2 Guatemalan officials probed over BCCI loans INTERNATIONAL BANK SCANDAL

August 04, 1991|By John M. McClintock | John M. McClintock,Sun Staff Correspondent

GUATEMALA CITY -- Former Guatemalan President Vinicio Cerezo Arevelo and the current army chief of staff are being investigated as a result of $43 million in loans from the scandal-ridden Bank of Credit and Commerce International.

The bank's worldwide seizure last month and subsequent disclosures reveal that its tentacles may have controlled or corrupted hundreds of officials, from Peru to Zambia.

The BCCI investigation here is noteworthy for two reasons:

*It threatens the current government's fragile relationship with Guatemala's coup-prone military.

*It threatens to expose a BCCI network that U.S. investigators believe spread to government and military officials in El Salvador and Honduras. The two countries were key to illegal U.S. arms shipments to the Nicaraguan contras in the 1980s.

Attorney General Acisclo Valladares Molina said his investigation was continuing to press for evidence that BCCI may have been involved in financing Guatemalan military arms shipments to the contras in 1984.

At that time, Gen. Cesar Caceres, military chief of staff, suddenly resigned after it was learned he signed certificates for weapons that were secretly destined for the contras.

Mr. Valladares said that his investigation had yet to link former President Cerezo to BCCI funds but that it had unearthed Cerezo accounts at other foreign banks. Investigators are seeking to find how much money is in those accounts, he said.

He declined to identify the banks, but they are thought to be in Miami, where a two-man Guatemalan investigative team ended a visit last week.

Mr. Cerezo was traveling abroad and could not be reached for comment, said a spokesman.

The former president's half-brother, Milton, and two top generals have been linked to $420,000 in payoffs in the purchase in 1988 of three Jordanian helicopters, including King Hussein's personal chopper, Miami court records show.

The Sikorsky helicopters, worth about $2.5 million, were sold for $5 million, allowing for kickbacks to the officials, middlemen and BCCI, the records show.

The attorney general said that retired Gen. Roberto Matta Galvez, then head of Mr. Cerezo's presidential guard, received kickbacks and that Gen. Edgar Godoy Gaitan, now army chief of staff, was "probably involved" when he served as chief of the presidential staff.

General Godoy, due to retire in December, was head of military intelligence. He is the government's military representative in peace talks with Guatemalan guerrillas.

"My hypothesis is that BCCI and its friends wanted to involve as many high officials as possible so as to prevent an investigation into coffee smuggling and arms dealing," said Mr. Valladares in a lengthy interview Friday.

Aside from the helicopter case, the Guatemalan investigation has unearthed a $25 million BCCI loan to the National Bank of Guatemala. It was used to retire a loan from the U.S. Agency for International Development in 1989, said a private Guatemalan bank director.

But investigators cannot account for the bulk of the funds, said Mr. Valladares.

An additional $13 million in various BCCI loan accounts has been found at the central bank, but only documents at BCCI's branch in Miami will determine what actually happened to the money, he said.

If the revelations result in prosecutions against former military officers, a political crisis could result.

Mr. Valladares said he would not hesitate to bring charges against former officers. The attorney general said he did not fear that his efforts would provoke a military coup, citing the defense minister's support for human rights and the peace talks with the Guatemalan rebel forces.

However, two senior congressmen feared that the investigations and the take-charge attitude of President Jorge Serrano Elias may alienate the military and lead to his downfall.

Mr. Serrano, a devout Evangelical Christian in a predominantly Roman Catholic country, has sought to assert civilian authority over the military. But Gen. Luis Enrique Mendoza Garcia, the defense chief, has bridled at efforts to demilitarize, saying: "We don't understand that term, nor do we want to understand it."

As the first democratically elected government in more than 30 years, the Cerezo administration survived at least two coup attempts. It did so by playing ball with the conservative military brass, which traditionally skimmed about 10 percent of the $200 million defense budget, said a West European economist.

And while President Cerezo was fond of pointing to a steady drop in military expenditures during his administration, it was offset by money from the president's "confidential" discretionary funds for which there is no accounting, said the economist.

But the BCCI revelations indicate that Cerezo officials went further by taking kickbacks from military sales.

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