Panamanian Corruption Concealed Amidst Free Trade Negotiations

9/13/13
Panamanian Corruption Concealed Amidst Free Trade Negotiations
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PANAMANIAN CORRUPTION CONCEALED AMIDST FREE TRADE NEGOTIATIONS

By: Eric Jackson, Panama News, COHA Senior Research Fellow
April 28, 2011 in COHA Research, Economic, Free Trade, Front Page, Panama
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Ob ama welcomes Panamanian President Ricardo Martinelli in the midst of major scandal and corruption in Panama. Once again, Ob ama falls short of his commitments to Latin America as he collab orates with Martinelli to negotiate a flawed trade agreement.
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From April 27 to April 29, Martinelli and 11 other Panamanian officials are meeting in Washington D.C. to discuss free trade, regional security, and bilateral cooperation with various U.S. departments and organizations. Today at the White House, President Barack Obama met with Panamanian President Ricardo Martinelli to discuss, among other issues, the pending free trade agreement between Panama and the United States. The meeting with Obama marks the halfway point of Martinellis three-day work trip to Washington D.C. and brings the U.S. one step closer towards closing the agreement with Panama. Free Trade with Panama The free trade agreement (FTA) was first drafted during the Bush administration, resembling the trade deal that Washington signed with Peru. The agreement was signed by the United States and Panama on June 28, 2007 and was then ratified by
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the Panamanian National Assembly less than 2 weeks later. As
of now, the free trade agreement continues to await MercoPress 8h congressional approval in the United States. However, on April @MercoPressNews 18, 2011, U.S. Trade Representative Ron Kirk announced that the Argentina has access to last obstacles to U.S. ratification had been met after Panama 1.5bn dollars from IDB to ratified a tax information sharing agreement with Washington. As improve metropolitan railways dlvr.it/3ySh0P the Obama administration prepares to present Congress with the Retweeted by COHA free trade agreements with Colombia, Panama, and South Korea, Expand Democrats remain reluctant to support such agreements while COHA @cohastaff Republicans continue to push for action on all three deals by July. 12 Sep
How badly would the Caribbean be hit by a U.S. attack on Syria? bit.ly/1e6jVGa Expand
U.S. policy toward Panama, in light of the countrys realities, reflects a desire to move forward with a free trade agreement.
With both countries urgently pursuing an agreement, Washington Per News 12 Sep invented a Panama that has never existed. Rather than a @PeruNews Peruvian lawyer leads compelling democracy led by a veritable Boy Scout Master, OAS electoral Panama is one of the most corrupt, drug-sodden and scheming observation mission in societies in Latin America. Panama - Andina Agencia... bit.ly/1854hlZ pn perunews.info Retweeted by COHA Expand COHA @cohastaff Panama offers a relatively boutique market that relies primarily on
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its service sector and very little on its manufacturing industry. The agreement is likely to increase U.S. agricultural exports to Panama, hoping to create a few hundred jobs in the United States and devastating Panamanian producers, who in most cases are ill-prepared to compete with the subsidized exports of mechanized U.S. agribusiness giants.
