Guatemala detains anti-graft crusaders as U.S. pushes for rule of law

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GUATEMALA CITY, May 19 (Reuters) - Guatemala on Wednesday dropped a graft charge against a jailed former president and arrested former investigators who built cases against him, hours before a White House meeting to discuss concerns about the rule of law in the Central American nation.

The arrests and move favoring former president Otto Perez Molina were the latest setbacks to U.S. President Joe Biden's campaign to hold the powerful accountable in Central America.

Guatemala's first chamber of the Court for High Risk Crimes said that it dropped one of five charges linked to corruption and money laundering against Perez Molina, 70, whose government was brought down by corruption scandals.

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Perez Molina, a former army general, will remain in a prison on a military base, where he has been held since he resigned and lost his immunity in 2015.

Also on Wednesday morning, police arrested Juan Francisco Solorzano Foppa, a former prosecutor who was part of a team that revealed the first case of corruption against Perez Molina.

Solorzano went on to serve as the head of the Tax Administration Superintendency (SAT) between 2016 and 2018, where he built a reputation for chasing the wealth of powerful families that hold huge sway in Guatemala.

"This does not give me any shame," Solorzano said, showing the handcuffs on his wrists to reporters in court. "This shows we are touching the powerful people of this country."

Solorzano had been forming a new political party and was detained on accusations of falsifying official documents related to the party. Under a warrant in the same case, police also arrested Anibal Arguello, a lawyer who had worked for Guatemala's U.N.-backed anti-corruption commission CICIG.

Arguello is a witness in the main case against Perez Molina. Known as La Linea, the case relates to corruption in Guatemala's customs agency.

Solorzano is best known for uncovering and reporting a corruption network within SAT that had been defrauding the state by helping business leaders avoid paying taxes.

The Biden administration has made targeting corruption central to its $4 billion strategy to address "root causes" driving migration from the so-called Northern Triangle countries of Guatemala, Honduras and El Salvador.

On Wednesday, only hours after Solorzano's detention, U.S. Vice President Kamala Harris met in Washington with four former Guatemalan judicial officials, some of whom she said fled the country because of their work against corruption.

The officials included former attorneys general Claudia Paz y Paz and Thelma Aldana, and former judges Claudia Escobar and Gloria Porras.

"Injustice is a root cause of migration and in particular it is causing the people of the region to leave their homes involuntarily, meaning they don't want to leave but they are fleeing," Harris said during the meeting.

The vice president is scheduled to visit Guatemala in June.

A day earlier, a U.S. State Department report on Central American officials "credibly alleged" to be corrupt includes six sitting Honduran lawmakers and two Guatemalan legislators, according to a list released by the office of U.S. Representative Norma Torres on Tuesday.

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Reporting by Sofia Menchu in Guatemala City Writing by Drazen Jorgic Editing by Rosalba O'Brien

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