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Volume 16, Number 9
September 10, 2010


news

Also in the news section:
Genaro López steps down as SUNTRACS chief to concentrate on politics
Police raid international surf tournament
Strip mining dispute coming to center stage here
Ferrufino claims that he has been absolved in scandals
Government shuts down Bocas water taxis
The strange case of Valentí­n Palacio
Toned down PANAMAX 2010 war games
Panamanian-style gun control politics and how the Americans here react
Ana Matilde Gómez convicted
International Indigenous Peoples Day in Panama City
Low intensity power struggle over Law 30

Many things that used to be in a Panama News Briefs feature of the website have now migrated to our constantly updated Facebook page

Trial court throws out underlying gambling concession corruption case, but charges for laundering the money from that scheme are still pending for now
Toro Pérez Balladares acquitted
on grounds of double jeopardy

by Eric Jackson

In a decision that seemed almost apologetic, 15th Penal Court Judge Georgina Tuñón dismissed corruption charges against former President Ernesto "Toro" Pérez Balladares in the matter of the gambling concessions his administration awarded. There is a paper trail that on its face indicates that the former president handed out these concessions to close friends and retained for himself silent minority stakes in them. The charges were brought with respect to on concessionaire, Lucky Games SA, which is the parent company of the Cirsa Panama casinos. The concession paid regular dividends, including to a company called Shelf Holding, which Pérez Balladares owns.

Tuñón called her action "objective and impersonal" in the decision itself, an unusual thing to do, but maybe in reflection upon the strange state of Panamanian justice at the moment more than an anticipatory defense of a bad ruling. The judge pointed out that a previous case about essentially the same facts had been brought by anti-corruption activist Enrique Montenegro against Panama's Gambling Control Board (JCJ) and was thrown out without any serious investigation by prosecutors or consideration by the courts back in 2007. The former president's testimony was taken in that case and according to Tuñón's decision that turned the case into one against Pérez Balladares. Law professor Miguel Antonio Bernal said that as a matter of procedural law Tuñón's decision was correct, with its principal weakness being the lack of prosecutorial and judicial diligence in the case brought by Montenegro.

The travel restrictions against the former president remain in effect, because he is charged with laundering the money he received from the gambling concession kickbacks, in a separate case that's pending before 9th Penal Judge Diego Fernández. The money laundering charges carry a more severe potential penalty than did the underlying corruption charge.

However, there is a major flaw in the money laundering case as well, which, most likely depending on what sort of political deals have been made, could also abruptly end that case. It has to do with when the courts start and stop counting.

Until sometime last year, Pérez Balladares's company was receiving dividends from the kickback. To look at the law as it stood then, it appears that a money laundering crime was committed.

However, this scheme did not start last year, but in the late 1990s, during the Pérez Balladares administration. At that time, Panama's money laundering laws only applied if the underlying crime was drug-related. During the Moscoso administration there was strong international pressure when she agreed to expand the scope of money laundering predicate crimes, then attempted to renege. With many of the world's important economic powers applying restrictions on bank transactions with Panama and threatening to tighten them, Moscoso backed down. By the time that Panama made laundering the proceeds of public corruption a crime, Toro had been playing his casino kickback game for several years.

But prosecutors have conducted the money laundering investigation going back to when the kickback scheme began, rather than to when the law made the laundering of such kickbacks illegal. This error --- whether unintentional or not --- may end up destroying the entire money laundering case against the former President.

In another of Toro's kickback schemes, American accomplices are now in prison after having been convicted in the United States under the Foreign Corrupt Practices Act for entering into a contract for the maintenance of Panama's lighthouses and non-canal navigation buoys, wherein the former president and most probably some other officials in his administration took hidden stakes in the concession they awarded. But the investigation of that scheme was begun by former Comptroller General Alvin Weeden at a time when Pérez Balladares was shielded by legislative immunity from prosecution or investigation as a member of the Central American Parliament. The Supreme Court held that Weeden's illegal investigation precluded any subsequent prosecutorial or judicial inquiry into the matter.

Shortly after he left the presidency, the US State Department stripped Pérez Balladares and the members of his immediate family of their visas to visit the United States. Thus the possibility of Toro stepping off of a plane in Miami and being arrested on US corruption charges is remote, and under Panamanian law citizens can't be extradited to foreign countries.

Also in the news section:
Genaro López steps down as SUNTRACS chief to concentrate on politics
Police raid international surf tournament
Strip mining dispute coming to center stage here
Ferrufino claims that he has been absolved in scandals
Government shuts down Bocas water taxis
The strange case of Valentí­n Palacio
Toned down PANAMAX 2010 war games
Panamanian-style gun control politics and how the Americans here react
Ana Matilde Gómez convicted
International Indigenous Peoples Day in Panama City
Low intensity power struggle over Law 30




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