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Martinellis Court Scandal
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Embarrassingly enough, the meeting in Washington with President Obama came at a time of a major public scandal in Panama. In less the than two years, Ricardo Martinelli has example, the countrys disregarded all of the protective checks and balances that exist in Panamanian constitution. For Comptroller General, Gioconda Torres de Bianchini, who must approve all significant government contracts, was the in-house accountant for Martinellis privately-owned lucrative supermarket and food packing businesses. Bianchini assiduously looks into peculations of the opposition parties, in particular the Democratic
www.coha.org/panamanian-corruption-concealed-amidst-free-trade-negotiations/ 2/14
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Revolutionary Party (PRD), but shies away from investigating members of Martinellis coalition. Moreover, she played a central role in the tactical defections of a number of key PRD elected officials to Martinellis ruling Cambio Democrtico (CD) party. When San Miguelitos PRD mayor, Mayor Hctor Valds Carrasquilla, was caught more or less red-handed for skimming at least USD 250 thousand from the citys municipal coffers, he faced major scrutiny from legal officials, until he switched his party affiliation to the CD. The investigation was eventually abandoned.1 In any case, Martinellis CPA had abolished many of the requirements for prior approval of contracts, and since then, no-bid direct contracting has become the name of the game in the country.2 ,3 Most egregiously, WikiLeaks recently revealed suspicions that the bidding process on the biggest government contracts of them all, the design and construction of the new lock expansion for the Panama Canal, was rigged, to the detriment of a U.S.-based company.4
The former Attorney General (Procurador General de la Nacin), Ana Matilde Gmez, was a 10-year appointee who took office during the five-year term of Martinellis predecessor. She was driven out on completely trumped up charges. After acceding to an extortion victims request, Gmez tapped the victims phone, capturing Prosecutor Arquimedes Saezs demand for an illegal payoff on tape.5 ,6 The consensual wiretap was alleged to be a crime, giving rise to Gmezs subsequent removal from office. The Attorney Generals replacement should have been the offices number two person. However, Martinelli and a compliant Supreme Court revived a position previously abolished in 2004 in order to override the current constitutional provision. This allowed Giuseppe Bonissi, a highly questionable public official, to be appointed to the Attorney General position.
Bonissi was an associate at Moreno & Fbrega, the law firm headed by Jorge Fbrega, the father of Vice Minister of the Presidency Mara Fbrega. Bonissi lasted less than a year at the job. At the time, a resident DEA (Drug Enforcement Agency) officer complained of major drug traffickers being let go, even though Panamanian law allows for no bail in drug cases and reverses the burden of proof. These draconian measures were adopted
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some years ago at Washingtons behest. They were ignored when charges were dropped against four individuals tied to the landing of a small plane on an illegal airstrip on a farm in the Azuero Peninsula. The provincial anti-drug prosecutor, who later ordered the four detained suspects freed, had recently been hired by Bonissi.
According to this prosecutor, the single condition for being given the job at the time was to arrange for the release of the four detainees. The provincial anti-drug prosecutor also named the Public Ministrys Secretary General Nedelka Daz and Personnel Director Eva Lorentz as being involved, explaining that both had known about the deal. The Public Ministry is a constitutionally independent organization that encompasses the nations prosecutors, medical examiners and other forensic specialists. The Public Ministry, like the courts and legislature, has fallen under Martinellis direct and notorious control. As soon as he replaced Gmez, Bonissi brought Daz and Lorentz into the ministry.
Criminal charges were brought against the three women involved in the case, but Lorentz made a series of allegations about Bonissis personal corruption. The latter responded by claiming that a USD 400 thousand bribe had been paid in order to free the suspects.
Bonissi insisted that he would investigate the three womenall of whom he had personally hiredbut as new data and swelling calls for his ouster mounted daily, Bonissi resigned on December 22.7 The cases against the three underlings have dragged on, although the two higher-ranking suspects were granted bail.8 As of yet, there has been no investigation of Lorentzs allegations against Bonissi, or of his role in the freeing of the drug suspects.
Initially, in order to have a job for Bonissi to fill, it was necessary to

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remove Attorney General Gmez, as discussed above. It turns out that the ouster was choreographed by a group of powerful lawyers that waggishly called themselves PAMAGO (Prejudiced by Ana Matilde Gmez).9 The group included, among others, Supreme Court magistrate Jos Abel Almengor, alternate Judge Zulay Rodrguez (who for years had been the de facto Supreme Court clerk through which culprits paid their bribes to the High Court magistrates), and its organizer, former national ombudsman and head of Martinellis constitutional reform committee of notables talo Antinori.10
Acting as the judge, Zulay Rodrguez granted bail to the three high-profile drug suspects, but the DEA raised complaints.11 ,12 She was subsequently arrested for bribery, after which she blamed Almengor for setting her up. For months, she tried various motions, arranged her defense, and marshaled evidence for a counter-offensive.
