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Latin America and the Panama Papers

President Varela’s minister without portfolio — now on a leave of absence — Ramón Fonseca Mora.

Latin American exposure: The Panama Papers

by Jessica Cruz, Melanie Landa & Christopher Razo — Council on Hemispheric Affairs
editing, added content and hyperlinks by Eric Jackson

On April 3 Suddeutsche Zeitung, Germany’s largest daily newspaper, leaked 11.5 million files from the database of the Mossack Fonseca law firm whose headquarters is in Panama City, Panama. The files exposed financial dealings of some of the world’s richest and most powerful individuals including a number of leaders in Latin America. The sources were shared with the International Consortium of Investigative Journalists (ICIJ) and a network of international partners including the BBC and the Guardian. The millions of documents were shared after a yearlong investigation conducted by the German newspaper on the Mossack Fonseca law firm.i The documents included financial records, legal documents such as passports, and correspondences dating back over 40 years.ii These files reveal offshore accounts of current and former world leaders as well as individuals with close ties to political figures and business moguls around the globe. Some of the well-known and shocking names included in the files were the president of Russia, Vladimir Putin, Britain’s Prime Minister, David Cameron, and the president of Argentina, Mauricio Macri. iii The files also reveal that it is not only politicians who are found to be tied to the alleged laundering of funds but professional football star, Lionel Messi and the former head of European football’s governing body UEFA, Michael Platini as well. Along with those who are allegedly involved with this corruption scandal are Latin American leaders from Argentina, Brazil, Ecuador, Mexico, Panama, Peru, and Venezuela.

Concerns for Latin America

Concerns are high for Latin America not only because the law firm whose files were leaked was based in Panama, but because these files exposed the offshore tax-exempt accounts of a number of Latin American leaders and politicians from all throughout the region. In Argentina the recently elected President Mauricio Macri was linked to the offshore company Fleg Trading Ltd, which was incorporated in the Bahamas in 1998 and dissolved in January 2009. Macri, however, claims he did not recognize any financial ties with the company that would have existed during his time as mayor of Buenos Aries. Following the release of the Panama Papers, Macri’s official spokesman Ivan Pavlovsky stated that the Argentine president did not list Fleg Trading Ltd as an asset because he had no participation in the company and declared that Macri was not a shareholder.iv Along with Macri, former Buenos Aires Finance Minister Nestor Grindetti was linked to the Panama Papers scheme, but he refused to make any comments on such accusations.v The leaked documents also allege that Mossack Fonseca’s US lawyers at its Las Vegas office helped to cover up an Argentine business scandal.

The documents also included Juan Armando Hinojosa, known as the “favorite contractor” of Mexican President Enrique Peña Nieto. The ICIJ reports that in the summer and fall of 2015 Mossack Fonseca aided Hinojosa in creating three trusts that apparently took over accounts valued to $100 million. Hinojosa was mentioned as the primary beneficiary, along with members of his immediate family. It is stated that his network is multifaceted, with units in New Zealand, the United Kingdom and the Netherlands. Hinojosa has not commented on the report.vi Other documents suggest that the affair will reach into Mexico’s state-owned Pemex oil company.

The document also names the former governor of Ecuador’s Central Bank, Pedro Delgado, for involvement in money laundering. Delgado is a second cousin of President Rafael Correa and is a fugitive in the United States who is facing an extradition request by Ecuadorian authorities for forging a university degree. As others accused, Delgado has not provided any comments on his involvement in the Panama Papers.vii

