news

Martinelli's team
by Eric Jackson

Who serves in a top post in a Panamanian government is only Panama's business, but foreign powers will have their usually unexpressed opinions about this. Historically in Panama the reference is to Washington, but many of the media references here seem to be caught in a time warp when reporting about how Martinelli looks inside the Beltway. The emphasis has been on how Martinelli's election has been enthusiastically received by Republicans, business lobbies and conservative media --- who happen to be out of power in the United States at the moment.

Opus Dei gets key cabinet posts

The truth of the matter is that the United States is neither particularly annoyed nor overjoyed by the president elect or the composition of Martinelli's team, and that if any foreign state has reason to jump for joy, it's the Holy See. The conservative Catholic organization to which Pope Benedict belongs, Opus Dei, now counts on two key ministers in the incoming Panamanian government: Foreign Minister Juan Carlos Varela (who's also vice president elect) and Education Minister Lucy Molinar (a television personality with no previous government or teaching experience).

Molinar's appointment was one of Martinelli's later ones, and she, a black woman, joins an overwhelmingly male cabinet. It's even more demographically askew, given Panama's less than 10 percent white minority, because it's a far whiter cabinet than the United States has had in many years, one that has fewer nonwhite faces than the last cabinets of South Africa's former apartheid regime.

As a media pundit Molinar was a stern critic of teachers' unions, which are wary of the policies she may introduce. However, both the educators' labor organizations and the business-oriented incoming administration acknowledge that the public education system is broken. Meanwhile, the Torrijos administration has proposed a "decentralization" program that would transfer responsibility for public schools, but not the finances resources to support them, to local governments. If this passes in the lame duck weeks Molinar will likely face labor troubles at the top of her agenda as she assumes office.

Varela, who after a talk with Martinelli at the US ambassador's residence where both were guests to watch the Obama inauguration, abandoned his own presidential bid to support Martinelli, is an executive with Hermanos Varela. It's Panama's principal liquor distilling business, which his family owns.

As his vice minister, Varela will be working with attorney Melitón Arrocha, who served as Vice Minister of Government and Justice in the Moscoso administration.

Banking industry, ¡Presente!

One of the people whom Varela beat in the Panameñista primary, Alberto Vallarino Clement, will be the next Minister of Economy and Finance. Vallarino, a dual Panamanian-Costa Rican citizen, spent most of the 1990s and the first half of the present decade in a frenetic campaign of mergers and acquisitions by which Banco del Istmo grew from a small local player into an international organization and the largest private bank based upon Panamanian capital. Then a change in the capital gains tax laws was engineered, which saved Vallarino and about a half-dozen other partners somewhere between $160 to $400 million when they sold Banistmo to HSBC. In the wake of that deal, HSBC executives here and in England took large bonuses as a reward for the purchase and jumped out in their golden parachutes, and then the new HSBC management complained that they discovered that the assets acquired from Banistmo for $1.77 billion were less than they were led to believe. Vallarino, meanwhile, dedicated his post-banker days to tourist resort development and politics. The next Minister of Economy and Finance is one of Panama's half-dozen or so wealthiest individuals, and his marching orders are to change Panama's graduated income tax system to one based on a flat tax.

Serving under Vallarino as vice ministers will be Frank De Lima and Dulcidio de La Guardia hijo.

Vallarino is and will be the point man in Panama's efforts to resist international pressures to abandon banking and corporate secrecy. It appears that the US House of Representatives will not pass the proposed US-Panama Trade Promotion Agreement unless Panama makes some concessions on banking secrecy, but one of the very first policy declarations from the Martinelli camp is that there will be no changes in bank secrecy rules.

A controversial new police chief

Corporate lawyer José Raúl Mulino, who's president of the Union Patriotica party and served as Minister of Foreign Relations in the Endara administration and writes a newspaper column, will be the next Minister of Government and Justice. Serving as the two vice ministers will be attorney and Union Patriotica secretary general Jorge Ricardo Fábrega (on the "government's law firm" side of it) and former National Security Council director on the security (law enforcement) side.

The National Police exist under the aegis of the Ministry of Government and Justice and Martinelli's choice of Gustavo Pérez hijo as police director. The director-designate's late father had served as National Police chief in the Torrijos administration and the son, also a member of the PRD, is far more controversial than his dad.

