El Salvador’s Constitutional Court Considering Claim Against Presidential Candidate Tony Saca

The Constitutional Court of El Salvador yesterday accepted a claim filed by Ramiro Peña Marín y Wilmer Humberto Marín Sánchez that the presidential candidacy of Tony Saca is unconstitutional.

The Court is considering three claims – 1) Saca, who was President of El Salvador from 2004-2009, isn’t eligible to run again until 2019; 2) he is guilty of fraud during his presidency; and 3) he has shares in corporations that have state contracts, which is a violation of Article 127 of the Constitution.

Tony Saca, who is running as a candidate for the UNIDAD party, is not the defendant in the case; rather it is the Supreme Electoral Tribunal that has to prove the constitutionality of their decision to certify his candidacy. The Court has given them 10 business days to submit a brief justifying their certification of the Saca candidacy. After the TSE has submitted its brief, the Court will send the case to the Attorney General’s Office to get their opinion.

The first claim argues that a former President cannot run for another term until he has been out of office for an entire term. Article 152 of the Constitution says, “The following shall not be candidates for the President of the Republic:

1^st – He who has filled the Presidency of the Republic for more than six months, consecutive or not, during the period immediately prior to or within the last six months prior to the beginning of the presidential period.

The plaintiffs argue that the former president is ineligible to run again until after the new President takes office in 2014, and he couldn’t begin a second term until 2019.

The second argument is that Tony Saca committed fraud in 2009 when his administration submitted its final report. The plaintiffs argue that there was no way the administration could complete the report appropriately until those who had positions in the administration had finished going through their final audits, which did not happen until 2010.

The third argument the Court is considering is that Tony Saca is ineligible to be President because he holds shares in corporations that have government contracts. Article 152 .7, which refers back to 127 .6, of the Constitution prohibits a President from having government contracts. The plaintiffs argue that his ownership of Grupo Radial Samix, which has government contracts, makes Saca ineligible to run. They also argue that his involvement in the National Telecommunications Administration, which also has government contracts, makes him ineligible. Saca has argued that he transferred interests in these corporations to family members to avoid a conflict with the Constitution, but the plaintiffs argue this was insufficient and just an attempt to circumvent the constitutional requirements. He also argues that the concessions were to corporations, and while he was on the board of those corporations he did not own the concessions.

Tony Saca responded to the claims by saying he is sure the Constitutional Court will resolve the claim in his favor. He also said the claims show that the ARENA party is afraid of his candidacy and that they have had to resort to a dirty campaign. The former president also pointed to polls that show his candidacy will guarantee that no one candidate will win 50% of the vote on election day, forcing a runoff.

There were six other claims of unconstitutionality related to the Presidential Candidates – 4 others against Tony Saca (UNIDAD), one against Norman Quijano (ARENA), and one against Sánchez Cerén (FMLN). The court did not validate these complaints; they only agreed to consider the three against Tony Saca.

El Faro.net points out that if the Court agreed to hear the case, it means that there is a real constitutional issue to debate – this is not just a formality. All five members of the Court signed off on the decision.

Tony Saca is not having a good week in the press. On Tuesday (November 19, 2012) El Faro published an interesting report on Saca’s earnings during his presidency. They found that in 2003, the year before he became president, Saca was worth roughly $600,000 and had an annual income of  $200,000. By 2009 and the end of his Presidency, Saca was worth $10.5 million, more than 16 times what he was worth the year before he was sworn in as President.

If the Constitutional Court decides to annual Saca’s candidacy, it will most likely favor Norman Quijano and the ARENA party. Polls indicate that Saca is splitting the more conservative votes, giving Cerén and the FMLN a boost. The argument is that if Cerén can’t win in the first round, he’ll be able to peel away enough Saca supporters to win in the second and become President.

The last polls from La Prensa Grafica, however, show a close race with the Cerén and the FMLN ahead with only 29.4%. Quijano and the ARENA are close behind with 28.3%, with Saca is a distant third getting only 9.8% of the vote. Approximately 30% of voters remain undecided, which means this race is still far from over.

Latest Presidential Polls out of El Salvador

IUDOP released the results of a new survey and FMLN presidential candidate Sanchez Cerén seems to have moved ahead in the polls with 36% support. Former Salvadoran President Tony Saca, who is representing a Unity party, is second with 28% support, and ARENA candidate Norman Quijano is in third place with 25%.

