economy

Genuine concerns expressed, fears vented, assurances given, supporters recruited for new extremist movement

"There are people who have used novel interpretations of the law to claim vast areas."

Minister of Economy and Finance
Alberto Vallarino

"One person is claiming one-fifth of the Caribbean coast of Veraguas."

Vice Minister of Economy and Finance
Dulcidio De La Guardia

"This is just one more of the accustomed spirals of corruption in which goverment resources are used to bankroll the defrauding of US Citizens, in support of third party old school politicians with contacts in all the spheres of government....

"That is why it is so important that we all unite!...

"American investments and assets are being nationalized by the Republic of Panama in a scheme by organized crime elements....

"Now you know why Vice Minister, Dulcidio De La Guardia would not allow Richard Crucet to read a letter to you at the forum...."

Richard Crucet
American Alliance of Panama

Scratch the surface, and...

The arguments over proposed Law 71 and the emotions they have aroused have a few very deep roots.

This country's legal profession is in a sorry state. That the rule of law is often just theoretical leads us to a chicken-and-egg conundrum about whether the lawyers and judges are the cause or the product of the malady. On the matter of land tenure on islands in particular, attorneys who in general are poorly educated --- one only needs a four-year degree, and need not take a bar exam to qualify --- relied on the practices of local officials, some of them outright crooks, to the extent that they advised their clients that Panama's constitution and laws don't really mean anything. Now a government has gone into court and cited provisions that legal advisors --- not all of them lawyers and not all of them even literate in Spanish --- told people to ignore, or never mentioned in the first place. So would-be face-saving gestures are being made by people who gave bad advice. Meanwhile, the drafting skills of government lawyers who are given the task of drawing up laws to address problems of any and all sorts are often very poor, sometimes legendarily so.

This country's land tenure system, such as it is, has long been affected by bribery, extortion, forgery, influence peddling and other forms of public corruption; by a common presumption that the interests of a few aristocratic Creole families trump the law and all other public policy factors; by a piratical "smash and grab" culture that has seeped down from the ruling elite into almost every nook and cranny of Panamanian society, including this country's foreign residents; and by an influx of foreign hustlers, some of them with serious criminal records, whose aim is to get rich quick by any means available. Under such conditions people tend to suspect the motives of all public officials and often everybody else. Thus the fear that crooks in high places might by way of some legal sleight of hand take away people's homes, often acquired with the bulk of their occupants' lives' savings, has a certain rational basis that's rooted in this country's history.

This country's laws are made in Panama City with the capital and its environs in mind, with scarcely a thought to physical facts in other places, such as the vast difference in tides between our Caribbean and Pacific coasts; or of cultural facts like the tradition in certain parts of Bocas del Toro, Kuna Yala and Darien for people to erect houses and other buildings over the water; or of administrative realities in places where the government's presence is or has been minimal.

This country's American community has some problems, some of them reflecting things going on in the USA at the moment, some of them reflecting things that Americans were told in order to entice them to come here, some of them having to do with individuals who have promoted themselves, or who have been promoted by Panamanian politicians, as "expat community leaders." All of the spontaneous and organized rancor that characterized the summer congressional break's town hall meetings is present in Panama's American community. There are Americans who have come here because they have been told that Panama is a land where there are no taxes and there is no social responsibilty. Despite the occasional extradition or expulsion, Panama is and has been an attractive place for criminals from the United States and elsewhere to flee, and some of these have bought or otherwise obtained the endorsement of Panamanian public officials. We had an American colonial era on the isthmus which, after some tragic experiences, was phased out --- but now we have many Americans who don't remember any of that, and a few who do and are nostalgic for old privileges. On the other hand, it seems to many Americans living here --- and not only to Americans --- that a lot of Panamanians seem to believe that God created gringos so that they could be fleeced. From the cabbie to the licensed professional, many demand a "gringo surcharge" when dealing with Americans. Even the panhandlers tend to single out the Americans.

The October 29 hearing

At the direct and indirect urging of a number of real estate lawyers, some representing clients who claim right of possession over vast tracts on which they neither live nor work, foreigners who own property along beaches and on islands were urged to complain to their embassies about proposed Law 71. This was done, and the embassies reported this to the Panamanian government. The Ministry of Economy and Finance responded by calling a public forum for the benefit of foreign investors in Panamanian real estate, to be held at the Hotel Continental on October 29.

More than 100 people attended the event. Many of those present were Panamanian lawyers with clients who might be affected. People of several nationalities, but above all Americans, were in attendance. Some of those who came to express their concerns would not in any case be directly affected by proposed Law 71, and many came to complain about corrupt or inefficient government in general.

One US - Panamanian dual citizen, Richard Crucet, is a titled property owner along the beach near Santa Clara and has made a cause of his attempts to block long-standing public access to the beach and to fence off part of the beach itself. He was circulating a sign-up sheet for an organization he is starting, "American Alliance Panama."

