#491 – The Expat Files: Real Estate, Electrical Issues, and Political Corruption in Latin America

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border, down Mexico way That's where I fell in love when the stars above came up to play and now I wonder Hello there all you expat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started Naturally when you come down here to Latin America, you're gonna buy or you're gonna rent Hopefully you're gonna rent at least for six months That's always the best of recommendations and you know, I don't care how great how fantastic or how earth-shattering

[00:46] Those real estate deals seem the bubbles here and it's gonna burst as you know I've been talking about this real estate bubble that's been inflating little by little for the past four or five years And you know people still ask me why gringos who've been down and have seen it for themselves say don't they see this bubble? Well, I always tell people no They're not at all aware of the real estate bubble that blew in the States in 2008 and the average Latin even the way above average Latin's never followed that news unless it was in Spanish and even then They didn't get it. The fact is no one alive down here in Latin America except for the case of Argentina even knows what a real estate bubble is you have to sit down and explain it to him But it's futile. They don't want to hear about it It's like trying to explain a punch in the face to someone who's never had one before

[01:32] So remember in the 20 Latin American countries, there's only one exception. That's Argentina Most people 40 or over have been through that trauma a couple times Which is why the smart ones put their money in banks where Uruguay Which is great for Uruguay when Argentina is hitting the skids But when Argentina is on the grow Uruguay takes a big hit, but you knew that already, right? Anyway staying loosely with the real estate theme. Let me ask you the $60,000 question What do you think the number one gringo expat complaint is once they move into a house or an apartment? That is besides the fact that during the rainy season there are always leaks. So what is it? What do you think is our number one complaint? well, I'll tell you what the number three complaint is most houses and apartments are designed like dungeons and

[02:22] Unfortunately when rooms are dark and dingy like that, that's an invitation to mold and humidity Latin builders and architects just don't know how to light the interior of a building naturally And by the way, Latins always undersize their lamps and light fixtures too So even when they do turn on all the lights, it seems like you're living in a parking garage Now it's true when you're driving around you'll see a lot of houses with domos on them. That's domo That means a Lexan or acrylic skylight dome. In fact in Latin America They rarely use flat plain glass for skylights Why because Lexan and acrylic domes can take a beating they can take a hit a lot better than a piece of glass So it's true as you're driving along you'll occasionally see these domes or domos on people's roofs

[03:08] But still they're usually way undersized and there's never enough of them So if you're in a house like that, maybe the living room will have a little skylight or two But the rest of the house dark and dingy and almost always plagued with moisture and mold problems And that in turn invites all manner of bugs and creepy crawlers and remember down here those things are on steroids So just a tip if you're gonna build put in as many skylights as possible That is domos which will provide plenty of daytime light and in the rainy season help burn off that moisture and humidity So why don't more people use skylights? Well, they're expensive to Latin said is not to us In fact, they're rather cheap and secondly in time. They all Managed to leak now. I'm not saying that from day one. They start leaking again. It's details details

[04:00] They never seem to have a nice tight flush fit. Instead. They glop silicone all over the place Maybe it'll take a year or two But eventually there will be a nice puddle on your living room or kitchen floor So if you move into a new house or a new apartment, that's something you might not notice for a long long time Therefore it won't be your number one complaint By the way for all you wannabes and gunabes looking for a business idea. How about a skylight installer a gringo skylight installer Now that's a novelty. All you have to do is be gringo about it You know first world details and all and give a 10 year no leak guarantee Man, that would be a first because you know guarantees are not much in a latin businessman's vocabulary yet Sure, big first world places like walmart and cosco and seers have them but the average contractor or installer forget about it

[04:49] So have you guessed the number one gringo moving into a house or apartment complaint? Time's up It's all about the electrical outlets There isn't a single latin residence down here old or new or even so called to first world standards That has near enough electrical outlets for each room So that means when you go into a latin person's house You'll see all kinds of cheater plugs extensions tape a real rube goldberg rat's nest of wires So you'll see this stuff hidden in closets behind couches and chairs and most often right out in the open It seems that even upscale latins that have learned to live in luxury Except dangling ugly wires and overloaded wall sockets No big deal to them. I guess they don't see it

