Economic Damage to the State | Daño Económico al Estado

Francesco Zaratti:

I find significant ambiguities in the concept of “Economic Damage to the State” (EDS), which generally refers to the impact on the state’s assets by officials and authorities but has become a pretext for political persecution.

EDS is one of the most common offenses within a society that idolizes the State and tends to manifest itself on various scales. For example, it is not uncommon for public servants to take office supplies home, or for authorities to use official vehicles for personal errands, or for police officers to exchange fines for bribes, or for legislators who neither legislate nor oversee to increase their salaries at will, among other things. Some of these acts may seem trivial, but they reveal an ethical attitude towards the State that is inconsistent with the embraced ideology. It is often argued – as in the joke about the guy reprimanded by the public pool caretaker for urinating in the water – that “everyone does it.” “That’s true,” replied the caretaker, “but not from the diving board.”

Indeed, there are small and large economic crimes, as recognized by article 4.5 of Law 1390 of August 27, 2021, which sets at one million dollars (at the legendary exchange rate of 7 Bs/$) the “serious” harm to the State. So, what crimes are we talking about to classify them as serious?

Of course, there is the corruption of public servants to benefit (via insider information, fraud, or irregularities) from tenders and contracts, even to the detriment of the State’s interests, which is the one paying the bribes. Likewise, according to the MAS government, the recent MAS blockades caused immense damage to the State.

The performance of the State Attorney’s Office in international arbitrations is questionable, even within the framework of the “mission impossible” of defending arbitrary acts of governments. The Quiborax and Glencore cases, more recently, seriously challenge former lawyers of Evo, heads of that institution.

YPFB has officially admitted the loss of $130 million due to the exploratory failure of Boyuy. It was told from the beginning: since there was no specific contract, the drilling of Boyuy legally became part of the “services” of the Margarita field and, therefore, a recoverable cost for Repsol.

Certainly, there are acts that, even if they cause damage to the State, are not punishable, such as those resulting from the implementation of policies approved in a democratic election through government programs. It could be argued that Evo Morales’ “nationalization” is, in the long term, a failure because the final damage to the State outweighs the immediate benefits. However, it was a policy approved democratically, and that makes it immune. Hence the importance of debates between candidates, and not, cowardly, “with the people.”

The difference lies in how those policies are carried out. Let me explain. Lithium extraction is a national milestone, but was the choice of the evaporation method for the pools the result of rational analysis? We are talking about nearly a billion dollars literally “down the drain.” The same, and even more so, applies to the Ammonia and Urea Plant (PAU), which often produces more shutdowns than urea, even stopping only to allow more gas to be exported to Argentina. Did the defense in arbitrations not have insider information and incompetence that warrant an audit by the Comptroller? And didn’t Boyuy show more culpable desperation than legal care? In short, there is EDS also when state policies are implemented poorly, due to obvious personal responsibilities, and that damage should not go unpunished.

Finally, who will be held accountable for the damage caused by the cunning words of a Cuban agent and former US ambassador?

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