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Volume 17, Number 11
October 24, 2011
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economy

Also in this section:
Anton beach land grab scandal reaches into Martinelli's inner circle
Local forex trading scam victims win partial victory in a Canadian court
Italy's foreign minister denies what photos show, more questions raised about aid to Panama
Santo Tomas doctors walk out, others may join them
Changes in the regional oil market
NAFTA starves Mexico
Crisis reaches far beyond the European Union
CEPAL, FAO call for region to close technology gaps and increase food production
Chinese investments boost Brazil's rise as a regional power
International climate change negotiations in Panama
Latin American conference on marine energy
Free trade is not so free
Tax printers: a big expense for many small businesses


Gotcha moment, given current claims: Italian Foreign Minister Franco Frattini, fugitive Berlusconi bag man Valter Lavitola and Panamanian Minister of the Presidency Jimmy Papadimitriu at a May 2010 state luncheon at the Palacio de Las Garzas. Photo by the Presidencia

Italian press and parliamentary feeding frenzy catching politicians in contradictory statements about relations with fugitive bag man Valter Lavitola, shedding light on Italian aid to Panama
Umm, well, that's a different matter...
by Eric Jackson

Silvio Berlusconi survived a no-confidence motion by one vote, with people who insult him voting to keep his government in power because as scattered and weak as the left may be, the right is afraid that snap elections will doom all of the people who supported the dirty old man and wants a few months to put some distance between themselves and him. Now, however, the press and opposition parliamentarians are engaged in a daily rite of asking embarrassing questions to which they know the answers, then slapping their cards on the table as a way of showing the public that they should never trust anything that anybody in the Berlusconi crowd ever says.

At the center of many of these questions is the man who used to hold Benito Mussolini's old job as editor of L'Avanti, Silvio Berlusconi's bag man Valter Lavitola. Unless he has slipped out of the country without notice, the fugitive Lavitola, now officially wanted for allegedly paying off witnesses to lie about the procurement of prostitutes for Berlusconi's notorious "bunga bunga parties," is holed up in Panama. Prostitution is legal in Italy as it is here, except when the services are purchased from minors. That's the charge in one criminal case against the prime minister. In any event, it's a crime in Italy to pay someone to influence his or her testimony in a court case.

The subject matter of the warrant for Lavitola's arrest, however, is mostly a side issue in Italy's heated political climate. The government is asking all but the richest Italians to accept stern austerity measures that reduce their standard of living, people are rioting in the streets of Rome about it, and there are allegations that the prime minister's bag man, an unlikable character whom the voters soundly rejected when he ran for the European Parliament in 2004, was getting a percentage of the action in the international contracts of state-owned or state-run companies, and that to boost his sales income he was paying bribes and kickbacks to corrupt foreign public officials. Panama plays prominently in the questions and allegations, as does Italy's Foreign Minister Franco Frattini.

Frattini was questioned about Lavitola's participation in Foreign Ministry meetings with dignitaries from other countries. Frattini denied it. Then La Repubblica put a photo of Frattini, Lavitola and Albanian Vice Premier Edhe Meta on its front page. Frattini issued a statement that:

[I]n no case are persons extraneous to official delegations, such as Mr. Lavitola, present at institutional meetings, including the meeting of the Italian Minister for Foreign Affairs with his Albanian counterpart.

It is a well known fact that no official photographs are taken during bilateral meetings except for those of the two ministers standing in front of the meeting room flags. It is also clear that at the time the photo was taken there had been no news of legal investigations regarding Mr. Lavitola.


In "no case?" Really?

What about, for example, Frattini's May 27 and 28, 2010 visit to Panama? Isn't Lavitola standing next to Jimmy Papadimitriu while Frattini is glad-handing in the presidential palace? Isn't this Lavitola meeting with Panama's Vice President and at the time Foreign Minister Juan Carlos Varela?


Photo by the Presidencia

Isn't that Lavitola seated next to Frattini, at the luncheon's head table with Martinelli and Varela?


Photo by the Presidencia

The embarrassing photo ops, however, are not the main Lavitola story either. A series of leaked transcripts from Berlusconi's and Lavitola's telephone calls, documents from state-owned companies and revelations by third party witnesses to the relationship flesh out a portrait of Lavitola as the fixer involved at the highest levels of Italian foreign policy. For example:
  • Receiving a five percent commission on all the foreign sales of Italy's state-controlled aerospace and military hardware company Finmeccanica, whose contracts with Panama run into the hundreds of millions of dollars.

  • Trying to sell Panama modular prison units by the Italian Svemark consortium, a deal mentioned in a memorandum of understanding between Italy and Panama but not consummated.

  • Soothing Ricardo Martinelli's annoyance about delays in the construction of a children's hospital in Veraguas and the delivery of new patrol boats for the National Aeronaval Service.

  • Petitioning Frattini for a raise and promotion for Italy's top diplomat in Panama, Lavitola's friend Giancarlo Maria Curcio.

  • Organizing Ricardo Martinelli's state visit to Italy, in which Berlusconi, Martinelli and Lavitola appeared together:



In Panama President Martinelli controls the prosecutors and the legislature, and will soon have an iron grip on the courts. He's not going to be officially questioned unless or until those basic power relationships change. But his friend Berlusconi is melting down in Italy and that process is shedding unfavorable light on the Martinelli administration. Because Berlusconi and his supporters have chosen to hold onto office until elections (probably to be held next March), there will be many more revelations to come. Italy's relationship with Panama will likely be a favorite target for opposition politicians and media because of the odious reputation for corruption that this country's government has in the world.

It is not merely a matter of Panama's general disrepute. It's a matter of Italian newspapers and the international aerospace press reporting that Finmeccanica, whose de facto salesman for Panama was Lavitola, has a reputation for paying bribes and kickbacks to officials of governments that buy their equipment. Italy's press, politicians and prosecutors aren't going to look at the pictures from Panama and pretend that the Panamanian officials aren't there.

Typical of the talk in Rome these days was the observation by Felice Belisario, the president of the Italian Senate:

From the last intercepted phone call emerges an alarming picture: Berlusconi has entrusted the management of our institutional relationships to a fixer who is currently a fugitive.


The intercepted phone call? It was between Panama and Italy. That's a problem for Ricardo Martinelli. Other European heads of state and foreign ministers are now going to great lengths not to be seen with either Berlusconi or Frattini. But Martinelli took in the bag man whose existence is making Berlusconi and Frattini squirm.





Also in this section:

Anton beach land grab scandal reaches into Martinelli's inner circle
Local forex trading scam victims win partial victory in a Canadian court
Italy's foreign minister denies what photos show, more questions raised about aid to Panama
Santo Tomas doctors walk out, others may join them
Changes in the regional oil market
NAFTA starves Mexico
Crisis reaches far beyond the European Union
CEPAL, FAO call for region to close technology gaps and increase food production
Chinese investments boost Brazil's rise as a regional power
International climate change negotiations in Panama
Latin American conference on marine energy
Free trade is not so free
Tax printers: a big expense for many small businesses




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© 2011 by Eric Jackson
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