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Martín's blank check for improper contracts

President Torrijos has already spent millions of dollars in public funds to promote a distortion of one particular canal expansion plan of the many possible, and he recently went before the Panamanian people and declared that "this is not a blank check."

But of course, he also in that same speech declared that "during the next three months the process of disclosure will continue." That is, he issued a blank check that lines the pockets of people close to him, given that "disclosure" means advertising for the "yes" campaign with public funds, and given that his father-in-law is the founder of this country's advertising cartel. And his proposed law --- not exactly the proposal submitted to the public last April 24, but one with substantial, costly and in this instance corrupt amendments --- won't allow anyone with any question about the Torrijos - Alemán Zubieta canal expansion plan to disclose anything at public expense. Oh, no --- it's in the Panama Canal Authority regulations that any employee who says anything to or in the press without prior authorization can be fired, and nobody working for the national government is going to be given any money to express a contrary view, and the referendum law restricts "disclosure" to public employees.

"Disclosure" means, for example, the ACP's El Faro, which is inserted into the daily newspapers, and which recently featured a prominent article by Bobby Eisenmann specifically advocating a "yes" vote in the referendum. (And of course, as a part owner of La Prensa, Eisenmann derived financial benefit from the insertion of that ACP-paid campaign ad in La Prensa.)

Why have the Electoral Tribunal and Martín Torrijos now broken their prior specific promises that public funds won't be available for the "yes" campaign? It's made quite clear by the lack of published polls for the past couple of months. Despite all of the manipulations, support for the Torrijos - Alemán Zubieta Plan is waning. It's in decline despite the avalanche of propaganda because people with good reason don't trust the plan's promoters. President Torrijos is denying that a "yes" victory would be a blank check because focus groups are telling him quite specifically that a growing number of Panamanians are concerned about exactly that.

Despite the denial --- and the creation of this ridiculous board composed of all the usual untrustworthy people to oversee things --- it's clear to anyone who really thinks about it that the Torrijos - Alemán Zubieta Plan is in fact a series of blank checks.

If Constructora Urbana SA --- the huge family construction business from whence Alberto Alemán Zubieta came to the Panama Canal administration --- uses its inside influence to get a contract while Torrijos is president, do you really think that after an election a new government could readily reverse that decision and kick them off the job? If Banco General, whose CEO is the ACP administrator's brother, gets a special usurious piece of the financing action, do you really think that the bond issue could readily be canceled by a new administration? The Torrijos - Alemán Zubieta Plan is a blank check for Martín Torrijos to sign all the important contracts.

Why should that be cause for pessimism? Don't good things sometimes come from corrupt governments? Why can't we just trust Torrijos up to a point, understanding that there may be some improprieties on the edges?

Mainly, because the Torrijos - Alemán Zubieta Plan makes no intrinsic financial sense. There is a good chance that it would leave Panama in worse shape that before.

For starters, the bid is a flagrant lowball. The $5.25 billion figure Torrijos and Alemán Zubieta keep citing does not include the costs of financing. It does not include the costs of roads and other infrastructure that will have to be built or replaced to support the project. According to former Panama Canal deputy administrator Fernando Manfredo, it grossly understates the cost of dredging that will be needed. According to the president of the Panamanian Society of Engineers and Architects (SPIA), the price of such work that was originally included in the Torrijos - Alemán Zubieta Plan is understated by about one-third. And then, in one of the promises President Torrijos made when turning his proposal over to the National Assembly, he added a bridge or tunnel across the canal to connect the Costa Abajo of Colon with the rest of the country, at minimum another $300 million to be tacked onto the cost.

Second, it appears that the revenue projections for the project are the wildly unrealistic figments of slow and servile minds that confuse Uncle Sam with Santa Claus. They are based on the supposition that the increasing imbalance of trade between China and the United States will continue increasing as it has for the past few years for the next 25 years. But no respectable economist will vouch for a continuation of that trend --- certainly in both China and the United States there is a general recognition that the current trade imbalance can't go on, let alone grow for the next generation as it has for the past few years.

If you take the SPIA estimate of a $7 billion pricetag (without the Colon bridge or tunnel add-on) and figure that, instead of growing three percent per year as the ACP projects based on recent US-China trade trends, it will only grow two percent per year, then the Torrijos - Alemán Zubieta Plan will be a net money loser for Panama. That is, a money loser for the Panamanian people. The ad cartel and the mainstream media are already getting their money, and the banks and construction companies will have their contracts guaranteed. Panamanians will pay for it with less money coming in from the canal for schools, roads, police protection and all of the other public services.

