Federico Franco was governor of the Central department during the 2003–2008 period,for the Authentic Radical Liberal Party. The party discussed in 2008 if they should support the ticket of Lugo in the presidential election or share the candidacy with him;the second option prevailed and Franco ran for the vice-presidency under Lugo's ticket. He was critical of the presidency of Lugo,such as with the management of lands and the 2009 controversy about Lugo's son. [3]
Presidency
One of Franco's first acts was to replace Rubén Candia Amarilla as Interior Minister with Carmelo Caballero. Candia Amarilla had briefly succeeded Carlos Filizzola as Fernando Lugo's Interior Minister,after Filizzola resigned on 15 June. [6] Franco also promptly resumed stalled negotiations with Rio Tinto Alcan over a $4 billion aluminum plant and approved sales of genetically modified soy beans from Monsanto. [7] [8] He also appoints several agribusiness representatives to his government. Budget cuts in social programmes are announced,as well as lay-offs in the public sector.
Corruption
In spite of its brevity and of the initial good economic situation of Paraguay,the presidential management of Federico Franco was characterized by the significant increase of the financial deficit of the country. After his departure from power,the new government blamed him for having plundered the state's resources through a vast system of corruption and clientelism organized around the Liberal Party. [9]
The former president was subsequently denounced by several of his political collaborators (one of whom himself was sentenced to 6 years in prison for corruption) for misappropriations of public money made on his initiative. [10]
From 2008,when he took office in the government,to its exit of the power in 2012,his fortune increased by almost 750%. [11]
Itaipu Binacional
In August 2012,Franco announced in the media that his government would conduct audits of the Itaipu Pension Fund (Cajubi) to uncover millions in misappropriated funds and that all avenues for recovering the lost funds would be exhausted. [12]
On August 10,2012,ABC Color reported that mutual accusations were hindering efforts to recover funds from Cajubi,and that the author of the blog “El Engaño Guaraní”(The Guarani Deception) was Guatemalan Eduardo García Obregón. [13] [14]
In August and September 2012,during his presidency,the fee agreement for former prosecutor and Cajubi's lawyer,Rafael Fernández (signed during the administration of his predecessor,Fernando Lugo),was rejected and renegotiated. The new Legal Director of Itaipu,Eusebio Ramon Ayala,described the agreement as quasi-criminal and exploitative. Fernández's fee was reduced from USD 4 million to USD 2 million. [15] [16] [17] [18]
