Source: Colombia Reports
On the day before the Easter holiday, the Colombian Attorney General’s office issued an indictment against the former governor of the Antioquia Department and current presidential contender, Sergio Fajardo, for fund mismanagement alleged to have taken place in 2013. These charges will affect the former governor’s candidacy by forcing him to take a firm position against the politicization of the judicial system, the lack of independence of top government officials, and the current government more broadly. Fajardo’s response to the allegations against him may redirect his candidacy just one year before Colombia’s presidential election.
On March 31, Sergio Fajardo, the former governor of Antioquia and 2022 presidential candidate, was indicted by the Attorney General’s office for allegedly embezzling funds in favor of third parties and entering into a contract without meeting legal requirements in 2013. This move cost the Antioquia government USD $85 million (COP 310 billion). In simpler terms, Fajardo allegedly entered into a contract without exchange rate insurance, and therefore was liable for the exchange rate risk.
When Fajardo first entered into this contract, the USD to COP exchange rate was 1 to 1,926. In 2015, when the contract expired, the exchange rate had risen 63 percent, standing at 1 to 3,140. Is Fajardo responsible for that increase? Not likely, as a governor does not influence exchange rates, country risk, or national macroeconomic policy. Should Fajardo have accounted for exchange rate risk? Probably, but according to Fajardo, financial advisors to the governor had advised against exchange rate risk coverage as conversion from USD to COP was expensive and could imply embezzlement, resulting in his possible indictment back in 2013. Did Fajardo act criminally? It is unlikely. All public officials in charge of budgets and procurements must take risks, and some of those risks inevitably involve exchange rate volatility.
Many experts across party lines agree that the legal arguments against Fajardo are weak due to the lack of a legal basis for requiring an exchange rate volatility analysis before conducting financial operations. If such a requirement did exist, many other public officials would also warrant indictments—starting with those members of Colombia’s Central Bank who approved the sale of about 67 percent of Colombia’s gold reserves in June, a month before gold prices hit record highs.
The Attorney General’s weak case, Fajardo’s position as a leading contender for the 2022 elections, and the polarization of the judiciary since Francisco Barbosa assumed the position of Attorney General have all led many observers to believe that the case against Fajardo is more about eliminating a political rival than prosecuting a crime.
Enrique Peñalosa, Gustavo Petro, and Rafael Nieto—all of whom are prospective rivals to Fajardo in the 2022 presidential election—came out against the decision, suggesting that the Attorney General acted with political intent. Fajardo’s initial reaction—calling on the Attorney General to present an official summons with evidence to support the claims against him and requesting the convention of a technical committee to review the allegations of impropriety—contrasts sharply with the typical behavior of politicians accused of wrongdoing: finger-pointing, accusing the prosecution of ‘playing politics,’ and employing delay tactics to allow statutes of limitations to expire.
According to La Silla Vacía, Fajardo recently shut down Green Alliance party members who had written a strongly-worded statement that attempted to cast the Attorney General’s decision as a political one and lashed out at Barbosa for his handling of the case. Fajardo, true to form, appears to be playing it safe, perhaps thinking that his non-confrontational tone and nature will win him support in a hypothetical second-round election. But to make it to a second round, he has to make it past the first round; and to do so, he needs to do more than nonchalantly address the allegations against him. Rather, he will need to proactively generate enthusiasm among his supporters, something he failed to do a few years ago.
Seemingly, after the Easter break, Fajardo had a change of heart—and strategy—regarding his approach to his indictment. Aside from defending himself in the media and establishing a website countering the claims, Fajardo sent out an unexpected attack, asserting that the Attorney General’s indictment erodes credibility in the impartiality of judicial institutions and maintaining that “many corrupt people were happy” following his indictment.
This represents a significant departure for Fajardo, who has long been known to maintain relative neutrality on critical issues such as corruption, human rights accusations against the government (including the false positives scandal), the implementation of the peace agreement, and education. The indictment could give Fajardo the gravitas to become bolder and more aggressive in outlining his political positions against the government, enabling him to show voters a more combative presidential candidate in contrast to his more passive, bystander persona that Colombians have come to know over the past three years.
However, such a shift could also entail risk. According to the latest Datexco Poll, Fajardo’s favorability is at 49 percent, with 11 percent of polled voters saying they would prefer a Fajardo presidency, making him second only to Gustavo Petro (19 percent) in voter intention. Fajardo’s high approval rating is partly due to his ability to stand above the political fray and manage to avoid getting involved in the polarization and mud-slinging that characterizes Colombian politics.
With nearly a year left until the first ballots are cast, Fajardo must set aside his old easy-going, people-pleasing political nature and become a more aggressive player in the political arena if he wishes to be a genuinely competitive presidential candidate. His current position leaves him vulnerable to attacks both from the far-left (for being too bland) and the far-right (for his recent indictment). It is unlikely that the charges brought against him will make Fajardo ‘pick sides’ or alter his policy positions concerning corruption and the economy. However, it may force a transformation in his campaign strategy. Time will tell if Fajardo’s indictment compels him to finally realize that the appearance of political neutrality and an aura of complacency will grant him no favors in the presidential race.
Sergio Guzmán is the director of Colombia Risk Analysis, a political risk consultancy in Bogotá. His social networks are @ColombiaRisk and @SergioGuzmanE.