Corruption in Hispaniola: Félix Bautista and Michel Martelly

On Saturday, March 31, the most respected investigative journalist in the Dominican Republic dropped a bomb of evidence linking Senator Félix Bautista's (PLD) construction firms to a host of illegal payments to among others, current President of Haiti, Michell Martelly. Even though the evidence from Nuria seem very convincing, and the whole case in most other countries I know, amounts to a big, international scandal, the local media in the DR, with the exception of acento.com.do has basically ignored the whole thing, and only published the denials of the accused not the details of the case itself. But before I lay out the details of this international scandal, let's look at Félix Bautista.

Félix Bautista is the Senator for PLD for the region San Juan, elected in 2010, and before that he worked for all three of Leonel's administrations. As many anonymous politicians that raise to fame, he worked in construction. During Leonel's first government (1996-2000) Bautista was director of OISOE (or OCOE which it was called then), which is the office of Enginerial Supervision of Public Construction Works. The office signs and gives out contracts for public construction work and oversees these. The office works somehow independently of the Ministry of Public Works. Bautista held the same position from 2004-2010 when he became Senator. As head of OISOE, as Nuria demonstrates, Bautista became a very rich man in a very illegal manner. In 2000 he was a short time in jail due to corruption, and in 2007 he created an institutional crisis when he signed contracts with Sun Land worth 130 million USD. These contracts which implied the state taking up loans for public works would have to pass by Congress, according to the constitution, which they didn't. The contracts were annulled, but the Dominican State lost a lot of money. The case, however, reached the Supreme Court for annulment and to declare the government's actions for unconstitutional. In a weird sentence that had as consequence a strict restriction of judicial review, the Supreme court declared that political parties or congress members could not be interested parties in this case or almost any case of judicial review. On these grounds the case was dismissed. Afterwards most "experts" have argued that this sentence was influenced by the government.

There have been a series of scandals during this campaign. Not surprising most have struck the government, and the presidential ticket of Danilo Medina and Margarita. The more colourful and interesting were the one that Danilo Medina (and Félix Bautista and the technical secretary to the President, Temistocles Montás) had plagiarised their thesis and that Medina never actually finished his Engineering degree in the UASD (Universidad Autónoma de Santo Domingo). The profesor who made these accusations lost his job (his job was to investigate fraud and plagiarism in the UASD). The other, very interesting, scandal hit the current first lady Margarita Cedeño, when a journalist based in Santiago argued that she (and Félix Bautista) had more than 40 million € in Den Danske Bank. The accusations were false, but have had their effect (I will write more on this later).

The latest scandal, however, is different. First of all it comes from Nuria Piera, one of few investigative journalist in the country, and by far the most known and respected investigative journalists in the country. Second, the evidence for the accusations seem solid (I did not watch her show on Saturday, but all is reported at www.acento.com.do, and the evidence can be found here). Third, they involve a Dominican Senator who happens to be President Leonel Fernández's closest ally, and according to the media a person Leonel considers as is son. Fourth, they also involve the current Haitian president and his opponent Mirlande Manigat in last year's presidential elections. Fifth, the case involves the recent resignation of Prime Minister Gary Conille. And sixth, they demonstrate an attempt to take economic advantage (illegally) of the disastrous Haitian earthquake, which sadly is not unique to this case.

