Herman Bern gets court order to seize newspaper's assets

Weekly newspaper published hotelier / developer Herman Bern's purported income tax return

Newspaper's assets seized
under ex parte pretrial order
by Eric Jackson

On September 4 an attorney for businessman Herman Bern showed up at the offices of Editora Graica del Pacifico SA in the banking district's El Universal Building with a crew of laborers and an order by Judge María Leticia Cedeño Suira of the First Judicial Circuit's 11th Civil Court to seize up to $1.1 million in the company's assets. The office was mostly used for distribution of the 20,000-circulation weekly El Periodico and that office, its contents, the company's bank accounts and a company car were seized.

This was the first time since the days of the 21-year military dictatorship that a Panamanian news medium was shut down under color of law.

The court's sequestration order had been issued ex parte --- without the defendants or anyone representing them having been given an opportunity to contest it in a hearing --- at the opening of a case that would easily take at least a year and most likely much longer than that to come to trial. Bern got the court to issue the order by posting a bond of about $300,000, anticipating that this would close the publication. But El Periodico's editor, Omar Wong Wood, said that investors and staff have gotten together and intend to continue publication.

The dispute arises over El Periodico's publication of a purported income tax return of Bern's in which the multimillionaire developer who owns the Hotel Miramar, the Gamboa Rainforest Resort, the Playa Bonita Resort, the Crowne Plaza Panama and the Panama Canal Holiday Inn allegedly reported only some $39,000 in income. Wong and El Periodico treated it as a flagrant example of tax evasion by Bern, a prominent unofficial advisor for President Torrijos and reputedly one of PRD presidential candidate Balbina Herrera's key backers (on that latter point it's difficult to precisely know, as the PRD keeps its contributor lists secret.)

The Tax Code protects the privacy of income tax returns, but arguably that just applies to the government. Wong claims that he was given the document by an anonymous reader and confirmed its contents with the Ministry of Economy and Finance before publishing it.

Bern's attorney Javier Arosemena described the lawsuit as a matter of "defamation" in a statement to El Panama America, made no specific denial of the allegations in Wong's article or the authenticity of the document in question. The suit and court order appear to be based upon a violation of the privacy of income tax returns rather than any false statement or bogus document.

Wong has a reputation as a mercenary hatchet man among Panamanian journalists. For example, when this reporter was accused of criminal defamation by Bocas del Toro / Atlanta swindler Tom McMurrain --- now a long-term resident of a US federal prison --- Wong wrote stories supporting McMurrain and deprecating The Panama News, this reporter and Dutch journalist Okke Ornstein, who wrote the articles upon which the prosecution was based and was also named as a defendant.

Despite that, there has been a widespread outcry from Panamanian journalists and international journalist defense organizations.

El Siglo editor Jean Marcel Chéry, president of the Colegio de Periodistas, avoided comment on the merits of Bern's complaint but pointed out to La Prensa that if the closure of El Periodico becomes acceptable procedure under Panamanian law then anyone with enough money who feels aggrieved by a news medium might, regardless of the merits of his or her complaint, have a news organization closed down. The Consejo Nacional de Periodismo also blasted the sequestration order against El Periodico.

Miguel Antonio Bernal, host of the Alternativa radio show and website and law professor, attorney and Panama City mayoral candidate, also criticized the court order without regard to the merits of the underlying dispute, arguing that the principle that a news medium may not be summarily shut down without even a chance to defend itself in court must be defended. Bernal, whose radio show had lots of problems with the dictatorship, leading to his exile from Panama, linked this case with a number of other recent high-profile transgressions against freedom of expression. These include the Electoral Tribunal's prohibition of some political advertisements and a court order that lawyers for the president's cousin Hugo Torrijos obtained to prohibit criticism by a group of ship pilots.

The Paris-based right wing journalist defense group, Reporters Without Borders, reacted "with alarm." "For a complainant to obtain a freeze on the newspaper's financial resources in exchange for a payment looks like a way of silencing journalists and is therefore a form of indirect censorship," the group argued.

Carlos Lauría, the Americas director for the New York-based Committee to Protect Journalists, said that "We are alarmed by the severity of this decision, which sets a chilling precedent for the local press" and called on the Panamanian courts to vacate the ruling.

Dissenting was Okke Ornstein, who alleged that "This is a guy [Wong] who makes his money publishing paid hit pieces while masquerading as a journalist and using civil society and real journalists as a human shield," arguing that Panamanian journalism is better served by leaving corrupt journalists to fend for themselves when attacked through the courts.

This reporter, Ornstein's erstwhile co-defendant, is put in an interesting position by the dispute between Bern and Wong:

Now were I to play this by my business interests and ego I'd be in a quandary. You see, Herman Bern has a business relationship with Mark Boswell alias Rex Freeman, the former Patriot militia radio personality and long-time hustler who has charged me with [criminal defamation]. Bern's Playa Bonita resort [where Boswell alias Freeman conducts his "investment seminars"] has the perfect limited ingress and egress controls to make it a great place to isolate otherwise intelligent people in conditions propitious for a cult-like indoctrination that tears down their normal BS detectors, making them more receptive to the most outrageous propositions. Thus it's a guy with a business relationship with Rex Freeman against a guy who was a shill for Tom McMurrain.

But I look at the structure of things. A court order by which a newspaper gets shut down, and moreover an ex parte, pretrial order, that allows this to happen without the accused ever getting a day in court? That sort of thing hasn't happened in Panama since the days of the dictatorship, and should not be permitted to happen again as far as I am concerned.

The Panamanian legal system is part of the Civil Code family of jurisdictions in which, unlike those that follow the Anglo-American Common Law system, precedent is not a strongly binding legal principle. But this case has strong political overtones as Bern is the beneficiary of a substantial and controversial government giveaway of lands on the Cinta Costera waterfront landfill, and because the ruling party's presidential candidate Balbina Herrera both bribes journalists and has vowed to act against "irresponsible websites." Thus many Panamanian and international journalists who rarely agree with one another have joined in opposition to the order against El Periodico.