FCPAméricas Blog
An Emerging Anti-Corruption Culture in Colombia? One Recent Case Suggests So
1.14.2016
The following guest post is from Luis Lizarralde, a Certified Fraud Examiner and Colombian attorney with experience in cross border transactions.
The recent prosecution in Colombia of Alvaro Cruz, the former Governor of the Department of Cundinamarca, tells us many different things about corruption in Colombia. It highlights the persistent corruption risks in the construction and engineering sectors in Colombia. It shows that government officials are positioned not only to receive bribes but to pay bribes too. It involves a failed effort by Cruz to manipulate the criminal justice system, with more bribes, after the corruption investigation began. Most importantly, it reflects recent changes in Colombian law that have made it easier for prosecutors to pursue corruption cases. As a result, a tangible culture against corruption appears to be emerging in the country.
Overview of the Cruz Case
Governor Cruz was investigated for his ties to ICM Ingenieros, an engineering firm found to have paid bribes to win a public roads contract in Bogota in 2009. As part of what is now known as that “Bogota Carrousel of Contracts,” the company paid the bribes to some members of the Bogotá City Council and a member of Congress, who admitted to prosecutors that they received 5% of the contract amount from Cruz to ensure that the contract was awarded to ICM, a company in which Cruz had personal investments. For more than two years, as the investigation continued, Cruz denied his participation and relation to ICM.
After serving almost four years as Governor, Cruz resigned on August 11, 2015, to defend himself before the Colombia General Prosecutor’s Office. On October 1st, the prosecutor issued an arrest warrant for Cruz, and, hours later, Cruz voluntarily surrendered. The next day, Cruz was indicted for bribery, undue interest in the execution of contracts, and breach of trust. He accepted the charges and is now in jail awaiting sentencing.
Cruz attempted to collaborate with the investigation in an effort to get his sentence reduced. However, the prosecutor found that both Cruz and his wife had bribed an official from the Attorney General’s Office to get help in delaying and hindering the investigation for Cruz’s benefit. Cruz’s wife was also indicted on November 30th, 2015 and accepted the charges. She is on house arrest due to health problems. Her sentence will be reduced to half given her collaboration with authorities, though Cruz himself will be granted no leniency. The payments were discovered when an individual who participated in the scheme to interfere with the investigation confessed his involvement in the attempted crime, implicating Cruz and his wife. He made the confession because he never received the funds promised from Cruz.
Notable Aspects of the Cruz Case
The Cruz case tells us several notable things about the state of anti-corruption enforcement in Colombia:
Risks in the Construction/Engineering Sectors. It shows the prevalence of corruption in the construction and engineering sectors. Of course, there is the risk of corruption in practically every public contract that involves large sums, no matter the sector. Since the construction industry usually involves expensive contracts and generates considerable revenue, it is a target for corruption. The most common ways in which corruption in the awarding and/or execution of public contracts comes to light is by tips from participants, active inquiries by prosecutors, and confessions of individuals who disclose the participants of bribery schemes to reduce their own jail time by collaborating with prosecutors. The role of the media has also been important in Colombia; investigative journalists publish findings related to bribes they have investigated. When public companies breach public contracting commitments, prosecutors, the public and investigative journalists take particular interest in the potential for corruption.
Legal Reform Facilitating Corruption Investigations. Changes to Colombia’s legal framework are helping the country fight corruption. For example, on January 1, 2005, Colombia transitioned from an inquisitorial penal system to an accusatorial penal system. With this change, that took time to be implemented, prosecutors now play an active role in the investigation of crimes. The new system also provides for the reduction in sentencing for those who collaborate with investigations. Moreover, in 2011 the Colombian Congress adopted the Anti-Corruption Statute. The Penal Code and the Anti-Corruption Statute are both tools that the country can use to fight corruption. In practice, prosecutors have been pursuing any individual involved in corruption, no matter if the individual is a well-known figure in the public or private sector. These developments have made the Colombian criminal justice system more effective.
The Cruz case suggests that, little by little, a culture of fighting corruption is emerging in Colombia. The environment for participating in bidding on public contracts is, in fact, getting better today. Many actors, including governmental agencies, Ministers, prosecutors, journalists and the public, have been making their own contributions to bolster transparency in the country.
The opinions expressed in this post are those of the author in his or her individual capacity, and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author’s employers, other contributors, FCPAméricas, or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.
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Comments
January 25th, 2016 at 11:15 pm
Actualización.
De acuerdo con la revista Semana, la esposa de Cruz fue condenada el 14 de Enero de 2016 a dos años y once meses. La sentencia no restringió su libertad, pero deberá pagar una multa de aproximadamente al equivalente a US$116,000. Para disfrutar del beneficio de libertad condicional, deberá depositar una suma aproximada al equivalente a US$1,000. El Juez expidió la sentencia en estos términos considerando su colaboración con las autoridades.
January 25th, 2016 at 11:16 pm
Update.
According to the weekly magazine Semana, Cruz’s wife was sentenced on January 14th , 2016 to two years and eleven months. The sentence did not restrict her freedom. She will have to pay a fine of approximately US$116,000. In order to enjoy the benefit of conditional freedom, she will have to deposit an amount equivalent to US$1,000. The judge issued the sentence in these terms considering that she collaborated with the authorities.