If there were a second round of voting, which occurs if no candidate receives more than 50% of the vote, Cerén would defeat Quijano 43.6% to 41%. If it were Cerén and Saca facing off in a second round, the polls show a virtual tie (42.5% Ceren, 42.8% Saca). If a second round of voting matched Saca against Quijano, Saca would win 39.2% to 30.1%.

The FMLN is generally enjoying more support than the other parties. Based solely on party, if the elections were today the FMLN would get 44.1% of the vote, while the ARENA would get only 25%. The GANA party, which comprises much of Tony Saca’s coalition would only get 12.9% of the vote.

Polls released last week from CIOPS/UTEC had somewhat different results. Based on party affiliation, they show a near three-way tie between the ARENA (29.5%), the FMLN (28.5%) and Unity (23.4%).

The elections are not until February 2014 so there is plenty of time for Quijano to connect with rural voters or any number of factors to sway voters one way or the other.

 

Dollarization: “A Sack of Unfulfilled Promises”

In January 2001, El Salvador began the dollarization process, which changed the official currency from the Salvadoran Colon to the U.S dollar. According to an article posted on Tim’s El Salvador Blog, former President Francisco Flores and his Minister of Finance, Manuel Enrique Hinds, made the change in order to keep interest levels low, control inflation and increase foreign investment.

In the twelve years since, Salvadorans have engaged in a constant debate over dollarization – has it been good or not, and should they keep the U.S. currency or revert back to the Colon. In June 2011, we posted an article on this blog looking back at ten years of dollarization, concluding that it has not brought about the positive benefits promised.

Others have reached the similar conclusions, including the current President of El Salvador’s Central Reserve Bank, Carlos Acevedo who earlier this month said dollarization was “a sack of unfulfilled promises.” The Central Reserve Bank is a government-controlled entity that regulates many aspects of El Salvador’s economy, including its currency, and Acevedo’s opinion carries some weight.

This is not the first time Acevedo has criticized dollarization. In March 2012 he penned an opinion piece for El Faro that described the process of planning for and implementing dollarization as “hasty and improvised.” He also said that reversing dollarization (de-dollarization) would be even more detrimental. Acevedo, however, also told Contrapunto that “the next government will be forced to consider the possibility of de-dollarization to allow for a monetary policy that provides greater flexibility of public finance, and so it will be able to return to printing money and adjusting interest rates to stimulate the economy.

Bank President Acevedo made his most recent statements (reported by Active Transparency) following the release of a government study on dollarization, which reached some rather negative conclusions. The report found that many key economic indicators, including exports and GDP fell, while inflation and interest rates rose. Dollarization has failed to shield the economy from downturns and instead made El Salvador more susceptible to instabilities in the U.S. economy, as witnessed during the 2009 recession. The Economista published an article yesterday reaching very much the same conclusions.

In his statements this month, Acevedo said dollarization was “badly designed, improvised and lacking consultation,” and that El Salvador’s fiscal performance with dollarization was the worst in sixty years. He also said the performance was so poor that even proponents of dollarization could not ignore its negative impacts. Even in his most recent comments, however, Acevedo stressed that the Funes administration is not considering de-dollarization and that doing so would cause more economic hard and instability. One of his fears is that Salvadorans would make a run on the banks, withdrawing dollars before they were converted to Colones or another currency.

While President Funes may not have de-dolarization plans for the last year of his administration, Vice President and FMLN 2014 presidential candidate Sanchez Ceren said in May 2012 that dollarization was the cause of the current economic recession and that El Salvador’s currency had to be changed back to the Colon.

Norman Quijano, the Mayor of San Salvador and the ARENA party’s 2014 presidential candidate stated in the past that dollarization would be beneficial to consumers. In a more recent interview he said, “reversing dollarization would be the worst thing to do.” Former President Tony Saca, who may run as the GANA party’s 2014 presidential candidate, stated in the past that he supported dollarization and that de-dollarization would be detrimental.

Acevedo’s comments paint a pretty difficult position for El Salvador in terms of the country’s economic policy. Dollarization has been bad, but de-dollarization would be really bad. While the current slate of presidential candidates have made general statements, it is unclear whether they are open to more nuanced positions that will give government economists more tools to promote a more stable economy.

