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Belgis Castro first prominent PRD member jailed for corruption
by Eric Jackson

A lot of people who occupied public posts in the previous administration dedicated themselves to something else and not working for the government and the people. And now when the law comes down on them they accuse everybody and say they're being persecuted.

We call upon Panamanian citizens, especially the militants of the PRD, to stay alert in the face of the arbitrary measures of the current regime, whose only purpose is to neutralize our party and avoid its playing its role of opposition and counterweight, in order to advance its clear agenda of turning back history.

As if the people don't know about it, or haven't been told the story of their adventures. As if their endless thievery wasn't so blatant and so open. As if the twisting of laws wasn't a part of their misdeeds. As if the system was not sunk over its head in corruption and impunity. As if the truth could be forever hidden and the lie could reign eternally.

For five years, Attorney General Ana Matilde Gómez has had a poor performance in carrying out her constitutional responsibility to prosecute crimes. Her inexplicable silence in the face of the excesses of corruption that marked the administration of Martín Torrijos, who appointed her to this job, is suspicious.

On August 26, after an eight-hour interrogation by prosecutors, former Education Minister Belgis Castro was jailed in preventive detention for embezzlement. Castro, the third of four education ministers in a scandal-plagued Torrijos administration, took office in the wake of a scandal that involved members of Balbina Herrera's old San Miguelito entourage looting the public schools' Quality Education and Equity Fund (FECE) in excess of $1.3 million. But on Castro's watch, contracts were awarded to remove fiberglass insulation from public schools during the vacation months and when it was time for school to begin again, in many schools the job was partially done and the buildings were unusable due to irritating fibers blowing around, in other schools --- including some in which there was never any fiberglass to begin with --- contractors had been paid for work that was not done, and myriad excesses of multiple billings, advance payments and favoritism in the awarding of contracts came to light. Castro is the first major Torrijos administration official to go to jail for corruption.

The following day two members of the PRD National Executive Committee appeared at a press conference, where former legislator Pedro Miguel González read a communique purportedly in the name of the committee but bearing no signatures of its members. González said the arrest was unjustified and an act of "judicial terrorism." Conspicuous by their absence and silence were supporters of former Panama City Mayor Juan Carlos Navarro and former President Ernesto Pérez Balladares, whose factions have called for the National Executive Committee, including party president Balbina Herrera and secretary general Martín Torrijos, to step down. A major party faction fight is ongoing, but a high-profile rebellion was avoided when the Herrera and Torrijos factions were obliged to agree to an early party congress next year. Pérez Balladares is facing corruption investigations himself but notwithstanding a stream of unsubstantiated allegations by Bosco Vallarino, Navarro is not facing any corruption investigations. Both Navarro and Pérez Balladares blame Torrijos, Herrera and the corruption that surrounded the previous administration for the PRD's stinging defeat at the polls this past May.

Thus the "purported" PRD communique. Balbina Herrera says that she's leader of the opposition and she expects to be her party's presidential candidate again in 2014. A large part of her party is standing by silently --- and sometimes even cheering in a fashion --- as the people aligned with her are called to account for corruption. Probably very few of those who are not answering Pedro Miguel González's call want to wreck the party. It's just that they believe that the party has to be cleaned up before it can make any comeback, and if the cleanup comes from outside the party they're willing to live with that. On top of that, there are surely some party members who aren't anti-corruption per se and would gladly indulge in it if given the opportunity, but who aren't so upset when intra-party rivals get called on it.

Toro's problems

Former President Pérez Balladares has tried to jump-start the CEMIS case, which has been reopened by the Supreme Court, by releasing a series of video recordings of some revealing conversations with some of the people allegedly involved. Apparently he turned them over to prosecutors years ago, but now he has provided copies for the Supreme Court and posted the videos on YouTube. That seems to be his ace in a power struggle for control over the PRD with Martín Torrijos, but there are several problems with this tactic:

• The power struggle in the PRD is more than two-sided and Toro Pérez Balladares isn't the strongest of the leaders arrayed against Torrijos and Herrera. Harming the interests of the latter two thus doesn't necessarily accrue to the benefit of the former.

• The contents of those videos can in large part be discounted as hearsay, although there would be some parts that would be fairly damning admissions against penal interests. Panamanian courts don't have strict rules of evidence, but things that are admitted here that would be disallowed in other jurisdictions are still usually discounted when there are problems with them.

• Those videos seem to have been made surreptitiously, without the consent of the people appearing in them. That would be illegal, and would be one reason for the courts to disallow their use altogether.