[05:35] Like a beautiful woman with a big black hair growing out of a mole on her nose Come on. You know what i'm talking about. Don't you just want to rip that thing out? Now I remember back in the 60s and 70s many us homes had that very same problem Nope, not women with hairy moles on their noses though There were a few of them around usually fresh off the boat, you know But here we're talking about vastly overloaded electrical sockets In fact, there were so many house fires that the local electric company warned us against overloading sockets By amusing the kids with an animated light bulb in tv commercials. His name was ready kilowatt. Remember him? He'd actually sing a song about it man. Am I dating myself, huh? I mean, let's face it back then in the 50s 60s and 70s new electronic stuff was coming online all the time

[06:22] And there were never enough duplex outlets to go around And you know back in the 40s 50s 60s even in 70s That's how a lot of house fires got started in the states because let's face it one outlet socket per room Just doesn't make it which is why people of course overload the hell out of that socket And of course almost all u.s Home construction is stick built that is you know, two by fours real wood clad siding At least it used to be years ago and that stuff would go up like a box of matches That's why in the 60s they rewrote the electrical code and now the maximum distance between wall outlets is 12 feet And down here in latin america, they try to follow first world codes But no one's inspecting so you can do what you want Which is why the majority of bedrooms and such have only one outlet and it's standard operating procedure to have no outlets in a closet

[07:11] How's that? So when I walk into a house and see a rat's nest of wires I think immediately of the lag time effect And because they use cement steel and concrete block construction here There's not much of a fire hazard because there's nothing to burn when those things get hot and overloaded and they do get hot Believe me so steel cement and concrete block construction is a good thing But it also causes big problems if you try to add another outlet box worse yet an aftermarket skylight or two Problem is you have to get a guy in with a hammer and a hardened steel tip to blast away Whether it's punching a hole or making a channel for the cable So even though that steel black and concrete construction is really good as a deterrent to earthquakes and such I know of a few gringos even the most ardent do-it-yourselfers who will take on that kind of work

[07:56] I mean really why risk your knuckles your hands your eyes and your lungs when you can pay a guy $15 a day to do that kind of work. I mean, that's what they do That's part of an electrician or a maintenance man's work So then you might ask if electrical outlets are truly that much overloaded in houses and structures down here They must be melting burning up and popping circuit breakers all the time. Well, yes, exactly But with the concrete steel and cement construction nothing ever burns down or almost nothing Which I suppose in a way is why average latins even above average and wealthy latins don't add extra outlets the correct way Instead they overload the ones they've got. Oh, by the way They do have fire departments here in latin america and yes houses even whole neighborhoods burn down But it's always in extremely poor areas where people build their tin shacks with wooden two by four supports

[08:47] Along with scraps of particle board and plywood and such and remember most of these people are cooking with wood So there's a fire going all the time and their kids are always blowing off firecrackers and cherry bombs, too Yes, it's true It seems the world over young boys would rather blow up things than eat when I was a kid I had the same sentiments In fact young boys the world over like nothing better than a good fire, too Sometimes I still feel that way So just keep in mind that in the lower middle class in poor neighborhoods dangerous electrical wiring practices prevail and nobody Seems to follow any kind of code and also note that your maintenance guy can do a lot of electrical work But he doesn't know code either. He just kind of copies what he's seen being done around him So do tell him exactly what you want and how you want it Oh, and when you hire a bona fide electrician, he can say he's a bona fide electrician all day long

[09:35] Who knows he might even have a business card to that effect But there's generally no professional organization checking on that stuff either. So down here It's word of mouth buyer beware or look on olex.com. Remember that's that craigslist latin american style That I mentioned on the last show Oh and to digress on that a bit Just got an email from bob saying that if you put an olex.com in the states You'll get olex.com in the u.s You won't get it anywhere else even though it exists in almost all latin countries Even in some european countries in the uk, by the way So if you're looking to get the olex.com for the country of your choice, just put it in your search engine start page olex.com and the country you're looking for whether it's columbia or peru, whatever Oh, and by the way, one of my newest friends from my latest expat wisdom seminar jerry asked how much can you really negotiate with?

