IKN

As promised yesterday, here’s a paste-out of the criminal charge faced by Jaime Pinto for corruption. It’s long, so it gets to clutter up the blog during our lower-traffic weekend days. It’s in English, just for fun.

We must underscore that as in any other country, the assumption of innocence until proven guilty is sacrosanct. That Jaime Pinto faces a criminal charge that carries a penalty of minimum three years and a maximum of fifteen years in prison does not yet mean that he’s guilty of the charges.

The only thing I’ve changed is that I’ve edited out the name of the person and the DNI number (national identity card number) of the person who has brought the charges. However, I can confirm that to the best of my knowledge the person has nothing to do with Minera IRL. It is a totally separate case. I thank my source in the Peruvian judicial system, also unconnected to Minera IRL, for providing IKN with the document.

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FILING
OF A CRIMINAL COMPLAINT FOR THE CRIME OF COLLUSION

SIR PROVINCIAL CRIMINAL PROSECUTOR SPECIALIZED IN CRIME OF CORRUPTION OF
GOVERNMENT OFFICIALS:

(Name of person), identified with ID Card No. (), domiciled for service of process at
box () of the Lima Bar Association, fourth floor of the Courthouse; I
thoughtfully say to you:

I FILE
THIS CRIMINAL COMPLAINT against
Mr. JAIME PINTO TABINI with ID Card No. 07809274, domiciled at Calle Los
Nogales 362, dpto. 201, San Isidro, and e-mail jpinto@pintoabogados.com; for
committing the crime of Illegal
Collusion, which is a crime provided in and punishable under Article 384º
of the Criminal Code, committed against the State. Consequently, I REQUEST to your office to
kindly admit this complaint to proceedings, to dispose the appropriate
investigations and, in due course, to issue the corresponding fiscal judgement whereby
the CRIMINAL LIABILITY of persons
who are identified as perpetrators or involved participants of the facts matter
of complaint is established; in view of the factual and legal arguments, which
I explain below.

1.                
As part of the characteristics
configuring the administrative concept of public official[1],
criminal law relaxes the requirement of the endowment so that it assimilates
the notion of public official to contracted agents and those who are
occasionally involved in public service and to those who have lost their status
of law officials. Likewise, it rationally adapts the other requirements to
match the particular individuals linked by specific forms (temporary and occasional)
in the management of public funds, or of social commitment[2].
Thus, we have that the criminal legal concept of public official has a wide,
open and suitable regulatory conceptualization in accordance with the purposes
of protection established in the criminal law.

2.                
Article 425º of the
Criminal Code contains a strictly administrative concept in its first level by
pointing out in the first paragraph that public official are those who are
included the administrative service, for then being extended to those holding a
political or trust positions, those who exercise, even if they are elected by
popular decision, anyone who regardless of the labor regime which he / she is
in, maintaining employment or contractual ties of any kind with entities and
agencies of the State and that by virtue of that, performs functions in such entities
or agencies, the administrators and trustees of seized or deposited wealth by relevant
authority, even though they belong to particular individuals, the members of
the Armed Forces and National Police, and others specified by the Political Constitution
and the law.

3.                 
Whenever the respondent
had the status of a public official at the time of incurring in the facts
alleged; the extension of the stature of limitation provided for in the last
paragraph of Article 80 of the Criminal Code shall be applied, which states:

 “Article
80. – Statute of limitation for criminal action

The criminal
action is time-barred in a time equal to the maximum penalty provided by law
for the crime, if it involves deprivation of liberty.

(…)     

In cases of
crimes committed by public officials and servants against property of the State
or bodies supported by it, or committed as part of criminal organizations, the statute of limitation is
doubled.” [Our emphasis]

1.     The Brady Plan was a strategy adopted in 1989 to
restructure the debt of developing countries with commercial banks in the scope
of Latin American debt crisis that was based on operations for reducing debt and
the service of debt voluntarily made under market conditions.

In 1996, the Peruvian government approved the ‘Brady
Plan’ which, according to the research by CEFID-AR, “considered a procedure for recalculation of interests and the exchange
of the due and unpaid debt for new debt securities: Brady bonds,” however
the commission headed by former Congressman Rafael VALENCIA-DONGO in 2002 found
several cases of corruption in the renegotiation of external public debt
between 1990 and 2000.

2.           
On September 26 of that year, Elliott got from the
Brussels Court of Appeal an order to seize the payment of interest on international
bonds that Peru had scheduled to make through Euroclear – financial services company located in Belgium – and even
though no funds were awarded, it threatened the country to fall into default, said US attorney Mark Cymrot.

3.           
SBC, which bought Peruvian debt as financial agent of
Peru since 1994, sold external debt
securities valued at US$ 20 million to Elliott Associates, LP for US$ 11.4
million in 1996, breaching the contract
that prevented the negotiation of securities without giving communication to the
Peruvian government.

1.           
JAIME
PINTO TABINI joined the Ministry of Economy and Finance (MEF) in 1992 during
the presidency of Carlos Boloña. PINTO TABINI said he only looked at the
operations made by the Swiss Bank Corporation (SBC) on behalf of Banco de la
Nacion through the Investment Program, so he had total lack of awareness of
other operations made by the SBC. On September 30, 1996, he retired from MEF;
but before his dismissal he left the team of external debt to continue working
as a legal adviser of the MEF; having started a relationship with Elliot
Associates, LP. That is, we are aware of the voyages of Mr. Pinto to the United
States in 1996 when the problem with Elliot began. On the other hand, some witnesses
interrogated by the Investigation Committee of the Peruvian Congress noted that
when Elliot Associates LP bought the papers of the Peruvian debt, the MEF, in
the person of Jaime Pinto, received the information from the operation in the same
way as the whole information from the operations made by the Swiss Bank were
received, although Pinto has denied this information in his defense before the
Commission.

