Riesenfeld Symposium Special: THE RELATIONSHIP BETWEEN CORRUPTION AND INCOME INEQUALITY. REFLECTING ON MR. VELÁSQUEZ GÓMEZ’S KEYNOTE SPEECH.

Ivan Velasquez Gomez from https://www.flickr.com/photos/usembassyguatemala/30583442626/in/photolist-NAy8YW-NvXADi-NvXNPR-NtpaVY-MFVobC-NceSZ5-MFVtsu-NceRxs-6cmEb1-XSMfYQ-XwQ9CL-XVwPEn-9ZrwoX-aNWv7F-aNWw8H-r9mf5x-XwQ2CU-WUmqbp-8ZgdYG-BT3gP7-cCt1wE-XwQ9dh-XVx6ZX-cCt389-WUnqvv-9ZuqoG-aSt4oB-9Xnzin-6cm8vo-9XnzcH-9Xnz1g-9Zuqub-EajAVv-9XqrAj-9Xqrnw-9Zur11-9XnzmZ-9XnyxP-9XqrwA-9Xqs5E-9Xqr8U-9XnyD6-zMij7U-9ZupwC-WUmNPk-9ZuqT5-9ZrvXa-9Zrwy2-9ZrwiK-sa62dS

Article by: Francesco Arreaga

On March 1, 2019, Mr. Velásquez Gómez accepted the Stefan A. Riesenfeld Award at Berkeley Law, in recognition of his distinguished career in the area of international law and his commitment to dismantling corruption at the highest levels. As UN High Commissioner of the International Commission Against Impunity in Guatemala (CICIG), Mr. Velásquez Gómez led this anti-corruption international body to support and strengthen Guatemalan institutions charged with investigating and prosecuting crimes committed within state institutions that instigate impunity and undermine democracy. During his acceptance speech, Mr. Velásquez Gómez described the work of the CICIG and highlighted the connection between economic inequality and corruption.

LINKING ECONOMIC INEQUALITY WITH CORRUPTION

Mr. Velásquez Gómez began his speech by citing Herald Waxenecker’s recently published report in Guatemala called, “Inequality and Power in Guatemala – Captured Economy.” He explains how Guatemala is experiencing extreme income inequality through the unequal distribution of wealth. For example, “3% of large companies capture 65% of the operating surplus,” while “56% of small companies only absorb 4%.” Consequently, a cyclical trap is created where “the concentration of wealth generates power inequality, which in turn creates the conditions for the capture of the state and economy.”

Mr. Velásquez Gómez described how once corruption infiltrates the state, corrupt actors work to ensure that decisions made at the legislature, central bank, and courts all favor their interests. He explains how he identified “illicit political economic networks” in Guatemala, organized to accomplish three goals through legal and illegal methods: “1) accumulate and exercise illegitimate public or private power, 2) illicitly enrich themselves, and 3) generate impunity for their members.” When the government has been infected by corruption, it no longer works for the common good, rather, it works for corrupt actors that have captured the state and the economy.

In my opinion, the connection that Mr. Velásquez Gómez made between economic inequality and corruption is fundamental and political leaders in all countries must understand and act upon it. We must not assume that this economic and institutional problem only exists in developing countries because income inequality and the concentration of wealth is prevalent around the world. As economists Thomas Piketty, Emmanuel Saez, and Anthony Atkinson have shown in their studies of global income inequality, the concentration of wealth and rising inequality is a global phenomenon. Effectively dealing with income inequality will diminish the concentration of wealth, decrease political power inequalities, and prevent special interests from capturing or rigging the state and the economy.

THE BENEFITS & VULNERABILITIES OF INTERNATIONAL ANTI-CORRUPTION INSTITUTIONS

Mr. Velásquez Gómez passionately described how CICIG has made extraordinary accomplishments with regards to stemming corruption in Guatemala. He spoke about how in 2015, Guatemalan prosecutors in conjunction with CICIG launched criminal investigations regarding fraud which caused the “immediate resignation of Guatemala’s Vice President and months later the President himself.” He also spoke of CICIG’s 2016 report called the “Cooptation of the State of Guatemala,” which exposed extensive corruption throughout the government. For example, the report exposed “corruption in the health, customs, and penitentiary systems; in the judicial, executive and legislative bodies; the links between politics and corruption, [and] between money laundering and politics.” It is abundantly clear that CICIG helped support the rule of law in Guatemala by showing that no one is above the law, not even the President or Vice President of the nation. Moreover, these anti-corruption efforts helped the government and institutions of justice regain the public’s trust.

Notwithstanding the public benefits that CICIG has brought to Guatemala, it is vulnerable to political attacks from state actors that seek to delegitimize and silence it. The Guatemalan President declared Mr. Velásquez Gómez persona non grata in 2017 and even though the Constitutional Court of Guatemala reversed the measure, Mr. Velásquez Gómez is still not permitted to enter the country. In addition, the President of Guatemala has ordered the termination of CICIG. All of these events have led to a constitutional crisis that will shape the future of the country. Mr. Velásquez Gómez expressed his concerns about the return of authoritarianism to Guatemala, the threat to the rule of law, and unchallenged corruption that leads to impunity.

The Guatemalan government’s actions against CICIG, remind me of the first article that I wrote for the Berkeley Journal of International Law Blog, “The Effectiveness of International Law in an Anarchic International System,” where I described how a nation’s claim of sovereignty may conflict with international law and institutions. It is without a doubt that CICIG has benefited Guatemala and has even garnered favorable rulings from the Constitutional Court of Guatemala. Nevertheless, state actors that wield the levers of power are set on preventing this international body from fighting corruption inside of the nation. As Mr. Velásquez Gómez stated in his closing remarks, “what is at stake in Guatemala is the will of the people, of a new citizenship that aspires to hold the reins of its destiny and that has assumed with absolute responsibility the defense of the conquests, still small, perhaps, but significant, that ensure a future of peace, prosperity, and coexistence in which the smile of children, all children, illuminates the faces of their families.” Only time will tell whether the will of the people will prevail.