Even when Panamanian governments aren’t concealing or falsifying the figures, for a number of reasons our official economic statistics aren’t very precise. Nevertheless, there is general agreement that in 2003 the Panamanian Gross Domestic Product grew by about four percent. That’s four percent after an almost zero-growth 2002, and an economic free fall for the couple of years before that, but it was still an upswing after a long slide, especially in the tourism and construction sectors.
So why was this economic upturn accompanied by a continued slide in public support for the president, her partisan coalition, and particularly her choice for a successor, José Miguel Alemán, who is running just above eight percent in the public opinion polls?
One major reason is a string of scandals that has many Panamanians believing that even if the economy is doing better, the benefits will go to a tiny group of well-connected people and companies. There have been a number of business scandals ongoing as well, but purely private sector sleaze is beyond the scope of this review. The following is a brief review of some of the events that eroded public confidence in the current administration.
Mireya’s brother gets the presidential beach house
For public bidding processes, Panama generally sets pre-qualification standards, often using these to rule out all but one selected bidder. For any genuine bidding process, potential buyers need to know what they would be bidding for.
President Moscoso’s beach house at Punta Mala was old US military housing that underwent substantial renovation for its conversion into a presidential compound. The acquisition was sternly criticized and Mireya relented and said she’d sell the place.
Nine groups, individuals or enterprises expressed an interest in bidding. There might have been more, but the value of the renovations are not a matter of public record and people have been arrested for taking pictures of the place from public property outside of it. It was kind of a pig in the poke, with one group headed by Arnulfista activist Antonio Domínguez vowing to buy the place and hand it to Mireya, and satirist Ubaldo Davis soliciting donations to make a bid.
In the end only five bids were submitted, and the beach house went to --- Franklin Hidalgo Moscoso Rodríguez, the president’s brother. Later it turned out that he hadn’t met the prerequisites to submit a bid, but the process was not overturned.
The Reina Torres de Araúz Anthropology Museum heist
On the morning of February 17, it was discovered that the gold room at the nation’s public anthropology museum had been stripped of 311 pre-Columbian antiquities. Whoever took the items had the keys and combinations to get into the room and the showcases without breaking anything.
It was an inside job, of course. There were 13 arrests, mostly of museum and National Institute of Culture (INAC) employees. The suspected ringleader was out of jail on an appeal bond for another grand larceny when he was hired by INAC on the basis of his relationship with a Mireyista elected official.
In May, police investigating a credit card falsification ring stumbled upon information that allowed them to set up a sting that resulting in the recovery of most of the stolen artifacts. Nine suspects remain behind bars awaiting trial in the case.
National Bank of Panama embezzlement ring
There has been massive internal theft at the National Bank of Panama (BNP). How much was stolen, all of the methods used and the length of time that the thefts had been taking place are unknowns, but documentary evidence has it that in 2002 alone more than $1.1 million was siphoned out of the National Bank of Panama. At least 50 people, from cashiers to managers, and some outside attorneys and couriers are also also suspected of involvement.
Basically what would happen was that when taxes due the government were paid at the bank, taxpayers would get official-looking receipts but no record would be kept of the transaction with the bank. Some witnesses said that the practice dates back to the 1990s. Investigations, which seem to be looking no higher than middle management levels, are still ongoing and 15 former BNP employees remain in jail awaiting trial.
Skimming the National Lottery
It was discovered that two of the National Lottery’s accountants, working with an unknown number of lottery ticket vendor accomplices, were able to steal at least $1.5 million by regular skimming of the proceeds between 2001 and early this year. Again, there is doubt about how long the practice had been going on and the total amount of money taken.
Protecting Marc Harris
The formerly flamboyant “offshore asset protection guru” Marc Harris fled to Nicaragua in 2002 after Panama’s National Securities Commission denied him a license to deal in securities and held that this is in fact what his spiderweb of companies were doing. To US authorities, what he was doing was laundering the proceeds of criminal enterprises in the United States, and participating in the evasion of US taxes by American citizens. He was thrown out of Nicaragua, handed to US authorities, and tried and convicted of conspiracy, money laundering and tax evasion by a Miami federal jury. He’s now in jail, awaiting a February 6 sentencing.
