Q&A: A Corruption Scandal Undermines Colombia’s Peace Accord Implementation

Corrupt officials in Colombia allegedly abused their positions to steal hundreds of millions of dollars in peace accord implementation funds, which were meant for some of the country’s poorest, most violent, and least governed territories. Their actions, documented in 2021 but likely occurring earlier, have undermined one of the most important commitments in Colombia’s fragile peace process: better governance in conflictive rural areas.

All involved did harm to a priority vital to any who share an interest in helping Colombia improve security and diminish illicit economies. They must be held accountable.

The so-called “OCAD Paz” scandal came to light thanks to a six-month investigation by journalists at the Colombian outlet Blu Radio.. Here’s an overview of what they found, what has happened since, and what it means for Colombia’s peace process as a new government takes over in Bogotá.

What is the OCAD Paz program?

The Colombian government’s budget is not funded entirely from taxes. Royalties collected from oil and mining companies make up very roughly five percent of central government income, a figure that varies with commodity prices. A 2012 reform created “Collegial Administrative Bodies” (Órganos Colegiados de Administración, OCAD) to administer these funds.

The 2016 peace accord with the FARC guerrilla group (Revolutionary Armed Forces of Colombia, Fuerzas Armadas Revolucionarias de Colombia) committed Colombia to carrying out dozens of promised efforts with an estimated total cost of about $41 or 42 billion over 15 years. About 85 percent of that would go to implement the peace accord’s first chapter, “Comprehensive Rural Reform.”

In 2018, Colombia’s government set up a subset of the OCAD, known as “ OCAD Paz,” to channel some royalty funds into meeting these rural reform commitments. Though a critic of the 2016 peace accord, President Iván Duque (August 7, 2018-August 7, 2022) rhetorically supported the accord’s rural reform chapter. From 2019 to 2021, his government channeled about 6.6 trillion Colombian pesos (about $1.5 billion) to the OCAD Paz.

What was the OCAD Paz money meant to pay for?

The 2016 accord’s rural reform provisions aim to achieve a longstanding goal: to bring the government into long-abandoned agricultural frontier areas where armed groups thrive and farmers grow illicit crops. While the Duque government didn’t give the “rural reform” chapter all of the resources it needed, it did increase rural development funding.

In particular, OCAD Paz funds supported “Territorially Focused Development Programs” (Programas de Desarrollo con Enfoque Territorial, PDETs), a crucial feature of the 2016 accord. The PDETs are 15-year plans to bring government presence and services into the most conflictive and ungoverned 170 of Colombia’s 1,100 municipalities (counties), covering 36 percent of national territory and 13 percent of the population.

These areas suffer from chronic statelessness. Roads and formal land titles are rare. Disputes tend to get settled informally or by armed groups. These 170 municipalities contained 94 percent of Colombia’s coca crop when the program started. Some areas are so far from government presence that currency is hard to come by, and stores allow customers to weigh coca paste on scales to pay for goods.

The PDETs, along with the FARC’s exit from the conflict, offered a crucial opportunity to address this chronic statelessness. But they would be expensive. The OCAD Paz funds were a critical part of the response.

In 2021, as part of an effort to fund the COVID-19 pandemic recovery, the government and opposition agreed on a legal provision allowing expenditure of future years’ OCAD Paz money. The program’s budget jumped from just over 1 trillion pesos ($225 million) in 2019 and in 2020, to 4.4 trillion pesos (about $1 billion) in 2021.

What did the journalists find?

With that, “corrupt people smelled blood in the water,” say Blu Radio reporters Valeria Santos and Sebastián Nohra. Over their 6-month investigation, they spoke to 25 mayors of PDET municipalities who found corrupt central government gatekeepers standing in the way of OCAD Paz funding for infrastructure and other projects in their territories.

Those gatekeepers were in the Presidency’s National Planning Department (Departamento Nacional de Planeación, DNP), which administers OCAD Paz. Some were in the national Comptroller’s Office (Contraloría), an auditing body that signs off on these expenditures. Some were members of Colombia’s Congress serving as “godfathers” shepherding the funding projects through the approval process.

All told, Santos and Nohra very roughly estimate that about 12 percent of 2021 OCAD Paz resources, perhaps 500 billion pesos ($115 million) meant for about 355 of the peace accords’ vital PDET infrastructure projects, was lost to bribes and kickbacks.

How did the corrupt officials allegedly steal the money?

The DNP and Comptroller roles in approving OCAD Paz grants created an unfortunate opportunity for unethical officials to serve as gatekeepers, holding PDET funding hostage until they paid bribes or kickbacks. Without bribes, projects stalled or were canceled. The Colombian investigative website La Silla Vacía summarized the Blu Radio findings succinctly:

25 mayors…denounced off the record that in order to obtain the approval of a project in the OCAD Paz they had to pay several bribes: between 1 and 2 percent to officials of the Comptroller’s Office, who although they only exercise “preventive” control in the OCAD generated alerts that were enough for a project not to proceed; 5 or 6 percent to Álvaro Ávila, director of the General Royalties System [within the DNP], technical secretary of the Ocad Paz, appointed by then-DNP director Luis Alberto Rodríguez; and between 7 and 9 percent to the congressman who “sponsored” the project. They specifically mentioned Ape Cuello and Samy Merheg.

