Envío Digital
Central American University - UCA  
  Number 196 | Noviembre 1997


El Salvador

End of ARENA and Future of the FMLN

ARENA’s deterioration has been rapid: its divisions are ever more evident and a scandalous financial fraud is presently sullying the highest-placed leaders. This situation allows the FMLN to open new spaces and broaden the spaces it already holds. It may be able to occupy them successfully if it knows how to resolve its great dilemma.

Ismael Moreno, SJ

Everyone is in agreement, though no one will say it aloud, that Sunday, September 21, marked the end of the government of Armando Calderón Sol, though he will continue to be El Salvador's President until mid-1999.

What happened that Sunday? The Nationalist Republican Alliance (ARENA), the governing party, decided to confront its major and growing internal crisis by electing former President Alfredo Cristiani as president of the party's National Executive Council (COENA) in its General Assembly. Cristiani is charged with putting a stop to criticisms of the party for its not-at-all transparent government administration, worsened in recent weeks due to scandalous financial frauds. ARENA also entrusted Cristiani to begin the campaign that will culminate in the 1999 presidential elections. ARENA is trying to keep its own party from falling apart while blocking the advances of its historical enemy, the FMLN.

From September 21 on, with Cristiani at the fore, fundamental government decisions will be made by the ARENA sector that blames Calderón Sol and the retiring COENA leaders for the party's crisis, the blunders in government management and the rise of the political left represented by the FMLN. But Cristiani's election does not signal a response to the crisis with much chance of success; it meets all the conditions to intensify the factors that led to its origin. Cristiani is not the solution to the ARENA crisis because he is a central problem in it.

Terminal Illness in ARENA?

ARENA was founded in September 1981 by the bloody Roberto D'Aubuisson, assassin of Bishop Romero. During the decade of war it acted as the political arm of the military that sought to destroy the guerrillas. It now finds itself in the death throes typical of a terminal crisis. Everyone agrees: ARENA has given all it had to give as a political institution of the Salvadoran right. And the right is now beginning to parade other political expressions that update its interests. ARENA was a party for the war, and has not known how to outgrow that war. While its party song still calls on people to "defeat communism," its leaders must sit down with the FMLN to negotiate national issues. The right was so affected by its commitment to the war that not even its economic proposals have shed the bellicose confrontation and senseless verbal attacks.

Three ARENA Sectors In Conflict

At least three sectors of the right are battling it out with each other in ARENA. The one headed by Calderón Sol is a group of politicians and businesspeople who, victims of their economic ambition, have drowned themselves in corruption and influence peddling and are now being displaced from political decision-making. The misdeeds of this sector were unveiled even more in mid-1997, with the publicizing of a million-dollar fraud by several financial officials who, taking advantage of the institutional weakness of the country's justice and security systems, diverted the savings of hundreds of Salvadorans toward diverse businesses owned by high-level government functionaries.

The sector headed by Alfredo Cristiani, directly linked to the government group, has been directing its interests toward controlling the financial sector and managing the political networks that will allow it to control the country's most profitable economic sectors: telecommunications, airlines and airports. This sector knew how to make use of the negotiations that culminated in the peace accords to keep hold of the country's economic threads. While Cristiani stuck to his peace discourse and met with the UN and the FMLN to reach accords that would put an end to the war, his hands were rapidly moving in banks and businesses to allow him to get the most out of that peace. He ended up being not only the "President of peace," but also the country's most powerful banker.

The third of these contending ARENA sectors is that of the most extreme rightwing businesspeople, those who conserve the most genuine tradition of what throughout Central America is known as the power of "the fourteen families." This group directly connects Calderón Sol's administration to Cristiani's economic policy and will never forgive Cristiani for having negotiated with the FMLN. It holds this "sin" responsible for the left's current rise and blames Cristiani a priori for any FMLN triumph in the next elections. Since this group had been the absolute owner of the country's economic life for so many years, it does not accept that a modernizing sector like Cristiani's made use of its term in government to take control of El Salvador's economic system. This sector has no qualms about using its media—originally dedicated to haranguing the left—to criticize Cristiani and company, whom it calls "the mercantilist right."

