Petrocaribe Protests: What You Need to Know Before October 17

October 16, 2018

More than two months have passed since an innocuous tweet went viral and a social media campaign targeting government corruption in Haiti began. Using the hashtags #PetrocaribeChallenge and #KotKobPetwoKaribea (“where is the Petrocaribe money?”), the campaign has shifted the paradigm in Haiti and forced a reckoning over alleged fraud and mismanagement in the $2 billion Venezuela-financed Petrocaribe program. This anticorruption movement, which has brought together disparate groups ? both formal and informal ? from across the political and economic landscape of the country, now faces a critical moment.

A Country on Edge

Tomorrow, October 17, is expected to be the largest demonstration yet; a prospect that has the entire country on edge. The US Embassy has issued a security warning requiring employees to “shelter in place.” President Jovenel Moïse, who, despite being implicated in the wrongdoing, has pledged to support an investigation, visited police stations across the capital region over the weekend in anticipation of the protest. “In the camp of power, the panic is palpable,” warned Mario Andresol, the former chief of police. Some 1,500 officers will be deployed throughout the capital. Businesses have already begun boarding up windows. Reports of money being distributed to keep people away from the protests have circulated widely, as have mysterious audio and video clips warning of a bloodbath. “As October 17 approaches, the authorities are doing all the ‘bagay’ [things] to defeat the announced insurrection,” Andresol said.

By focusing on the possibility of violence, the government is attempting to intimidate the population into not participating, while laying the groundwork for blaming opposition political actors if things do go south. Last week, Schiller Louidor, an outspoken government critic, was hauled before a court to answer questions after using the term “Petro-dechoukay,” a reference to dechoukaj (literally “the uprooting,” but more easily translated as rioting). However, what likely scares the government more than the possibility of violence is a massive and largely peaceful demonstration; a demonstration that the government is not able to demonize or use to deflect attention from itself and its lack of response to calls for greater accountability.

The reality is that this movement appears to have tapped into a deep reservoir of political frustration, and not just among those who have taken the streets for years in opposition to the ruling party. With inflation in double digits, the local currency continuing to depreciate, and the cost of living rising each week, the country’s economic malaise has reached the middle and even upper classes of society. If those calling for an investigation into the Petrocaribe accounts are to be successful, they will need the support of a broad-based coalition. Nevertheless, there is also a palpable fear among those tepidly supportive of this movement and tomorrow’s protests who are also deeply distrustful of the popular organizations that have been leading the opposition in the streets. There will be a lot riding on tomorrow’s protest for the future of this burgeoning anticorruption campaign, as well as for a government attempting to stave it off.

Why Petrocaribe?

Haiti formally joined the Petrocaribe initiative in 2007. Under the program, Haiti ? as well as more than a dozen other Caribbean and Central American nations ? received discounted oil, paying a portion of the bill up-front and converting the remainder into a long-term concessional loan to be used for government investments and social spending.

In contrast to traditional donor support that generally bypasses the government entirely, Petrocaribe serves as direct support to the government. As the price of oil rose throughout the early 2010s, the Petrocaribe program filled government coffers. From 2012 to 2015, Haiti spent an average of $270 million a year through the initiative, a critical source of financing for a government sorely in need of additional revenue. Haiti has spent some $1.8 billion of Petrocaribe-related funds since joining.

However, Petrocaribe has been plagued by a lack of transparency. While some have warned for years of the dangers posed by such expenditures without proper oversight, it was elevated to the forefront of Haiti’s political consciousness by an unlikely source: Senator Youri Latortue, whom a former US Ambassador once described as the “poster-boy for political corruption in Haiti.” Though few trusted Latortue’s motives to be anything other than craven politics, his efforts in many ways laid the groundwork for today’s anticorruption movement.

In the fall of 2017, Latortue and a small senate commission released a 600-plus page report (with a similar length appendix) on nearly 10 years of Petrocaribe. The investigation found that over the course of multiple administrations, the program was characterized by mismanagement, waste, fraud and abuse; ghost companies that received no-bid contracts; payments for work that was never completed; and a host of other financial improprieties. The investigation directly implicated high-level government officials, including current president Moïse. Though the report was never formally approved by Parliament, it has hung over the heads of Haiti’s political class ever since.

What Comes Next?

While the current anticorruption movement is largely leaderless and brings together many organizations and individuals with different interests, one demand is clear: an independent investigation into the decade of Petrocaribe largesse.

Though initially critical of the senate report, President Moïse has since changed his rhetoric and pledged to support an investigation. The government has tasked the Superior Court of Accounts and Administrative Litigation (CSCCA) with this and the body has pledged to release its work in early 2019. However, there are reasons to be skeptical that this can lead to accountability. To begin with, the CSCCA is responsible for approving government contracts, meaning that the body now set to investigate is the one that already signed off on most of the contracts in question. Further, many question the ability of the CSCCA, or of any governmental body, to adequately and independently investigate.

Perhaps most importantly, the CSCCA has already produced a report on a limited amount of Petrocaribe spending and despite finding significant problems, nothing was ever done to follow up. In fact, it was the work of the CSCCA that originally provided the basis for the Senate to investigate Petrocaribe. By kicking the investigation back to the court, the cycle of investigation continues, while the prospect of real accountability dithers.

The CSCCA audited government spending for the fiscal year 2014-2015 and produced a public report on its findings, though this has received scant attention. The findings, however, remain relevant. The court found the selection of projects to be financed by Petrocaribe to be procedurally lacking, as many either did not have specificity or did not appear to be sustainable. By making multiple budget amendments and reallocations of Petrocaribe resources throughout the year, the court found that it allowed the government to conceal its actions under the investment program. The government “gave itself many liberties … and poured into illegality,” the court wrote.

The system, the court concluded, was set up for failure and did not support accountability efforts. “A significant portion of public spending is indecipherable,” the audit found, adding, “There is a culture of accountability to be established … and appropriate information systems must be put in place.”

It therefore seems unlikely that a further investigation undertaken by the court will be able to adequately follow the money wherever it may lead or otherwise satisfy the demands of those taking to the streets in tomorrow’s protests. This brings us back to the importance of tomorrow’s events. Without sustained public pressure, it is clear the governing party will not provide the necessary level of transparency to ensure real accountability.

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