[10:27] People selling stuff on olex.com or is their price pretty much fixed like for example if you're looking for a car Well, here's a good tip Suppose you're looking for a compact car on olex.com and you see there's a list of maybe 300 cars Just go back in time because they're all set up by date when they were entered Note that the longer a car has been up there for sale the more flexible the guy's gonna be with his price naturally, huh? Now note a guy who's just listed his car today or maybe yesterday He's probably gonna be pretty firm on his price because the offers haven't come in yet He hasn't had enough tire kickers to come in and beat his price down Oh, and by the way on olex.com when something gets sold it generally will get flagged as sold Nope, it doesn't disappear from the site right away

[11:14] But at least you don't have to waste your time checking it out, but I digress Okay, one last thing about electrical wiring down here Like I said Most houses are 99 concrete steel and concrete block making it very difficult to retrofit electrical boxes and outlets and such So as usual latins will take the easy way out and they'll go to the hardware store and buy some lamp cord. That's lamp wire Usually the cheapest and thinnest they can get because they know nothing at all about wire size and current carrying capacity So they'll buy 18 20 even 24 gauge lamp wire and try to use it as an extension cord for any electrical appliance Doesn't matter to the average latin cheaper the better They'll use 24 gauge wire, which is the diameter of a nose hair Then they'll attach a two-prong plug to it sticking in a socket

[12:02] And run that wire 10 or 20 feet to a badly installed surface mount electrical strip Or even use it to power or try to power a refrigerator Now to us gringos when we first see this kind of stuff, it looks dangerous and really ugly 110 volts running through a tiny little lamp cord To a badly mounted outlet box with about five separate things plugged into that in our minds It's not only carny and white trash style. It's dangerous Which always makes me wonder why more little latin rug rats aren't electrocuted because these Stangling cords are always within a crawling kids reach And of course young kids like that are always sucking their hands and gnawing on things Yet you just don't read or hear about kids getting electrocuted Yet if you ask any latin person about electric shocks

[12:49] Every one of them will tell you personal stories on that count So I guess it really is true if it doesn't kill you it makes you stronger Another thing you know in the states by code you have to have ground fault interruptures in your bathroom And in your kitchen anywhere, there is water, you know They're called gfis and have a built-in circuit breaker and a reset button You won't see those in kitchens and bathrooms here in latin america Oh, you can get them all right at the electrical supply stores and ace hardware, etc But no one's got them. It seems except four star hotels Electricians don't install them because well again, no one wants to spend the extra money and there are no inspectors, etc Talk about lag time, huh? So my advice have them installed in your kitchens and bathrooms They're great

[13:34] And by the way since so many latin homes even some of the newer ones don't have that green earth grounding wire That means they're set up like u.s Homes were in the 30s 40s 50s even 60s You know back in the day when outlets only had two holes in them for two prongs on each appliance In other words no earth ground at the receptacle Well, that means in many cases if you ever did want to install one of those ground fault interrupters It needs to be connected to earth ground internally. So it probably won't work, right? Which again makes you wonder why you don't read about people getting electrocuted down here. Just so rare Okay, moving on i've been asked by a number of people over the last couple of weeks about what's happening in guatemalan politics since Up in the first world stories are actually bleeding through talking about how there's some kind of massive political corruption case going on

[14:23] Okay for everyone who is wondering what the hell is going on? Let me try to explain this first of all note that every single latin american government is as corrupt as it possibly can be In fact, it's often said the real road to riches for any lazy-ass slug here in latin america is to become a politician and that's certainly true Sound familiar if you're elected to or appointed to anything It becomes a vehicle for full employment for your entire family and your friends and relatives, too Not only that if you're an upper level functionary, it's a license to steal millions Which is why right before election time a certain number of politicians and candidates are actually bumped off That's how serious it is when you're in you're living like a king in a different world than when you're out You're nothing which is why so many candidates will kill to get the job or stay in office

[15:09] And even when the corruption cases are international in other words money laundering trafficking with narcos and outright theft of millions When it involves massive corruption all the way to the highest levels Often the scumbags will get prosecuted in their own courts But they'll get off because you see by that time they've stolen so many millions They can hire the best team of lawyers money can buy Not only that down here latin lawyers can postpone court appearances indefinitely for years And of course these crooks always get out on bond They've got millions so they can afford whatever the judge says not to mention if the political criminals very high up Let's say a vice president or president that judges and actual supreme court judges will owe their very jobs to this guy or his party

