Guatemala president's brother, son held on suspicion of fraud

GUATEMALA CITY (Reuters) - Guatemala on Wednesday arrested the brother and a son of the country’s president, who swept to victory with an anti-graft campaign, for their alleged involvement in corruption.

Sammy Morales, (L) brother of Guatemala's president Jimmy Morales, arrives at the court after being arrested for his alleged involvement in a corruption case in Guatemala City, Guatemala, January 18, 2017. REUTERS/Luis Echeverria

Jimmy Morales was elected president in 2015 pledging to clean up Guatemalan politics after riding a wave of public anger over a corruption scandal that led to the arrest and trial of his predecessor, retired General Otto Perez.

The alleged corruption in Morales’ family represents a major blow to the former comedian’s credibility in a country roiled by years of armed conflict and political corruption.

Last September, a judge barred Samuel “Sammy” Morales, an older brother and a close adviser to the president, and Jose Manuel Morales, one of his four sons, from leaving the country over suspicious payments linked to the mother of Jose Manuel’s then-girlfriend in 2013.

On Wednesday, Guatemala’s Attorney General Thelma Aldana said Sammy Morales had been arrested, and that Jose Manuel had turned himself in.

Aldana asked that the two men be detained pending a trial for fraud and, in the case of Sammy Morales, money laundering.

The charge of money laundering was later dismissed.

Another eight people, including officials from the general property registry, were also detained.

Aldana said that so far, it had been determined that neither Sammy Morales nor Jose Manuel Morales made any money from the scheme, which she called an “illicit favor.”

“The support to my family is 100 percent. My respect for the law, as a citizen and president, is also 100 percent, as it always has been,” President Morales said to reporters after inaugurating a school outside the capital.

Aldana said the president had “not interfered once” during the investigation into his brother and his son, who studies in the United States and returned to Guatemala to answer questions in the case.

After his arrest, Sammy Morales told reporters he was willing to answer any questions.

“This doesn’t affect me because it shows nobody is above the law,” he said.

The alleged corruption arose when the mother of Jose Manuel’s then-girlfriend agreed to supply Christmas hampers to officials at the national property registry, which is being investigated for suspected graft, according to testimony given during a public hearing about the registry.

Guatemala’s general property registry records land and property ownership across the country.

The woman sent the registry a bill for 90,000 quetzal ($11,936) made out in the name of a local restaurant for 564 breakfasts, not Christmas hampers, according to the attorney general.

The breakfasts were not delivered, according to statements given by a witness during the public hearing.

Sammy Morales, the president’s brother, said at the time he had helped obtain the bill from the restaurant as “a favor” to his nephew, but denied it was fraudulent.

It was not clear what happened to the Christmas hampers or why the woman submitted the bill through the restaurant.

($1 = 7.5400 quetzals)

Writing by Gabriel Stargardter and Enrique Pretel; Editing by Simon Gardner and Jeffrey Benkoe