NEW MONEY LAUNDERING INVESTIGATIVE UNIT

C O N F I D E N T I A L SECTION 01 OF 03 GUATEMALA 000450

SIPDIS

TREASURY/OFAC FOR SAMARA, TREASURY/TFFC FOR ROSS, BOGOTA
FOR OFAC, STATE FOR INL/C PETERS, INL/LP AMARTIN,
EB/ESC/TFS CLARK

E.O. 12958: DECL: 02/06/2016
TAGS: ECON EFIN GT KCOR PTER SNAR KTFN
SUBJECT: NEW MONEY LAUNDERING INVESTIGATIVE UNIT

REF: STATE 18358

Classified By: Econ Tom Palaia for Reasons 1.5 (d).


1. (SBU) Post is coordinating with the GOG regarding support
for a new anti-money laundering investigative unit. The
multi-agency unit would be supported with INL/NAS funds and
vetted according to DEA guidelines. The idea is to create a
unit capable of working closely with the DEA to target major
international organized crime and drug smuggling operations
while serving as a model investigative unit to improve
Guatemala's capacity to tackle major investigations,
independent of USG assistance. The effort has been
spearheaded by Minister of Government (MOG),Carlos Vielmann,
but will likely be placed under the authority of Prosecutor
General (PG) Florido, where it would have the legal mandate
to develop and prosecute cases. The March 1 INCSR
classification of Guatemala as a country of primary concern
for money laundering should help consolidate GOG support for
the initiative. Post will work to solicit and coordinate
additional assistance and trainings with other USG agencies.
End Summary.

--------------
Money Laundering Investigative Unit
--------------

2. (SBU) The proposed Money Laundering Investigative Unit
(MLIU) will differ from existing GOG anti-money laundering
entities in two ways which we hope will address the primary
weaknesses in Guatemala's anti-money laundering regime.

-- Improved Coordination: The unit will include various GOG
agencies with access to financial information and enforcement
capabilities.

-- Potential End-Game: The unit's specific purpose will be
to pursue investigations through to prosecution, taking it
beyond the mandate of existing entities such as the Financial
Intelligence Unit (IVE) and the Financial Analyses Unit (UAF)
which are limited to analyses.


3. (SBU) The MLIU is the brainchild of MOG Carlos Vielmann,
who is frustrated by the lack of law enforcement success in
targeting the heads of major criminal organizations.
However, in order to be effective and comply with Guatemalan
law, the unit will likely be constructed under the purview of
Prosecutor General Florido, within the Public Ministry (MP).
INL/NAS has already invested approximately $140,000 in
support of a UAF within the MP. However, the UAF has been
limited to analyses and has lacked the focus of a strong
money laundering prosecutor to guide cases through to
prosecution. This initiative is an effort to address these
deficiencies.


4. (C) Post proposes a smaller unit (we envision six to ten
elite vetted members) that will focus on targeted
investigation and prosecution. This unit would led by a
designated money laundering prosecutor with guidance from a
DEA Special Agent liaison. The larger UAF would still exist
and coordinate analyses with the vetted unit and the rest of
the MP, but would not have access to sensitive US law
enforcement information. The designation of a lead money
laundering prosecutor would provide the unit formal access to
financial records. (note: Guatemala's anti-money laundering
legislation mandates that bank information can only be
solicited from financial supervisors by a "money laundering
prosecutor"). Supporting this prosecutor would be four to
six investigators and one analyst drawn from the MP and the
MOG, along with two to four additional investigators from the
Superintendent of Tax and Customs Administration (SAT) and
the IVE which is under the Superintendent of Banks (SIB).