It turns out that while Antinori was the functional coordinator of PAMAGO, Rodrguez was its acting secretary. Full of the kind of hubris that comes with undisputed presumption of presidential backing, the committee to get rid of Gmez talked an awful lot through the medium of email. When Gmez was finally removed, Antinori ordered the various emails erased, but Rodrguez cagily made copies and saved them as a would-be insurance policy.13
Before going public with these files, Rodriguez lined up other pieces of evidence to validate the collection of emails and build a case concerning other examples of judicial misconduct; most notably, an ex parte meeting among Supreme Court magistrates Almengor and Alejandro Moncada Luna (another Martinelli appointee), and Lidio Rancharan, a reputed Belizean-American swindler, regarding a case then pending before the High Court. This sort of thing happens all the time in Panama. It is nevertheless illegal, and the nations principal bar association, the Colegio Nacional de Abogados, cried foul. Then, even more astonishing, the High Courts presiding magistrate, Anbal Salas, having been informed about the meeting, declared it
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necessary.14
The details of Ricardo Martinellis drive to remove the Attorney General were emphatically exposed, with at least three members of the High Court compromised and six complaints filed with the National Assemblys Credentials Committee. This assembly hearsand almost never acts uponcomplaints against High Court magistrates. Antinori then resigned as Martinellis constitutional revision czar and Almengor resigned from the Supreme Court. In short order, the complaints were dismissed without an investigation. It was held that complete proof of a crime had not been submitteda common excuse, but an outrageous denial of the ample evidence that had been presented in this case.15
The Public Ministry declared that since the legislature had previously taken up the complaints and dismissed them, an ordinary criminal investigation against Almengor, who had given judicial immunity, would be tantamount to placing him under double jeopardy.16 However, in addition to her pending bribery case, Rodrguez is being prosecuted for penetrating the PAMAGO members privacy by revealing emails that were addressed to her.17
So, how did such an ethically challenged person like Almengor get elevated to the High Court in the first place?18 Almengor was the nations chief anti-drug prosecutor under Ana Matilde Gmez. In this position, he was in charge of various cases, including one involving David Murcia Guzmn and his gang.
Murcia was engaged in the business of selling bootleg CDs until he and his taxi-driving brother-in-law set up shop in Colombias Department of Putumayo. This move came at a time when the right-wing AUC (United Colombian Self-Defense), a paramilitary organization with the backing of the Colombian government, was on the offensive in Putumayo. Its target, the leftist guerrilla
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organization FARC (Revolutionary Armed Forces of Colombia), had been forced to retreat into the hinterland, leaving the ability to tax drug trade operations up for grabs. It has not yet been proven in a court of law, but it appears that Murcia was able to create what looked like a giant pyramid schemewhich did not collapse in the ordinary fashion because it was not financed as a Ponzistyle operationas a money laundering plot for the AUC and their Valle del Norte Cartel business partners.19
As Murcias operation spread across the region he bought politicians in the countries in which he was operatingincluding Panama. He became too flagrant in his personal lifestyle, tooling around little Panama in Maseratis and Ferraris, getting escorted through Tocumen Airport by the National Assemblys protocol officers. Most controversially, he had given funds to both sides in the 2009 election campaign, but slaughtered the PRD when that partys Panama City mayoral candidate first denied and later admitted to meeting with Murcia. It was alleged that Murcia gave USD 800 thousand to Martinelli via current Tourism Minister Salomn Shamah (identified in a leaked U.S. Embassy cable as suspected of links to drug traffickers) in the form of the purported purchase of gift certificates from Martinellis Super 99 supermarket chain.20 Photocopies of alleged checks involved in this transaction were shown on television, and were in the files of the Murcia investigators. At the time, it was ruled that since the campaign finance reports (which are by law kept secret from the public) were not due, there could be no investigation into gangster financing of Martinellis campaign, and the matter was then peremptorily closed. To no surprise, evidence of the alleged checks disappeared from the files.
