Jackson, Another deception from Panamanian justice

It’s neither madness nor genius that makes Bernal see the attorney general’s deal as unacceptable. It’s because he doesn’t owe anybody and he doesn’t let fear of anybody cloud his judgment about it. Photo by SIN (Dominican Republic television).

Odebrecht: another deception here, firestorms elsewhere, silence in the USA

by Eric Jackson

Attorney General Kenia Porcell’s August 1 announcement that the scandalous Brazilian construction conglomerate Odebrecht would be providing the Panamanian people with the names of those whom they bribed here and paying fines and restitution was initially greeted with enthusiasm by some anti-corruption activists. Now, nearly two weeks later, we don’t have the list of those who took bribes, we don’t have the full details of the agreement, and those details that have been released indicate that major parts of Odebrecht’s criminal activity in Panama are being left out of the case.

While Libertad Ciudadana, the Panamanian chapter of Transparency International, immediately hailed the agreement, Miguel Antonio Bernal — now an independent candidate in the 2019 presidential race — said at a demonstration the day after Porcell’s announcement that “I realized that the attorney general’s story is a sea of falsehoods, and it had done mortal damage to society.” There immediately began a chorus from figures overt and pseudonymous in President Juan Carlos Varela’s Panameñista Party deriding Bernal, the law professor, radio show host and activist, as “Dr. No.” It’s an old refrain from that quarter, recycled from the days when they were supporting the clumsy criminal Bosco Vallarino against Bernal in the 2009 Panama City mayoral race. But in La Prensa people were also attacking Bernal, and especially questioning the statements of Spanish-Brazilian attorney Rodrigo Tacla Durán that concurred with previous allegations that Varela had taken money from Odebrecht and added that Varela used his influence to hinder Panamanian cooperation with Brazil’s investigation of the company.

We can get into political rivalries, the partisan orientations of Panama’s various news media and fears that a way of life might end. But the structure of the announced settlement and its justification tend to support the professor’s complaint. It’s a $100 million fine to be paid by Odebrecht for bribes paid, plus $120 million in restitution. The problem with the restitution is that the full extent of Odebrecht bribery in Panama has yet to be investigated, and Porcell herself admits it when she promises that the investigation is continuing and will get into everything. An overview of the Odebrecht corruption that has been revealed in other countries, typically it’s an overcharge with about 10 percent kicked back directly or indirectly to politicians. If that rate prevailed in Panama with all of the Odebrecht public contracts since they began in the Torrijos administration, the $120 million restitution figure would be very low.

Also, excluded from the settlement and anything that Porcell is talking about is the matter of Panama being used as a money laundering mill and for the concealment of evidence with respect to public corruption in other countries. Early in the Brazilian investigation of the scandal there were claims that computer hard drives and key records were sent to Panama to keep them away from authorities there. Requests were made for Panamanian help, but it seems that not only were none of those materials recovered, but if there were police or proseutor raids looking for those things they have never been publicized. Those money laundering and concealment of evidence matters don’t appear to be in the attorney general’s settlement with Odebrecht.

Might the money laundering and concealment or destruction of evidence figure in the criminal cases against some 43 individuals, most of whom have not been named? Well, we don’t know and as of the most recent notice Porcell intends to conduct secret investigations and secret trials, after which only the names of those convicted would be made public. Secret trials could be a great new weapon for an authoritarian government, but at their inception under Porcell they stand to be a great new shield from the democratic consequences of public corruption.

The money laundering has not been entirely submerged, however.

The general rule has been that legislators are not allowed to engage in any private business while serving in the National Assembly. However, the deputies have carved out an exception for those who are practicing law. It might be reasonably argued that a deputy could be all the more effective in guarding the public interest if she or he could also file the public interest lawsuit when such is called for. But that’s pretty unheard-of.

However, one legislator moonlighting as a lawyer is Jorge Alberto Rosas, of the Rosas & Rosas law firm, and until recently the president of the National Assembly’s Credentials Committee, which hears complaints of corruption against Supreme Courts magistrates and several other classes of public officials. His creativity at coming up with reasons not to investigate complaints is something of a legend.