So what is the case: Bautista for some time had been the target of attack by the opposition and their constant accusation of government corruption. Rumours had been spreading that there might be a Dominican angle to the resignation of Gary Conille as Prime Minister of Haiti in February this year. The reason was that Conille had started investigating 8 construction contracts worth $ 385 million that his predecessor Jean Max Bellerive had signed during the course of one day. An auditing committee declared that these contracts were illegal and damaging the Haitian nation, which made Connille start investigations (a move that finally got him removed). The companies that won these contracts were Dominican. For some time Nuria has linked these companies to Félix Bautista either directly, or through straw men (family members of Bautista). Bautista, however, has defended himself saying that it is not illegal to win contracts (in fact 69% of the $500 million the DR government has given for reconstruction in Haiti has gone to Bautista's companies), that all was ok and legal (referring to some vague statements by Conille that could lead to that conclusion). In fact Bautista last Thursday decided to explain himself in the Senate in order to make his defence public, and to get an arena where there would be no critical questions raised given the fact that PLD has 31 of 32 Senators. After his declaration the PLD and the Senate (much the same thing these days) defended Bautista's honour and said that he was the victim of the hardest and most unreasonable attacks that any politician had suffered in the Dominican history (PLD senators would not score very good in a history test of Dominican politics). And then the PLD published a full one page add in most Dominican newspapers whitewashing Bautista and the PLD and attacking the PRD (the title was The 17 lies from the PRD).

The next day, Friday, Bautista went to the Attorney (prosecutor) General (Procurador general in the DR), who is member of the PLD government, a PLD member and former lawyer of Félix Bautista, and asked the Attorney General to investigate the false accusations against him. A couple of days earlier the Attorney General, Radhamés Jiménez, had stated that the accusations were only rumours and speculations, and that he would not act upon them. It is important to remember that in the Dominican political system, the Attorney General is a politician and it has almost never happened that he has started serious investigations against one from his own party/government (see my assessment on horizontal accountability in the Dominican Republic here). If he tries, he would probably be removed or just leave when he sees that it is impossible to work against corruption as Attorney General (such as Hipólito Mejía's first Attorney General, Virgilio Bello Rosa, who resigned in 2002 on this account). The Attorney General has no independence or autonomy, and until relatively recently he was also powerless since the president had to sign off on any legal cases he would like prosecute on in court.

On the Saturday, Nuria threw the bomb. She accused Félix Bautista of two cases of crimes, and she presented hard evidence to substantiate the following: 1) Through the director of the state company INESPRE Ricardo Jacobo, the companies of Félix Bautista paid presidential candidate Michel Martelly more than 2.5 million USD cash, and the other principal candidate Mirlande Marnigat 250.000 USD. This is plain corruption in order to win state contracts in Haiti. However, this particular accusation is probably worse for Martelly than for Bautista, and the Haitian Congress has promised to investigate. 2) Nuria indirectly accuses Bautista for having enriched himself illegally. Pointing out that in the official declarations of his fortune in 1996 (when he became a government bureaucrat) and 2010 (when he became Senator), Bautista declared 547.000 DOP, and 16 million DOP (about 500.000 USD), respectively, and that now Bautista owns appartments in the capital of Santo Domingo worth more than 10 million USD (407 million DOP). Those 10 million USD do not include the value of any of his companies or bank accounts or other real estate. Showing documents of how his companies have won government construction contracts that Bautista himself signed when being head of OISOE, Nuria plainly says (and proves) that Bautista has become rich at the expense of Dominican taxpayers. Nuria also showed how Bautista pays millions of DOP to the PLD and high members of the party, which may come in handy now that he might come under official investigation for corruption.

The case is now officially under investigation in the DR. First of all since Bautista asked the Attorney general to investigate, but also because after Nuria's show there is evidence of corruption. The Attorney General, having this hot potatoe in his hands (either he becomes extremely unpopular with the newspaper-reading population, or he becomes extremely unpopular with his president and loses his job), sent the case to the Department of Anti-corruption, where I am quite confident that they are trying to do whatever they can to get rid of the case without further investigation. The government has remained silent on the issue, which is Leonel's constant tactics when one of his own is accused of corruption, but Nuria reports that government agents are searching high and low for the sources of her story. Nuria plainly says that if it is correct, as Bautista alleges, that the accusations are false, why are the authorities looking for the journalist's sources (and the original documents)?

So what consequences may this scandal have:
Let's first look at Haiti, then the DR.

