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President Martín Torrijos, left, and First Lady Vivian de Torrijos, in the orange top, get their picture taken with Prime Forestry management. Behind them are banners bearing the logos of the Ministry of Agricultural Development and Prime Forestry. Photo from the Prime Forestry website
President, agricultural minister, ANAM
caught up in teak scam Gonzalo Menéndez briefly ran the National Environmental Authority (ANAM) during the Moscoso administration. The occasional contributor to The Panama News was, in fact, the third straight Moscoso appointee to that post who quietly but firmly refused to approve Mireya's controversial road through the Volcan Baru National Park. By that time the tide was going out for Arnulfismo and Menéndez, who was brought up in the Panameñista tradition, served out the final days of the unpopular outgoing administration, turned the office over to his PRD successor, Ligia Castro de Doens, and went back into private sector employment. He runs a small consulting firm that does environmental impact studies, and at the same time is pursuing a master's degree. Called upon to meet with people from a company called Prime Forestry to discuss a possible contract for some consulting work, he was surprised when he visited the company. "There were four guys from the Forestry Service working there, and I asked them if they had quit ANAM," Menéndez said. "'No,' one of them told me, 'I need to have another job on my time off, and I'm on vacation from ANAM.'" The former environmental director was appalled. "Legally and morally, it's not right for somebody who has to say 'yes' or 'no' to a company to go to work for that business." Menéndez isn't the only person, or the first person, to raise these ethical concerns in public. Such conflicts of interests on the part of at least three ANAM employees have been reported in La Prensa, which picked up the Prime Forestry story after aspects of it were first broken in Panama by Okke Ornstein's English-language Noriegaville website. And in the scheme of things, these petty betrayals of the public trust may be the stuff of which fall guys are made, because what appears to have gone on here is much uglier and goes much higher. It goes as high as the president and first lady themselves, in fact, and involves at least indirect connections with the Genovese mafia family. Prime Forestry is a Zurich-based boiler room operation that was selling investments in Panamanian teak plantations in several countries. "Was" until this past April, when the Swiss Banking Commission took over the company due to its allegedly fraudulent sales activities and because its CEO, one Kurt Meier, had been a central figure in a 1980s investment scam involving Genovese mobsters, an outfit called Chartwell Securities. Chartwell, a Zurich company that was run by disbarred Brooklyn lawyer and Genovese family associate Tommy Quinn, took investors from various countries in Europe for some £1.1 billion. It was at the time Europe's biggest-ever investment swindle. One of the investments that Chartwell's 150-member telephone sales force plugged was a video gambling device on which bettors would place their wagers on dog and horse races. The machine's inventor was convicted Genovese mobster Jimmy "The Weasel" Fratiano, a fact carefully concealed from investors. In the summer of 1988 Quinn was arrested in France and ultimately sent to prison for four years for fraud. Meier, who was Quinn's right-hand man at Chartwell, was busted in Spain while traveling on a fake German passport, but managed to avoid any serious prison time. But the years rolled by, the century and millennium turned, and 14 years after Chartwell's fall Meier was back in business in Zurich, operating as Prime Forestry, purportedly in the business of growing and selling tropical hardwood. Not long afterwards he was creating a subsidiary in Panama, one of whose directors is a Guillermo Salazar --- as in Panama's Minister of Agricultural Development Guillermo Salazar. One might expect that someone like Salazar would know a thing or two about what's appropriate to plant where in Panama, but talk began to spread among people in this country's reforestation business --- who despite some high-profile scandals, by no means adds up to just a collection of scam artists --- that Prime Forestry was making some rather absurd forestry decisions. For example, by planting teak in places where soil or rain conditions were clearly inappropriate. That, in turn, led to speculation that Prime Forestry was about something other than growing teak trees for the world market. And indeed, on the website of Panama's Chamber of Commerce, Industry and Agriculture, of which Prime Forestry is a member, "teak reforestation and sale of seedlings" is listed as the company's "secondary" activity. One other activity that Prime Forestry was known to engage in was the trade in international carbon emissions bonds, and on the company's website they talked about "the possibility of producing energy from sawmill wood." As is almost inevitably the case with a business in this country whose activities on their face make little intrinsic sense, people wondered if it was all a money laundering scheme. And then there was the company's unique version of ecotourism, which it described on its website as follows: As an exclusive offer for private and institutional investors in tree assets of the Prime Forestry Group, we organize an eight-day adventure trip to Panama. In addition to the unique countryside, the tropical climate and the vibrant culture of Panama our current travel itinerary also offers guests the chance to visit the Prime Forestry plantations. "Private and instutional investors" were not the only people who dropped in on Prime Forestry. On February 4 of this year, in the course of a trip to Darien province, President and Mrs. Torrijos paid a visit to a Prime Forestry teak plantation in Torti, which is in eastern Panama province, adjacent to Darien. The Prime Forestry website described the visit as follows: The President of Panama, Mr. Martin Torrijos Espino, paid a visit to the plantations in Torti as well as to Prime Forestry Panama’s business management on 4 February 2006 and took this opportunity to inspect the facilities currently under construction for Prime Forestry’s local logistics center. The President was accompanied by his wife, Vivian Fernandez de Torrijos and the Minister for Agriculture, Mr. Guillermo Salazar as well as the Minister for Public Buildings [sic], Mr. Carlos Vallarino.
While enjoying sancocho, the traditional chicken soup of Panama, Mr. Dominique Y. Leuba, Business Manager of Prime Forestry Panama, informed the President about ongoing and scheduled projects. The possibility of producing energy from sawmill wood met with particular interest. In addition, Prime Forestry Panama’s business management explained the positive social impact of PFG’s plantation projects in largely rural areas. The Prime Forestry Foundation that was formed in January 2006 was welcomed. In particular, the President’s wife praised the 40% share of women working for Prime Forestry and the creation of jobs in plantation development and maintenance for Panama ‘s indigenous population.
The visit by Panama’s President to the Prime Forestry plantations was a great experience for the entire Prime Forestry Panama delegation and a confirmation of good relations with the government of Panama. Set aside ethical concerns about the president of the republic using his office as a stage prop to promote even a legitimate private business for a moment. Assume, for the benefit of the doubt, that the Torrijoses hadn't heard about how the governments of Spain, Australia, New Zealand, France and the UK had either banned or warned investors about Prime Forestry by that time --- homework, after all, has never been Martín's strong point. But setting all of that aside, something is still very odd about visiting a teak plantation in Torti. There is a lot of rain, and a short dry season, in the Torti area. These climatic conditions mean that market quality teak can't be grown there. This is not to say that people don't plant teak in this area, or that the government hasn't through tax breaks and otherwise subsidized such plantings, but teak trees raised in Torti won't deliver the fast growth and high market value that Prime Forestry's telephone sales people were promising. Surely after the Tom McMurrain scandal and a number of other well known teak planting debacles, the president, or at least his agriculture minister, would have known about or at least suspected this problem. At first blush, then, it appears that President Torrijos knowingly promoted a fraudulent teak investment scheme.
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