Comptroller General Alvin Weeden is trying to have one of his critics imprisoned again. Anti-corruption activist Enrique Montenegro says that Weeden pressured Tomás Gabriel Altamirano Duque, an alternate legislator and former vice-president of Panama, into voting for President Moscoso's Supreme Court nominees by conducting a review of the lottery ticket printing contract held by a company owned by Altamirano Duque. Montenegro produced a document about an official audit, which Weeden claims is bogus. Weeden is alleging calumnia e injuria --- criminal defamation --- and wants Montenegro thrown in jail.

It's likely that the authenticity of the document will ultimately be proven or disproven to most people's satisfaction. If it was a fake, it would be far from the first time that a false document took a prominent role in Panamanian politics. (Recall the waning days of the 1994 presidential campaign when then-legislator Leo González, now the number two man in the Ministry of Canal Affairs, used a bogus document to smear Rubén Blades by falsely accusing him of being backed by Fidel Castro's government.) In any case, the question of whether the document proffered by Montenegro is genuine should not end the inquiry about whether Altamirano Duque was pressured to vote the way that he did.

A few days before the controversial vote, Weeden moved to void a gravel mining concession that a company owned by PRD deputy Miguel Bush had, citing the constitutional ban on legislators holding government concessions. Weeden warned that he would take similar actions with regard to other concessions held by politicians. Thus, whether or not Montenegro's documentary evidence is worthy, Weeden cannot credibly deny that he exerted economic pressure on Altamirano Duque. Maybe the comptroller can argue that his action against Bush and his threat against unnamed others had nothing to do with the Spadafora and Cigarruista nominations, but considering that there was no action on his vow to act against other illegal contracts or concessions once the president's nominees were approved, a lot of people will find such an assertion unbelievable.

The important issue here, however, is neither whether Weeden is a partisan hack with totalitarian tendencies nor whether Montenegro is a zealot who doesn't let the truth get in the way of his tirades. The principal issue is conflict of interest, and it's a huge problem in Panama's private sector as well as its government.

Altamirano Duque has a conflict of interest that made him vulnerable to economic blackmail, and the PRD leadership knew of this and never took any action to protect either their party or the nation. Bush had a conflict of interest that should have been of simliar concern, although in the high court vote he did put partisan loyalty ahead of pecuniary interest. PRD leaders have openly defended Bush's conflict of interest. All this makes a very good argument in favor of new leadership for the PRD.

But meanwhile in the private sector, conflicts of interest do immense harm to the Panamanian economy.

For example, when a foreign company that wants to promote a product in Panama goes to one of this country's ad agencies, the publicity campaign is unlikely to be based on solid market research. The ads will usually be funneled to media with family or business ties to the advertising agency, without respect to what makes the most sense for the client and without disclosure to the client that there is a conflict of interest.

And what if a foreigner wants to buy into the Panamanian economy by way of stocks or bonds traded on the Bolsa de Valores? At one point we had the economy minister's son in charge of the nation's stock and bond exchange, but now THAT conflict of interest is history. But last year during the collapse of Grupo ADELAG, whose shares were traded on the Bolsa, it turned out that investors had been deceived by the multinational Arthur Andersen accounting firm's opaque auditing. Andersen, which apparently did the same kind of favors for Enron, was fined for putting its contract with Grupo ADELAG before its duty to inform investors.

In a truly scandalous decision whose ultimate result is Panamanians going hungry and homeless, the Supreme Court in effect upheld Enron-style accounting by striking down the law mandating Generally Accepted Accounting Principles. It did so for the most specious of reasons, holding sua sponte that Panama's use of international accounting standards would amount to a copyright violation. The court ruled against transparency and for business empires made of smoke and mirrors, but they didn't fool investors here or abroad. Thus Panamanians with money tend to invest it abroad, and foreigners with money hesitate to invest it here. Unreliable figures from accountants with conflicts of interest must be counted as part of the reason why our economy is stagnant.

Conflict of interest is at the heart of juega vivo, the culture of dishonesty that thrives among the social elite and has spread to all levels of our society. It harms Panamanian business, corrupts the Panamanian labor movement and is destroying Panamanian public institutions. It's a nuisance to rich and poor alike. Some may call it mamey, patronage, realism or the way things have always been done, but to me it's a social form of gangrene, something that needs to be cut away in order for Panama to recover from its malady.

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