Notes from the AG

Paraguay’s former Attorney-General, Roberto Moreno, walks GC through reimagining the office of the AG, navigating political minefields and defining Paraguay’s place in South America.

Relaunching the office of the Attorney-general

My family is traditionally one that has always had a relationship to public service and with government in Paraguay. Even though I didn’t consciously have the objective to go into public office, I knew subconsciously that sooner or later the time would come for me to serve my country.

The office of the Attorney-General is a relatively new one, created by the constitution in 1992. In Paraguay, we had a long history of being run by a dictator, with Alfredo Stroessner in office from 1954 to 1989. When he was overthrown, a new constitution was implemented and the public sector was completely redesigned, with one of the offices created that of the Attorney-General. Normally in our country, the constitution will establish an article and Congress will then need to pass a law to develop the functions and details. The problem was, Congress never issued one, which created a vacuum. This meant that since its creation, the office has been downtrodden and has never been paid much attention.

It was a pity, because I think the office is very important. It is responsible for every legal issue the Paraguayan government has – not only every trial and lawsuit, but all the advice on everything the central government undertakes. But because of this vacuum, from 1992 to 2013, the office didn’t have the prestige it needed, and did not get much done. I’ll give you a couple of examples:

When I got into office in 2013, we had no computer programmes. You had the lawyer for the government – essentially the largest law firm in Paraguay – without any IT or software for managing their cases. Coming from the private sector, I couldn’t believe it. Even worse, the office didn’t have a physical archive, which meant there was no continuity between incumbents. What happened is each new Attorney-General would come in, bring a couple of people with him and then take all his papers when he left. Each new Attorney-General was basically starting from scratch. So that’s what we did.

The first thing I did was get an IT programme, which now, I am confident in saying, is the best of any Latin power – private or public.

The second thing we did is we hired SGS and we completed ISO 9000, so we had all of our services and processes certified internationally. It was the fastest certification of any organisation, public or private, in Paraguay’s history.

Thirdly, my idea was to recruit young and interesting people who would normally target law firms – essentially, we wanted to compete with the big firms for top talent. Look at what’s happening in Brazil – the justice department there is working effectively because they have the best young people – people such as Judge Sergio Moro who is leading the prosecution for Operation Car Wash. They did this by doing what we didn’t do for 20 years – you have to pay them well, you have to protect them, you have to establish immunities to make sure they have the courage to do their job. You want the top talent to say: ‘I don’t know if I’m going to a law firm, because I can make good money in the public sector and I can do something for my country.’

I worked in the private sector for 20 years. I’ve seen most things that a corporate lawyer would in Paraguay. There is no comparison to the personal satisfaction that you get in the public sector if you do it well.

Finally we got a new office, very near to the President’s residence. This did a lot for our profile. Now, everyone knows the office of the Attorney-General exists – it’s there, it’s tangible, it’s working and it’s open to the public.

On Political Judgment

One of my heroes, Isaiah Berlin, authored a very good essay before he died called On Political Judgment. He wrote that the most difficult thing in the public sector and politics is having political judgement. You can be a genius in mathematics. You can be a genius in nuclear engineering. But if you don’t have the ability to navigate the public sector, you won’t achieve your objectives. Because once you start working in this job, you start bothering the big fish.

In Paraguay, we had a tradition that no public official would go to jail, and that there were no lawsuits against former public officials who had committed corrupt acts against the government. I always said: ‘Either Paraguay is Denmark and no one in the government is stealing, or something is going wrong.’

Paraguay is now the country with the highest rate of growth in South America for the second year in a row.

And let me tell you, it’s 45 degrees Celsius here in Paraguay, so I’m fairly sure it’s not Denmark.

What you had in the past is public officials who came into office, took everything they could while in office and then left. They took so much money that they could pay lawyers, get a settlement or get off from a crime and get away with all this money. So this is where we started – for the first time in Paraguay’s history, we issued lawsuits against former officials to get back what they stole.

This was perhaps the biggest challenge. The office, even though it is a technical one, is also very political. You have to have an iron fist in a velvet glove. If it’s only the velvet – you won’t get anywhere. If it’s only the iron fist, you might get a couple of headlines in the newspaper, but you’re not going to get much done.

It is all about finding a way to do what we do without being so disruptive that every political actor is against the office. It’s one thing to have to have your goals, but it’s another thing to know how to achieve them. It’s not as easy as when you’re running a law firm, where you set your financial and HR goals. Here, you have to know how to move politically. You have the executive government, the Congress, the judiciary. Everyone you are dealing with has their own job and own interest. Every time you go after a crook, he’s a big fish and he has friends everywhere. Friends in Congress, friends in the judiciary, even friends in the executive.