But wait a minute here, you may object. All of this, even if true, doesn't support the headline of this editorial, does it?

Granted, the grossest conflicts of interest that would bring in prosecutors elsewhere are the norm here, and apologists for this state of affairs would argue that we are a small country with a tiny ruling elite so such things can't be avoided. However, what we have seen from the Torrijos administration goes well enough beyond the ordinary sleaze to give rise to extraordinary doubts.

Prime Forestry: the president goes to work for mobsters

President and First Lady Torrijos with managers of Prime Forestry, posing for a photo to lure gullible investors into a teak reforestation swindle that Swiss authorities closed down because of its fraudulent nature and because of its ties to the Genovese mafia family. Agriculture Minister Guillermo Salazar is on the board of directors of Prime Forestry's Panamanian subsidiary. President Torrijos allowed officials of the National Environmental Authority (ANAM), some of whom would have a hand in approving or rejecting Prime Forestry's environmental permits, to moonlight by working for Prime Forestry. Photo from the Prime Forestry website

President Torrijos, First Lady Vivian de Torrijos, Agriculture Minister Guillermo Salazar and a number of ANAM employees have been directly involved in promoting Prime Forestry, a teak investment scam. That now bankrupt operation's top figure --- until Swiss authorities moved in --- was one Kurt E. Meier, who was previously best known from the 80s as the top lieutenant of Chartwell Securities, the biggest European investment fraud of its time that was run by disbarred Brooklyn lawyer and Genovese family mafia figure Tommy Quinn.

Prime Forestry claimed a tie to the Smithsonian Tropical Research Institute, which the latter denied. The Torrijos administration, however, can't really deny its ties to Prime Forestry and has not even admitted the slightest mistake in this matter.

Richard Fifer and his Petaquilla mining concession

Former Cocle Governor Richard Fifer, Fifer's publicist Octavio Choy and Martín Torrijos, at a Cabinet Room meeting earlier this year in which Torrijos promoted Fifer's company to gullible investors abroad. This meeting took place despite embezzlement charges then and now pending against Fifer, related to his alleged theft of Spanish aid to a museum in Penonome and his alleged pilfering of funds from the governor's office. The mining concession that was being promoted at this meeting has existed for 19 years now, and it has never produced minerals for the world market --- the company's only product has been paper sold on foreign stock exchanges. Photo from the Petaquilla Minerals website

When President Torrijos used his office to promote the gold mining stock of former Cocle Governor Richard Fifer, who is and was at the time facing criminal charges for embezzlement of public funds, that was by any normal definition "improper." But the use of the Cabinet Room at the Palacio de las Garzas for the above photo was not the first offense. Earlier, when Fifer was a fugitive hiding out from Panamanian justice --- his lawyers arranged bail before he turned himself in --- the Torrijos administration held another photo event with managers of Fifer's mining company.

(And will one of Fifer's other companies, GeoInfo --- which is part of a consortium that has been barred from doing business with the ACP due to some contract breach that the authority's website doesn't specify --- be allowed in on the canal expansion feast? We shall see.)

Tongsun Park, Samuel Lewis Navarro and Alberto Alemán Zubieta

South Korean lobbyist and businessman Tongsun Park has long been a controversial figure, but at the moment he's a guest of the United States. To be more specific, he's a resident of a New York jail, where he is awaiting trial on charges that he bribed United Nations officials in exchange for favorable rulings with respect to the old food for Iraqi oil program.

Back in the mid-70s, Park was a central figure in a congressional scandal that saw one representative sent to prison and several others rebuked by their colleagues for taking money from a group of South Korean businessmen who wanted better treatment for their country's dictatorship of that time.

Along the way, Park has had among his clients one Manuel Antonio Noriega, one Saddam Hussein, and one Reverend Sun Myung Moon. (The latter, through his Washington Times, is the principal disseminator of the myth that China runs the Panama Canal.)

Park was apprehended in Mexico, on a stopover during a flight from Canada to Panama. Why Panama? His office told reporters it was something to do with the canal expansion project. The ACP and Torrijos administration steadfastly denied this, and denied knowing who Park is --- until they finally had to admit that ACP administrator Alberto Alemán Zubieta and Vice President Samuel Lewis Navarro had in fact met with Tongsun Park in Seoul, to talk about the canal expansion project.