2.           
Now, Mr.
Pinto would have retired from the MEF on bad terms according to the press of
that time due to a hard argument with Jorge Peschiera, Team Head. Then he began
to work in the multinational company Telefonica; and later in the Estudio
Muñiz, Forsyth, Ramirez, Pérez – Taimán y Luna Victoria. It is important to
note that in these circumstances he went back to “visit” the MEF to talk to
Jorge Camet and inform him that Elliot was willing to negotiate the debts it
had with Peru, being that from February 1998, Jaime Pinto started to provide
legal advice to Elliot Associates LP in the trial against Peru. Indeed, attorney
Mark Cymrot (Representative of Peru) request in the United States that Mr. Jaime
Pinto is moved away from representation since he had privileged and
confidential information from the Ministry of Economy and Finance with regard
to Peruvian external debt.

3.           
Certainly,
the SBC by contract could not sell papers of the Peruvian debt to a third
party; and in the case of the transfer of papers of a third party, it should
inform this to the Peruvian Government. Within the clauses of the contract it
was stated that there was a term of 24 hours -after entering into an agreement for
making the investment- to inform the Peruvian government who were the owners of
promissory notes that it was buying back. The SBC committed the crime of use of
privileged information on its own behalf since it bought at a lower price
before the recognition as public debt. Moreover, according to paragraph 7 of
the contract, it states that the SBC could not buy or sell by its own. The SBC kept
this purchase between 13 and 15 months and then sell it to Elliot Associates,
LP and not to the Peruvian Government, its fast track customer. That is way
there was a breach of the contract with the Peruvian government, because it fouled
by not changing the registration within the normal deadlines established (20
days).

4.           
With
regard to Peru, the entity who claimed for this sale was the General
Directorate of Public Credit and not JAIME PINTO (who was in charge of
receiving the report of all investment operations made by the SBC on behalf of
Banco de la Nación, being aware of the sale made by the SBC to Elliot) and the
Special Commission of Banco de la Nación (who had been in constant contact with
the SBC). Paradoxically, Jaime Pinto was appointed by the MEF as the
representative of Peru at the IDB since March 2001.

5.           
As a
result of the unlawful behavior of JAIME PINTO TABINI, Elliott Associates, LP – an investment fund founded by Paul Singer –
received more than US$ 58 million from the Peruvian Government in September
2000, after winning a lawsuit in New York where it demanded the payment of US$
66 million for a Peruvian debt that bought at an almost six times lower price.

6.           
In 2003, the
investigating commission presided by former Congressman Ernesto Herrera
recommended to sue Jaime Pinto together with the Swiss Bank Corporation (SBC),
after determining that the purchase of debt, by the so-called ‘vulture fund’,
generated a damage to the State for the value of 50 million dollars, but these
allegations were not raised. Jaime Pinto, responsible for
supervising the contracts of the SBC (with whom it was in permanent contact), not only allowed this operation to be made
but avoided to claim when the Peruvian government became aware of the
purchase.

A.    
CRIME OF
COLLUSION

1.           
The
crime of collusion provided for and
sanctioned in Article 384° of the Criminal Code would have been committed by as
follows:

“Art. 384.- The
official or public servant who, in contracts, supplies, auctions, price
competitions or other similar transaction in which he is involved because of
his office or because he is part of a special committee, defrauded the State or
any State entity or agency, according to the law, arranging with stakeholders
in agreements, adjustments, liquidations or supplies shall be punished by
imprisonment of not less than three nor more than 15 years.”

2.           
The core
of the illegal behavior is defrauding the State or State entities or agencies
by arranging with stakeholders in agreements, adjustments, liquidations or
supplies. The typical behavior in relation to the times of execution and
consummation is thus given by the willful arrangement with consequent
patrimonial defrauding to the State interests. This defrauding involves any
flagrant infringement of the duties attached to the position or to the orders
of the special commission entrusted to public officials and servants. These
make use of the powers to illegally vary, circumvent or replace the state or
parastatal interests and claims, which by law must ensure and safeguard, opting
instead for preferring different and even for prioritizing individual claims
harmful to those that are typical of the public administration.

3.           
What the
active subjects violate with their behavior -which can be for action or
omission- is the necessary state partiality in management, making it become a personal
partiality of stakeholders, which is incompatible with the charge or commission
and involves affecting the economic interests of the State or State agencies.

4.           
To
defraud the State and its agencies or entities, is thus, result of the violation
of the special roles assumed by linked individuals, with consequent violation
of the confidence given by the society and the State by deceiving the public
interest. The official or servant assumes roles incompatible with those of
professionally negotiating as it is a representative part of the public
administration which contradict its powers or orders of the commission and
affect the patrimonial expectations and interests of the State.

THEREFORE:

To you,
Sir Prosecutor, I REQUEST: To
kindly admit this complaint to proceedings, providing the relevant investigations,
for the purpose of, in due course, determining the CRIMINAL RESPONSIBILITY of the respondent.

FIRST
ADDITIONAL PLEADING: Find
attached simple copy of the identification card of the claimant.

SECOND ADDITIONAL PLEADING: I request that, once this complaint is admitted, you
kindly call for the following means of investigation:

1.     Investigative statement of the respondents.

2.     Investigative statement of the aggrieved party.

Lima, November 17, 2015

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