It turns out that Rosas & Rosas incorporated the money laundering shell companies for Odebrecht, and that the company’s seized records indicated millions of dollars going into that law firm. So lawyers at the firm were called in for questioning and it turned out that the legislator handled that account and was paid at least $1.3 million for doing so. Not long after than came to light he stepped down as head of the Credentials Committee. But so far as is known Rosas is neither charged with any crime nor under investigation.

Panama stands in contrast to most other Latin American places where Odebrecht did business, where politicians are being prosecuted.

In Peru it may lead to the elimination of most of the political class. Former President Alberto Fujimori is in prison for other things, his daughter and political heiress Keiko Fujimori is accused of taking payoffs, former President Alejandro Toledano is an international fugitive on Odebrecht-related charges, and most recently his successor Ollanta Humala and ex-first lady Nadine Heredia have been jailed for taking from the Brazilian company.

In Colombia the right is in turmoil, as both the political parties of former President Álvaro Uribe and current President Juan Manuel Santos apparently took money from Odebrecht. Neither of these two men have yet to be personally charged, but one of Uribe’s former ministers has been and the high court has called in Santos to testify.

In Ecuador there has been a spectacular falling out on the left, with current President Lenín Moreno having turned on his Vice President, Jorge Glas, whom he has stripped of official tasks that include earthquake reconstruction due to allegations that Glas was on the take from the Brazilians. That has caused a falling out between former President Rafael Correa and Moreno. Factions of the left have chosen sides that pit human rights and anti-corruption activists from whose ranks Moreno comes against harder left supporters of Correa, some of whom accuse Moreno of selling out to the CIA over the Odebrecht affair.

Where, actually, are the CIA, and more importantly, the NSA at, about Odebrecht? The NSA would have records of any electronic money transfers or incriminating emails or telephone calls, and lots of time to figure out any that may have been heavily encrypted. For a long time there have been suspicions of the US government starting the whole Petrobras / Odebrecht scandal by feeding information to police and prosecutors.

Odebrecht does business in several US states, including in its American subsidiary’s base of Miami. The company gave to Jeb Bush’s foundation and former Miami Democrat boss Xavier Suarez’s political action committee, then received huge state and local contracts for things like Florida highways and the expansion of Miami International Airport. But by the US way of reckoning, the statutes of limitation would have run on those things. (Perhaps not on laundering any proceeds, though.) Still, if Americans are in a big argument about foreign influence in US elections one might think that somebody in the mainstream of politics or mass media would have pointed out that the Russians are far from the only suspects over the years, citing Odebrecht as well as several Middle Eastern governments as examples to look into en route to reform legislation.

Panama’s legal response to the Odebrecht affair mostly derives from a Foreign Corrupt Practices Act case that Washington brought against the Brazilian company, wherein it alleged some $59 million paid to foreign politicians or their entourages in 12 countries, including $6 million to Ricardo Martinelli’s two sons. But a Swiss money laundering investigation put the two Martinelli sons’ take at more than $20 million. There is a perception that authorities here are taking the lower US figures and such evidence as the United States feeds Panama because Washington still wants things out of Varela and is not prepared to turn on him at this point.

Bernal warns of a possible violent explosion, but the anti-corruption protests, while growing again, still remain divided and relatively small. The larger ones are led by the hard left FRENADESO. As the 2019 elections draw inexorably closer the mainly middle class and professional coalition of which Bernal is a part would seem vulnerable to splintering over rival presidential campaigns. Figure from the polls that President Varela may not be on the verge of ouster by popular demand, but that his Panameñista Party will not retain the presidency in the next elections. But so far there is no groundswell of support for any particular alternative.

So figure that if the attorney general says that nothing much happened and if it did she’ll tell us after the court cases are over, nobody will believe her. But nobody seems ready to die to call her bluff, either.


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