The former head of Peruvian intelligence, Cesar Almeyda, was also cited in the documents. Almeyda was imprisoned for eavesdropping in 2006. In 2010 he was investigated for alleged overseas bank accounts that were in tax havens. ICIJ has not been able to contact Almeyda or any officials that can provide a statement on his behalf.viii The spread of the implications caused by the release of the papers can be seen even in the upcoming Peruvian presidential elections, with its first round of voting on April 10. Also accused in the Panama Papers is Peruvian presidential candidate, Keiko Fujimori. Her father, Alberto Fujimori, the former Peruvian president, is now in jail for embezzlement and corruption. TeleSur, a pan–Latin American television network, notes that Fujimori’s financial backers used Mossack Fonseca to set up their offshore accounts.ix Most — but not all — of Peru’s major presidential candidates in this year’s election have been named in the leaked documents. It could possibly delegitimize the electoral process. Aside from Keiko Fujimori, candidate Pedro Pablo Kuczynsky was cited for recommending Francisco Pedro Mesones for president of the Council of Ministers. Another candidate and former president, Alan García, was linked via mention of the leader of his political party (APRA) in the Panama Papers. Harvard University’s Dr. Alberto Vergara stated that it is highly likely in the coming weeks that more information regarding these candidates’ involvement will be seen as the electoral process continues.x

In Venezuela those involved in the Panama Papers include former security chief of the Venezuelan presidential house, Adrian José Velazquez Figueroa; the former head of the Treasury Office, Claudia Díaz Guillén; and the former commander in chief of the Venezuela Armed Forces, Víctor Cruz Weffer.xi xii

The former head of the Panama state-owned bank Caja de Ahorros and ex-VP of Tocumen International Airport’s authority, Ricardo Francolini, has also been named. The ICIJ reports that Francolini is accused of accepting a $500,000 bribe for a failed irrigation project during former President Ricardo Martinelli’s administration.xiii Martinelli has a history of corruption and embezzlement accusations. A previous Council on Hemispheric Affairs article about corruption in Panama contends that President Varela had “vowed to tackle issues of corruption from the previous administration, and plans to do so by improving government transparency.”xiv The recent leaking of the Panama Papers adds to the woes of the Central American country, which for years has been struggling with a plethora of corruption scandals.

Mossack Fonseca’s history of alleged corruption

The Panama Papers is not the first investigation against the Panamanian law firm. At the end of this past January, apartments registered by Mossack Fonseca’s Brazilian branch were raided as part of the Operation Lava Jato investigation of the Brazilian Petrobras bribery scandal and associated money laundering. Brazilian prosecutor Carlos Fernando dos Santos Lima claimed that the law firm was a criminal organization responsible for the money laundering, bribery, secret offshore accounts and shell companies.xv

Despite these accusations, the law firm declared that there was no involvement in illegal actions that might pertain to Mossack Fonseca. One of the firm’s founders, Ramón Fonseca Mora, stated that those cited in the release of such documents were not direct clients of the law firm. Furthermore, he explained that Mossack Fonseca works with banks and lawyers that, subsequently, work as intermediaries to those involved in the scandal. “We form the corporation and our clients’ resale it; and nothing more,” Fonseca Mora said.xvi CNN released an article explaining that “the documents do not necessarily indicate illegal activity. But shell companies and offshore accounts can be used to mask the origin of financial transactions and ownership.”xvii Fonseca Mora, one of the firm’s founders, has served as the president of the Panameñista Party and is on a leave of absence as a minister without portfolio in President Varela’s cabinet.

President Varela said that his government would proceed with investigations of the law firm and that they would cooperate, nationally and internationally, by providing any information that might be of use for the investigations.xviii According to a statement by the Panamanian Embassy, “In fulfillment of Panama’s commitments to FATF-GAFI and in compliance with the roadmap set up by the Committee Against Money Laundering, Law 23 of 2015 was adopted in order to strengthen our financial system against money laundering and terrorist financing, leading to our nation’s withdrawal from the FATF-GAFI Grey List.”xix Further declarations from the Panamanian government would be of great relevance, given the fact that the leaks included names of drug trafficking organizations and groups with alleged terrorist links that have been blacklisted by the United States.xx

What’s next?