Máximo Haddad and PYCSA

"Construction boondoggle" and "PYCSA" have become rather synonymous in Panama this past decade --- as in the unfinished Corredor Norte and Colon-Panama autopista. It is not, however, just a matter of an unqualified contractor making a mess of a job that's important to this country's development.

When US bank regulators moved in on the Hamilton Bank in Florida, a series of events was set into motion that recently resulted in the conviction and imprisonment of Eduardo A. Masferrer, who used to run Banistmo here before moving to Miami. But about the first thing that happened was that the feds prohibited the Hamilton Bank from making any more loans to Máximo Haddad, the owner of PYCSA, a naturalized Panamanian of Mexican origin.

Why? Because Haddad and PYCSA are insolvent. They owe a lot of people and institutions a lot of money and have dispersed their assets into a shell game of companies to avoid debt collections. One of these debts, for example, is owed to the foundation that maintains the Metropolitan Nature Park for land that was taken for the Corredor Norte.

PYCSA is the most outrageous of scofflaws, to the point that three little boys died when the company tried to cut corners by reducing the right of way through a densely populated San Miguelito neighborhood along a branch of the Corredor Norte and using shoddy construction methods that caused an elevated roadway to collapse, killing the children who were playing nearby.

Anywhere other than Panama, PYCSA would have long ago been declared in breach of its contracts and thrown off the job. However, the Torrijos administration continues to deal with Haddad and PYCSA, for another extension of the Corredor Norte.

The congressman from Caterpillar and his genocidal son-in-law

Would you be surprised that Illinois Republican Congressman Jerry Weller, in whose district the Caterpillar construction equipment company employs a lot of people, would be an enthusiastic supporter of the Torrijos - Alemán Zubieta Plan to expand the Panama Canal? You shouldn't be.

When the Torrijos administration's Washington lobbyists set up a US congressional caucus to support the Torrijos - Alemán Zubieta Plan, it was Weller they chose to be their front man. This choice carries some baggage, and reveals much about the way that the people who run our government think.

You see, Martín Torrijos didn't need to pick the father-in-law of one of the very worst criminals in the Americas. But in Weller the Torrijos administration cemented a familial alliance with Efraín Ríos Montt, who orchestrated massacres of entire indigenous villages when he was Guatemala's "born-again Christian" dictator in 1982 and 1983.

Father Ron Kelly

For more than a year, Canadian newspapers have been reporting how nearly $150 million has gone missing from the Food and Commercial Workers union pension fund, having evaporated in the investments of one Ronald Hubert Kelly. Kelly lives down here, despite having a 10-count child molesting conviction as part of the baggage he brought to Panama.

Kelly, a former Catholic priest, got probation for his sexual abuse of those boys, then was transferred to another parish, then rose to become the chief financial officer of the Archdiocese of Toronto, then quit the priesthood to become a money manager and real estate speculator.

A Bahamian court has found, and the Supreme Court of the Bahamas recently confirmed, that Kelly received several million dollars in a fraudulent transfer from a bank about to go under, then laundered that money by depositing it in the Banco Atlantico on Panama City's Calle 50. Kelly's story has also played prominently in the Jamaican newspapers.

The Torrijos administration has long known about Kelly, and well knows that it's illegal for child molesters to immigrate to Panama. Yet, apparently because Kelly is so wealthy, President Torrijos tolerates his unlawful presence here.

Guilt by association?

It is one thing to allege that a person is guilty of something because he or she is associated with someone suspected or guilty of something. With respect to PYCSA, Fifer and Prime Forestry, however, the problem is not just those with whom the president associates but those whose private business fortunes the president uses his office to promote. Still, the "What did he know and when did he know it?" question might be successfully interposed in Martín's defense in all of these instances.

All such defenses, however, are beside the point. This editorial is not a criminal indictment. The decision that the Panamanian people must make in the referendum is not whether to convict or acquit. It's about whether it would be wise to approve the Torrijos - Alemán Zubieta Plan. The nature of the people revolving around and benefiting from their ties with this administration and this canal management is a legitimate thing to consider when deciding whether to trust Mr. Torrijos and Mr. Alemán Zubieta with billions of dollars worth of contracts.

Quite frankly, the president and the canal administrator have been far too friendly with some exceptionally questionable people to be trusted with such a huge blank check.



Bear in mind...


Take your work seriously, but never yourself.

Margot Fonteyn


I've always said that in politics, your enemies can't hurt you, but your friends will kill you.

Ann Richards


Political liberty and economic despotism are incompatible.

Victor Berger



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