Special Report: Ex-President Flores and the $10 Million Scandal - A Timeline

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Ex-President Flores in a Legislative Assembly hearing
photo: Salvador Sagastizado

Ex-President (1999-2004) Francisco “Paco” Flores, of the right-wing Nationalist Republican Alliance (ARENA) party, has been embroiled in perhaps the most significant scandal of the 2014 presidential electoral campaigns with devastating effects on the already-struggling ARENA party. The emblematic corruption case was first made public by President Funes, then moving to a Special Commission in the Legislative Assembly for investigation and onto the Attorney General.  At stake are what began as $10 million in checks from the government of Taiwan received by Flores in the waning days of his presidency, though Flores soon admitted he may have received as much as $20 million. The money was officially intended for earthquake relief, but Flores’s claims that he distributed the funds to the unnamed “recipients” in “small bags” of cash are without evidence, even refuted by residents of communities impacted by the disaster. As ARENA presidential candidate Norman Quijano’s principal campaign advisor, Flores’ disgrace has likely contributed to Sanchez Ceren’s steady climb in the polls as the Feb. 2 election neared and to ongoing internal divisions within ARENA. What follows is a timeline of the case, whose investigation is ongoing:

TIMELINE

  • June 1, 1999 -                        Flores assumes the presidency of El Salvador
  • October 22, 2003 -             Checks for $1, $4, and $5 million are issued from Taiwan’s diplomatic account at the International Commercial Bank of China’s New York branch in the name of Francisco Flores. The funds are transferred to Banco Cuscatlan in Uraca, Costa Rica, destined for International Bank & Trust Ltd. in the Bahamas. This last transaction required intermediary transfer services from a third institution, International Bank of Miami, which raised a red flag and contacted the Financial Crimes Enforcement Network of the U.S. Treasury Department.
  • June 1, 2004 -                   Flores leaves office
  • September-October, 2013 -      The Funes Administration, as well as the independent Attorney General’s Office, begin making inquiries with U.S. agencies regarding the Taiwanese checks, including the Justice Department, which was independently investigating two think tanks associated with Flores and the privatization of the Salvadoran state geothermal energy company – another Flores administration corruption scandal currently being prosecuted by the Attorney General’s office.
  • November, 2013 -             President Funes releases a statement that the $10 million never entered El Salvador’s national budget, then making a television appearance to reveal U.S. documents supporting the allegation.
  • December 9, 2013 -             The U.S. Ambassador to El Salvador, Mari Carmen Aponte, makes a public statement that the U.S. is investigating how Funes obtained the documents, in an apparent attempt to move the heat from Flores to Funes.
  • January, 2014 -                   As the conservative Attorney General seems to stall, legislators from the FMLN, Gana, PCN, and PDC parties form a Commission in the National Assembly to investigate Flores. In hearings before the commission, Flores admits to receiving the funds, but claims he never deposited the money in a personal bank account and rather distributed the money in small bags of cash to earthquake victims and other unnamed recipients.
  • January 25, 2014 -             The Attorney General freezes Flores’s assets, including bank accounts and real estate. Flores’ accounts hold around $5,000, most having already been emptied or closed.
  • January 28, 2014 -             After failing to appear before the Commission in a second hearing, Flores is apprehended at the Guatemalan border, claiming he had a business meeting to attend but decided to return to San Salvador at the last minute.
  • January 30, 2014 -             Just days before the first round of the elections, Flores sends a letter to Quijano stepping down as campaign manager in order to focus on clearing his name. Many ARENA members, including two former party presidents, had called for Quijano to distance himself from Flores sooner, but Quijano stood by him. Even in accepting his resignation, Quijano praised Flores contributions to his campaign and to the country.
  • January 31, 2014 -            Flores again fails to appear before the Legislative Assembly. Police report he is not at his home in the San Benito neighborhood of San Salvador. He has not surfaced publicly since, leading to speculation he has successfully fled the country.
  • February 7, 2014 -             President Funes tells the Salvadoran press that his source for the original documents incriminating Flores was ARENA leader and coffee baron Mario Acosta. Acosta denied involvement.
  • February 12, 2014 -             The Supreme Court rejects a request from Flores’s lawyer asking to declare the Legislative Assembly investigation a violation of constitutional separation of powers.
  • February 14, 2014 -             The Supreme Court approves a request from the Attorney General's office to investigate Flores' bank accounts abroad, including accounts in the Bahamas and Costa Rica.

The dust has yet to settle, and many details of the case vary depending on the source, but every day this story is reported in the media is a bad day for ARENA. The initial corruption investigation has begun to sprawl, with the a new Legislative Assembly Commission finding that at least $95 million in public funds were misappropriated during the Flores administration. Perhaps most significant, in terms of political theater, is the shameless behavior of Flores himself, indicating the astounding culture of impunity and arrogance that reigned during past ARENA administrations. The scandal has certainly helped position the FMLN for a likely win in the upcoming March 9th runoff election, with Funes working tirelessly to maintain public pressure on the Attorney General to push on with the investigation. But furthermore, as impunity and rampant corruption are finally being forced to face the light of justice, the case raises hopes that a second FMLN administration could continue to further the investigations and prosecutions of the former officials who for decades looted El Salvador’s treasury for personal gain.

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