Now that the door is open, new revelations are bound to come forward to expose the depth of the Panamanian corruption scandal. The release of the Panama Papers is merely chapter one of a much more serious and larger case. There are assumptions that a number of Americans are bound to be involved and such information may be disclosed as new developments occur. Further spurs or revelations may include the exposure of a number of Americans involved in land speculation, building booms, and canal exploitation. Although there has been no statement from the US State Department, the US Department of Justice is reviewing the Panama Papers. Spokesman Peter Carr, public affairs specialist for the US Department of Justice, stated, “the US Department of Justice takes very seriously all credible allegations of high level, foreign corruption that might have a link to the United States or the US financial system.”xxi

Given the close diplomatic ties between the United States and Panama, it may be in the US interest to investigate the firm — which has offices in the United States — as a whole. The disclosure of the Panama Papers makes Panama the stage for history’s largest leak of confidential files that shed light on corruption. Much is still unknown. However, the exposure of the vast network involved in the Panama Papers should alert Latin America as a whole. Corruption has not been a small issue in the Western Hemisphere. It is a vicious cycle across the whole region. As new details emerge, Latin America’s stability may be affected.


[i] http://panamapapers.sueddeutsche.de/articles/56febff0a1bb8d3c3495adf4/

[ii] Lyengar, Rishi What to know about the Panama Papers leak, TIME magazine April 4, 2016

[iii] http://www.euronews.com/2016/04/04/panama-papers-world-leaders-caught-up-in-biggest-financial-leak-in-history/

[iv] https://panamapapers.icij.org/the_power_players/

[v] Ibid

[vi] https://panamapapers.icij.org/the_power_players/

[vii] Ibid

[viii] Ibid

[ix] http://www.telesurtv.net/english/news/Panama-Papers-Macri-Implicated-in-Offshore-Tax-Haven-Scandal-20160403-0026.html

[x] “Peru’s 2016 Presidential Elections,” Washington Office on Latin America, April 4, 2016.

[xi] https://panamapapers.icij.org/the_power_players/

[xii] http://m.libertaddigital.com/economia/2016/04/04/siete-claves-politicamente-incorrectas-sobre-los-papeles-de-panama-1276571156/

[xiii] https://panamapapers.icij.org/the_power_players/

[xiv] Jessica Cruz and Melanie Landa, “Country Brief: Panama,” Washington Report on the Hemisphere, Volume 36: Issue 2, 8.

[xv] http://www.prensa.com/judiciales/Varela-compromete-cooperar_0_4452304843.html

[xvi] http://www.prensa.com/judiciales/Varela-compromete-cooperar_0_4452304843.html

[xvii] http://www.cnn.com/2016/04/04/world/panama-papers-explainer/index.html?adkey=bn

[xviii] http://www.prensa.com/judiciales/Varela-compromete-cooperar_0_4452304843.html

[xix] http://www.embassyofpanama.org/panamanian-government-reaffirms-its-commitment-to-reforms-to-strengthen-transparency-in-its-legal-services/

[xx] [xx] http://www.cnn.com/2016/04/04/world/panama-papers-explainer/index.html?adkey=bn

[xxi] http://theweek.com/speedreads/616539/justice-department-reviewing-panama-papers-links

[Editor’s note: An earlier version of this article was published on the Council of Hemispheric Affairs website.]


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Editorial, Do we keep the financial crimes sector?

Has this notice prompted some people to flee from Panama in great haste? That would be a good thing.

Panama needs to decide

The details are funny for those with the properly perverse sense of humor, horrifying for those with gored oxen, an apparent victory for anti-corruption activists and a sad defeat for Panama’s reputation in the world. The big fuss is about “The Panama Papers,” some 11.5 million documents hacked out of the Mossack Fonseca law firm’s data trove, which will be dribbling out for months, leading to further investigations and much commentary. If some pundit comes on your video screen and tells you how she or he is shocked, turn that mind rot off. That a leak of this magnitude happened was unexpected. The firm’s activities for the sorts of clients it has should surprise nobody who knows anything about Panama and its “offshore asset protection” rackets.

Dozens of public figures, including a number of heads of states and many other lesser or former government officials, have either been directly named or implicated through revelations about close relatives that suggest that these family members were being used as money laundering fronts. Some of the clients’ activities were legal but unseemly, but mostly these people were concealing money for the purpose of tax evasion or hiding the proceeds of public corruption.

