By Sofia Menchu
GUATEMALA CITY (Reuters) - Guatemalan police on Friday arrested 17 people on suspicion of involvement in a web of money laundering and illegal election financing, in an investigation that also has embroiled a local unit of Mexican billionaire Carlos Slim's America Movil.
The International Commission Against Impunity in Guatemala, (CICIG) a U.N.-backed anti-corruption body, said the scheme was run by former communications minister Alejandro Sinibaldi, who has been a fugitive from justice since June 2016.
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Sinibaldi served under former president Otto Perez, who fell from power in 2015 following a CICIG-led investigation into his alleged involvement in a lucrative corruption racket.
Ivan Velasquez, head of the CICIG, told a news conference Sinibaldi created a series of shell companies to launder money he collected in bribes to authorized state building companies.
Some of that money also was intended to finance Perez Molina's right-wing Patriot Party, Velasquez said.
During the probe, investigators found evidence of payments from Telecomunicaciones de Guatemala S.A. (Telgua), a subsidiary of America Movil, in Sinibaldi's account, Velasquez said.
Interviews with a former Telgua executive revealed that the payments were intended to secure the company favorable treatment in a dispute with a rival, Velasquez said.
A spokesman for America Movil had no immediate comment.
Former president Perez, who denies wrongdoing, is currently in prison and on trial over various corruption charges.
(Writing by Julia Love; Editing by Bill Trott)