Cuello and Merheg are members of Colombia’s Conservative Party. They, along with Conservative Rep. Wadith Manzur, are now under investigation by Colombia’s Supreme Court. Others frequently mentioned in press coverage of the scandal are former top Comptroller’s Office officials Juan Carlos Gualdrón, who oversaw post-conflict issues, and Aníbal Quiroz, who oversaw royalties.

Together with Gualdrón and Quiroz, El Espectador explained, Ávila, the Planning Department’s royalties chief, “pressured officials of the Ministry of Transportation to withdraw approval from more than half of the tertiary road projects already approved for different municipalities.”

What was the Duque government’s response?

All of the above officials have denied requesting or receiving bribes or kickbacks to allow PDET projects to go forward using OCAD Paz money. The Duque government’s final DNP director, who was not in her position when most of the alleged corruption occurred, said that she looked into the allegations going back to August 2021 and, finding no proof, shelved internal investigations.

The Duque presidency’s top official for peace accord rural reform implementation, former presidential counselor for stabilization and consolidation Emilio Archila, said that he had heard these allegations as well, and had e-mailed information to the Colombian government’s Prosecutor-General’s Office (Fiscalía). Archila’s e-mails, though, did not constitute a formal complaint. “We find it hard to understand,” reads an El Espectador editorial, “why, if these allegations existed and Archila considered them of sufficient importance to forward them to the authorities, the government itself has not given more impetus to the investigations.”

What investigations are underway?

At least three investigations are now ongoing.

  • The Fiscalía is looking into the OCAD Paz allegations; in early July, investigators brought Archila in for questioning about what he knew. (Archila, who often served as the face of peace accord implementation within the Duque government, is not suspected of wrongdoing in this case.)
  • Colombia’s Internal Affairs Office (Procuraduría), which administers administrative investigations and punishments, has opened 24 disciplinary proceedings connected to the case, covering 13 of Colombia’s 32 departments (provinces).
  • As noted above, Colombia’s Supreme Court has opened preliminary investigations against three Conservative Party members of Congress.
  • Colombia’s Congress may carry out a political oversight debate, but that has not happened yet.

With the exception of the congressional action, these investigations are likely to take many months.

Is this the only scandal involving corrupt management of rural peace accord funds?

No, there are others.

  • In Chocó, Colombia’s poorest department, a local political boss—a former congressman who served prison time for working with paramilitary groups— offered a lawyer (himself the brother of a former paramilitary leader) “several projects in PDET municipalities” in exchange for a loan to his son’s congressional campaign. The lawyer turned him down flat. (Edgar Ulises Torres’ son failed to win election in March, winning just 2 percent of the vote.)
  • In the Caribbean department of Cesar, Ávila, the former DNP royalties chief, appeared in an anonymous complaint regarding major contracting irregularities in a multi-million-dollar solar panel project.
  • In Valle del Cauca, the Pacific department whose capital is Cali, more than US$100 million in OCAD Paz funds for PDET municipalities ended up being administered by a body run by the governor’s political machine, which mostly handed out no-bid contracts.

Why is this scandal particularly harmful to U.S. and international community interests in Colombia?

The U.S. government and Colombia’s other international donors have invested heavily in implementing the 2016 peace accord, including its promise of undoing the lack of government presence in the country’s rural areas. That state-building effort, foreseen in the accord’s “rural reform” chapter, required Colombia’s government to move fast, filling vacuums left by the FARC before other armed groups could move in.

Colombia has mostly failed to do that—and now a corruption scandal provides a compelling argument for more safeguards and red tape, which would slow the implementation process even further.

Government presence and services in PDET zones offer the greatest hope for denying territory to organized crime, armed groups, and illicit economies, from coca to illegal logging to wildcat mining. The OCAD Paz scandal shows that hope being undermined by corruption of the most vulgar sort: the kind that robs resources from the poorest and most violence-wracked Colombians.

This is exactly the kind of behavior that the peace accord sought to undo, by empowering social leaders, increasing community participation in the PDETs and similar development programs, and establishing strong oversight bodies. All of these efforts flagged badly during the Duque government.

The Petro government must ensure accountability

It is now up to the new government of President Gustavo Petro to restore trust in the peace accord implementation process. WOLA urges the Petro government to give the OCAD Paz investigations the resources and high-level political backing that they require. We urge Colombia’s Congress to move forward with oversight hearings.

Since the scandal involves the new government’s political opponents, much of that is likely to happen. However, the facts may at times lead investigators to people whose political support could be needed to achieve other priorities. (The Conservative Party’s legislators, for instance, are up for grabs, having decided not to join the opposition bloc in Colombia’s Congress.) The Petro government must ensure that those responsible for the OCAD Paz scandal face consequences, regardless of where the investigation leads.

WOLA encourages U.S. diplomats to make clear, in all appropriate ways, that those investigating this scandal have Washington’s full political support, and that the U.S. government continues to support the PDETs and other rural reform efforts within the peace accord.

Finally, WOLA urges Colombian authorities to provide any necessary protection to Santos and Nohra, the reporters who broke the OCAD Paz story. In mid-July, Nohra reported receiving threatening phone calls.

Tags: Budget, Corruption, Implementation, Stabilization

August 16, 2022

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