Passing the torch

With my term having come to an end last year, there’s something I’d like to tell the incoming tenant of the office of the Attorney-General: you have two options.

One is to go the traditional political route – get all your cronies in and work to get your political clientele results. Maybe it’ll be ‘good’ for you in the short term.

Or, you can continue the process of making this office an institution, regardless of who is in power. The country needs institutions – institutions that are stable and that work. There’s no secret to it. That, together with getting talented and idealistic people in public office, will allow this country to ‘get to Denmark’, as they say.

Again, look at Brazil – you have had ferocious corruption in the past, but now you have an institution that works, and is getting the crooks. Lula (the ex-president of Brazil) was convicted last week – that’s unheard of in Latin America. That’s what we need in Latin America.

Paraguay’s shifting role in South America

Fifteen years ago, Paraguay was like the sick man of South America. The Mexicans said of themselves that ‘Mexico is so far away from God, and so near to the United States’. I think the phrase is applicable to Paraguay in that we are near two giants in Brazil and Argentina. Yet if Paraguay was in the news, it wasn’t good news: it was either corruption, money laundering or contraband. But things have changed.

I talked about institutions before, and one area where institutions have worked for Paraguay is in the economic, financial and central banking sectors, and that’s because the politicians have respected them. We have a full and elite set of economists and technical staff working in the Ministry of Finance and Central Bank to give the country what it needs, and Paraguay is now the country with the highest rate of growth in South America for the second year in a row. And it’s sound economic growth, because it’s based on public policies of insulation, free exchange of goods and heavy protection for our exports. Our macroeconomics have been sound for 20 years, which has immunised Paraguay against economic disease. With the reform and the institutionalisation of the public sector, things can only get better.

All this growth has happened despite Brazil and Argentina going through severe economic crises. There used to be a sense that if Brazil sneezed, Paraguay would get influenza. Not only did that not happen, we actually had growth. All from our politicians respecting sound macroeconomics. This doesn’t always happen in Brazil or Argentina, where you see the trampling of sound economic advice in exchange for short-term benefits.

‘Tied together in the single garment of destiny.’

Paraguay is a member of Mercosur, a South American trading bloc composed of Argentina, Brazil, Paraguay and Uruguay. Taken alone, Paraguay is the 98th largest economy in the world. But Mercosur, taken as a whole, is the 5th largest economy in the world. The leverage this gives a small country makes a difference if you are trying to, for instance, sell your meat to the European Union. It also enables Paraguayan producers to stay competitive in the region: we are able to sell goods without customs in large economies like Brazil and Argentina.

Paraguay has also been able to get specific benefits from being a member of Mercosur. The Structural Convergence Fund for Mercosur (FOCEM) is one example. This requires Brazil and Argentina to pay for infrastructure projects in the smaller economies of Paraguay and Uruguay, which has enabled us to get some major public works completed.

It’s one thing to have to have your goals, but it’s another thing to know how to achieve them.

There’s a political factor that everyone has to understand. Smaller countries like Paraguay and Uruguay depend on Brazil and Argentina, so we must tread carefully. We must know when to give in to certain claims that may not be very popular, and when to thump your hand on the table and say ‘No, we will not negotiate’. It’s quite an art, but it’s how we got FOCEM.

Mercosur can, and does, work for Paraguay. But Mercosur has its challenges to face.

For example, if Brazil and Argentina were to continue their economic downturn for 10 years, not even the best goodwill in the world will make Mercosur work. Mercosur’s success largely depends on the health of Argentina and Brazil. Fortunately, Argentina is now doing a little better and Brazil is going to have growth for the first time in five years, so that makes us a little less worried.

The other challenge is political. I think every technical problem has a political element. Mercosur is fundamentally a commerce and trade agreement – technically, an economic body. However, if you allow Mercosur to be politicised, which has happened in the past, nothing is going to come out of it. This understanding is why Paraguay is doing well and everyone in the region is paying attention to Paraguay – it’s becoming a Cinderella story in South America. Our politicians have respected the economic rules. The hope with Mercosur is that even though current governments will come and go, they won’t tinker with the economic logic. It has worked for Paraguay, and can work for the rest of South America.

The future

Paraguay is a small country indeed, but a country that is growing, and is very proud of its history and proud of its recent achievements. I hope that in the coming years, we continue. I hope that we as Paraguayans are up to this challenge in making the country strong and prosperous – that even though we are a small country, we are in the heart of South America, and we play a role in keeping that heart healthy and able to keep its lifeblood flowing around the region, so to speak. I hope that in 20 years I can look back and say ‘Hey – I wasn’t that wrong. Paraguay is doing just fine.’