Meanwhile, one of the Murcia cases handled by Almengor was against Ernesto Chong Coronado, a CPA who created Murcias maze of Panamanian corporations, through which money of dubious provenance flowed. Months before the Murcia scandal exploded, Almengor allegedly alerted Martinelli to the perils of being caught dealing with Murcia. Later, Almengor issued a house arrest order against Chong, but failed to take the routine step of notifying migration officials that Chong was not permitted to leave the country. Chong, who was defended by Alma Corts
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(now Martinellis Minister of Labor), stepped onto a plane and flew off to Miami. Gmez suspended him for it.21 In reaction, Almengor quit in a huff, and went to work for Martinellis team. It is alleged that he used his connections at the Public Ministry to remove documents establishing ties between Martinelli and Murcia from the files.22 Eventually all Panamanian charges against Murcia and Chong were droppedbut Murcias luxury cars were kept as trophies by the Panamanian prosecutors and cops.23 Journalist Eric Jackson was stopped by three security guards from taking a photograph of the Maserati parked in Bonissis parking spot at the Public Ministry while Bonissi was acting Attorney General. Illustrious Family Ties
Some would maintain that the allegations of Ricardo Martinellis gangland ties are rather thin. That might be reasonably said if the Murcia allegations were all the evidence that there were available, but there are also the circumstances that led to the downfall of Bonissi. Martinelli himself might be examined according to the standards that are routinely used in Panamanian society to judge everyone else: blood ties, ties of affinity, business and professional associations, and so on.
For example, the cousins of Martinelli, Ramn Martinelli and Csar Fbrega Sarmiento, as well as Jorge Luis lvarez Cummings, Ninoska Yariela Escalante Paredes, have all been detained in Mexico at one point or another for money laundering with the Beltran Levya Cartel.24 Csar Fbrega died of cancer in prison, while the other three defendants have been ordered to remain in preventive custody for a trial process that may take several more years to run its course.
According to a U.S. Embassy cable, the DEA believes that this drug operation was laundering upwards of USD 30 million per month through Panama.25 President Martinelli and his entourage denied any familial relationships with those arrested, but later claimed that Ramn Martinelli had not had any relationship with CD for a decade, and that Panamanian authorities were on the
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verge of arresting the gang leaders themselves, none of whom were involved in CD.26 ,27 But all of those denials could easily be refuted and inevitably made it appear at that Martinelli had a number of other things to hide.28 ,29 Bottom Line
Going beyond the rhetoric that will be heard during Martinellis visit are the realities of economic integration and the anti-drug effort. Its not possible to have economic relations on a level playing field when there is hardly any rule of law. Its not possible to have a reliable anti-drug ally in a Panamanian government that is in bed with the mob. References for this article can be found here
Additional editorial contrib utions b y COHA Research Associates Tess Burns and Reb ecca Tran
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Comments (7)
Jose Supla
April 29, 2011 at 1:07 am Reply
You've got to be kidding? Nevermind these petty corruption charges, who isn't, starting with the US international oil mafia, I mean government, and just get on with business.
PanaMonkMan
April 29, 2011 at 11:47 am Reply
Nothig new under our tropical surreal sun: Our president is pushing our country like his 99s supermarket.
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Alberto L. Arias April 29, 2011 at 11:48 am Reply

This is definitely NOT an impartial analysis. Besides the several flaws with respect to facts, the authors are notorious for their biased opinion against Martinelli. Martinelli is not perfect by any means, but the guy is getting things done, and has 70 percent of proven popularity. Its sad that the COHA " researchers" , not named in the credits, are well known in Panama for their radical anti government position.
@rodrigvm
April 30, 2011 at 12:50 pm Reply
You've gotta be kidding, these are serious criminal offenses, just because he is US's darling does not excuse him from criticism.
Dr DIAS
May 2, 2011 at 5:00 pm Reply
"Panama where the numbers never add up" Panama where the Martinelli Government and his Political Ruling Criminal class use Panama, it's People and the Panamanian Constitution as indenture personal Property!
Zulay Rodrguez Lu
1.
Zulay Rodrguez Lu says: zulayrodriguezlu@gmail.com 3 May 2011 at 02:54 He leido su artculo en Ingls, y lastimosamente mi ingls no es muy bueno, para poder contradecir varias posiciones que usted publica sobre mi persona. En primer lugar, mi nombre es Zulay Rodrguez Lu, y ejerc como Jueza Suplente por muchos aos, y nuestra legislacin penal nos permite otorgar fianzas de excarcelacin, hasta para casos de homicidios, como en los Estados Unidos.
