US guilty plea for man who bribed former RP president, two other top officials

Fonte Investment Ltd had as its president and general manager one Jovan Vukelja, also president of another company that got a lucrative maritime contract out of the Pérez Balladares administration, Ocean Pollution Control, and also a recipient of PECC's dividends. So what did Toro do for Fonte? The former president got his cut from the PECC contract and funneled his proceeds through Fonte, which also got a cut.

The courts here blocked criminal and civil proceedings because the former Comptroller General started looking into the matter while Toro had immunity from investigation as a member of the Central American Parliament

Guilty plea in US court revives the PECC scandal
by Eric Jackson, the US Department of Justice and others

Editor's note: In the early weeks of the Martinelli administration, some of the more notorious crooked deals of previous administrations are being aired out in public, even if many doubts remain whether the prosecutors and courts here will do anything to hold anybody accountable. We have had the Supreme Court decide to reopen the CEMIS case, but don't yet know who will handle the investigation or what the probe's scope will be. We see Jean Figali, the high-flying businessman whose fortune was mostly smoke, mirrors and the political connections inherent in being Mireya Moscoso's prinicipal connection to the world of haute couture, about to lose all the government concessions he had because he never had the money to pay for them and probably figured that with his friends in high places he would never have to pay. Ernesto Pérez Balladares and some of his close friends have been stripped of gambling concessions that were steered their way during the Pérez Balladares administration. (Toro says he never owned a stake in any of those casinos, but the paper trail suggests that however he wants to characterize it, he received a portion of the proceeds.)

Now we have a case in which the paper trail was laid bare for the public to see six years ago, the PECC scandal, coming back front and center before Panama's eyes by way of a US federal district court in Virginia. In a cautiously worded public statement, the US Department of Justice announced the guilty plea of one Charles Jumet, who had been under investigation pursuant to the US Foreign Corrupt Practices Act (FCPA) and who admitted to the court that in a "privatization deal" for the maintenance of Panama's maritime lighthouses and buoys (except for those managed by the Panama Canal, which was still under US management when Toro left office), a company called Ports Engineering and Consultants Corporation SA (PECC) kicked back part of the proceeds to three Panamanian officials who were not identified by their names but by the descriptions of the offices they held: former President Ernesto Pérez Balladares, former director of the old National Port Authority (APN) Hugo Torrijos, and former APN deputy director Rubén Reyna.

Virginia resident pleads guilty to bribing Panamanian officials for maritime contract
by the US Department of Justice Office of Public Affairs

Friday, November 13, 2009

Charles Paul Edward Jumet of Fluvanna County, Virginia, pleaded guilty today in connection with his role in a conspiracy to pay bribes to Panamanian government officials to secure a maritime contract, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, US Attorney for the Eastern District of Virginia Neil H. MacBride, Joseph Persichini Jr., Assistant Director-in-Charge of the FBI’s Washington Field Office, Jennifer Smith Love, Special Agent-in-Charge of the FBI’s Richmond Field Office and James A. Dinkins, Special Agent-in-Charge of US Immigration and Customs Enforcement’s (ICE) Office of Investigation, Washington.

Jumet, 53, pleaded guilty before US Magistrate Judge Dennis W. Dohnal in Richmond, Va., to a two-count information charging him with conspiring to make corrupt payments to foreign government officials for the purpose of securing business for Ports Engineering Consultants Corporation (PECC) in violation of the Foreign Corrupt Practices Act (FCPA); and making a false statement.

PECC, a company incorporated under the laws of Panama, was affiliated with Overman Associates, an engineering firm based in Virginia Beach, Va. According to Jumet’s plea, PECC was created so Jumet, Overman Associates and others could corruptly obtain a maritime contract from the Panamanian government.

According to court documents, Jumet was involved in a conspiracy to pay money secretly to Panamanian government officials for awarding PECC contracts to maintain lighthouses and buoys along Panama’s waterway. In December 1997, the Panamanian government awarded PECC a no-bid, 20-year concession to perform these duties. In exchange for the concession, Jumet and others authorized corrupt payments to the Panamanian government officials.

In 2000, Panama’s Comptroller General’s Office suspended the contract while it investigated the government’s decision to award PECC a contract without soliciting any bids from other firms. In 2003, the Panama government resumed making payments to PECC.

