El Salvador’s Attorney General Douglas Meléndez has opened an investigation for tax evasion into a telecommunications company linked to Supreme Court Magistrate Belarmino Jaime. The case has also drawn attention to possible conflicts of interest in Supreme Court decisions that Magistrate Jaime participated in involving the telecommunications sector, leading social movement groups to file a complaint against him with the Government Ethics Tribunal (TEG).

Attorney General Meléndez announced he had opened an investigation on September 12^th, 10 days after  Lorena Peña, president of the Legislative Assembly and member of the governing Farabundo Martí National Liberation Front (FMLN), drew public attention to the case of alleged tax evasion and questioned why Meléndez wasn't pursuing the case with the same gusto he had demonstrated when investigating leftist public functionaries.

The case in which Magistrate Jaime is implicated involves the company Grupo Centroamericano de Telecomunicaciones (GCA Telecom), which allegedly failed to report and pay taxes on incoming international calls that would have added up to $2.79 million in taxes. Magistrate Jaime previously served as the managing director at GCA Telecom before transferring that title to his son when he was elected to the Constitutional Chamber of the Supreme Court. Members of his family own 89% of the company, which has made campaign contributions to the right wing Nationalist Republican Alliance (ARENA) party in the past. In an apparent effort to cover up the non-payment of taxes, GCA Telecom used a front company, Avance Telecomunicaciones (AVANTEL), to carry its tax obligations. Investigators later learned that AVANTEL had a fictitious address, and were unable to locate the heads of the company.

The tax on incoming international calls was later declared unconstitutional by the Supreme Court’s Constitutional Chamber; however, the ruling was not retroactive and companies were still liable for collection and payment of the tax during the six years it was in effect.The decision to declare this tax unconstitutional is part of a larger pattern, documented in the Nation, in which the Constitutional Chamber of the Supreme Court has consistently protected the interests of El Salvador´s right wing and economic elite, using dubious legal arguments to block tax reforms and cut off funding sources for the FMLN government and its social programs.

Following the Attorney General’s decision to open an investigation, the Social Alliance for Governability and Justice (ASGOJU) also submitted a complaint against Magistrate Jaime to the Government Ethics Tribunal (TEG) for conflicts of interest in several cases that have come before the Constitutional Chamber. Jaime ruled in favor of telecommunications companies, including the one owned by his family, in cases they had brought against several local governments. ASGOJU’s complaint also expressed concern that, while the magistrate did not vote on the ruling that overturned the tax his family’s company was allegedly evading, he may have participated in discussions about the case.

Onidia Gómez of the Salvadoran Foundation for Local Development and Democracy (FUNDASPAD), which is part of ASGOJU, expressed hope that the TEG issue “an exemplary decision so that there is a change in the way that [functionaries] exercise and carry out their public service.” The ASGOJU demands that the TEG investigate the conflicts of interest and apply appropriate sanctions.