This leak comes on the heels of revelations from Brazil about the roles that Mossack Fonseca and Panamanian shell companies have played in that country’s widespread public corruption. At the center of one more scandal that might lead to a Brazilian president’s impeachment, once again we see the Odebrecht group of companies. Were convicted and imprisoned former CEO Marcelo Odebrecht’s emails kept on a server in Panama? Those are “unavailable.” Did Odebrecht bribe money make its way through Panama on a circuitous route to corrupt officials of the Brazilian state-owned oil company Petrobras? The Panamanian lawyers who designed those dodges plead that everything that they did was legal under Panamanian law. Are several recent or current Odebrecht contracts with Panamanian government entities questionable? We haven’t had an investigation, just tortured logic to conclude that nothing is amiss.

Yes, President Varela proclaims “zero tolerance” for anything that Panamanian law doesn’t tolerate. Yes, he presented legislation to bar public contracts with companies convicted of corrupt acts — but only if that corruption is condemned by a Panamanian court. Meanwhile he gave Mossack Fonseca partner Ramón Fonseca Mora a leave of absence from his government post as minister without portfolio in the Varela cabinet in order to “fight for his name.” So far it’s a matter of a politically clumsy president doing the funky ostrich. Nobody will believe the denials. Nobody will be fooled by the distractions.

It is not, however, the Panamanian government’s misdirections that should be of greatest public concern. It’s countries like Russia, China, the United Kingdom, the United States, Saudi Arabia, Israel, Pakistan, Peru, Argentina and Spain (etc.) who will have an interest in diverting attention from their own corruption by pointing the finger at Panama. We saw how bad sanctions can be in the years leading up to the 1989 US invasion. Battering Panama again would be the easiest way out for some of the many countries whose leaders’ corrupt behavior has been exposed or suggested.

At long last, Panama has to decide whether it wants a paper economy based on the pathologies of the industrialized world. Relatively few Panamanians benefit from this kind of economic activity, but the prices we may and sometimes already do pay — inablity to get justice when we are harmed by anonymously held companies, international blacklists and graylists that slow or block financial transactions with Panama, difficulties for Panamanians seeking visas from other countries and the disappearance of foreign investment — are high.

We should end banking secrecy, corporate secrecy, “mirror companies” with names that are misleadingly similar to those of established firms in other countries, the unaccountability of lawyers and law firms and the general perception that we are a nation of accomplices to the world’s financial crimes. Mr. Fonseca should definitively go from the cabinet, but that would only be meanigful if a way of life leaves Panama at the same time. We just can’t afford that stuff.


Bear in mind…


I always clean before the cleaning lady comes. If not, when I come home, I can’t find anything. Cleaning ladies are always hiding things you leave out.
Celia Cruz


I shall do nothing with malice. What I deal with is too vast for malicious dealing.
Abraham Lincoln


You measure democracy by the freedom it gives its dissidents, not by the freedom it gives its assimilated conformists.
Abbie Hoffman


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Festival de la Pollera Conga — Portobelo 16 Abril

La pollera conga, una expresión de la cultura afrocolonial de Panamá.

Festival de la Pollera Conga

El próximo sábado 16 de abril la histórica población de Portobelo será el escenario propicio para el III Festival de la Pollera Conga, una de las máximas expresiones vernaculares que resaltan la cultura afrocolonial panameña, organizado por la Fundación Portobelo, el Grupo Realce Histórico y el Municipio de Portobelo, en alianza con la Autoridad de Turismo de Panamá y el Instituto Nacional de Cultura.

Este un evento cultural y turístico bienal que busca reforzar la conservación, el desarrollo y la divulgación de las ricas tradiciones de la región, enfocándose especialmente en el invaluable aporte que ha tenido la mujer negra y cimarrona en la historia de estas poblaciones y en la supervivencia y preservación de todas las manifestaciones que componen la llamada cultura conga, desde la época de la esclavitud.