5. (C) All members of the unit (regardless of parent agency)
will answer to the lead prosecutor in charge of the unit.
That prosecutor will answer directly to the Attorney General;
however, sharing of specific case information will be limited
to vetted unit members, which does not include the AG or
other parts of the MP. Post has proposed to the AG and the
MOG that, due to the nature of the envisioned continual
vetting process (coordinated by NAS and DEA),they will not
be able to solicit case specific information directly from
the unit. Instead, the Embassy will brief the MOG and AG,
along with other GOG officials on any case sensitive
information.
--------------
The Role for "Other Agencies"
--------------

6. (C) Assigned to the unit would be one or two delegates
each from the SAT, and the IVE. These delegates would
similarly be vetted and share space with the unit at the MP,
answering directly to the unit's lead prosecutor; however
this chain of command may need to be kept informal, depending
on the legal limitations of the parent agencies. Both SAT
and IVE have legally protected access to separate sets of
financial information. Ideally, SAT and IVE delegates would
informally access information to guide the investigation and
help develop and run down leads. When appropriate, they
could then assist the prosecutor in formally requesting
information in such a way that it could legally support a
conviction. They would also help to inform the unit as to
what types of information exist, and the best ways to solicit
that information from their parent agencies, or otherwise
acquire it through investigation. (note: IVE and SAT
officials consistently complain about the poor quality of
requests for information coming out of the MP; alleging that
they ask for too much information and miss what is really
valuable because of how they structure their requests.)


7. (SBU) A potential indirect benefit from SAT and IVE
involvement is the encouragement of these agencies to
actively participate in tracking organized crime activities.
Increasing their understanding of organized crime and the
needs of investigators and prosecutors, might encourage
increased vigilance and tracking of suspicious activity.
Their increased institutional understanding of investigative
and prosecution necessities should improve the general
quality of information forwarded to MP investigators.


8. (C) MOG Vielmann is coordinating the GOG's solicitation
of USG assistance and, as President Berger's lead law
enforcement figure, will take an active, if unofficial role
in constructing the money laundering unit within the MP.
Three MOG investigators are contemplated for participation in
the unit. The MOG will also need to maintain its own elite
unit capable of executing warrants and otherwise supporting
the activities of the money laundering investigative unit.
This will likely be coordinated as part of the NAS supported
restructuring and vetting of Guatemala's drug police (SAIA).


9. (C) A long-term goal is to make the unit capable of
standing alone within the MP. The MP personnel system is
extremely cumbersome and appointments are often politically
tainted by interested parties. Thanks to a combination of
corruption and incompetence, the previous two Attorney
Generals made successful prosecution of high-profile cases
impossible. Creating a stand-alone unit capable of
cooperating directly with the USG on sensitive investigations
would safeguard our interests from potential interference.
Including these other agencies in the unit removes extra
bureaucratic steps for soliciting information that open the
door to potential case tampering.

--------------
Potential GOG Sensitivities
--------------

10. (C) Poor coordination among Guatemalan agencies is an
ongoing struggle, and these particular groups do not entirely
trust each other; participation will require ongoing
coordination and Embassy oversight. Additionally, GOG
leaders may understandably be sensitive to our insistence
that they cannot directly access all information managed by
the unit, but this should be manageable through a commitment
to regular dialogue between the Embassy and GOG. Giving the
MP more direct access to tax and bank records through SAT and
IVE inclusion in the unit presents a legal challenge and may
cause some private sector resistance. Framing these
interagency delegates as "advisors" or "liaisons", there to
help the MP with analyses and preparing formal legal requests
for information, rather than investigators directly accessing
information, should address the concerns.

--------------
Comment: Continuing USG Support Critical
--------------

11. (SBU) Even with top level GOG support, creation of the
unit will require close Embassy coordination. The Ambassador
has met separately with the heads of the MP, MOG, SIB, and
SAT, to solicit their cooperation, and plans to bring them
all together to finalize details of their agencies'
participation. Post will seek additional resources and
training from various USG agencies with expertise in money
laundering. We envision hands on training that
simultaneously builds capacity and directly advances specific
cases of particular importance to the USG and GOG. This
unit's success would address a primary weakness in
Guatemala's anti-money laundering enforcement, strengthen the
rule of law in the face of a growing threat from organized
crime, and advance cases of specific interest to US law
enforcement.
DERHAM