Social Insecurity: The Case of IGSS-Pisa in Guatemala

Alex Papadovassilakis wrote up, recently, in InSight Crime, his investigation into serious levels of corruption into Guatemala’s social security system. The levels of corruption amongst the elites in Guatemala continue to stagger. It’s like the word ‘enough’ does not exist when linked to greed.

So it goes..

The investigation looks into a particularly contentious deal between a major pharmaceutical firm and the Guatemalan Social Security Institute (IGSS).

Following the deal, which prosecutors said the IGSS greenlit despite the firm’s lack of experience and infrastructure, dozens of patients with kidney disease died and scores of others were infected. The case would eventually reach the country’s highest courts where the elites implicated in the IGSS case had bought what some said was an insurance policy to make sure they would never be prosecuted.

The investigation has been widely re-published in the region. It is framed in three parts and the links for each are below.

Dead Kidney Patients

Ground to a halt in Guatemala City’s unrelenting morning traffic, a small team of government investigators began to worry they had lost their suspect.

They had been tracking him for months, listening in on his calls and tailing his black Audi around the city. That day, on November 5, 2014, their intelligence suggested he was headed to a crucial meeting to seal the deal on a bribe worth over $2 million.

The subject was Otto Molina Stalling, then an advisor for the financial branch of the Guatemalan Institute of Social Security. Known locally by the acronym IGSS (Instituto Guatemalteco de Seguridad Social), it is the state body that provides healthcare and pensions to over a million working Guatemalans. Due to its size and varied portfolio, IGSS had become something of a lair of corruption, and Molina Stalling, investigators believed, was carrying on that tradition.

Stress Test for Guatemalan Justice

As day broke in Guatemala City on August 31, 2016, a judge named Carlos Ruano anxiously awaited a meeting with one of Guatemala’s most powerful magistrates.

It was six in the morning. Ruano had not slept, having worked through a night shift, and he now sat in his car with just over two hours to kill before the rendezvous.

He had been summoned by Blanca Stalling, the mother of Otto Molina Stalling. The latter had been arrested in May 2015 and jailed for allegedly soliciting a million-dollar bribe from a pharmaceutical firm called Droguería Pisa de Guatemala (DPG) while he worked as an advisor at the IGSS.

And Impunity for All

On July 5, 2019, one of Guatemala’s deadliest and most infamous corruption cases landed in the murky world of the country’s appellate court.

The case had started four years earlier when the IGSS hired the pharmaceutical firm, DPG, to provide a delicate treatment to high-risk kidney patients, despite what a lower court had declared was a fundamental lack of infrastructure to do so, and after it had allegedly paid a million-dollar bribe to secure the contract.

The scandal that followed – at least 150 patients reportedly fell ill, and over 50 died between the time Pisa began treating them in early 2015 and mid-2018 – would lead to the historic arrest and eventual conviction of a host of political and economic elites, including the former president of IGSS, business and banking leaders, and the son of a powerful Supreme Court judge, who herself faced charges in a separate case for trying to subvert the investigation.

You can read the full piece, including links, photos, and graphics, here Social Insecurity: The Case of IGSS-Pisa in Guatemala.

Categories: Corruption, Guatemala, Human Rights, Impunity, Justice, Lobbying, Poverty, Report, Violence

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