El III Festival de la Pollera Conga ofrecerá un día de actividades que incluirá venta de bebidas y comidas propias de la costa colonense, desfile acuático de barcas de cada población participante, el desfile de polleras congas por las calles del pueblo, el gran encuentro de grupos congos con 15 delegaciones invitadas en el escenario principal y un cierre con una rueda de tambores en la plaza central. Mayor información al 6677-0341 y festivaldelapolleraconga@gmail.com


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US State Department money laundering report on Panama


D6C4D486-6EBE-401E-95EA-F9BA307ACDF2_cx0_cy10_cw0_mw1024_s_n_r1Money laundering and financial crimes in Panama

by the US Department of State

Bureau of International Narcotics and Law Enforcement Affairs 2016 International Narcotics Control Strategy Report (INCSR) Report

Panama’s strategic geographic location; dollarized economy; status as a regional financial, trade, and logistics center; and lax regulatory system make it an attractive target for money launderers. Money laundered in Panama is believed to come in large part from the proceeds of drug trafficking due to the country’s location along major drug trafficking routes. Tax evasion, financial fraud, and corruption also are believed to be major sources of illicit funds. Numerous factors hinder the fight against money laundering, including the existence of bearer share corporations, a lack of collaboration among government agencies, lack of experience with money laundering investigations and prosecutions, inconsistent enforcement of laws and regulations, and a weak judicial system susceptible to corruption and favoritism. Money is laundered via bulk cash and trade by exploiting vulnerabilities at the airport, using commercial cover and free trade zones (FTZs), and exploiting the lack of regulatory monitoring in many sectors of the economy. The protection of client secrecy is often stronger than authorities’ ability to pierce the corporate veil to pursue an investigation.

Panama has 16 FTZs, including the Colon Free Zone (CFZ), the second-largest FTZ in the world.

For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: http://www.state.gov/j/ct/rls/crt/

Do FINANCIAL INSTITUTIONS engage in currency transactions related to international narcotics trafficking that include significant amounts of US currency; currency derived from illegal sales in the US; or illegal drug sales that otherwise significantly affect the US: YES

CRIMINALIZATION OF money laundering:

All serious crimes” approach or “list” approach to predicate crimes: List approach

Are legal persons covered: criminally: YES civilly: NO

Know-your-customer (KYC) rules:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Banks, savings cooperatives, savings and mortgage banks, and money exchanges; investment houses and brokerage firms; insurance and reinsurance companies; fiduciaries; casinos; FTZ companies; finance companies; real estate brokers; and lawyers


Number of STRs received and time frame: 1,005 in 2014

Number of CTRs received and time frame: 554,879 in 2014

STR covered entities: Banks, cooperatives, money exchanges, money transfer companies, casinos, betting and gaming companies, fiduciaries, insurance and insurance brokerage companies, the national lottery, investment and brokerage houses, real estate brokers, construction companies, precious metals and mining companies, pawnshops, and FTZs

money laundering criminal Prosecutions/convictions:

Prosecutions: 295 in 2015

Convictions: 251 in 2015

Records exchange mechanism:

With US: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

Panama is a member of the Financial Action Task Force of Latin America (GAFILAT). Its most recent evaluation can be found at: http://www.imf.org/external/pubs/ft/scr/2014/cr1454.pdf

Enforcement and implementation issues and comments:

In June 2014, in response to continued criticism, Panama developed an action plan to address its AML deficiencies, and the Government of Panama offered a high-level commitment to implement the necessary actions. In 2015, the government approved and passed legislation to criminalize money laundering, address countering the financing of terrorism (CFT), and cover designated non-financial businesses and professions (DNFBPs). A key factor contributing to Panama’s vulnerability to money laundering was that not all financial and non-financial sectors were subjected to regulations and supervision, which has now been addressed in legislation. Government agencies responsible for AML issues are under-resourced and often lack the personnel and training to investigate and prosecute complex money laundering schemes.