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En segundo lugar, siempre falle mis casos en derecho, y, en nuestro pas, si alguna de las partes no esta de acuerdo, puede ejercer el derecho de apelacin, el cual, del caso que usted menciona, se le venci el trmino al Ministerio Pblico. En tercer lugar, fui investigada por el caso que usted menciona, y fui absuelta de todos los cargos por los jueces y Magistrados de la Corte Suprema de Justicia, porque mi labor fue en derecho. En cuarto lugar, la suscrita estuvo todo un ao recolectando pruebas para poder validar mis acusaciones, si la suscrita no hubiera minuciosamente recolectado las pruebas, lastimosamente nadie en nuestro pas, ciudadanos, medios de comunicacin y pblico en general sabra la verdad. En quinto lugar, me considero una mujer, profesional, de familia, abogada litigante, que hizo su labor en Panam, y denuncie lo que tena que denunciar, si las investigaciones quedaron en nada, lastimosamente, eso se lo debemos a nuestro sistema legislativo, y, considero que la ciudadana y dems estamentos deben continuar mi labor, la cual como ciudadana responsable y que amo a mi Pas, PANAMA, lo hice porque considere que la poblacin y ciudadanos panameos merecan conocer la verdad. Y estoy dispuesta a someterme a todos los interrogatorios que me quieren realizar las personas interesadas porque no tengo nada que temer, puesto que desde el da uno, siempre dije la verdad, y me mantuve en lo que denuncie, sin embargo, si hay que combatir la corrupcin y adecentar la justicia en nuestro pas, siempre lo hare en la medida de mis posibilidades, porque creo en Panam, amo mi pas, y considero que solamente a los ciudadanos panameos nos corresponde esa labor, la cual s y
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confo que esto nos toca a las nuevas generaciones de panameos, los revelos generacionales y futuras generaciones que componen mi pas. Hago la salvedad, que la mayora de mis casos siempre los falle en derecho, y, los abogados de dichas personas eran defensores de oficio, pagados por el Estado panameo, porque no podan econmicamente pagar su defensa, y, la suscrita siempre fallo en el mismo acto de audiencia (por eso nunca tuve objeciones que se me hicieran auditoras o inventarios judiciales), es la primera vez que responde un correo electrnico, sin embargo, varios hechos en que se me menciona en este artculo estan desapegados a los hechos, sin embargo, no tengo miedo a ser entrevistada, pero como en todos los artculos, debe escucharse a todas las partes, y, a mi no se me ha escuchado ni entrevistado para dar la versin de mis actuaciones como Jueza Suplente, que fueron en derecho, y, si una de las partes no estaba de acuerdo, tena el derecho de apelar a mi decisin, y mis superiores jerarquicos podan reformarla, confirmarla (dejarla igual) o cambiarla, todo en el marco de la Ley panamea, que me parece funciona igual en los Estados Unidos. Cualquier interrogante que tenga, puede contactarme a mi correo electrnico, de usted, ZULAY RODRIGUEZ LU Ciudadana Panamea.Reply
Eric Jackson
People go up and down in the polls, Mr. Arias. This poll was taken shortly before the above piece was written: http://www.padigital.com.pa/periodico/edicion-act but of course, the scandals have become much worse since then, for example with the revelation that
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Colombian gangster David Murcia Guzmn flew of Mr. Martinelli's personal plane. http://www.wikileaks.ch/cable/2009/10/09PANAMA765 Absolutely typical that a Martinelli defender alleges that I am factually wrong and yet does not offer a single example. You people are too used to invoking your surnames as authority, but I never bothered to study rabiblanco genealogy and don't think I will. Ms. Rodrguez, your reputation precedes you. I would not have written what I did were it not from multiple well placed sources who are credible to me. My job is not to write the legal fiction on which the Panamanian courts and prosecutors thrive, but the reality of what happens in Panama. Yes, we all know that according to the official findings, nobody has ever been guilty of money laundering in Panama and the Supreme Court has never been bribed. But the people who make those findings need to go elsewhere to get their fictions written.
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