Street Vendors Ousted from Downtown San Salvador

San Salvador looks a bit like a war-zone today after mayor and ARENA presidential candidate Norman Quijano deployed 1,000 police officers and 4,000 city employees to oust 970 vendors from 33 blocks in the downtown area.

When police and city workers showed up Friday with heavy machinery and began clearing the area, vendors fought back by setting up barriers and lighting fires. They were eventually removed, but not before 10 people were injured including 6 police officers. The mayor has asked for locals to be patient as 2,500 workers clean up the area, a process he expects to continue through Tuesday. He also estimates that the clean up will cost taxpayers a whopping $200,000!

Downtown El Salvador has been the home to an informal market for many years. Venders sell just about everything – food, clothing, videos and music, school supplies, hardware, and so much more.

Vendors did not have advanced notice of the removal and many lost all of their merchandise and other capital investments including refrigerators, jukeboxes, slot machines, video games, antennas, and much more. One vendor, who lost $10,000 worth of merchandise, told La Prensa Grafica, “they did not give us the opportunity. They arrived and threw us out and we lost all of our things. The mayor is responsible for everything.”

La Prensa Grafica noted that this was not the first action of its kind. Since 2009, the San Salvador municipal government has removed vendors from 167 blocks in the city in more than 31 interventions.

The mayor’s office says the vendors are able to move to a central market in the area where there are 623 stalls available for them to use. Of course that is not enough space to accommodate for the 970 vendors removed over the weekend.

This has been a complex issue for many years (downtown street vendors organized their first union in 1962) and there are some real issues, all of which stem from the systemic exclusion of people from the formal economy. Salvadorans without jobs can generate income by selling things on the street, generally to other poor people who can’t afford to shop in the formal economy. These informal markets are a bad deal all the way around. The street vendors lack the security, rights, and benefits that their counterparts in the formal sector have (or are supposed to have, but that’s another article). But they also don’t collect or pay taxes, which has been a point of contention for the international community (World Bank, IMF, U.S, and other). Many street vendors also violate international intellectual property laws by selling pirated movies, music, software, and clothing ($10 knockoff Ray Bans). Street venders also clog downtown streets, and if you’ve ever tried to take a bus through downtown on a Friday afternoon, you know how bad it can be.

Spending $200,000 to clear street vendors with bulldozers is in no way a sustainable solution to these problems. It doesn’t help venders get work in the formal sector and it definitely doesn’t mean low-income folks will all of a sudden start buying their blue jeans at Metro-Centro (a San Salvador shopping mall).

These evictions only mean that the poor have even fewer and fewer options – but that seems to be a global trend.

Here is a link to photos of the destruction.

 

ARENA Nominates Norman Quijano

COENA, the ARENA’s executive committee, announced that it has selected San Salvador mayor Norman Quijano as their 2014 presidential candidate. Other possible ARENA candidates included former Vice President Ana Vilma de Escobar, Diputado Edwin Zamora, and former Chancellor Francisco Laínez.

Quijano is a 64 year-old dentist from Santa Ana. His political career began in 1994 when he was elected to the Legislative Assembly, where he served for fifteen years. In 2009, he was elected the mayor of San Salvador, defeating FMLN incumbant Violeta Menjívar. This March he won a second term as a cadre of ARENA candidates won other former FMLN strongholds throughout the San Salvador metropolitan area.

Friends of Quijano have a website up with more biographical information including a 10 minute video.

More than 18 months before the March 2014 elections, both of El Salvador’s major political parties have selected candidates. In May the FMLN chose Sanchez Cerén, the current Vice President under FMLN President Mauricio Funes. It also appears as though former President Tony Saca (2004-2009) will run for another term as President, this time representing a coalition of the GANA, CN (Concertación Nacional – formerly the PCN), and PES (Partido de la Esperanza) parties.

Norman Quijano’s nomination is no surprise. In a July survey, 71% of respondents indicated that Quijano would be their best candidate for the ARENA party. On the contrary, 76% said that Vice President Cerén would not be the best candidate for the FMLN. The survey also found that 32.6% of respondents supported ARENA, while only 20.7% supported FMLN. GANA came in a distant third with only 4.6% support. Almost 40% of respondents didn’t have a preference for any of the parties. Perhaps the most telling was that 60% thought the ARENA would win back the presidency.

