Central America's kingpins of graft
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Central America's kingpins of graft

This year’s two most wanted men in Central America were not drug barons, but a former president and a surgeon.

Both are accused of embezzling millions of dollars in state money meant for earthquake victims and poor patients on social security. And both were on the lam until this month.

In El Salvador, former President Francisco Flores strolled into a courthouse in early September after nearly four months in hiding. He is accused of stealing $5.3 million donated by Taiwan after two earthquakes killed some 1,500 Salvadorans in 2001. About $15 million in donations from Taiwan are still missing.

But Flores’ alleged crimes pale in comparison to the more than $300 million a medical professional bilked from Honduras’ Institute of Social Security (IHSS), which provides healthcare and workers’ compensation to 1.6 million Hondurans.

Authorities say Mario Zelaya, a 46-year-old surgeon and head of the IHSS for four years, along with two high-level associates and hundreds of lesser accomplices, created dozens of shell companies that overcharged the IHSS for essential hospital equipment and supplies, some of which never materialized at all.

Zelaya and his cohorts spent lavishly on mansions, luxury cars, and plastic surgeries, while the IHSS was left hundreds of millions of dollars in debt. The IHSS hospital’s surgery unit in Tegucigalpa, Honduras’s capital, has had to make due without soap, oxygen, cotton and sterilizing equipment, forcing patients and their families to buy these necessities themselves.

“This is not just ordinary corruption,” said Eric Olson, Associate Director of the Latin America Program at the Woodrow Wilson Center. “Its impact on people’s lives is probably greater than that of any drug trafficker.”

Zelaya was arrested on September 9 near the Nicaraguan border, after eight months on the run.

Both cases have drawn outrage. Anti-corruption authorities in Honduras have discovered more than 50 properties bought with embezzled IHSS funds, including a $5.2 million mansion in Miami. Zelaya’s Chilean mistress, with whom he had a one-year-old son, owned two luxurious apartments and another property in Honduras, all apparently paid for with IHSS money.

The IHSS funds also paid for a Porsche, a BMW, several pick-up trucks and SUVs, jewelry, and foreign trips for Zelaya’s accomplices, including a grand tour of Europe, a U.S. football game, and a concert by U.K. boy band One Direction. More than a dozen prostitutes from Costa Rica and Chile not only provided sexual services to IHSS officials, but helped smuggle cash out of the country when they departed.

Zelaya, who is now being held in custody on a military base, is accused of bribery, fraud, abuse of public funds and money laundering. Prior to his capture, another top IHSS administrator, Jose Bertetty, was also arrested, and authorities are investigating a third.

Also caught up in the scandal is Ilsa Vanessa Molina, a former Honduran model and baton twirler who is said to have had a romance with one IHSS official. She is accused of running a front company that charged IHSS $500,000 for supplies from cotton to X-ray machines, some of which were never bought or delivered at all. Molina has denied all charges.

Hurting health care

The investigation into the ring began with one official’s scorned wife, who allegedly tipped off authorities after discovering that her husband’s mistress owned one of the front companies. Authorities say Zelaya and his accomplices, said to number some 400 people, used the IHSS for four years as their personal piggy bank. But the scale of corruption and graft, already considered the biggest in Honduras’ history, is still unclear, as properties bought with IHSS money continue to be discovered.

What is clear is that an already weak healthcare system—which has seen constant shortages of medications and patients waiting months, even years, for operations—has been made even more fragile.

Some patients have made their experiences public. Nelson David Nolasco, 27, who was diagnosed with a non-cancerous tumor in his knee in 2012, recently wrote on Facebook that all he’d needed then was a minor surgery to correct it. His surgery continued to be delayed as the tumor grew, destroying his knee. Now, though the tumor has finally been removed, he needs his knee fully reconstructed, or an amputation and prosthetic. Both options cost thousands of dollars, which he can’t afford — and his social security benefits have run out.

“I am one of the many victims of this disaster and corruption,” he wrote.

Smiling through the investigation

Meanwhile, in El Salvador, protesters flocked to the house of former president Francisco Flores in a wealthy section of the capital after a judge ordered him held under house arrest. Flores, who was president from 1999 to 2004, faces charges of embezzlement and corruption in connection with what prosecutors say is the misappropriation of $5.3 million in donations from Taiwan that was meant to fund earthquake relief.

Flores’ alleged corruption first garnered headlines here last January after he smirked his way through two days of investigative hearings by legislators. The hearings were convened after it came to light that the U.S. Treasury Department was investigating Flores for suspicious movements of funds among his bank accounts.

During the hearings, the former president admitted he received checks in his name donated by Taiwan but insisted that the money had made it “to the designated people.” Flores himself admitted to receiving some $15 million in this manner.

A government recess then put the investigation on hold until the end of the month, but by then Flores had vanished.

In late April, the Attorney General charged him with embezzlement and Interpol put out a red alert, an international warrant for his arrest. According to the charging affidavit, $10 million from Taiwan was deposited in a Costa Rican account that was controlled by officials of Flores’ political party, the right-wing Nationalist Republican Alliance (ARENA).

Despite the dragnet of police scouring Central America for Flores, the former president’s first appearance came when he walked into the San Salvador courthouse at 8 a.m. on September 5th, taking just about everyone by surprise.

Through it all, Flores’s smile has rarely wavered.

“My smile is not cynicism. It is born of peace, confidence and the security of having the truth on my side,” he told CNN Español from the comfort of his home.

Last week, however, a court revoked his home detention, and his grin dimmed ever so slightly as he was transferred Saturday to jail. His new home is a 10-foot wide concrete cell.