Two ex-presidents interrogated and get travel restrictions on one day

Does Ricardo Martinelli go to prison, or a psychiatric ward, over what prosecutors say is his purchase of a media empire with stolen funds while he was president? Or will it do for the government and prosecutors just to strip him of these assets, which are used to publish attacks on people in the legal system like this one and perhaps boost Martinelli’s return to the presidency in 2024. From the El Panama America Twitter feed, promoting yet another dubious legal argument.

Varela and Martinelli before the prosecutors

by Eric Jackson

On July 2, former presidents Juan Carlos Varela and Ricardo Martinelli made their ways to the Avesa Building on Via España to face interrogation by separate prosecutors on separate cases. The two men, once running mates, are bitter political enemies.

Martinelli, who was president between 2009 and 2014, didn’t testify. He asserted his right not to testify in a case in which he is suspected or accused, pursuant to Article 25 of the Panamanian Constitution. The one with questions for him that day was the organized crime prosecutor and the subject matter was “New Business.” As to the former president it’s a money laundering case at the moment.

The affair takes the name of one of a series of shell companies through which it is said that Martinelli, when he was president, diverted state funds to buy himself a media empire, the flagship of which is EPASA, the parent company for the El Panama America and La Critica newspapers. The allegation is of overpriced construction contracts for a legislative office building and the widening of the highway between Arraijan and La Chorrera, the excess skimmed and laundered through 18 companies or foundations, four individuals and a law firm and run through 24 accounts in 13 companies in four countries.

So, what’s Martinelli’s defense to that one? That since he prevailed on lower courts to throw out evidence of illegal eavesdropping and theft sent down to them by the Supreme Court, a principle in the 1904 US-Panama extradition treaty, “specialty,” protects him from being tried for any other crimes. Except that the 1904 treaty was not the only ground for Martinelli’s extradition from the United States and some of the other international agreements, like the Cyber Crimes Convention, don’t include specialty clauses.

In any case, the prosecutor ordered Martinelli not to leave the country and to report every 15 days.

The following day Martinelli had another appointment, for an indagatoria (sworn deposition in a criminal matter before a prosecutor and court reporter) about allegedly taking bribes from the notorious Brazilian construction conglomerate Odebrecht. He didn’t attend. A lawyer submitted a doctor’s note saying he couldn’t handle it.

A 2017 prosecutor’s chart outlining the alleged New Business scheme.

On the same day former president Juan Carlos Varela, who was president between mid-2015 and mid-2019, appeared for a second indagatoria session. He was questioned for eight hours. In his case it was before the anti-corruption prosecutor, over alleged bribery by Odebrecht.

Much of the evidence against Varela was developed by foreign courts or prosecutors, particularly but not only in Brazil and Spain. Worse in many ways is that the allegations came first and most prominently from Varela’s erstwhile minister without portfolio, Ramón Fonseca Mora. As in the notorious lawyer whose firm’s archives got pilfered and published and known as The Panama Papers. In the wake of that scandal Fonseca was sacked and prosecuted as Varela caved under international pressure. Fonseca responded with his tales of millions in Odebrecht payoffs and there has been corroboration by some of the people allegedly involved, who made plea bargains.

Varela’s defense was that he didn’t take a cent, that it was all a matter of legal corporate contributions to his Panameñista Party.

The prosecutor ordered Varela not to leave the country and to report every 30 days while this case is pending.

In mid-May the National Assembly’s Credentials Committee referred a number of criminal complaints that were made against Varela while he was president to the regular prosecutors of the Public Ministry. There has been some doubt about the seriousness of any public corruption prosecutions, as former Attorney General Kenia Porcell was forced out for improper communications with Varela and others about politically charged cases, and the new attorney general shifted the chief anti-corruption prosecutor to a new assignment in the Interior. At this point it does appear that the Odebrecht cases are going forward, against both Varela and Martinelli, and a host of others. Some of the “others” have made their deals with prosecutors to turn state’s evidence. Asamblea Nacional photo.

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