Harris, several of whose erstwhile clients claim that he stole their money, notoriously enjoyed the protection of Attorney General José Antonio Sossa and the patronage of the former Pérez Balladares administration.
Meanwhile in Managua, Nicaraguan authorities seized Harris’s archives, and they claim that within those files there were documents indicating that even in Nicaragua Harris was receiving inside information from the Moscoso administration’s National Security Council and anti-laundering Financial Analysis Unit. Curiously, the National Security Council, which in 2002 had made a big show of its surveillance files of anti-corruption activist Enrique Montenegro, said that Harris couldn’t be getting information from them because they don’t in fact maintain any files. Harris was known as something of a computer hacker, and there is thus the possibility that he got into sensitive Panamanian government information with little or no inside help.
Mireya Moscoso vowed that there would be an investigation of those in the Panamanian government who helped Marc Harris, but it seems that this has not happened.
Meanwhile, US prosecutors alleged that although Harris claims to be a naturalized Panamanian citizen, there is no record of his renouncing his US citizenship. However, to legally become a naturalized Panamanian, one must renounce his or her prior citizenship. Thus on the face of it there’s an Immigration fraud case here, with the larger scandal arguably that the Panamanian government is not looking into it.
Legislative bribery investigations quashed
The allegations and counter-allegations that bribes were paid for the approval of the CEMIS multi-modal container handling and airport expansion project, and for the approval of President Moscoso’s Supreme Court nominees Winston Spadafora and Alberto Cigarruista and their respective suplentes Jacinto Cárdenas and Virgilio Trujillo, surfaced in January of 2002. However, in a 6-3 court decision in which Cárdenas and Trujillo were the deciding votes, the high court prohibited the investigation of these cases, apparently holding that if a legislator is involved in a crime there can be no investigation, including of alleged accomplices who do not enjoy legislative immunity and including of legislators who waive their own immunity, unless the entire Legislative Assembly approves the investigation.
This court decision prompted a storm of public protest, including from religious leaders and civic organizations that rarely become involved in political controversies.
The PECC case
Comptroller General Alvin Weeden produced a series of documents that on their faces indicate that in 1997 the old National Ports Authority granted a concession to maintain the nation’s buoys and lighthouses to Ports Engineering and Consultants Corporation (PECC), a company in which former President Ernesto Pérez Balladares was a partner. Weeden also showed that Rubén Reyna, the former deputy director of the authority went to work for PECC after leaving the government and that RPC talk show host Dorita de Reyna, then Toro’s press secretary, became PECC’s landlady. Weeden also says he can prove that the former Ports Authority director, Hugo Torrijos, and Rubén Reyna were also silent part-owners of PECC. The Directorate of Patrimonial Responsibility (DRP), a branch of the Comptroller General’s office, froze assets belonging to the former president, Torrijos and Rubén Reyna.
Weeden produced his documents while Attorney General Sossa was out of the country, so his deputy, Mercedes Araúz de Grimaldo, asked Weeden for the papers, received them, and began an investigation. When Sossa got back that investigation was quashed and instead the procurador general went to the high court with a motion to remove Weeden from office for exceeding his authority. As 2003 drew to a close, one Supreme Court magistrate unfroze Toro’s assets while another high court panel accepted Weeden’s proofs and voided the PECC contract.
Meanwhile, PECC’s American CEO denies that Pérez Balladares, Torrijos or Reyna owned shares in the company and further alleged that several high Moscoso administration officials demanded large payoffs in order for PECC to continue with the contract, and then began legal proceedings to void the concession after he refused to pay. The current administration officials involved all deny this, but a careful examination of their denials shows that what they are denying is not what has been alleged.
Also in this section:
Business & Economy Briefs
A year of high-profile scandals
All the hype
