Entrepreneurs feel that corruption in the public administration is the State's main problem, and they affirm that a high percentage of companies have been exposed to bribes.
The Coordinating Committee of Agricultural, Commercial, Industrial and Financial Associations of Guatemala carried out the "I Survey of Business Perception 2018", and among the main results that were obtained, were that "...38% of entrepreneurs said that corruption in public administration is the state's main problem which prevents development, while 43% say that their companies have been exposed to bribes."
Proportion of people who have paid a bribe in the last year to access a public service: in Panama 38%, in Honduras 33%, in El Salvador 31%, in Nicaragua 30%, in Guatemala 28% and in Costa Rica, 24%.
EDITORIAL
The report "People and Corruption: Latin America and the Caribbean", prepared by Transparency International, shows how inhabitants of Latin American countries have got used to corruption: from the scandalous cases at the highest political level to under the table payments which are made on a daily basis when carrying out procedures as simple as requesting medical care in a public hospital or obtaining a document from a public office.
"When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed."
Fitch Ratings has downgraded Brazilian construction firm from B- to CC, arguing that the revelations about bribes "have exacerbated its reputational risk".
From a press release by Fitch Ratings:
Fitch Ratings-Sao Paulo-17 January 2017: This is a correction of a release published Jan. 17, 2017. It corrects the rating for the USD800 million senior unsecured notes due 2023.
The revelation that the brazilian construction company paid nearly $60 million in bribes in Panama is a clear wake-up call to society and the private sector, which must demand transparency in government procurement processes.
EDITORIAL
When a company bribes government officials to win public works contracts not only does it cause serious damage to that country's institutions, but it also damages economic development and the performance of private companies who do operate within the framework of the law, paying taxes and complying with the law.
The Public Ministry of Guatemala has announced that its investigations have shown that a network of illicit laundering of money and other assets operated in the port terminal.
Consideration is being given to canceling the contract with the concessionaire Container Terminal Spanish Quetzal after the denouncement that it paid bribes to Perez Molina for the award of the terminal.
The Attorney General has requested investigating whether there were cost overruns in the works in the country awarded to the construction firm which is accused of corruption by the Brazilian justice system.
The Attorney General's Office has asked the Comptroller General of the Republic of Panama for an audit of the prime contractor for the Panamanian government, Odebrecht, in order to know "in detail" about the contracts awarded to the Brazilian construction firm, where the works amount to $9, billion, reported Prensa.com . The prosecutor Rigoberto Gonzalez intends to audit both the works already delivered and those which are still running.
The court ruling that imposed a 19 year prison sentence has forced a review of the projects being managed by the company in the region, where two projects which are underway in Panama alone, total $2.4 billion.
On March 8th the Brazilian justice system condemned Marcelo Odebrecht, former CEO of the largest Brazilian construction company, Odebrecht, to 19 years and 4 months in prison and to pay a fine of $35 million along with executives from the group for the payment of about $65 million in bribes to officials in the case of corruption in the state run oil company Petrobras, reported La Prensa. The ruling mentioned fraud in tenders, where bribes were also paid for the award of the works.
SAP International agreed with the the US National Stock Committee to pay $3.7 million of its profits and $189,000 in interest for bribing panamanian officials.
The penalty relates to the corruption case linked to former company executive, Vicente Eduardo Garcia, who was sentenced to 22 months in prison for bribing Panamanian officials. Garcia paid $145,000 in bribes to the company Advanced Consulting Panama, SA, who won a $14.5 million contract with the Social Security Department which included the sale of software licenses.
Following revelations about corruption at the highest level and the processing of those involved, it is unlikely that an official will request bribe money from a businessman.
EDITORIAL
Some analysts are concerned about the effect of allegations of corruption in Guatemala, noting that it will increase mistrust and the instability in economic activity, which could even have a negative effect because of the greater weight of the Guatemalan economy in Central America, over other countries in the region.
World Bank statistics show that every day, about $1.3 billion are paid in bribes related to state contracts.
The figures were mentioned by Michael Kramer, a consultant at the entity, who is taking part in the forum "Preventing and combating corruption and collusion in public procurements", taking place in Panama.
"... In addition to cash bribes for the award of contracts in recent years the practice has spread to awarding projects to companies created by officials," reported Prensa.com. Sometimes they are consultancies or suppliers that have no references or physical offices.
35% of companies surveyed said they pay some sort of bribe to do business.
The data comes from "The Survey on the Field of Investment", conducted by the World Bank.
Employers surveyed also pointed to corruption as a principal constraint to improving productivity.
An article for Elperiodico.com.gt by Lorena Alvarez notes 'Corruption is twofold: the company paying the bribe and the official who receives the money" said Juan Carlos Zapata, director of the Foundation for the Development of Guatemala (Fundesa) when warning that corruption creates a circle of unfair competition and increases the cost of doing business.
To avoid prosecution in the United States for bribes paid in Costa Rica, Taiwan and Kenya, Alcatel-Lucent agreed to pay $137.4 million.
The Department of Justice of the United States will defer prosecution of Alcatel on charges it violated the Foreign Corrupt Practices Act, and must enter a three-year probation period monitored by a French anti corruption monitor.
The agreement includes the acknowledgment on behalf of Alcatel of having bribed Costa Rican public officials.
The fact that the French company acknowledged paying bribes will certainly affect the trial currently underway against several public officials, among them ex President Miguel Ángel Rodríguez.
Alcatel is currently in another legal dispute related to the same topic, but against the Costa Rican Electricity Institute (ICE).
Corruption is a serious issue, with social, political, legal, economic and ethical implications, affecting public and private organizations.
"Why companies should worry about corruption".
"Corruption seems inoffensive in the surface; however, the behaviors which embody it end up destroying the basic pillars of society".
"A transparent and integral image makes a company more attractive to financial institutions, enhances the possibilities of reaching new markets and improves the chances of getting awarded contracts or public licenses".
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