So Think ARENA Hardliners

It took only Cristiani's naming as president of ARENA's highest leadership body for businessman and former superintendent of state modernization Alfredo Mena Lagos to go public about the conflicts within El Salvador's powerful economic groups in his opinion column in El Diario de Hoy the very next day—Monday, September 22. "Now that ARENA's internal situation has been more clearly defined," he wrote, "El Salvador's political panorama is clearing up. With Alfredo Cristiani taking the post of COENA president, it is clear that the mercantilist right has taken over the party and that the possibilities for real change in its political direction have been eliminated."
The same Mena Lagos defined this new concept in a television interview: "The mercantilist right is characterized by giving its sectoral, business or personal interests first and foremost priority over the interests of the nation. I think a businessperson has the right and obligation to defend personal interests and positions; what is unacceptable to me is that a political apparatus is used to do this."
In his column, Mena Lagos clarified his evaluation of the men of the mercantilist right: "These individuals are the same ones who divided up the banks in a privatization process that was rigged from the beginning; those who prevent the entrance of more airlines, especially in the Central American market; those who want to give over airport management to local airlines; those who want to maintain secret contracts for electrical generation and block new local projects; those who systematically oppose trade liberalization; those who do not want a truly independent Central Reserve Bank; those who resist structural changes that would prevent rigged bidding; those who oppose decentralization; those who want laws and structures to be at the service of a new economic oligarchy. And they are the same ones who are handing over the country to the left through their political actions, repudiated by the people in the last elections."

Financial Scandal

"Finsepro will lend you money to buy your vehicle in less than 48 hours," read large billboards on the main roads of greater San Salvador before July. At that time no one linked to financial capital knew anything about the existence of Finsepro-Insepro. After July, the entire country identifies these twins with fraud and with the largest influence peddling ever known in El Salvador; its total exceeds US$300 million. At the same time that the fraudulent financial institution was made public, the names of "distinguished" families such as Mathies Regalado, Guirola and others were made public along with it. They appeared as part of the high-level organized crime network that is sacking the country and extending its tentacles through the public offices, enormous financial buildings and exclusive luxury residential zones of the capital, and even the poor neighborhoods of greater San Salvador.

"They Steal Among Themselves"

No one escapes from crime in El Salvador. The big-money frauds that have been made public since mid-year have now exposed the biggest criminals: some oligarchs who, enthused by the fabulous profits possible through financial speculation, have not only continued accumulating capital at the cost of the Salvadoran majority's calamity, but have decided to steal from each other. "If they do this among each other," commented an elderly woman from one of San Salvador's many poor neighborhoods, "what have they not done against us poor, and what will they continue doing?"
Three months after the Finsepro-Insepro fraud was uncovered, the following businessmen went to jail: Roberto Mathies Hill, the young president of Finsepro and person in charge of ARENA's business sector; Francisco Rodríguez Laucel, former superintendent of the financial system; Mario Galdamez, who in addition to being Finesepro's general manager also managed a car dealership and was the communication link with other enterprises to which the savings funds deposited in the financial institutes were illegally diverted. Prominent businessman Roberto Mathies Regalado, Mathies Hill's father, who is a fugitive, sends manifestos to the media from his hiding place and is organizing plans to guarantee a happy ending to the scandal in which he is involved. The jailing of some of those responsible appears to have been a requirement of others involved in the frauds in order to protect the lives of those who were Finsepro's public face. It was also done to keep the declarations made by those now in jail from acquiring legal force over those with high responsibilities in the corruption ring who still have important influence and decision-making power in the banking system, commerce and public administration.

In It Up to the Neck

Never in El Salvador's history have so few people accumulated so much capital as in these years. Of all the economic sectors, the financial sector is the only one that continues to grow and grow. El Salvador's current economy can be defined as the boom of large financial speculation. Though some specific financial frauds have now been made public, all analysts agree that many more illegal operations exist than those that are known or even those that will become known, because speculation fever envelops all economic spheres. It is a question of following the path of those with major influence and power in the banks to know who is determining the country's direction.

The Calderón Sol government is involved in the fraud up to its neck. Even though the president of the Central Reserve Bank (BCR) assured when questioned by the Legislative Assembly that he knew nothing about the case until the day before it was made public, everything indicates both he and the President of the Republic knew of this fraud since at least early 1997. Everything also indicates that they not only did not confront the fraud, they held various meetings to put in motion a strategy to cover it up with extraordinary economic measures so as to prevent a scandal. They were concerned about the possible discrediting of well-known members of the "sacred" Salvadoran families and terrified that this would destroy ARENA even more, as well as negatively affecting its highest leaders and the President himself.

Exceptional Questioning

The financial scandal led the Legislative Assembly, with the vote of all opposition representatives, to use its constitutional right to "extraordinary questioning" for the first time. In El Salvador, extraordinary questioning is an exceptional recourse used only when other measures are insufficient to get convincing responses to critical national problems. The Assembly questioned BCR president Roberto Orellana Milla, considered architect of the ARENA economic policy since 1989, when he was named to that post. After 20 hours of interrogation and debates, the questioning left clear indications both of irregularities in the financial system and of Orellana Milla's desire to hide the truth by riddling his answers with technical concepts.