Despite his popularity, the ARENA mayor has sparked his share of controversy this year. In March 2012, the Salvadoran Institute for Municipal Development (ISDEM) sued Quijano for using his position in the Institute for political purposes.

A month later, the Court of Accounts found that as Mayor of San Salvador, Quijano had mismanaged over $580,000 in 2010 and 2011. The funds were provided by the Fondo para Deserrollo Económico y Social (Fodes) for public infrastructure projects, but Quijano used them to cover administrative expenses. As of August 11, the Mayor still hasn’t responded to the Court’s request for more information. Last week an official from the Mayor’s office denied that the funds were used for administrative costs.

With these allegations pending, Quijano recently led a group of ARENA mayors to request support from their conservative colleagues in the Legislative Assembly to increase the amount Fodes contributes to municipalities for infrastructure projects.

As the Salvadoran presidential race (more like an ultra-marathon) gets under way, it’s easy to look at polls like the one above, and conclude that Quijano will be the next president of El Salvador. But nothing is that straight forward, especially in Salvadoran politics. Each candidate has strengths and weaknesses, and Tony Saca could end up having a lot of influence over the outcome.

ARENA ahead of the 2014 Presidential Elections

With the 2014 presidential elections “just around the corner” in El Salvador, political parties are well into the process of picking their candidates. Like other countries, Salvadoran political parties go through a nominating process to decide who will represent them in the general election. While the FMLN has all but officially chosen Sánchez Cerén, the current Vice President of El Salvador, as their candidate, the ARENA party has yet to select their candidate. Some in the ARENA party are still are still trying to change the way party officials will choose their 2014 representative.

El Faro reported on Monday that a group of ARENA reformists have proposed changing the nominating process. The party’s top leaders would still choose the candidate, but their vote would be secret. One party spokesman said, “if passed the reforms could change the invisible structure of the party.”

While it may seem counter-intuitive that secret ballots would somehow eliminate the “invisible structure of the party,” the idea is to provide those who cast votes with some anonymity so they can vote on merit. According to the El Faro article, four main power blocks finance and control the ARENA party. A former official in the Saca Administration (2004-2009) said these interests exert the most influence during the nomination of presidential candidates. Once a president is elected they may try to push an issue every now and then, but for the most part they leave them alone.  The secret ballots during the nominating process would in theory decrease the influence these four powerful interests have over the nominating process.

The nominating process has always been top-down, with the party base having little to no input. The secret ballots won’t change that power structure at all. The party leaders will still be the ones casting votes and the base won’t know whom they voted for. The main shift would be a consolidation of power away from the four interest groups back to the party leaders. One ARENA founder suggested the party give the base a voice in choosing candidates by moving to a party-wide vote. Doing so would bring the party more in line with the independent and inclusive voting practices that the Supreme Court has been discussing for the past year.

The El Faro article indicates that former President Alfredo Cristiani supports the reforms and is currently surveying the AREANA leadership to see if he can muster up a consensus to vote them into the party bylaws. While he has benefited from the current system over the years – it got him elected president in 1989 – it he would likely benefit from the changes. Instead of having to answer to the power blocks, party leaders will have more control.

The proposed reforms are not new; party leaders have been considering secret ballots for many years but they have not had the internal support to get them passed. Opponents of secret ballots argue that the current system has served the party well for the past 31 years and that there is no need for reform. They also argue that the current open system is more transparent.

The 2014 election is important for ARENA. They lost the presidency to the FMLN in 2009 and they want it back. ARENA did well in the March 2012 municipal and legislative elections, taking control of the Legislative Assembly and winning several municipal seats that have been in the hands of the FMLN for many years.

A few names have been tossed around as possible ARENA candidates for 2014. Norman Quijano just won his second term as mayor of San Salvador, and is often mentioned as a possible candidate. He said shortly after the elections that he would certainly be open to the idea of running. Another possible candidate is Ana Vilma de Escobar, who was Vice President under Tony Saca (2004-2009) and is the wife of one of El Salvador’s wealthiest businessmen. As already mentioned, Sánchez Cerén is the likely candidate for the FMLN party, and former-president Tony Saca may try to run as a GANA party candidate. Back in April, Tim’s Blog posted short bios on each of these candidates.