[15:55] Which is why almost all big government crooks get their cases dropped due to quote Insufficient evidence unquote. So that said what makes the present guadamala corruption case so interesting and worth international coverage Well first a little history guadamala had a 35 year civil war that ended in 1996 Now the civil war was all about the fact that the usual scumbag politicians in military Discovered there were very rich mineral deposits and very valuable agricultural land up in the northern part of guadamala Way out in the boonies and off the beaten track the landowners up there were poor indigenous farmers So it was basically a big land grab by the wealthy oligarchs the military and the politicians Anyway, during that 35 years the people in power and the military instead of going after the land legally and paying these people for it

[16:48] Started simply taking it and disappearing whole villages in the process So then in 1996 the un came in and brokered a peace deal and it worked and how did it work? Well, they paid everyone off as usual do-gooder countries like the us and japan and finland and thailand and sweden All donated countless millions even billions of dollars to the locals here all in the efforts to restore peace and rebuild the country In an equitable way of course the u.n didn't want its responsibility of dolling up that money So they gave it to the politicians to dole it out accordingly And the peace agreement also gave amnesty to all those military guys that committed the genocide cool, huh? And with all those billions floating around all the upper level military and political boys got rich

[17:36] And those poor indigenous farmers, well, they got their land back, but they didn't see a scent They still go down to the river and wash their clothes. A lot of their houses aren't electrified and almost none of them Have clean running water in the house So it's the case once again of meet the new boss same as the old boss So when the peace accords came billions flowed in and a lot of it was unaccounted for well It was accounted for it was in the pockets of the politicians, etc And by the way, all those former military guys that were in on the genocide They got amnesty So now they wear suits and they're deeply involved in the political system now and hold very high positions in government Anyway, the fly in the ointment was the peace accords came with a hitch Since 1996 united nations has had a presence in the country monitoring what's happening up north where you know

[18:25] The land grabs were and trying to keep an eye on where all that donated money was going. Anyway as it turns out by 2006 about 10 years after the war ended the united nations team that was down in guadamala called minugua by the way They uncovered evidence that the state institutions of guadamala had been thoroughly infiltrated by crooks The way they put it officially was it had various black elements including members of illegal security forces and clandestine security structures In other words a black government within a corrupt government and they reported there was no transparency in government and that the judicial system Was an utter failure So the united nations approached the president of guadamala at that time and offered to give assistance

[19:11] To help the failed judicial system eradicate and prevent the reemergence of clandestine security structures and illegal security forces Are the kind that started that 35 year war in the first place So the president and congress of guadamala as thoroughly corrupt as they were in 1996 when approached by this u.n commission called Seagig the commission against government impunity in guadamala Well, the president and congress of guadamala signed on to it even though they were thoroughly corrupt themselves because All international eyes and pressure were on them and they wanted to appear as if they were thoroughly Cooperating and were on the up and up meaning for the last nine years There's been this u.n commission consisting of an international panel of highly regarded first world judges and investigators

[19:58] Looking to uncover clandestine black organizations working within the government. In other words They're trying to find out who's stealing all the dough In fact the commission came out and said that from 30 to 50 percent of all the money collected by the guadamalan government for whatever tariffs taxes gas taxes import taxes And the billions they get in donations every year from do-gooders They say 30 to 50 percent of all that is stolen through government corruption They said none of the public hospitals have to be without water or medicine or electricity None of the public schools have to be without desks and water and electricity and books and pencils not only that they said if the money hadn't been stolen every single kid in guadamala could have his own personal computer and

[20:43] Every single school could be rebuilt now. It's not just pure government theft There are thousands of no-bid contracts that go out to the cronies of these politicians in fact a guadamalan friend of mine who did some basic campaigning for a guy who eventually at that time in 2006 became president He told me a couple of weeks after the guy won He got a phone call from the priorities general secretary saying he'd been awarded a nice big fat road maintenance contract Now my friend said to the guy well, you know I didn't bid on that contract and I wouldn't know the first thing about road maintenance The guy said never mind. This is payback take the contract hire a couple of guys get a beat-up pickup truck and some Shovels and some rakes and stuff. We'll tell you what section of the country and what roads you'll be maintaining

[21:31] Don't worry about that. Just keep them busy. Oh, and by the way, he said Open up an essay corporation with some kind of road maintenance name in it because that's where we'll write the check And my friend after the four or five years that president was in office built a nice first world house in an upscale subdivision And had enough left over to buy himself a nice suv Now the only difference between that kind of cronyism and the stuff that goes on in politics up in the states down here We're talking about completely non-transparent handed out to friends and cronies Is that often don't know the first thing about how to fulfill the contract that they've just been given? All it is is really payback with public funds. Of course. Hey, wait a minute Isn't that how they do it up in the states at least in the military? Isn't that how middle eastern wars are fought and then countries rebuilt with non-transparent no-bid contracts to