The meeting started with a presentation by Alberto Vallarino, who appeared to be annoyed. Speaking in English, the Minister of Economy and Finance first complained that some of the newspapers have distorted the issue. He claimed that he had overflown some of the large tracts of land claimed under a theory of right of possession, and seen them to be uninhabited, uncleared and uncultivated. "The lands belong to the people of Panama," he said, pointing out that right of possession exists for people living or working public lands to continue their tenure, although the lands are technically in the public domain.

Vallarino noted different situations: "There are people who have lived on the islands for generations. There are people who have purchased. There are people who have used novel interpretations of the law to claim vast areas." He said that the law does not allow people to claim vast uninhabited tracts of public land under the guise of right of possession --- if it's not inhabited or used, there's no "possession." (Upon abandonment, right of possession (ROP) land that becomes uninhabited and unkept reverts more fully to the public domain, pursuant to Article 257, Section 4 of the Constitution, which provides that the state owns lands that are vacant or forsaken.)

The minister said that it would be irresponsible for him to allow large tracts of public land to be claimed and sold off to speculators for a small fraction of their true value, noted that people titling ROP land have always paid for the change in status and assured that proposed Law 71 contains "nothing to alter the situation... of people who own right of possession land continuing to enjoy that status."

Vallarino left, and the government's presentation continued in Spanish with the poker-faced Catastro director, Publio Cortés, putting things much more bluntly. His discourse was bound to be poorly received no matter how delivered because Catastro has historically been the place to go to get ROP land titled, and such was the "no se puede" corruption of that institution during the five Torrijos years that fewer than a dozen titles were issued for ROP parcels. The eternal delay in what should be a quick and simple administrative procedure is a standard Panamanian shakedown technique.

Cortés told those assembled that under Panama's constitution, the government regulates land use (Articles 120, 123, 125 and 126); places certain special restrictions on use and ownership of land on islands (Article 291); and claims for the government substantial propery ownership in, above and below the land (Articles 257, 258). Of particular interest is Article 257, Section 4, which in its Spanish original provides that: "Pertenecen al Estado... [l]as tierras baldías o indultadas." That means that any land defined as "baldía" or "indultada" belongs to the state.

"Indultada" refers to lands that were declared common areas for public use by the Spanish crown in colonial times. In 1909 the Republic of Panama recognized the existence and status of such properties.

According to Cortés, "baldía" means any land without a title inscribed in the Registro Publico. "All land without property title is the state's," he maintained, adding that people can have right of possession in state land. "Is right of possession the same as titled property?" he rhetorically asked. "My answer is no."

That set some of the audience off, even though Cortés maintained that this legal definition of "baldía" goes back to colonial times and has never been changed. The problem is that the word has many uses. Spanish-English dictionary definitions of "tierra baldía" include: wasteland, shore land, dirt, a pale, uncultivated earth, vacant lot, untilled land, common land, useless land, unappropriated land and public land. One of the people in the crowd who owns ROP land in Bocas, Susan Guberman Garcia, protested that her home in Bocas is not a vacant lot. But of course, that's not the only definition of the term.

The government's presentation continued with Vice Minister of Economy and Finance Dulcidio De La Guardia, who allowed that people who bought ROP land have some legitimate concerns which will be taken into account. He also said that the Martinelli administration is "open to revisions," including the declaration of specific development areas on specific islands, which would ease the restrictions on property ownership found in Article 291 of the constitution. (The Martinelli administration still balks at the notion that in one legislative act all land on all islands in Panama could be constitutionally declared a development zone, as Law 23 purported to do.) 

However, De La Guardia drew the line on certain points. "The situations are not the same in the whole country," he argued, denouncing Law 23 for allowing one person to claim one-fifth of the Caribbean coastline of Veraguas under a theory of right of possession, and condemning Law 23's concept of "environmental possession," which he said "allows private persons to fence the wilderness" and exclude the public from it, and will lead to the division of jungle islands into private lots.

The public participation segment of the forum began with a presentation by former Electoral Tribunal magistrate Guillermo Márquez Amado, who owns ROP land on the Costa Arriba of Colon and has other ROP owners as clients. On the theoretical level, his legal argument was that:

1. Right of possession is a concept that goes back to Spanish times, well before the Registro Publico existed;

2. The old Spanish definition of "tierras baldías" existed well before the current constitution came into being; and thus:

3. Because the Registro Publico and constitution came later, the legal meanings of right of possession and "tierras baldías" must have changed.

However, the former magistrate and sometime law professor did not cite any law that established different meanings for these legal terms and concepts.

Márquez Amado went on to call the government "pirates," eliciting applause from the audience.