In 2015, Panama strengthened its legal framework, amended its criminal code, and passed a new AML/CFT law and other legislation enhancing the framework for international cooperation. Panama is beginning to develop an adequate legal framework for freezing terrorist assets and effective measures for customer due diligence to improve transparency. Panama passed a series of laws, which brought its legal regime more in line with international standards. Law 10 and Law 34 amend the criminal code by adding predicate offenses that typify terrorist financing and money laundering. Law 11 addresses provision of international legal cooperation and assistance in criminal matters. Law 23 of 2015 includes many new reporting entities, in particular a broad array of DNFBPs as well as money service businesses. For the banking sector, the law sets out key customer due diligence requirements. The government also amended or adopted new regulations pertaining to the identification of suspicious activity by banks and other entities. Additionally, Panama’s financial intelligence unit, the UAF, has significantly improved its analytical capacity under the leadership of its new director. Panama has started to implement the various AML/CFT laws; however, implementation efforts are in early stages.

Panama’s Law 18, 2015, which came into effect in December 2015, provides for the custody of bearer shares. The law will severely restrict the use of bearer shares; companies still using these types of shares must appoint a custodian and maintain strict controls over their use. Bearer shares issued before the law was approved must be replaced with nominative shares or handed over to a custodian by December 2015. Until the law is fully implemented, financial institutions face a risk associated with clients who maintain bearer share companies. Additionally, only banks have enhanced due diligence procedures for foreign and domestic politically exposed persons (PEPs).

The judicial branch’s capacity to successfully prosecute and convict money launderers remains weak and judicial branch employees remain susceptible to corruption. Panamanian officials have given assurances they will complete the transition to a US-style accusatory judicial system in all provinces, which began in September 2010, by 2016. All known money laundering convictions are tied to bulk cash cases with an obvious connection to a predicate crime. Panama does not adequately track criminal prosecutions and convictions specifically related to money laundering. The numbers of prosecutions and convictions shown in this report represent partial figures from the drug and anti-corruption prosecutors for 2015, because not all provinces reported figures.

The Panama Customs Authority’s collaboration with US agencies increased passenger scrutiny and notable seizures of undeclared cash at Tocumen International Airport. However, regional airports are undergoing renovation and gaining prominence and could be new channels of access for money launderers. Although Panamanian Customs can identify potential trade-based money laundering with information from the Trade Transparency Unit, a regional trade data-sharing entity, it can only levy fees for customs tax evasion.

The CFZ remains vulnerable to illicit financial activities and abuse by criminal groups, due primarily to weak customs enforcement and limited oversight of trade and financial transactions. Bulk cash remains easy to introduce into the country by declaring it is for use in the CFZ, but no official verification process exists to confirm its end use for lawful business in the free zone. The lack of integration of the CFZ’s electronic cargo tracking system with Panamanian Customs hinders timely analysis. The CFZ administrator, appointed in July 2014 by the president, has reinstated the CFZ’s Office of Money Laundering Prevention and is aiming to expand its control over CFZ businesses and transactions. Under Law 18, 2015, the CFZ comes under the supervision of the Intendencia, the body within the Ministry of Finance that supervises DNFBPs.

On October 22, 2013, the Government of Panama signed a case-sharing agreement with the United States, creating a bilateral committee to manage $36 million of forfeited assets for use by the Panamanian government to strengthen AML practices. However, there is limited cooperation and communication among the various government agencies to propose and approve projects to use the funds, and the Government has not finalized a process to disburse the funds. The US and Panamanian governments jointly administer these shared funds to address AML issues.

Panama must continue to strengthen the prosecutor’s office and the judicial system, increase transparency in financial and trade networks, and enforce the legal framework approved to freeze terrorist assets. The government should criminalize tipping off to ensure the integrity of STR reporting. Panama should also work diligently to fully implement its new laws and regulations and ensure all relevant agencies and departments have adequate resources to effectively fulfill their responsibilities. The government’s action plan is providing a roadmap for Panama to achieve these goals.


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Avnery, Under the lime trees

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Yemenis search for belongings in the wake of Saudi air strikes on their village.

Under the lime trees

by Uri Avnery — Gush Shalom

One of the most famous lines in German poetry is “Don’t greet me under the lime trees.”

