Judge Baloisa Marquínez presiding over the first day of the Lava Jato money laundering trial. Photo taken from an official court video.
NOW the judge takes up the Lava Jato case
by Eric Jackson
Odebrecht was a notorious thug company from way back. In 1992 it was revealed to be the clearinghouse for Brazilian public works contractors sharing out the graft opportunities in a bid-rigging and kickbacks scandal the led to the impeachment and ouster of then Brazilian president Fernando Affonso Collor de Mello. The company said it had cleaned up its act but by 2014 it was embroiled in a scandal about offshore oil rigs for Brazil’s Petrobras state-owned energy company. It was the same stuff – kickbacks from inflated construction contracts. By then, though, Odebrecht had become much more multinational, with Brazilian government backing to do so, and much more sophisticated and global about how they did things.
Computers and records disappeared, but witnesses say that the company’s “structured operations” – bribes and money laundering – were largely run through Panama. In Brazil this became a central part of the “Car Wash” – Lava Jato – investigation, a long-running process that was itself plagued by corruption, with bribes paid to protect certain people and on the other hand falsely accuse others in Brazil and elsewhere. The US Department of Justice issued a blistering report, politicians and governments fell in several Latin American countries, banking investigations were begun in several bank secrecy jurisdiction and in 2016 two major things happened:
1. Somebody in the Panamanian law firm Mossack Fonseca dumped a huge amount of the computer data on a German newspaper and an international team of journalists was formed to review the information, and
2. Brazilian prosecutors kept running across operations, companies and accounts involving Panama.
A big problem was that the Panamanian administration at the time and at least two previous ones were seriously compromised. The wheels of Panamanian justice were made sticky.
In 2017 Brazilian authorities shared what they knew about the Panamanian end of things with their counterparts here and an investigation began here. The probe went slowly and fitfully, with some boosts from courts in Spain and Switzerland, and most probably some quiet transfers of information from the United States. Now, more than six years later, 32 people sit in the defendants’ dock to face money laundering charges. Basically they are accused to setting up international chains of shell companies with secret numbered bank accounts to conceal bribery on a massive scale, including but not limited to payoffs to Panamanian officials.
Now this can all be said to be very irregular, slow and complicated. Motions have been and will be made on such grounds, and these could be helped by Panamanian criminal procedure’s lack of a tolling statute – the stopping of calendar counting during delays caused by the defendants for purpose of calculating the statute of limitations.
Judge Marquínez, however, has been developing a no-nonsense reputation for frivolous and dilatory defense tactics. (If you read Ricardo Martinelli’s newspapers, that of course makes her a ruthless criminal “hanging judge.”)
The New Business case, about the laundering of public works contract kickback proceeds for Martinelli to buy three newspapers, and this case come against a backdrop of Panamanian prosecutors rarely being able to win a major money laundering case. These trials are being looked at by officials of various nations to determine whether Panama is, notwithstanding promises, really serious about dealing with financial crimes. Financial sanctions against Panama may not be explicitly riding on these trials, but the ways that they are conducted and their outcomes likely will affect this country’s standing in many other important places.
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