economy special

Polite society and its media are so polite. 

Lately, this society has been livened up a bit by a bitter row between one Gustavo Barahona, who until recently was finance director for the Ministry of Social Development (MIDES) and his former boss, Social Development Minister Guillermo Ferrufino. 

Ferrufino came to his high position with no governmental experience: he was a television personality and an activist with the right-wing Catholic organization Opus Dei. His ministry is mainly about passing out goodies of one sort or another, theoretically to help out the needier Panamanians. So is his work a matter of bringing Christian charity into government, or is it more a matter of running government for the benefit of certain specified businesses?

Barahona called it something else. He filed a complaint with police about no-bid contracts that featured systematic overpayments for things that the ministry purchased, particularly for the contents of food bags that the government passes out at its thinly disguised political events. He was promptly fired, and now Ferrufino has filed criminal charges against Barahona for stealing government documents and criminal defamation.

For example, there is the program to win the hearts and minds of gang members in miserable slum neighborhoods, young men who ordinarily would not see themselves as beneficiaries of a business-oriented, "hard hand against crime" administration. The purchase order above is part of that program, and one of the allegedly stolen documents. (Actually, the original seems to be in the government's possession as it always has been --- it's just a matter of Barahona providing a copy to a legislative committee, law enforcement and the public at large.) As in 1,792 bags of groceries for "adolescents at high social risk" --- that is, young gang members whom their neighbors tend to fear.

The purchase order is to one ERMIS, SA, whose president is one Vassilios Papadikis. Notice the details, however. It's not a matter of ERMIS shopping around for the best prices for the contents of the food bags. The purchase order specifies the brands and sources. Notice that mostly it specified "Ricamar" --- Ricardo Martinelli's food packing company. The Ministry of Social Development was paying about 40 percent above the grocery store retail price for these items, with the split in the proceeds of the overcharge between ERMIS and Ricamar unclear.

This was not the only ERMIS contract that the ministry had, and it was far from the largest. The biggest of these of which The Panama News has learned was for 3,352 Christmas food bags, for a total of more than $200,000.

So what's a government that has been caught with its hand in the piggy bank to say? The president's cousin, "anti-corruption czar" Fernando Núnez Fábrega, said it's just the way that the government purchasing system works. He said that purchasing is so complicated and payment takes so long that the government can't hope to get as good a price for its wholesale purchases as people pay at the retail outlets.

This complex bureaucracy argument might work a bit better had ERMIS had to go through a bidding process, but these were direct purchases.

Ferrufino said that it was a matter of "extortion," that Barahona wanted to be director of the National Secretariat for the Disabled (SENADIS) and tried to force the issue by threat of exposing the overcharges.

So what does the owner of Ricamar, the beneficiary of these no-bid self-dealing government contracts have to say? So far, the silence is deafening.

In the country's mainstream media, this is being played out as an argument between Ferrufino and Barahona, with little or no mention of the conflict of interest involving Ricardo Martinelli, the owner and namesake of Ricamar. They're so polite.