Red Flags Raised About Emergency Purchases For COVID-19 Pandemic

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On June 26, the Attorney General of El Salvador, Raúl Melara, announced investigations of top Bukele administration officials after information surfaced from media outlets about a possible misuse of public funds during the COVID-19 emergency response. Despite repeated insistence from lawmakers, the Bukele administration has refused to abide by transparency requirements set by the Legislative Assembly intended to prevent embezzlement of public funds. The prolonged crisis that Bukele is contributing to by refusing to work with the Legislative Assembly also leaves the door wide open for corruption. 

After the Legislative Assembly voted to approve a State of National Emergency on March 14, legislators activated the 'state of emergency' provision of the Procurement and Contracts Law (LACAP), El Salvador’s prevailing legal framework to govern government purchases. The state of emergency provision permits the government to "make direct purchases" without going through the standard open bidding process. To ensure government transparency and accountability with regards to purchases made during the pandemic, legislators required the Executive to provide detailed financial reports of purchases to the Legislative Assembly within a 30 day period. However, the Bukele administration, with the exception of some ministries like the Ministry of Health and Ministry of Public Works, refused to comply with the requirement, arguing that the Legislative Assembly cannot audit the administration since that responsibility "belongs to the Accounts Court" (similar to the U.S. Government Accountability Office). However, the Accounts Court, in testimony given to legislators, shared that its audit work has been stonewalled by the administration, which has refused to hand over expense reports.

Amid Supreme Court rulings that called into question the constitutionality of the administration’s response to the pandemic like the police and military detentions of those deemed flouting the stay-at-home order, concerns over human rights violations echoed by the Human Rights Ombudsman, and the administration's general unwillingness to comply with basic audit requirements, the Legislative Assembly decided not to renew the state of emergency and instead voted to pass a new law to regulate the response to the pandemic and establish a ‘Plan for the Safe and Progressive Return of Social and Economic Activities,’ in accordance with international health protocols.

On May 16, the day the state of emergency was set to expire, Bukele issued an executive order (Executive Decree 18) to extend the emergency. However, on May 18, the Supreme Court declared the decree "unconstitutional" arguing that the President can only declare a state of emergency unilaterally if the Legislature, due to extreme circumstances, is not able to meet. In response to the May 18 ruling, Bukele promised to abide by the ruling, but stated that he considered it a "violation of the Constitution itself, of the laws of the Republic, of the Rule of Law and we consider it an interference by the judicial body." One day later, on May 19, the President decreed a state of emergency again (Executive Decree 19). 

The back and forth between Legislators and the President has been exhaustive and has stalled a comprehensive response to the health emergency. According to Saúl Baños, Executive Director of the Foundation for Studies for the Application of Law (FESPAD), a civil society organization, the President's "state of emergency" declaration allows the Executive to "freely procure goods and services without having to comply with ordinary requirements that must be met." Without having to go through the procedure established by the LACAP, Baños warns that supplies can be bought at overvalued prices without any transparency about who is getting the contracts. He added that public access to information is nonexistent at the moment. "The Information and Response Offices, where citizens can make a request to know what is being bought, at what price, and from whom they are being bought, are not open either," he reports. 

Some cases of possible government corruption have already begun to surface. According to El Salvador's Attorney General Raúl Melara, several Bukele administration officials are now under investigation for selling products at inflated prices to the Health Ministry during the emergency, as well as other cases of conflict of interest. In one particular case, the Health Ministry of El Salvador bought masks at an inflated cost of $250,000 from the President of the Environmental Fund of El Salvador (FONAES) Koky Aguilar, a Bukele appointee. In a financial report given to legislators by the Health Ministry on April 30, INSEMA, Aguilar's company, was mentioned as a provider hired during the pandemic. After journalistic investigations revealed that INSEMA belonged to Aguilar, Bukele announced that Aguilar would be removed from his position for having potentially violated the Governmental Ethics Law. In addition, the ARENA legislator Gustavo Escalante and the Vice Minister of Income in the Treasury Department José Alejandro Zelaya Villalobo are also under investigation for selling masks at inflated prices to the Health Ministry.

On May 22, the Supreme Court struck down the President's second state of emergency decree (Executive Decree 19). In the May 22 ruling, the Supreme Court ordered the Executive and the Legislature to pass a new law that would regulate the government's response to the pandemic without violating human rights. After negotiations with Bukele administration officials, the legislature passed two pieces of emergency legislation, (the first was passed on May 30 and the second on June 12). Despite being negotiated by his representatives and granted the ability to continue making direct purchases, President Bukele ultimately vetoed the bills, arguing that they were not drafted in consensus with the Health Ministry and that they did not give adequate discretion to the administration for when and how to re-open the economy. The Supreme Court must now determine the constitutionality of the laws. In the interim, the government response to the pandemic and gradual re-opening of the economy is regulated by Health Decree 31. Decree 31 has been deemed unconstitutional by legal experts for continuing to restrict fundamental rights.

Since, at the moment, there is no state of emergency in place, the Accounts Court has issued a public statement reminding the government that it cannot make direct purchases anymore and instead must comply with the process established in the Procurement and Contracts Law (LACAP), which requires that the administration be transparent and impartial when contracting goods and services to respond to the pandemic.

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