When General Manuel Antonio Noriega called upon his friend, retired Israeli General Mike Hararia, to create the elite Special Anti-Terrorist Unit (UESAT), the younger Pérez was a gung ho Panama Defense Forces non-commissioned officer who volunteered for and was selected as a member of the elite force. UESAT was mainly used to suppress Civilista dissidents. Pérez was promoted to lieutenant and and became the unit's second in command.

During the 1989 invasion UESAT was one of the units that put up resistance to the Americans at Panama Viejo and Paitilla. A US Navy SEALS landing at the old Paitilla Airport was expected to be a bloodless affair, but the tide books had been misread by Pentagon planners and several of the Navy's elite force met their ends on the rocky beach as the Panamanian defenders fought back. Some of the airport's defenders surrendered, but UESAT retreated and tried without much success to set up anti-aircraft firing positions in Paitilla.

It is alleged that UESAT was the unit that abducted Raymond Dragseth, a nationalized US citizen, from his apartment in Paitilla's Sonesta building and killed the man.

After a couple of days of fighting, Pérez surrendered to the Americans and was held as a prisoner of war. Upon his release a few days later, he was re-arrested over allegations of involvement in Dragseth's death. But after a few weeks he was released for lack of evidence.

Thereafter Pérez sought employment with several successive Panamanian national governments, but the only job he got was with the municipal police when Mayín Correa was mayor. At every step, he found himself vetoed either by the US Embassy, the Christian Democratic Party (later the Partido Popular) or both.

When Panama privatized the ports of Balboa and Cristobal in 1997, Pérez was hired by the Hong Kong-based Hutchison Whampoa as its security director in Panama. Eventually the company promoted him to direct security at all of its ports in the Americas. In that post he certainly worked with US and Panama Canal Authority officials on canal security preparations after 9/11, and most probably with the US Department of Homeland Security on matters pertaining to Hutchison's ports in the USA. Moreover, due to right-wing allegations in the United States about how Hutchison Whampoa is a Chinese People's Liberation Army front and how the "Red Chinese" used the Cristobal and Balboa ports concession to gain control over the Panama Canal, Pérez was surely scrutinized by the Bush administration.

During his campaign Martinelli promised to rescind Torrijos's law enforcement reorganization decrees, which critics said essentially remilitarized Panama, which abolished the army after the 1989 invasion. Some of the old Civilista leaders, most notably former La Prensa publisher Bobby Eisenmann, complain that the Pérez appointment amounts to a breaking of this promise. But Martinelli's choice to head the police is hailed by other old Civilistas, who say that the man is disciplined, intolerant of corruption and in the habit of setting aside his politics on the job.

The political architect

One of Martinelli's closest advisors and his running mate in the ill-fated 2004 campaign, Roberto Henríquez, will be Minster of Commerce and Industry. He may turn out to be the most influential person on Martinelli's team.

Henríquez, one of the owners of the Atlas brewery, maintains his family's influence in government --- actually, increases it --- as his brother Milton is a media figure and former legislator associated with the Partido Popular that's allied with the PRD and was humiliated at the polls with the loss of most of its local offices, the election of only one legislator and an anemic two percent of the presidential vote as part of Balbina Herrera's 37 percent. Do not confuse the two brothers, either by politics or by temperament. Milton's the attack dog for whomever his party is allied with at the moment, while Roberto was one of the bridge building architects of Martinelli's coalition and the advisor most identified with that alliance's successful appeal to younger voters.

Serving as vice ministers under Henríquez are Ricardo Quijano and José Domingo Arias. That puts the ministry in the hands of the scion of one of Panama's prominent Jewish families at the top and people from two of its aristocratic Creole families in the second string.

To the extent that the Martinelli administration pushes for US confirmation of the US-Panama free trade agreement, Henríquez will be the friendly face on the Panamanian side. While Martinelli himself cultivated mainly Republican political ties in the United States, when many of Panama's Democrats and a number of non-US diplomats gathered in Paitilla to celebrate Obama's election last November, Henríquez was the only major Panamanian political figure in the room.

Another TV star

In Panama a person is allowed to hold multiple government jobs at one time and such will be the lot of one Guillermo Ferrufino. Two years ago, Ferrufino was a PRD member and host of the TVN television show "Que tal si te digo." He had ambitions to run for the National Assembly on the PRD ticket in La Chorrera, but the party hierarchy had other ideas.