However, any controversy over those recordings is a minor detail as far as Toro's political problems go. He's facing a public controversy and criminal investigation about gambling concessions granted during his presidency. A paper trail through bank accounts into which were deposited the proceeds of Lucky Games, which got its concession in 1997, leads in part to Mr. Bull Corporation and Blue Cascade Inc, both of which companies the former president owns. It seems that this company and several others that got their concessions from the Pérez Balladares administration have members of Toro's inner circle among their beneficial owners as well.

This modus operandi is strikingly similar to that in which Toro and members of his entourage appear to have retained enough minority stakes to constitute a shareholder majority in PECC, the company that got a concession to maintain the nation's lighthouses and maritime navigation buoys. The investigation into that was quashed by the Supreme Court because former Comptroller General Alvin Weeden began the probe without first moving to lift Pérez Balladares's immunity as a member of the Central American Parliament. However, the documents and details were all published in La Prensa and in the public mind form a foundation for perceptions about the casino affair.

The Martinelli administration has canceled the concessions of Lucky Games and three other gambling enterprises because they were issued without any bidding process during Toro's time. These also happen to include the companies in which the ex-president's inner circle held hidden stakes.

Toro says that the loss of the concessions is no big problem, but accused Martinelli of acting as he did for sleazy business reasons, because the current president is a casino owner himself. That latter allegation prompted a quick and furious denial from Martinelli, but later the president admitted that he owns stock in Thunderbird Resorts, which has some Panamanian casinos in its holdings, while arguing that he holds no direct stake in a casino. Martinelli's piece of the casino business was by way of a stock purchase on the Bolsa de Valores, well before taking his current office.

The battle over Ana Matilde Gómez

Panama's Attorney General --- Procuradora General de la Nación --- is appointed to a 10-year term by the president in whose term a vacancy comes up. The present holder of that office, Ana Matilde Gómez, was appointed by Martín Torrijos, while her notorious predecessor José Antonio Sossa, was a Pérez Balladares appointee.

Sossa was openly and sneeringly pro-corruption. Gómez has been more circumspect, but during the Torrijos administration she did very little against public corruption, except to act against a few lower level participants in the FECE embezzlement scandal and other matters. There is every appearance that she knowingly allowed foreign criminal elements who had improperly obtained residency in Panama to stay here, that despite numerous and flagrant violations of a number of criminal laws she protected former Cocle Governor and Petaquilla gold mine owner Richard Fifer, that despite personal knowledge that presidential guards were protecting Colombian racketeer David Murcia Guzmán she failed to fully investigate his ties with the Torrijos administration and the PRD, and that she had a "hands off" policy with respect to members of the Torrijos cabinet and other high-profile politicians.

The arrest of Belgis Castro breaks with this pattern, and has set off a public battle over the Attorney General.

Pedro Miguel González and some other PRD members accuse the Martinelli administration of pressuring the Public Ministry to act against Castro, despite what they say is scant evidence against him. From PRD circles there are theories about a Martinelli plot to remove Gómez and replace her with, as González puts it, a "Torquemada" of Martinelli's choice.

Meanwhile, Martinelli denies any plot and says that he just wants the law enforced without political favoritism. He urged prosecutors not to let themselves "be left intimidated by the shameless ones... who now want to shield themselves behind politics when what they have to do is return everything they have stolen." The president has not been criticizing Gómez herself, let alone calling for her replacement, but people around him have been quite a bit rougher. In a TVN interview, the president's cousin and Anti-Corruption Secretary Fernando Nuñez Fábrega likened Gómez to a baseball manager who throws games.

During the latter part of the Torrijos administration, however, a number of politically charged investigations slowly proceeded and political alarm bells began to go off within the PRD. There was talk of a constitutional amendment to shorten Attorneys Generals' terms to five years, but as the likely magnitude of the Martinelli landslide began to be apparent the possibility of any constitutional deal between the PRD and the current administration began to evaporate. Although at least one published report had it that Torrijos and Martinelli discussed a prosecutorial "non-agression pact" like that said to exist between Mireya Moscoso and Martín Torrijos in a post-election transition meeting, it does not appear that any agreement was reached on that subject.

In any case, Martinelli is responding to allegations that he engineered Belgis Castro's incarceration by observing that under the constitution the president can't order anybody jailed. He's saying that this was a prosecutor's decision, and urging the nation's prosecutors to do more of the same.