In connection with his guilty plea, Jumet admitted that from at least 1997 through approximately July 2003, he and others conspired to make corrupt payments totaling more than $200,000 to the former administrator and deputy administrator of Panama’s National Maritime Ports Authority and to a former, high-ranking elected executive official of the Republic of Panama.

In his guilty plea, Jumet also admitted that he knowingly made a false statement to federal agents about a December 1997 "dividend" check payable to the bearer in the amount of $18,000, which was endorsed and deposited into an account belonging to the former, high-ranking elected executive official. Jumet admitted that he had falsely claimed that this "dividend" check was a donation for the high-ranking official’s re-election campaign. Jumet also admitted that the "dividend" check was in fact given to the former official as a corrupt payment for allowing PECC to receive the contract from the Panamanian government.

As part of his plea agreement, Jumet has agreed to cooperate with the Department of Justice in its ongoing investigation. The conspiracy count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the gross gain or loss from the scheme. The false statement count carries a maximum penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for February 12, 2010.

The case was prosecuted by Trial Attorney Rina Tucker Harris of the Criminal Division’s Fraud Section and Assistant US Attorney Michael S. Dry of the US Attorney’s Office for the Eastern District of Virginia. The case was investigated by the FBI’s Washington Field Office, the FBI’s Richmond Field Office and ICE’s Office of Investigation, Richmond and Washington.

Editor's note: Toro, Torrijos and Reyna are denying all, to the amazing extent that Reyna told El Panama America that he's considering filing a Panamanian criminal defamation (calumnia e injuria) complaint against Jumet for the contents of his guilty plea an a US court.

Whether there will be any consequences greater than tarnished reputations for the three former officials remains to be seen. Under Panama's constitution, citizens can't legally be extradited to face criminal charges in another country. Starting in late 2003, a series of revelations and both civil and criminal court cases arose from the facts of the PECC affair. La Prensa published a damning paper trail that left little doubt about what was going on --- notwithstanding the claim of Reyna's wife and Toro's former press secretary Dorita de Reyna that the payment that came her husband's way was for rental of an office that PECC rented from her mother.

(At the time, it was reported that Alvin Weeden, the Comptroller General during the Moscoso administration, began looking at PECC because someone had complained that office furniture from the APN had been transferred to PECC, and upon looking into the matter Weeden said that he had discovered that PECC was essentially a front for PRD politicians to appropriate government assets, and not just for a $3 million per year contract for a job that cost $400,000 per year to perform. "They were so cynical that they didn't buy furniture or anything, but used the APN's furniture --- the APN's lighthouse and buoy section just passed to PECC," he told La Prensa.)

Bank accounts and other properties belonging to the former president and the former top men in the ports authority were frozen, and a criminal investigation commenced against Torrijos and Reyna, while an application was made to begin criminal proceedings against the ex-president. However, Toro was immune from investigation as a member of the Central American Parliament, and it was ultimately held that Weeden had improperly begun an investigation and that meant that all proceedings had to stop and were barred from ever coming back again. At the time the court was of the opinion that when a person with legislative immunity commits crimes in league with persons who have no such immunity, the legislator's protection also cloaks the accomplices.

Thus within two years of the PECC revelations coming to light, the charges were dropped, the corrupt politicians got their assets returned and the public got a bit more jaded about the politicians. Although the decisive rulings came down in October of 2005, during the PRD administration of Martín Torrijos --- whose presidential campaign received a $25,000 contribution from PECC --- the ruling throwing out the PECC investigation was made by a unanimous Supreme Court. Those left aghast tended to see it in terms of a broad-spectrum discreditation of all branches and all factions of our political system. Others, like law professor Miguel Antonio Bernal, saw a legally correct decision, given the constitution Panama has and Weeden's maladroit actions. In any case, the magistrates themselves foresaw just how ugly it would look and thus released the news of their decision during the November holidays when relatively few people were paying attention to newspapers or broadcast news programs.

All sorts of interesting legal questions remain.

If Pérez Balladares, Torrijos and Reyna did anything at all with the ill-gotten proceeds of the PECC scandal after the courts had thrown out the original investigations, wouldn't that use of the assets in itself be a separate money laundering crime?

Can the civil cases be reopened to strip the three former public officials of the fruits of their corruption?

Even if Panama's criminal defamation laws could be interpreted to criminalize a guilty plea entered in a foreign court, would former high-ranking public officials still have standing to bring such a charge in any case, given the changes that were made in the Penal Code during the Torrijos administration?

And so on.