The Jewish-German poet Heinrich Heine asks his sweetheart not to embarrass him in public by greeting him in the main street of Berlin, which is called “Unter den Linden” (“Under the Lime Trees”).

Israel is in the position of this illicit sweetheart. Arab countries are having an affair with her, but don’t want to be seen with her in public.

Too embarrassing.

The main Arab country in question is Saudi Arabia. For some time now, the oil kingdom has been a secret ally of Israel, and vice versa.

In politics, national interests often trump ideological differences. This is so in this case.

The area referred to by Westerners as the “Middle East” is now polarized into two camps, led respectively by Saudi Arabia and Iran.

The northern arc consists of Shiite Iran, present-day Iraq with its Shiite majority, the main Syrian territory controlled by the Alawite (close to Shiite) community and Shiite Hezbollah in Lebanon.

The Southern bloc, led by Sunni Saudi Arabia, consists of the Sunni states of Egypt and the Gulf principalities. In a shadowy way, they are connected with the Sunni Islamic Caliphate, a/k/a Daesh or Isis, which has lodged itself between Syria and Iraq. Except for Egypt, which is as poor as a mosque mouse, they are all stinking rich with oil.

The northern arc is supported by Russia, which just now has given the Assad family in Syria a massive military boost. The southern bloc has been supported until recently by the US and its allies.

This is an orderly picture, as it should be. People around the world don’t like complicated situations, especially if they make it difficult to distinguish between friends and enemies.

Take Turkey. Turkey is a Sunnite country, formerly secular but now ruled by a religious party. So it is logical that it quietly supports Daesh.
Turkey also fights against the Syrian Kurds, which fight against Daesh, and who are allied with the Kurdish minority in Turkey, which is considered by the Turkish government as a deadly menace.

(The Kurds are a separate people, neither Arab nor Turkish, who are divided between Iraq, Iran, Turkey and Syria, and generally unable to unite. They are mostly Sunnis.)

The US is fighting against Assad’s Syria, which is supported by Russia. But the US is also fighting against Daesh, which is fighting against Assad’s Syria. The Syrian Kurds are fighting against Daesh, but also against Assad’s forces. The Lebanese Hezbollah strongly supports Syria, a traditional enemy of Lebanon, and keeps the Assad regime alive, while fighting against Daesh, side by side with the US, a deadly enemy of Hezbollah. Iran supports Assad and fights against Daesh, side by side with the US, Hezbollah and the Syrian Kurds.

Can’t make sense of this? You are not alone.

Recently the US has changed its orientation. Until then, the picture was clear. The US needed the Saudi oil, as cheaply as the King could supply it. It also hated Iran, since the Shiite Islamists threw out the Iranian Shah of Shahs, an American stooge. The Islamists captured the American diplomats in Tehran and held them as hostages. To get them out, the US provided the Iranian army with weapons, via Israel (this was called Irangate). Iran was at war with Iraq, which was under the Sunni dictatorship of Saddam Hussein. The Americans supported Saddam against Iran, but later invaded Iraq, hanged him and effectively turned Iraq over to Iran, their deadly enemy.

Now the US is having second thoughts (if all this mess has much to do with “thoughts”). Its traditional alliance with Saudi Arabia against Iran does not look so attractive anymore. The US dependence on Arabian oil is not so strong as it was. Suddenly the Saudi religious tyranny does not look so much more attractive than the Iranian religious democracy and its beckoning market. After all, against the 20 million native Saudis there are 80 million Iranians.

So now we have a US-Iranian agreement. Western sanctions on Iran are being lifted. It looks like the beginning of a beautiful friendship, threatening to leave the multitudes of Saudi princes seething with anger and shaking with fear.

Where is Israel in this mess? Well, it’s a part of the mess.

When Israel was established in the middle of a war with the Arabs, the government favored something called “the alliance of minorities.” This meant cooperation with all the peripheral factors in the region: the Maronites in Lebanon (the Shiites were disdained and ignored), the Alawites in Syria, the Kurds in Iraq, the Copts in Egypt, the rulers of Iran, Ethiopia, South Sudan, Chad, and so on.

