US embassy cable - 04GUATEMALA2365

UNCLAS GUATEMALA 002365 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: MARR, PGOV, PHUM, EFIN, KCOR, SNAR, GT 
SUBJECT: GUATEMALAN MILITARY COOPERATING WITH INVESTIGATION 
OF MILITARY FINANCES DURING PREVIOUS GOVERNMENT 
 
 
1.  On September 10, the Guatemalan Defense Ministry complied 
with a civilian court order and released to government 
investigators the military financial records from the 
2001-2003 calendar years.  The investigation is focused on 
allegations of mishandling approximately $115 million in 
military funds during these three years. 
 
2.  The release of documents was delayed by the Guatemalan 
Defense Minister's solicitation of an opinion from the 
Attorney General as to the legality of such a release, given 
that the documents in question had customarily been labeled 
as state secrets.  Although some media reports had sought to 
portray the Defense Minister's earlier action as an example 
of military obstructionism, the Defense Minister told us and 
others that he had no objections to the request but was only 
seeking to protect himself and the military from legal 
liability. 
 
3.  Illustrating that the Defense Minister's concerns had 
some validity, six retired senior officers (former defense 
ministers and former military financial chiefs) filed an 
injunction to prevent release of the documents on secrecy 
grounds.  The injunction was rejected but did add to the 
delay in document release. 
 
4.  Article 30 of the Guatemalan Constitution permits the GOG 
to classify any military or diplomatic information affecting 
national security.  The military had previously used a broad 
interpretation of this provision to withhold all budget 
documents from public scrutiny.  Under the Berger 
Administration, the military has made great strides toward 
budget transparency.  By the end of next year, the military 
budget should be virtually transparent (per pledges by 
President Berger and Defense Minister Mendez), as well as 
greatly reduced from recent years. 
 
5.  Comment:  One of the principal avenues of attack in the 
Berger Administration's investigation of corruption during 
the Portillo Administration is an examination of the defense 
budget, which was reputedly the source of serious acts of 
corruption that also damaged the stability and reputation of 
the Guatemalan military.  This particular document release is 
only one element of this investigation, which is also 
reportedly targeting specific expenditures by the now defunct 
Presidential Military Staff (EMP).  The current military 
leadership appears to be fully cooperating with the 
investigation of wrongdoing that occurred under prior 
military leaders. 
HAMILTON