AEI is a shadowy energy firm, managed out of Houston, Texas, with a huge problem on its hands. Its subsidiary in Guatemala, a country known for corrupt politics, civil war, and social inequality, is accused of paying bribes to get special government treatment. Back in the day, such behavior would have gone unnoticed. But a massive anti-corruption probe, driven by local and international prosecutors, has upended political life in the small Central American nation and put a solid portion of its governing elite behind bars. An American subsidiary, meanwhile, got caught in the middle.
AEI emerged from the Enron collapse, after a Cayman Islands–based investment group called Ashmore Energy International bought up the bankrupt giant’s international assets in 2006. Today, the privately owned firm operates pipelines and electricity generators in places like Brazil and Peru. One of its biggest projects is in Guatemala, where its subsidiary, Jaguar Energy Guatemala, owns a 300-megawatt power plant on the country’s western coast. According to AEI’s SEC filings, Jaguar Energy Guatemala is legally incorporated in Delaware.
Jaguar’s $900 million power plant, the company claims on its website, is “the largest private investment” in the history of Guatemala’s electricity sector. That historic achievement, however, did not come cheap: Prosecutors say Jaguar Energy participated in an influence-trafficking scheme to obtain privileged information and favors from high-level Guatemalan officials. Among other things, the subsidiary is accused of paying to obtain meetings with the country’s former president Otto Pérez Molina.
The accusations against Jaguar are part of an unprecedented United Nations–backed investigation into Guatemalan political corruption. The International Commission Against Impunity in Guatemala, or CICIG, a prosecutorial body with authority under Guatemalan law and backing from the UN, is leading the effort. With startling aggressiveness and wild success, it is reintroducing accountability into a governing system plagued by cronyism and impunity. In early September, thanks to the commission’s work, president Pérez Molina followed his private secretary, his mining minister, and his vice president to jail after resigning in disgrace. He is accused of taking part in a vast criminal conspiracy to defraud the country’s customs system. The president’s former secretary and mining minister, meanwhile, are accused of accepting bribes from and selling influence to multiple companies, including Jaguar Energy.
Jaguar was just one player in one case among many that CICIG has brought forward in its war on corruption. But the company’s alleged crimes helped bring down one of the Guatemalan president’s closest advisers as well as a former cabinet minister. In the process, its misdeeds played a key role in the historic crumbling of the Pérez Molina administration, although the president himself was not implicated in the case. His fall came later and, in a nation where presidents, generals, and their friends live above the law, it was historic.