Ferrufino ran as an independent, and after the primary process Martinelli's Cambio Democratico party nominated him. On Election Day Ferrufino humiliated his old party comrades, knocking President Torrijo's aunt, Susana Richa de Torrijos, out of the legislature and winning her seat.

Now President elect Martinelli has nominated Ferrufino to be the next Minister of Social Development. Serving under him as vice minister will be one of the vice president elect's in-laws, Susi González Ruiz de Varela.

Ferrufino comes to both the cabinet and the legislature without ever having served in any elected or appointed public post. But Martinelli promises an austere government and it's expected that the Ministry of Social Development is going to play a diminished role in his administration.

Ferrufino reinforces the religious right aspect of the Martinelli cabinet. He's a leader of the Catholic youth organization Juventud Franciscana. He is also closely associated with the Fundacion Juan Ramon Poll, the leadership of which played a role in the purge of liberation theology supporters from Catholic media and organizations.

Dairy farmer and cheese maker heads MIDA

One of Ricardo Martinelli's old business associates, Víctor Manuel Pérez Batista, will head the Ministry of Agricultural Development (MIDA). The vice minister will be Luis Víctor Villarreal.

Martinelli's principal business is the Super 99 supermarket chain, which stocks the El Superior brand of cheeses. Pérez, who is a large-scale farmer and the proprietor of Quesos El Superior, will oversee an agricultural policy that's expected to favor those farmers big enough to export at the expense of smaller farmers who are likely to be ruined by competing imported products.

Health picks

Martinelli has chosen Dr. Franklin Vergara, a 59-year-old specialist in internal medicine and tropical diseases at Seguro Social's Arnulfo Arias Hospital Complex, to be the new health minister. Martinelli had problems with the Seguro Social doctors when he headed that agency during the Pérez Balladares administration and relations between the government and the public health care system's doctors --- which includes both those who work for the Seguro Social and those who work directly or indirectly for the Ministry of Health --- have been severely hostile under the outgoing administration. Any moves toward privatization by the Martinelli administration --- such as an attempt to implement the Torrijos administration's proposed decentralization, or a consolidation of the system that cuts overall funding --- will quickly lead to labor strife in the public health system.

Serving under Vergara as vice minister will be Julio Santamaría.

A step back from ministerial status in tourism

It takes a new law to create a ministry in Panama, but under the Torrijos administration the head of the Panama Tourism Institute (IPAT), which morphed into the Tourism Authority, was headed by entertainer Rubén Blades and he was given ministerial rank of a sort. He attended and had a right to speak at cabinet meetings, but as his department was not a legally mandated ministry he had no vote in the Cabinet Council.

There's a constitutional provision that reserves ministerial posts for natural born Panamanians. Martinelli's nominee to run the Tourism Authority, Salomón Shamah, was born in Colombia but has lived here most of his life and is a naturalized Panamanian. He's a lawyer and a producer of musical events, and was the "creative director" of Martinelli's campaign pitches and events.

Construction industry exec in charge of public works

The construction industry was one of the major beneficiaries of the Torrijos administration, but in the end local companies tended to work as subcontractors for foreign companies who won the choice contracts on no-bid or rigged-bid procedures. Plus, one of the spots usually reserved for construction people, the Ministry of Public Works, was headed not by a builder but by the former head of General Noriega's Dignity Battalions goon squad. But Martinelli's going back to tradition

The next Minister of Public Works will be industrial engineer Federico Suárez, the CEO of Constructora Suarez SA, a construction company. Suárez, a former member of the national soccer team, is also the director of the San Francisco (La Chorrera) soccer team and has a hand in a number of other family businesses.

Serving under Suárez as vice minister will be Iván de Icaza.

MBA, real estate exec to run MIVI

For most of the Torrijos administration the Housing Ministry (MIVI) was run by a politician and former Noriega goon --- one Balbina Herrera --- who went well out of her way to cultivate the support of developers by ignoring zoning laws, environmental regulations and the boundaries of national parks in approving construction projects. After Balbina there came an actual developer, who brazenly used MIVI to promote his family's controversial projects.

Now Martinelli has chosen a real estate exec, Inversiones Las Villas general manager Carlos Dubois, to head MIVI. But Dubois is not from one of Panama's elite families --- he's an MBA who has worked for those clans. His career started out with Banco General (the Alemáns, etc.), then passed through stints as business manager of Motta Internacional and general manager of Nestle's Panama operations.