After questioning the BCR president, the Legislative Assembly's Special Commission for Financial Affairs called ex-superintendent of the financial system Francisco Rodríguez Laucel, who contradicted Orellana Milla in significant aspects, especially those related to his prior knowledge of the financial fraud. The presentation by this former government official was critical to the Assembly's agreement on September 4, again with the vote of all opposition parties, to recommend to the President of the Republic that Orellana Milla be fired for incompetence and lying.

After the uproar sparked in political circles linked to banking and ARENA's "mercantilist right" by this legislative branch recommendation, President Calderón Sol decided to ignore it. With the unanimous support of the Council of Ministers, he ratified Orellana Milla as the Reserve Bank president. To fire the architect of ARENA's economic policy would be to acknowledge the policy's failure and expose the party to the severe process of truth and a dangerous calling up of accounts. It would consequently mean that ARENA would enter the electoral campaign even more weakened. Ratifying him in his post meant continuing to cover up the truth and feeding impunity as a government norm. With either of these options it was inevitable that the party and governing administration would be discredited and weakened. Calderón Sol decided, as always, on the easier, well-worn path.

What Remained Clear

The questioning of the BCR president clarified that the financial system, like all of the country's institutions, is very fragile, easily manipulated, and has no control mechanisms that guarantee its effective functioning. There is no doubt that the BCR president knew perfectly well about the corruption rampant in the financial system. But he had no problem, assuredly with backing from other high- level government officials, hiding the reality or keeping silent so as to not affect the financial-business elite who today run El Salvador's political destiny.

Despite everything, the questioning of the BCR president, as the weekly Proceso of the Central American University (UCA) in San Salvador stated, "uncovered many of the ills that politicians suffer from, their inconsistency at the moment of having to defend political projects, and their lack of clarity when they adopt positions on national problems. It is clear that the most notable men in Salvadoran public administration systematically control information and involvement in influence peddling and the list of them surely leads in a clear path to the President of the Republic."

Wicked Humor

There was no lack of maliciousness among Salvadorans; the first jokes quickly began running through neighborhoods. Lounging in the doorway of a ramshackle tavern in a poor San Salvador neighborhood, one who never had money to save says with a grin, "I'm poor because I deposited all my savings in Finsepro."
Some micro-enterprises have already produced the first t-shirts with images and statements about financial corruption and corrupt individuals. And, of course, the Regalados, the Guirolas and the Mathies Hills, famous for their fortunes and for being "good families," are great material for vulgar and double-entendre jokes.

Violence: A National Epidemic

The diverse studies that have been done on violence in El Salvador, on the insecurity that accompanies every step through the country, indicate that violence is not just the legacy of the war and a consequence of poverty. It is a more complex reality. Studies by both governmental and nongovernmental organizations suggest that the war was a violent phenomenon behind which lay hidden many other mortal expressions of a culture of generalized and national violence.

Twelve years of war left 75,000 dead—some 6,250 deaths per year, which represents 125 deaths for every 100,000 Salvadorans annually. The victims of the war were counted, but the dead from other forms of violence? The first Pan American Health Organization (PAHO) report was released in 1991-92, the last year of the war, when the fighting had diminished drastically. Victims of other forms of violence were already included in that report. That year there were 9,850 deaths, 197 for every 100,000 Salvadorans. The data already indicated the complexity of the issue.

Today, with the war at a distance, the most conservative studies speak of an annual average of over 140 violent deaths for every 100,000 Salvadorans, which places El Salvador in one of the highest positions worldwide for violent deaths. According to a study done by the UCA's University Institute of Public Opinion (IUDOP), some 60,000 people were attacked by firearms in 1996, 35,000 were injured with knives and 150,000 were victims of robberies. This means that some 20% of adults in greater San Salvador have been victims of one form or another of violence. With reason, PAHO speaks of violence in El Salvador as a genuine, extended and prolonged "epidemic." This epidemic means deaths, injuries, general fear and also a serious economic cost for the country. There are no precise data about the economic cost of violence, but the UCA study gathers a partial and conservative report of data from the Health Ministry, which states that in 1996 close to $19 million was spent to attend emergencies generated by weekend violence in greater San Salvador's primary assistance centers.

Violence that Comes from the Heart

According to the IUDOP study, published in September, crime is a very important factor in the generation of violence, but not the only one. Some others are present within the family and in people's hearts. In El Salvador acts of violence are not the only thing produced. There is also an attitude of violence in the hearts of Salvadorans. Some 5% of those polled by the UCA admitted that they had hit another person; 7% said they had insulted another person; over 6% admitted that their partner had insulted them, and 8% of women said they had been hit or insulted at least once by their partner in the last year.

