold it.

“The case of the president’s auto mau shows that even when a crime is discovered and thoroughly investigated, no one is punished,” said Maria del Pillar Callizo, president of Transparency Paraguay, a branch of the international group.

When even high-profile crimes go unpunished, people who are otherwise law-abiding start to wonder if they’re fools to play by the rules, Callizo said.

“The use of public goods as objects of plunder is becoming an ever more rooted feature of Paraguayan culture,” she said. “Honesty and integrity are the exception rather than the rule.”

Officials at all levels have made a grotesque art form out of stealing from the public till, extorting bribes and helping “friendly” citizens who are willing to pay to circumvent inconveniences such as business taxes and car registration.

By official estimates, 70% of Paraguayans who owe taxes don’t pay. And even those who do, Callizo said, sometimes have to bribe an official to get a receipt.

Driving across the country can require both patience and a thick wallet. Consider the case of a hard-luck Brazilian city councilman who decided that he would save money by driving to a convention in Paraguay. After crossing the border, he was soon stopped by police and hit up for a bribe.

A few miles down the highway, he was stopped again. And again. And again. More than a dozen times in all. Apparently, the corrupt cops were radioing down the highway: “There’s a rich Brazilian headed your way!” Finally, the councilman gave up and turned back for home.

At the upper end of the government pyramid, the pilfering has taken on similarly comic proportions. Inside the Palacio de Lopez, Paraguay’s White House, one high-ranking member of the information office, Nemesio Acosta, was fired early this year after it was discovered he was renting out the palace’s sound system for private parties.

Acosta’s company was also billing the government for use of the sound system at official functions, even though the equipment was public property. He now faces criminal charges.

According to an estimate by the nation’s comptroller general, corruption has cost the treasury $5 billion since Paraguay returned to democracy in 1989, or more than double the nation’s $2.3-billion foreign debt.

In 1999, then-Comptroller General Daniel Fretes Ventre wrote a withering denunciation of the corruption he’d seen during his years in office. He said 90% of Paraguayans suffer because of a powerful, amoral minority who run the country with “the most monstrous violations of ethics.”

Soon afterward, Fretes Ventre was himself charged with 15 crimes, including soliciting bribes and extortion. He survived an impeachment vote in Congress, then resigned. Later, he was found guilty of using his post as director of a university to launder the money from his “illicit enrichment” while in public office.

A year later, Fretes Ventre remains free, his appeal pending before the Supreme Court. Many influential Paraguayans believe that he will never see the inside of a jail cell, thanks to the legal practice of oparei, a Guarani Indian word meaning “useless” or “never-ending.”

Most judges will apply oparei to corruption cases that reach their courts, according to Almada, the rights activist.

“The cases die with oparei, with legal procedures that never end, that have no time limit, no schedule,” he said.

Two of the most notorious crimes tied to politics since Paraguay’s return to democracy have been smothered in oparei.

Gen. Ramon Rosa Rodriguez, head of the nation’s drug police, was killed in 1994 as he was about to deliver a report linking top political figures to the drug trade. Vice President Luis Maria Argana was assassinated in 1999. Some top political leaders blamed his rival, then-President Raul Cubas Grau.

“None of these cases has been cleared up,” Almada said. “Argana was part of the circle [of corruption], and he was killed by that circle. The people who are in power now are his friends, but none of them is interested in pursuing the case.”

Frustrated by so much legal paralysis, a group of prominent jurists has formed the private National Commission Against Oparei. In September, they met with the Supreme Court to voice their concerns.

Any hopes that the high court would act against judicial corruption were dashed the following month, when the justices themselves were mired in scandal. Secretly recorded phone calls, released to the media, revealed the inner workings of oparei, with senators pressuring justices over court cases and judicial appointments.

For months, it seemed that Gonzalez Macchi was being protected by a form of oparei enshrined in the constitution. No president can be prosecuted for any crime until he or she is impeached by Congress -- which Gonzalez Macchi’s Colorado Party controls, as it has for the better part of a century. Several attempts to remove him from office in the wake of the stolen-car incident and embezzlement charges failed for lack of votes.