The first accusation has already become an international scandal, and explains a long way PM Gary Conille's resignation in Haiti in February. Conille wanted to investigate the contracts given to Bautista's companies, Martelly did not, and Conille had to go. And now we have found a plausible explanation for why this was important for Martelly. This has become a headache for Martelly because it is incredibly difficult to find a PM that satisfies donors and the Haitian parliament, where Martelly himself has little support. Furthermore, Martelly definitely will lose goodwill in the donor community over this. And finally, he might actually be impeached for this. The Haitian Parliament has promised to investigate, and Martelly is already in trouble over the issue that he might hold US nationality as well (which would be illegal in Haiti), and he is meeting powerful demands to reinstate the army. This latest case might prove to become the tipping point against him (unless the international community saves him).

Former PM Bellerive who originally signed the contracts, also dragged Leonel into this saying that he had asked the Dominican president for advice on which companies to give the contracts to. Leonel naturally pointed to his friend's companies. Across the border it is now every man for himself. There is no reason to believe the former Haitian PM, who also may come under investigation here, but this scandal may, nevertheless, tarnish President Fernández's otherwise impeccable international image.

Leonel Fernández has managed the most marvellous feat to become extremely popular abroad and only mildly popular at home. Some reasons are that he is smart, knowledgeable, talks English perfectly and he is likeable. In addition, he has been relatively good at running the country. This Bautista case, however, puts in doubt all the good faith and altruistic motives the Fernández government might have had when they decided to construct a new University in Haiti and give 500 million USD for reconstruction. It looks bad for the president that most of these contracts are given to his closest ally, a person he has called his son. His image may also be tarnished even more if the case is not properly investigated, and given the fact that Bautista and Fernández are so close, his image could even become more damaged by a proper investigation.

Danilo Medina might also lose over this. Many now want to hear what Medina's take on this case is. Will he support Bautista? Or, will he criticise and distance himself from him? This is a lose-lose situation. If he supports Bautista, he might lose independent votes and some PLD votes (although maybe not too many given the fact that Mejía is feared by many due to his horrendous four year rule 2000-2004). This might be enough to lose a close election. Should he distance himself from Bautista, Medina might lose more. Bautista is the Organisational Secretary of the PLD, and contributes with millions of DOP to the party. Although still a controversial figure in the party (and for all we know the leaks may come from his own party, which we know is not uncommon in other countries in Latin America), the PLD (and the Senate in particular) has decided to support him. Even though this occurred before the latest evidence was presented, Medina might risk support in his own party if he distances himself from Bautista. And, what is worse, Bautista may pull the plug in San Juan, his home region. If Bautista says to his people not to vote (or to vote for Mejía), this may lose the election for Medina. Bautista does not risk much by doing this since he hold a position in the Senate until 2016 and with his kind of money I am sure he can make friends with Hipólito Mejía as well. Medina, I think, will remain silent and hope not to lose too many votes over this.

How about Bautista? What will happen to him? Well, Bautista is in a better position than Martelly, Fernández and Medina. First of all, he enjoys immunity as Senator until 2016. This may be lifted, but since 30 of the remaining 31 senators belong to his party (which he pays a lot of money) it is very doubtful it ever will be. So, even given a change in government in August 2012, and given the unlikely case that the new Mejía government will actually do something about this, it is not very likely to prosper. Second of all, he is already so rich that he is difficult to touch. Third, as everyone else, he will not go down silently and I am sure he can drag many down with him. That is enough to raise fears into all the three big parties. This case can in fact, end up with a president having to resign in Haiti for corruption, while the Dominican Senator who corrupted him may walk free and enjoy the benefits of a Dominican Congress member.

The positive note is maybe that 10 years ago a case like this would never have reached the media, and even though the DR is still one of the few countries where a scandal like this does not get any traction in the public, I sense that this case is getting some, but not enough, traction. The sad thing, however, is that there exists rich people many of which hereabout are elected politicians, who are willing to steal from the population that elected them and exploit the poorest of the poor that have survived one of the worst natural disasters ever in modern history.