Serving as vice minister under Dubois will be businessman Jaime Ford Castro.

Banking lawyer to oversee canal expansion finances

Rómulo Roux, a corporate lawyer with Morgan & Morgan who has represented local and regional banks in their deals to finance the Panama Canal expansion, will now sit on the other side of the table from his old clients. He's going to be the new Minister of Canal Affairs and will personify the long-standing claim by canal expansion critics that one of the financial problems with the project is that it has too many conflicts of interest at play.

Martinelli was Minister of Canal Affairs under the Moscoso administration, but under Torrijos the ministry was all but eliminated under the theory that its functions were duplicated by the Panama Canal Authority (ACP). As minister Roux will chair the ACP board of directors, but it's not clear whether he will exercise more power than the outgoing minister had.

A baseball revolution?

Maybe the most thuggish face of the PRD, and one of the principal reasons for its collapse from an appearance that it would surely be re-elected to power to humiliating defeat in little more than a year's time, is the notorious Franz Wever. Wever, a legislator, probably kept his job in the National Assembly by fraud in 2004. The Electoral Prosecutor wanted to investigate him for election crimes, but his colleagues in the legislature forbade any investigation. The more votes counted than cast were dismissed as inadequate to prove that fraud had affected the election results.

Wever, however, is more infamous as the head of Panamanian baseball's ruling organization, FEDEBEIS, and as such a member of Panama's Olympic Committee. His offer, at the Beijing Olympics, to show journalists his penis became one of the principal emblems of PRD arrogance. Meanwhile, the financial irregularities of both FEDEBEIS and the Olympic Committee have caused tremendous legal battles, diminished Panamanian baseball's international image, and caused the Panamanian team to be ejected from the 2008 World Baseball Championships due to an insurance payment that Wever didn't make.

There has been an unorganized national movement to rid Panamanian baseball of Wever, and its most noteworthy figure has been former Pittburgh Pirates outfielder Omar Moreno, who once was the national baseball team's manager but was driven out by Wever. Although the US Embassy has generally avoided overt interference in Panamanian politics, one of the exceptions has been that it has shunned Wever and boosted the baseball activities of the Omar Moreno Foundation. (In this stance, the US government has been joined by Major League Baseball, which may have been offended most of all by Wever's racist comments about another former national team manager, Roberto Kelly.)

And now Ricardo Martinelli has appointed Omar Moreno to head Pandeportes, the government's sports organization, which owns most of the sports facilities in this country.

So does this presage a baseball revolution? The International Olympic Committee takes a dim view of governments interfering in sports federations under its purview, but FEDEBEIS is a PRD dependency, the product of political manipulations during the dictatorship. Moreno would have the power to kick FEDEBEIS off of most of the nation's baseball diamonds and in any confrontation with Wever he'd have strong public support.

Campaign manager as Minister of the Presidency

Jimmy Papadimitriu ran Ricardo Martinelli's campaign, and it's somewhat traditional that a winning campaign manager will get a cabinet post. In this case, it's the Ministry of the Presidency. That includes the management of many things around the Palacio de las Garzas, supervision of the Institutional Protection Service (SPI) presidential guards and national security / espionage organization, and oversight of such dependencies as the First Lady's Office that was scandal-plagued in the Torrijos years.

The new Vice Minister of the Presidency will be María Fabrega.

An appointment that probably won't happen

In the Torrijos administration the director of the National Environmental Authority (ANAM) was, like Rubén Blades, given quasi-ministerial status: a voice but not a vote in the cabinet.

So who is Martinelli going to appoint to that position, and what will his or her status be?

During his campaign Martinelli promised to abolish ANAM, although he did say that he'd enforce environmental laws. Many of these laws, however, involve environmental permits from ANAM.

The Torrijos environmental record is a tale of sordid corruption. The abuses gave rise to the gradual agglomeration of an alliance among environmental, indigenous and community organizations that's directed against strip mining, developers' intrusions into park lands, hydroelectric dams and urban development projects that are seen as inappropriate in light of existing infrastructures or the characters of the neighborhoods in which they would be situated.

A move from PRD hypocrisy to right-wing laissez faire in the environmental field would galvanize this emerging alliance. But Martinelli might get away with scrapping ANAM if he also shut down some of the most inflammatory projects --- things like the Petaquilla gold mine --- and credibly explained his policy as one of cutting bureaucracy rather than gutting environmental protection.