Dam bursts in Murcia scandal

The PRD's melt-down moment
by Eric Jackson, from other media

In a series of jailhouse interviews, a young Colombian named David Murcia Guzmán had already shaken up the Panamanian political scene. First he said that the Balbina Herrera for president and Bobby Velásquez for mayor campaigns had "come knocking" on his door.

(Murcia is jailed in Colombia on charges that he ran a huge investment pyramid scheme through a series of companies under the DMG umbrella. However, his quick rise from rags to riches and the fact that the pyramid never collapsed (unless you consider governmental actions to shut it down), and from early on in the affair some of the major Colombian media have alleged that Murcia's real game wasn't a Ponzi scheme but the laundering of more than $1 billion in assets belonging to the mostly disbanded Valle del Norte Cartel and their allies in the at least theoretically demobilized right-wing AUC paramilitary. Murcia's business associates in Colombia included President Álvaro Uribe's two sons, and he is alleged to have bankrolled many politicians in Uribe's political camp, including governors, senators, judges, deputies and mayors. In Colombia one of the big differences between being nabbed for a pyramid scam and being nabbed for a major drug-related offense is that in the latter case one may be extradited to the United States.)

There were indignant denials from both PRD candidates' camps --- but initially, Velásquez denied taking money, not approaching Murcia. When pressed on the mismatch between the allegation and his first denial, Velásquez categorically said that he didn't know and had never met Murcia.

Murcia followed with allegations that he had met with Bobby Velásquez, his father Roberto Velásquez padre and representatives of the Herrera campaign; that he had paid $6 million in cash, half to the Velásquez campaign and half to the Herrera campaign, through the elder Velásquez; and that the Institutional Protection Service (SPI) had provided the services of presidential guards to work as his bodyguards. Murcia warned that if people wanted to deny these things, there were videotapes to prove the truth of many of these matters.

On March 13 that allegation about the presidential guards elicited an angry and categorical denial from President Martín Torrijos. "It's not true. Protection has never been given to this man. On the contrary, this government has been congratulated for the expeditious manner in which he was captured and turned over to Colombian authorities."

But one person who had reason to believe that this wasn't true was Mireya Moscoso, as two of her SPI guards, Fernando Aguilar and Arles Araúz, had told her that they had guarded Murcia. Also having been identified as having guarded Murcia was Rodrigo Ureña, head of the advance security detail for President Torrijos.

La Prensa found out about this from several sources, including some unnamed higher-ups in the SPI, and published the story. Through underlings, the Presidencia admitted it on March 17, said that the moonlighting was unauthorized, and fired Aguilar, Araúz and Ureña.

We have yet to hear from the three fired SPI agents, but from current and former members of that agency came expressions of incredulity. These were based on knowledge of how the guards' working times, and the supposition based upon that that moonlighting couldn't have reasonably been carried out without superiors knowing at least of a time conflict inherent in guarding somebody else.

On the evening of March 18 President Torrijos announced that he was creating a commission, headed by Minister of Government and Justice Dilio Arcia, to conduct an "independent" investigation of whether the involvement in the SPI went higher up.

But has somebody been shown those alleged videotapes?

In La Estrella the following morning, Guido Bilboa and Alex Charris exploded a bombshell. They reported that on October 27, 2008, Bobby Velásquez and his father went to visit David Murcia in the presidential suite at the Hotel Sheraton. To get to that suite, one needs a special electronic pass card to get off the elevator. They reported that with the Velásquezes were Aguilar, who had the pass card to the presidential suite, and two more SPI presidential guards, Luis Almengor and Joseph Antoine, the former the number three man in the SPI, the latter SPI's personnel director. And who was downstairs at the elevators when these men were waiting to ascend to meet with Murcia? Why, it was one Dilio Arcia, the daily reported.

That was not your ordinary bombshell, but something of a political cluster bomb.

See, Bobby Velásquez had earlier backed down from his categorical denial of having never met with Murcia, and owned up to a single meeting at the Colombian's apartment in the Miramar. But the meeting La Estrella described was across town at the Sheraton. On the face of it, then, the PRD mayoral candidate was caught in a second lie with respect to his ties with Murcia.

The story in La Estrella also effectively demolished the president's fall-back position, especially because, as we shall see, it was not the only Murcia news in the papers that morning.

Among the first to scorn the Arcia "independent investigation" was one of Velásquez's opponents in the mayoral race, Miguel Antonio Bernal. He issued a statement calling for a serious investigation by Attorney General Ana Matilde Gómez (one of his former students at the University of Panama's law school), the revelation of the facts in the scandal before people vote on May 3, and an explicit rejection by the organization of civil society of both campaigns that are funded by organized crime and the use of the SPI to guard Murcia. "We want transparency," Bernal said. "We want an accounting."

The labor / left FRENADESO umbrella group also weighed in almost immediately. "It's ridiculous," the leftists opined. "Torrijos designated a minister who should resign to investigate the Murcia case."

Meanwhile, the Panamanian media were beginning to pick up on a related story from New York. The US Attorney in the Southern District of New York, the Drug Enforcement Administration and the New York City and State Police announced that Murcia and at least six other people had been indicted on money laundering charges, and the Associated Press picked up on it.

Two salient facts about the New York case seemed to have flown over the Panamanian press's, and maybe the AP's, heads:

The lead agency announcing the indictment was the DEA. This is an indictment about the international laundering of drug money and thus a slap in the face of Colombian law enforcement and justice, who are treating the Murcia affair as a mere Ponzi scheme case. Given the compromising position in which this scandal has put the Uribe administration, it's far worse for them that the Americans are saying it's about drugs.
The 17-page indictment is about changing Colombian pesos for US dollars made in North American drug trafficking. It doesn't get into the provenance of the money upon which DMG was originally founded --- widely reported in Colombia to be more than $1 billion in drug money from the Valle del Norte Cartel and the AUC paramilitary. It doesn't get into the widely reported political corruption in Colombia and Panama, in which DMG was involved. There are confidential sources mentioned in the document, but no unindicted co-conspirators. The unsealed indictment contains one count --- a money laundering conspiracy --- but the docket cover sheet notes that it was "unsealed as to" the seven named defendants, which likely means that there are other parts of the indictment that remain sealed.

There can be many reasons why an indictment may remain sealed as to some matter and some defendants, but revealed as to others. There could be ongoing investigations, there could be people at large whom the justice system would not want to warn of a pending arrest, and then there are sometimes the political considerations of the US government.

Then there is also the possibility that the US government is hinting about further sealed indictments that aren't there, just as a warning shot to Panamanian or Colombian politicians who were in bed with Murcia.

So what's Panamanian justice to do in the face of the ruling party's public relations melt-down and noises coming from the north? On the afternoon of March 19 it was announced that the Electoral Tribunal had stripped Bobby Velásquez, Balbina Herrera and Ricardo Martinelli of their candidates' immunity from criminal investigation or prosecution. For the PRD presidential and mayoral candidates, immunity was lifted on Gomez's petition in light of the allegations made by Murcia. For Martinelli, the investigation comes pursuant to a complaint by Balbina Herrera that one of the items in which Murcia dealt was gift certificates to the opposition presidential candidate's Super 99 grocery stores.

Stay tuned. The odds are that the Panamanian legal system won't be doing or revealing much before the elections. However, the press is in piranha attack mode, the admissions we have heard from the PRD camp suggest that they have been forced because there actually are videotapes out there which may surface before the voting, and there already seem to be unapproved leaks coming from within the SPI. And now, all of a sudden, we have a factor that the Panamanian system can't control --- the Americans --- involved in this scandal.

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