The study demonstrates that children are the most frequent victims of violence in the home. Of those polled, 80.5% admitted that they had been physically punished when they were minors, 30% said they had spanked one of their children in the last month and 13.1% said they had punished them using some sort of object.

The study also investigated the population's attitudes towards violence. Six of every 10 Salvadorans would approve of killing rapists, almost 7 of every 10 approves of or understands when someone kills a person who is frequently threatening a community, more than 6 of every 10 would approve of or at least understand "social cleansing"— killing "undesirable people." Six of every 10 say they would kill to defend their family and more than 4 of every 10 are willing to kill to defend their property.

The IUDOP study concludes by saying that "combating violence has to do not only with reforming penal laws, but also with more practical questions: control of guns and of alcohol and drug consumption; strengthening the justice and security apparatus; and psycho-social attention to the population affected by the war, something that has still not been done." Above all, there must be a national program of "continued efforts," involving all social sectors determined to confront this epidemic until it is eradicated, until society is healed, allowing the emergence of a true and permanent culture of peace.

The FMLN and its Challenges

In recent months, the FMLN has confronted its greatest challenge within the Legislative Assembly so far. Both its strengths and its weaknesses have been seen with great clarity in the Assembly. The FMLN has managed to put various burning national issues on the legislative agenda and to join forces with representatives from other opposition parties to win some important battles.

Its first successful battle was to vote down the law approved by the previous legislature to privatize ANTEL, the telecommunications institute, considered the state's best enterprise, although ARENA later got the Assembly to look at the issue again and finally approve the sale. The discussions generated around this issue showed that the new legislative composition has ushered in a substantial improvement in parliamentary debate over the previous habit of presenting a bill then voting with no debate. The debates around privatization of the telecommunications institute overturned this formality; from now on voting on bills as well as legislative accords will require open debates in which the outcome will depend on the abilities of the two majority parties to convince the minority parties. The greatest defeat the FMLN bench forced on ARENA so far was to pull together the opposition legislators to request the questioning of the BCR president then get the necessary votes to recommend that he be fired.

But this is not enough. The FMLN is beginning to experience the symptoms of internal struggles as the date for electing new party leaders nears. The party does not have new figures with clear and accepted leadership among the diverse internal currents to replace Leonel González, who is finishing his second term as FMLN president and by the statutes is ineligible for a third term. Yet those with a recognized history would be rejected by some sectors if they were elected.

The FMLN's Central Dilemma

As the country's main political opposition and leftwing force, with significant power in the Legislative Assembly and in the most important cities, the FMLN continues to face a central dilemma: either face Salvador's challenges with its own forces, it own concepts and historic leaders, or broaden the fan to join with forces from other social sectors not militantly or politically linked to the Front's history and life, but interested in finding a response to major national problems. As long as the FMLN concentrates on maintaining its own strategies and analytical criteria and keeping controversial leaders who are eroded by personal incoherences in their posts, it will be difficult for it to successfully face new and complex national challenges. The secret to guarantee the FMLN's growth and vitality as a truly leftwing force lies in an opening to other social sectors and a willingness to listen to their feelings and thoughts and to value their participation. It is also in having serious proposals and electing leaders who are credible and transparent in both public and private life.
A recent study by the UCA on governability in the country shows that Salvadorans generally believe less and less in the proposals of politicians and the use they make of the instruments of government. Over half of those polled not only have no political preferences, they demonstrate either indifference to or rejection of politicians' activities. Although the study establishes that the Legislative Assembly is currently valued over other state branches, an important percentage of the population is convinced that its demands are barely represented by the legislators. The study leaves no doubt that the consensus of the population is that the legislative branch's greatest challenge is to listen to the demands of diverse sectors of Salvadoran society.

FMLN's Obligatory Agenda

The greatest concerns of Salvadorans, according to the poll, are public safety, the economic situation and corruption in its many expressions. If these are the major issues for Salvadorans, and if their greatest demand is that government representatives deal with them, both in the legislature and in the municipalities, then the obligatory agenda for the political parties could not be clearer.

If the FMLN, as the expression of the Salvadoran left, really wants to shorten the distance between its leaders and programs and the apathetic population disenchanted with policies and politicians, it will have to deal with these issues and convert them into its work agenda. It is a work agenda for a long time.

Print text   

Send text

<< Previous   Next >>


Contadora and Esquipulas Ten Years later

The Problem of Property And Property Owners

An Accord Besieged by Discord

El Salvador
End of ARENA and Future of the FMLN

The Left: A Past with no Present But with a Future?

Lavalas: A Fork in the Road

Envío a monthly magazine of analysis on Central America
GüeGüe: Web Hosting and Development