[22:24] Companies like hella burden whose former ceo was that scumbag? What a dick Cheney now get this there's another guy. I know a columbian guy He works for a big company that designs and installs industrial waste treatment systems And he bid on a gigantic project involving a lot of government buildings that had faulty or even No water treatment systems at all. He submitted his bid and was invited along with some other bidders To a meeting salon at a four-star hotel in order to listen to a presentation by seven or eight high-end government guys and a government lawyer He said that the group of bidders were told right up front that whoever got the contract would have to kick back 20% to them And he said they announced that without any reservations or shame just business as usual

[23:15] Now he says a couple years later. He wishes he would have recorded that Would have been great evidence for what's going down in guadamala right now Now you remember that united nations committee. I told you about that's been investigating government impunity in guadamala for the past nine years Well, nine years has gone by and almost nothing has happened. They haven't opened their mouth about pretty much anything Oh, they caught a few small fries, but never any high-end politicians And naturally after nine years people on the street were starting to think that this u.n commission was pretty useless Well about two months ago right when their commission was about to expire. They came out with a bombshell they'd been collecting cell phone conversations between some of the highest players in government and Discovered a huge corruption ring that was stealing five million dollars a week from the port authority. That's import export

[24:04] They've got conversations They've been playing directly on the tv news where cabinet members and the vice president's personal secretary are talking about how they're divvying up the money From the president on down so bottom line they've uncovered a ring They call la linea the line and that's just the tip of the iceberg because you see at the same time within the same month There was a huge unprecedented crisis in the public health system in guadamala Turns out the minister of health the cabinet member in charge of the public health care system Who in collusion with the government's buyers of hospital medicines and supplies? Had knowingly purchased drugs and medicines that were counterfeit directly contributing to the deaths of over a hundred hospitalized people Including many renal dialysis patients because you see they also purchased old defective renal dialysis machines

[24:56] Now they bought this low grade defective stuff because they didn't have enough money to fulfill the original contract why? The funds were skimmed by these same guys And thus came up short meanwhile the vice president's secretary is a fugitive from justice And when they searched this house in guadamala city, they found between two and three million us dollars stuffed in a sofa Remember, this is the secretary to the vice president of the country And now guadamala's only lady vice president is sitting in jail Now get this just in the last month the president's entire cabinet resigned and they fled the country Some with the panama some to cuba the dominican republic and parts unknown The ones accounted for by the way have checked into beautiful five-star resorts

[25:43] Surprise surprise, huh? And for once every social segment of the population is up in arms In fact last week the entire private business sector of the country called for a one-day shutdown And the whole country was at a standstill and they're threatening to do it again And again until the president resigns or congress impeaches him Tens of thousands of people outside congress pressure them so that they've removed the president's immunity and he will stand trial Now the strangest thing is that his own party who hold a majority in congress And who are totally in his corner because they're just as corrupt themselves They voted under severe international pressure and heavy heavy pressure from all the locals and all the civic groups and business groups To start the impeachment process this time the public is extremely pissed off

[26:30] In fact the first lady the president's wife cannot go out in public because people throw tomatoes garbage and even poop in her face Most are saying it's a big improvement Oh, and by the way the president's son who before he became mayor of a completely dysfunctional city in guadamala called misco a place I never recommend gringo step foot in before being mayor He was a lieutenant in the guadamala army and he never made over a thousand bucks a month Now, isn't it funny a Latin friend of mine who has a business in misco tells me the president's son The mayor of that town has two new maseratis and a new corvette, but guess what? It's not gonna last He's going to trial too. So then how does all this affect expat gringos? Not much Really, we came down here fleeing a very corrupt political regime as opposed to down here

[27:16] Where the politicians are thoroughly corrupt, but they don't have much power over the people at all In fact, most gringos don't know nor do they care about local politics Most expats no matter what latin country they happen to be in have learned how to divorce themselves from the vile stench of politics You've been listening to the expat files living in latin america coming to you twice a week from somewhere south of the border Email me the expat files at gmail.com And don't forget to check out expat wisdom.com to sign up for your free reports on latin america See you next time nos vemos