(But consider the broader application of the theories that Márquez Amado advanced in light of the fundamental demand usually raised by foreign investors, including some of the non-citizens at the forum. Investors want "judicial security," so that they can know the law and operate according to it to avoid problems. But what if, as Márquez Amado urged, every time a constitution is changed or a new government office is created, long-standing legal definitions lose their meanings? What sort of judicial security would there be then?)

"People who have right of possession with an animus to own have no worry," De La Guardia replied, and at this point he began to get some hecklers. "Why didn't you do that 14 years ago?" an American from Alabama demanded of the vice minister who had held his office for just under four months.

(Sic.)

An angry Dulcidio De La Guardia attempted to rule Crucet out of order, pointing out that his case is before the courts. However, there really wasn't any provision made to remove a heckler.

Some other foreign investors in ROP land --- not only on the coasts, but also on Gatun Lake, which is not covered by proposed Law 71 --- told tales of endless bureaucracy and in some cases acts of corruption. A number complained that they thought that things had been settled by Law 23, and now they are again uncertain about where they stand. Many bristled at the suggestion that they are the same as the large-scale speculators of whom the government representatives complained. Some reminded the public officials of President Martinelli's campaign pledge to title all ROP land during his administration.

Guberman Garcia, formerly a California criminal defense lawyer and claiming to represent 300 people (although she is not a lawyer here and is not fluent in Spanish), five times essentially called the government liars by way of a repeated cross-examination style question. She characterized the government's position in a lawsuit before the Supreme Court that Law 23's attempt to legalize all private land tenure on islands as unconstitutional as a claim that all ROP land on islands is illegal, then asked again and again (and again and again and again) whether the government was telling the truth in its legal filings or telling the truth in its assurances to people at the forum.

The vice minister stuck to his guns and the rhetoric from the audience turned more to the allegation that the intention of proposed Law 71 was expropriation. The basis of that claim is that Section 15 of the proposed law provides that:

Frightened ROP land owners are interpreting that as the ministry's threat to fine them, evict them and tear down their homes for the offense of living in them. It really gets into a question of what the word "occupy" would mean for the purpose of the law, and what an "appropriate contract" might be. Taken in the context of proposed Law 71 as a whole, the most sensible ways of reading it would be that "occupy" means "to invade and hold," as in a squatter invasion; and that if somebody buys a right of possession in some land from a person who has a valid interest of that sort to sell, that would be an "appropriate contract." But who knows? Section 15 of proposed Law 71 stands as a monument to abominable drafting skills, a malady common among Panamanian government lawyers. One would think that just to silence critics who claim that mass expropriation is the aim, in a future draft the new law would spell out some definitions for this section --- but then, the critics whose real objection is that they can't claim vast tracts and obtain title for pennies on the dollar will continue to spin horror stories, as will those who seek to establish themselves as right-wing gringo militant leaders.

Eventually the forum did get around to a portion of the large ROP claimants stating their case. The National Association for the Conservation of Nature (ANCON) and a foundation headed by attorney Celma Moncada complained about the proposed new law doing away with "environmental possession" that Law 23 purported to create. But De La Guardia noted that ANCON had previously obtained some land in Bocas del Toro for the purposed of protecting it, but then the organization ran into economic troubles and sold it to developers. The vice minister and the ANCON representative got into arguing about whether the tract amounted to 1000 hectares, or something less, but there was no disagreement about what was done.

(If ANCON and its record of holding and managing private nature reserves comes front and center in this debate, look for a number of Embera communities that are neighbors of ANCON's holdings to weigh in on the subject and object to "environmental possession." There have been some bitter disputes over the years, and there is a strain of thinking among indigenous communities that the more establishment environmentalists are just another group of outsiders grabbing for control over indigenous lands and resources.)

The notion of "environmental possession" essentially splits Panama's environmentalists along class lines very similar to those that were evident in the Panama Canal expansion referendum campaign. The organizations led or sponsored by the wealthy tend to be for the privatization of Panama's natural heritage, while the less well financed groups that rely primarily on their memberships' activities, and the left wing of Panamanian environmentalism, tend to be for keeping wilderness areas in the public domain and doing a better job of protecting them. About a week and one-half after the forum, an alliance of ANCON, the Centro de Incidencia Ambiental, the Nature Conservancy, PROMAR, the Red de Reservas Privadas, the Panama Audubon Society, and the MarViva, Albatross, Avifauna, Natura foundations signed a joint statement opposing proposed Law 71, arguing that to grant right of possession for farms or houses but not for environmental protection creates "a perverse incentive for deforestation."

Two and one-half days after the forum at the Hotel Continental, the National Assembly ended its regular session without again taking up proposed Law 71. That means that the legislative process must start all over again. That will be done, it seems, at a special legislative session to be held in December.