Monument to Corruption? Yacyreta & Itaipú in the Post-Lugo Transition, Interpellating the General Directors

Carlos Menem, former president of Argentina, and no paragon of transparent, corruption-free government, once described Yacyreta as "a monument to corruption."

Paraguay is co-owner of two of the world's largest hydrolectric dams: Yacyreta (shared with Argentina) and Itaipú (shared with Brazil). At first blush, they may appear very similar. But they are starkly different. What I find frustrating is that, in the Paraguayan public sphere, there is no distinction being made between the situation in Itaipú and the one in Yacyreta.

I have already blogged about why they are at the center of a crisis in Paraguay's foreign policy. These large construction projects, because of the systematic and organized corruption within the Paraguayan government, have been a source of misdirected hundreds of millions of dollars (probably billions) for the past 30 years.

Because of his moral stature as a priest, Fernando Lugo's election represented a chance for change in the Paraguayan government. (The subsequent revelation that he has fathered at least one child while bishop has seriously damaged his credibility and demoralized people in this country.) As of this morning, both of his appointed General Directors to the dams have been formally summoned ("interpellated") before Congress to answer regarding their administration of the dams.

I have already written my thoughts about the interpellation of Itaipú's GD Carlos Mateo Balmelli. In short, the accusations of poor administration appear factually baseless and are contradicted by both a large paper trail and expert opinion. A brief example: Mateo Balmelli was accused of irresponsibly contracting a private plane for trips from Asunción to the dam while Itaipú already owned a plane. It turns out that the Itaipú plane is unflyable and that the annual budget for the contracted plane is less than 1/10 of the annual budget for the Itaipú plane.

Yacyreta's situation is a bit worse. First of all, the dam is still incomplete, with no termination point in sight though construction began in 1983 (and planning in 1925). As a quick contrast: Itaipú planning started in 1966, construction in 1974, and completion in 1991. Its current director, Carlos Cardozo, was discovered to have used Yacyreta money to fund an international Young Leftists conference that took over military barracks two weeks ago. While it was only about $20,000 (USD), it caused a huge scandal because of the political nature of the event, causing Cardozo to return the money to Yacyreta. Given the history of using public funds from the dams to finance political parties and given the controversy of physically occupying a military compound (most of Paraguay's population is not hardcore lefty), this was troubling. Cardozo has just admitted to budgeting $1 million (USD) of Yacyreta money to fund the president's public relations and communitions secretariat. This, again, raises suspicions that Yacyreta is being used to finance the propaganda of a political party.

It seems to me that the severity of charges being levelled against Mateo Balmelli and Cardozo are quite different. What remains doubtful is whether Congress, the media, and the Paraguayan public will act accordingly.

UPDATE: Congress was not pleased with Cardozo's responses after more than 4 hours of questioning about misdirected monies (turns out that the Roman Catholic diocese of Misiones, the department where Yacyreta is located, also received money from the dam to distribute as it wished).

Posted in , , , , . Bookmark the permalink. RSS feed for this post.


Swedish Greys - a WordPress theme from Nordic Themepark. Converted by