Friday, January 23, 2009

Portillo Used School Lunch Program to Embezzle State Funds

The saga of how looted state funds ended up in the hands of ex-president Alfonso Portillo's ex-wife and daughter continues. The fraud involved two companies, one of which was responsible for school lunch programs, but the funds were diverted.

After a bidding process between several companies, four remained and the state allocated Q45 million for the project. One of the companies was Operaciones y Descuentos Diversos, S.A. (Odissa) with whom the Minister of Education signed a contract for school lunches. After signing the contract, the Ministry of Finance ordered the treasury to credit Odissa Q27 million which was deposited in Banco Reformador. In five months, Odissa and Corporación Electrónica de Guatemala, S.A. (Coegsa), moved funds to other accounts. On May 9, 2002, U.S. $516,000 and $462,000 were transferred to the accounts of Portillo's ex-wife, María Eugenia Padua González, and his daughter, Otilia Portillo.

Investigators found that those funds were in addition to the two checks donated to Guatemala by Taiwan which were deposited to the accounts of Portillo's relatives in Luxembourg and Paris. Authorities in those two countries have frozen those funds, amounting to Q28 million.

Last Wednesday the former president acknowledged that there were transfers but did not clarify the source of funds. He only said that they were private accounts.

Oddisa was the company responsible for importing, exporting, buying, selling, processing, manufacturing, packing, packing and canning all kinds of food and in 2002, when the public funds were received, the firm purchased several money orders and deposited Q27 million the account of Coegsa.

Both companies were headed by Roberto Federico Villeda Aldana, who was contacted last Friday to inform him of the findings. The following Monday, he offered to answer two days later but did not.

Coegsa, upon receiving the funds, split the money into four transfers, three of them for Oddisa, and one of the Portillo family. The first transfer was made from Coegsa to Oddisa on January 10, 2002, for $300,000 by
Transcom Bank, Offshore of Grupo Financiero Reformador, based in Barbados. The second similar transfer was made April 3, 2002 for $400,000. The third transfer was made on May 9, 2002 through Coegsa through the same offshore institution for U.S. $516,000 and $462,000 to accounts of Portillo's ex-wife and daughter at Banco Bilbao Vizcaya Argentaria, Paris. One day later Coegsa repaid Oddisa via a transfer of U.S. $400,000. Investigators say that these sorts of money movements are typical of money laundering.

SAT began an audit process of the two companies but found no documentation to audit. In 2007, SAT therefore filed a criminal action against the two companies in the Juzgado Tercero de Primera Instancia Penal. Neither company exists anymore. Both were de-registered in 2007.

Coincidentally, when these transfers of money were made burglaries were reported in school warehouses used to store school lunch product. Other warehouses were burned making it impossible to retrieve records.

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