FCC, in trouble here, says that “clean-up” and “restructuring” are going well

Carlos Slim, the principal owner of multinational engineering and construction firm FCC, which is based in Spain. ITU archive photo.

Is getting caught at bribery just an untidy business mistake in Panama?

by Eric Jackson

On December 4 in the Panamanian embassy in Madrid, an executive of the FCC engineering and construction firm appeared and, by way of an electronic hookup with an anti-corruption prosecutor in Panama, described how public officials in Panama were paid bribes and kickbacks for public works contracts, and how the money for the transactions was laundered. The company was several months ago charged in Spain for paying bribes in Panama, but although prosecutors from here had flown to Spain to hear and see the evidence leading to the Spanish case, no charges had been filed here. It is expected that the testimony will be part of a plea bargain where FCC will admit guilt and pay some sort of penalty.

This deposition was specifically aimed at a Martinelli regime project, the Via Brasil Corridor. This was a $174.5 million contract that with the add-ons ended up costing $216.2 million. A comptroller general audit alleges a total overcharge of $41.7 million. Three individuals have been accused of crimes by Panama – former Minister of Public Works Federico José Suárez, the ministry’s former head of contracting Jorge “Churro” Ruiz and Spanish-Panamanian attorney Mauricio Cort. At this point Ruiz is in jail under preventive detention and the other two are out on bail.

Generally in consortia with other companies, sometimes the infamous Brazilian firm Odebrecht, FCC did a lot of public works in Panama. Controversies swirl around several of these.

FCC has a contract for the Ciudad de Salud complex, a half-billion-dollar project on the north side of Panama City that’s far behind delivery schedule. The company may not be entirely to blame for the delays, as the Varela administration was delaying payments to suppliers and contractors and that often translated into delayed work or deliveries, but in any case the Cortizo administration is threatening to rescind the contract.

A consortium of FCC and Odebrecht apparently won the bidding to extend the Metro commuter trains out to Tocumen Airport. Or did they? A rival bidder’s objection that the contracting process was rigged has received some serious attention from the Cortizo administration and that project looks likely to go out for bids again.

Prosecutors are also reportedly looking at several other Odebrecht contracts, including Phase III of the Cinta Costera. There were allegations from an attorney for Odebrecht that then Metro secretary Roberto Roy took a large bribe from FCC, but he has denied that and as the allegation in and of itself is hearsay it’s not clear if it is being investigated here.

Mexican billionaire Carlos Slim was the “white knight” who bought into and rescued a floundering FCC starting in 2014. The company says that its “clean-up” of previous problems, and a restructuring to surmount financial woes, are in the process of successful completion.


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