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Bailey bridges: Panamanian scandal
or merely a British business spat?
by Eric Jackson

It's an argument and set of allegations that first surfaced in the British press, but has taken on a life of its own down here in Panama. It dates back to the Pérez Balladares administration, which could make it convenient for mudslinging in the context of a struggle for control over the PRD between former President Ernesto "Toro" Pérez Balladares and current President Martín Torrijos, but inconvenient for prosecutors or anyone else who might care to make a legal case of it due to statutes of limitation.

The basic allegation is by Sir Jonathan Danos, who was knighted by Queen Elizabeth II for promoting British exports and who worked for Mabey and Johnson Limited (Mabey), the manufacturer of the prefabricated steel Bailey bridges, as its export sales chief until 2003. Danos then left Mabey to head a competitor company, Structural Steel Solutions (3S). Mabey and 3S are going after one another in the same Caribbean and Central American markets, with Danos apparently using his contacts made when he worked with Mabey to build 3S.

Now Mabey is suing Danos for fraud, alleging that in bridge sales to the governments of Panama, the Dominican Republic and Jamaica Danos inflated commission payments, which he skimmed off for himself.

Sir Jonathan's defense? That Mabey routinely payed bribes of 15 percent to presidents, vice presidents and top ministers of the governments with which it dealt and then disguised them as commissions. And who was in charge of Panamanian purchases of Mabey bridges on Toro's shift? That would be then Vice President Tomás Gabriel "Fito" Altamirano Duque. Fito Duque isn't talking about this matter, and Toro's flatly denying any and all wrongdoing.

In 2001 the UK tightened its laws against the bribery of foreign officials, and the European Union now presumes that commissions paid to "finders" or other such agents in excess of five percent are indications of bribery. Toro, however, left office in September of 1999.

The transactions in question took place in 1996 and 1998, and the big one, in 1997, involved an order for 17 bridges worth some $30 million. According to Danos, one Rogelio Dumanoir acted as Mabey's agent in Panama, disbursing "commissions" into a Bahamian bank account, then through dummy companies held by Dumanoir and then --- where?

Dumanoir is a veteran PRD apparatchik, who served as minister of public works during the dictatorship. He did not, however, hold any position in the Panamanian government when Toro was president and he holds no public office under the Torrijos administration.

The way it's being played in some of the PRD-aligned press, the suspicion is being pointed at Dumanoir. But observers who were in the Panamanian diplomatic mission in London at the time and who otherwise served in the Pérez Balladares administration note that it was first not in character with that administration to allow kickbacks to flow to such minor figures as Dumanoir and second that it was Toro himself who insisted on a London contract signing ceremony with Mabey during the course of what otherwise appeared to be a minimally productive junket to Europe. Dumanoir maintains that he was a private businessman in his dealings with Mabey and that he wasn't involved in any acts of corruption. He's threatening legal action, whether in Panama or in the UK isn't clear, over his reputation being impugned in the British and Panamanian press.

Ordinarily, if Dumanoir, Fito or Toro took a kickback more than a decade ago, the statute of limitations bars any legal consequences for it. But there is the appearance that one of the contracts that was signed back then was for bridges that would be installed long after Toro's time in office ended, including some that have yet to be built. In that case it would be a most unusual practice for any Panamanian administration to have signed such a long-term purchase deal. Moreover, if there was an act of corruption involved in a contract that's still being performed, arguably the clock for the statute of limitations has not begun to run.

So why all of this, and why now?

It might just be a British company that's losing business to a competitor headed by one of its former execs deciding to defend its market share through litigation, and Latin American and Caribbean politicians getting wounded in the ensuing legal and public relations crossfire.

But might it be a case of British buttons being pushed in order to affect a power struggle within a Panamanian political party?

Whatever it is, a dangerous game is being played here because both sides in the UK court case are offering public versions of the usually covert world of corruption in international public works contracts. If the impetus is purely British, then there is a reckless disregard for the foreigners who may be hurt. If there is a Panamanian hand behind this apparent scandal, it may be calculated to burn a rival faction more severely but it scorches the reputation of the PRD in general.

Look for this matter to play itself out more openly in England than in Panama. But look for investigative journalism all over Central America and the Caribbean where Mabey and 3S do business, and a reasonable chance that this will spawn secondary scandals. 

Already in Barbados, for example, the British court case has journalists asking new questions about controversial bridge cost overruns in Barbadian overpass projects involving 3S. Meanwhile in Jamaica, the new Jamaica Labor Party government is using the UK allegations against its Peoples National Party opposition and Mabey is having an acrimonious breakup with its long-time agent on the island.