Then, early this month, while the president was attending a summit in Brazil, several lower house lawmakers from his party switched allegiances, voting for impeachment. The president, appointed to his post by Congress in the fallout after the Argana assassination, had become a liability to his party. Gonzalez Macchi now faces a trial in the Colorado-dominated Senate. Many government opponents fear that the case will again fall victim to oparei.

Paraguay remains a virtual one-party state, just as when Stroessner -- also a member of the Colorado Party -- was dictator. Therein lies one important reason corruption continues to thrive here, said Carlos Martini, a journalist and a sociologist at Catholic University in Asuncion.

“In Paraguay, we have no concept that there should be oversight of things that are public,” Martini said. Before Stroessner was chased from office, Paraguay had known only six months of democracy in the nearly 500 years since the arrival of Spanish conquistadors. Absolute leaders always called the shots, and “absolute power never accepts the idea of oversight,” Martini said.

Thirteen years into democracy, elected and appointed officials alike continue to see themselves as mini emperors, Martini said.

“People who have power identify themselves with the state and the law,” he said. Like King Louis XIV of France, “they believe, ‘I am the state, I am the law.’ In Guarani, we call this the law of mbarete, the rule of the strongest.”

This sorry state of affairs doesn’t provoke much outrage among ordinary citizens. In response to a recent survey that asked what was the most serious problem facing the country, 66% of respondents named unemployment, poverty or the economy. Only 6% cited corruption.

“We live in a country of shipwrecked people, so a lot of people have the ethics of castaways,” Martini said. “The castaway thinks only of survival. He doesn’t have a vision for the future.”

Given the almost complete lack of government regulation, it is little surprise that business accounting practices are lax.

“It’s very common for companies to keep their books in triplicate,” said Sergio Britos, an economist with Price Waterhouse in Asuncion. “They have one set of books to show the tax man, another to show the banks and a third set of ‘real’ books.”

The nation’s broken and bogus information systems only make it easier to hide a stolen vehicle, like the president’s BMW.

When the hot-car scandal broke last year, Gonzalez Macchi said he wouldn’t give up the car, which he had bought “on good faith” from a friend.

“This is a trivial matter,” he said. “We have more important things to worry about.”

The president’s office delivered a copy of the car’s title to the prosecutor pursuing the case, Alejandro Nissen. But that document belonged to a Toyota 4Runner imported from the United States. The only agency in the country authorized to import BMWs had no record of the president’s car.

Having become the butt of jokes here and abroad, Gonzalez Macchi relented. His office handed over the car to the Brazilian consul.

In an interview, Nissen said he believed the president knew the car was stolen.

But even if the president is removed from office, Nissen might not be able to charge him with anything.

“The car entered the registration system with official documents,” the prosecutor said. “The content of those documents is false, but they are still official, so no law has been broken.”

Nissen has since turned his attention to a photograph showing a black Mercedes-Benz parked at the president’s residence. Nissen checked the license plate number and found that it had been issued to a trailer that once belonged to former President Juan Carlos Wasmosy and was used to transport a Jet Ski.

The trailer had been sold and was on an Asuncion lot -- without plates. How and why those plates ended up on the Mercedes that witnesses say belongs to first lady Susana Galli is a question no one has been able to answer. The car has since disappeared, and Nissen is still waiting to question the first lady about it.

The embarrassing episodes of the autos mau helped prompt business leaders here to organize an anti-corruption “National Day of Shame” in September. Paraguayans were urged to wear black armbands and ribbons. Many did so, though not the multitudes the organizers had hoped for. In the nation’s schools, teachers were asked to recite a few words to students about the difference between right and wrong.

“You should always keep in mind and practice certain values that your elders -- not all of them -- have started to forget,” the statement went. “Important values like honesty and patriotism that were handed down to us by our forefathers.... You children are our hope for a better Paraguay.”