Colombia’s government has agreed to pay banking conglomerate Grupo Aval $375 million that one of the corporation’s subsidiaries partially owes to its sister companies.
The controversial agreement is the consequence of the government’s decision to liquidate the consortium formed by Grupo Aval subsidiary Corficolombiana, Brazilian engineering firm Odebrecht and Grupo Solarte.
First the good news
Transport Minister Angela Maria Orozco on Monday announced the liquidation of the consortium that bribed government officials and illegally financed election campaigns between 2009 and 2014.
According to Orozco, the liquidation would transfer almost $600 million (COP1.9 trillion) in public works from the consortium to the government.
Additionally, the liquidation would “protect the interests of good-faith third parties,” according to the Superintendency of Companies.
Now the bad news
This protection of the interests of third parties means that the government will take $375 million (COP1.2 trillion) from the national budget to pay the liquidated consortium’s debts to banks.
The majority of these banks belong to Grupo Aval, whose director has been accused of knowing about the subsidiary’s corruption practices, but has not been charged by the prosecution.
Until recently, the Prosecutor General’s Office was run by Nestor Humberto Martinez, the former attorney of Grupo Aval and its majority owner, Luis Carlos Sarmiento, Colombia’s richest man.
Orozco’s boss, President Ivan Duque, owes Grupo Aval $4.8 million (COP15.2 billion) he borrowed to finance his successful 2018 election campaign, according to one of Colombia’s surviving former anti-corruption czars.
And more bad news
The government assuming the debt of one Grupo Aval subsidiary to pay its sister companies is only part of the fiscal disaster that began in 2009 when the consortium bribed the administration of Duque’s political patron, former President Alvaro Uribe.
Odebrecht has sued the Colombian state before international arbitrary commissions twice for a total of almost $2 billion.
The first lawsuit is over $1.3 billion (4.4 trillion pesos) Odebrecht said it lost in investments after the government of former President Juan Manuel Santos canceled outstanding contracts with the firm.
The second lawsuit is over $690 million (COP2.2 trillion) the company said it is owed by Colombia’s infrastructure agency ANI.
The final bill
If all goes to the corrupt corporations’ plans, Colombia’s tax payers will have to cough up $2.37 billion for their politicians’ corruption. This is approximately $50 per Colombian citizen.
According to the United States’ Department of Justice, Odebrecht paid some $27 million in bribes in Colombia. If the disgraced company wins the lawsuits it would have a return on investment of $73.70 dollars for every dollar spent on bribes.