Tuesday, February 06, 2007

Water for El Salvador -- ANDA and the Perla scandal

El Salvador's water utility, ANDA, has been beset by problems, and the highest profile problem is the corruption revealed in the Carols Perla case. In August 1994, president Calderon Sol appointed Perla, a Salvadoran businessman, as the first civilian president of ANDA. The Coordinating Commission for Water Resources Reform (Comisión Coordinadora para la Reforma Sectorial de los Recursos Hídricos, COSERHI) was created, with Perla as chairman, to reform the water sector. At least through the late 1990's, Perla was looked at approvingly by outside agencies, as in this Kennedy School of Government case study from 1999.

But by 2003-04, that had all changed. Perla stood accused of embezzling millions from ANDA, of engaging in bid-rigging and similar practices, and enriching himself at the expense of a water system which desperately needed investment. An article in the Texas Observer stated:

Let’s take, for example, Señor Carlos Perla, ex-administrator of ANDA, the public water utility for San Salvador. In 1998 Perla was favorably reviewed by water reform experts at Harvard University: "Perla had taken significant steps to improve El Salvador’s water system by developing legislation to establish an independent regulatory body and by improving the workings of ANDA," they said. At the same time, however, Señor Perla signed a contract with a Spanish company arranging for generous kickbacks to himself.

Presumably he did this while the Harvardians were not looking because if they had been they would have noticed that, while busily designing regulatory legislation, Señor Perla had built himself an extremely big new house. He is currently charged with illicit enrichment.

With corruption charges being brought against him in El Salvador's Court of Accounts, Perla fled the country. He was finally found in France, claiming that he was innocent but that he had fled because he could not get a fair trial in El Salvador. After a prolonged battle against extradition, French authorities finally turned Perla over to El Salvador and he was returned to the country last November and now awaits trial.

Any solution to the water woes in El Salvador will need to provide mechanisms to reduce the possibility of corruption undercutting the best-laid plans.

You can also watch this satirical video about the Perla scandal:


El-Visitador said...

"Any solution to the water woes in El Salvador will need to provide mechanisms to reduce the possibility of corruption"

You mean... mechanisms such as letting private firms run the thing?

When was the last time you heard of corruption at private co's such as CAESS, Del Sur, Telecom, DEUSEM, CLESA, Tigo, Telefónica, Banco Cuscatlán, Banco Agrícola and other privatized entities?

You are right! The last time you heard about corruption at such companies is back when these were still government run!

Anonymous said...

Corruption can be seen in both the private and public sector. There is such a thing as Enron.. the list goes on. Corporate law in El Salvador does not require corporate transperancy so it would be even worse than having it state run. Atleast if the state is running it there is some form of transperancy and accountability.

Anonymous said...

Banco Cuscatlan and Banco Agricola were illegally privatized by Cristiani mafia to benefit his little own mafia, as well as all the previous state run businesses. They established monopolies, could be charged with overcharging, or not exactly delivering the product for which they charged, and the banks and the bankers themselves are cuprits of money laundery. The reason why in this country people seldom get a gllimpse of the corruption sinde the gvernment benefititing the usual cabal of mafiosos is because they control ever judicial, legal organ of the country, and even shut down any supervising entity like Probidad. To top that, recently the bankers of El Salvador (who by the way had the bank's holding registered in Panama in order to avoid taxes) sold the banks to transnationals without any real transperency in the issue, but that doesn't stop PCN and ARENA from blocking any investigation into the matter in the Assembly. By the way, anynymous above me is right, and here in El Salvador we had OUR OWN ENRON... it was called INSEPRO/FINSEPRO