GUATEMALAN MILITARY COOPERATING WITH INVESTIGATION

UNCLAS GUATEMALA 002365

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: MARR PGOV PHUM EFIN KCOR SNAR GT
SUBJECT: GUATEMALAN MILITARY COOPERATING WITH INVESTIGATION
OF MILITARY FINANCES DURING PREVIOUS GOVERNMENT



1. On September 10, the Guatemalan Defense Ministry complied
with a civilian court order and released to government
investigators the military financial records from the
2001-2003 calendar years. The investigation is focused on
allegations of mishandling approximately $115 million in
military funds during these three years.


2. The release of documents was delayed by the Guatemalan
Defense Minister's solicitation of an opinion from the
Attorney General as to the legality of such a release, given
that the documents in question had customarily been labeled
as state secrets. Although some media reports had sought to
portray the Defense Minister's earlier action as an example
of military obstructionism, the Defense Minister told us and
others that he had no objections to the request but was only
seeking to protect himself and the military from legal
liability.


3. Illustrating that the Defense Minister's concerns had
some validity, six retired senior officers (former defense
ministers and former military financial chiefs) filed an
injunction to prevent release of the documents on secrecy
grounds. The injunction was rejected but did add to the
delay in document release.


4. Article 30 of the Guatemalan Constitution permits the GOG
to classify any military or diplomatic information affecting
national security. The military had previously used a broad
interpretation of this provision to withhold all budget
documents from public scrutiny. Under the Berger
Administration, the military has made great strides toward
budget transparency. By the end of next year, the military
budget should be virtually transparent (per pledges by
President Berger and Defense Minister Mendez),as well as
greatly reduced from recent years.


5. Comment: One of the principal avenues of attack in the
Berger Administration's investigation of corruption during
the Portillo Administration is an examination of the defense
budget, which was reputedly the source of serious acts of
corruption that also damaged the stability and reputation of
the Guatemalan military. This particular document release is
only one element of this investigation, which is also
reportedly targeting specific expenditures by the now defunct
Presidential Military Staff (EMP). The current military
leadership appears to be fully cooperating with the
investigation of wrongdoing that occurred under prior
military leaders.
HAMILTON