There were indeed some loose connections with the Maronites. The Shah’s Iran became a close if half-secret ally. Israel helped the Shah to build his secret police, and the Shah allowed Israeli officers to pass through his territory in order to join and instruct the Kurdish rebels in North Iraq – until, alas, the Shah made a deal with Saddam Hussein. The Shah also became a partner in the oil pipeline that brought Persian oil from Eilat to Ashkelon, instead of going through the Suez Canal. (I once spent a day building that line, which is still a joint Israel-Iranian venture, subject to arbitration.)

Now the situation is quite different. The Shiite-Sunni divide (about the succession of the prophet Muhammad), which has been slumbering for many generations, has come to the fore again, serving, of course, very mundane worldly interests.

For Saudis, their competition with Iran for hegemony in the Muslim world is vastly more important than the old fight with Israel. Indeed, years ago the Saudis published a peace plan that resembles the plans put forward by Israeli peace forces (including my own). It was accepted by the Arab league but rejected by Sharon’s government and then totally ignored by successive Israeli governments.

Binyamin Netanyahu’s advisers boast that never has the geopolitical situation of Israel been better than it is now. The Arabs are busy with their quarrels. Many Arab countries want to strengthen their secret ties with Israel.

The ties with Egypt are not even secret. The Egyptian military dictator openly cooperates with Israel in strangling the Gaza Strip with its close to two million Palestinian inhabitants. The Strip is ruled by Hamas, a movement that the Egyptian government claims is connected with its enemy, Daesh.

Indonesia, the largest Muslim country in the world, is close to having open relations with us. Israel’s political or economic ties with India, China and Russia are good and growing.

Tiny Israel is considered a military giant, a technological power, a stable democracy (at least for its Jewish citizens). Enemies like the BDS movement are mere irritations. So what’s bad?

This is where we return to the lime trees. None of our secret Arab friends want us greet them openly. Egypt, with which we have an official peace treaty, does not welcome Israeli tourists anymore. They are advised not to go there.

Saudi Arabia and its allies do not want any open and formal relations with Israel. On the contrary, they continue to speak about Israel as during the worst stages of Arab rejectionism.

They all quote the same reason: the oppression of the Palestinian people. They all say the same: official relations with Israel will come only after the end of the Israeli-Palestinian conflict. The masses of the Arab peoples everywhere are far too emotionally involved with the plight of the Palestinians to tolerate official connections between their rulers and Israel.

These rulers all embrace the same conditions, which were put forward by Yasser Arafat and included in the Saudi peace plan: a free Palestinian state side by side with Israel, mutually agreed borders based on the June 1967 lines with minor exchanges of territory, an “agreed” return of the refugees (“agreed” with Israel, meaning at most a symbolic return of a very limited number).

Israeli governments have never responded to this plan. Today, under Binyamin Netanyahu, they are further from these peace conditions than ever. Almost every day our government enacts laws, enlarges settlements, takes measures and makes declarations that push Israel further away from any peace that Arab countries could accept.

Future generations will look at this situation with wonderment.

Since the foundation of the Zionist movement, and most certainly since the creation of the State of Israel, Israelis have dreamt of overcoming Arab resistance and inducing the Arab world to accept the “Jewish and democratic” State of Israel as a legitimate member of the region.

Now this opportunity is presenting itself. It can be done. Israel is invited to the Arab table. And Israel ignores the opportunity.

Not because Israel is blind, but because the occupied Palestinian territories and more settlements are more important to them than the historic act of making peace.

That is why no one wants us to greet them under the lime trees.


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¿Wappin? Fools and such…

Alice Playten and her ride.

¿Wappin? Fools and such…

Frankie Lymon & the Teenagers – Why Do Fools Fall In Love?

Alice Playten – Pizza Man

Billie Holiday – I’m A Fool To Want You

The Beatles – The Fool on the Hill

Monchy y Alexandra – Dos Locos

Peter Tosh – Reggae Mylitis

Bob Dylan – Idiot Wind

Natalia Lafourcade – Nunca es Suficiente

Javiera Mena – Esquemas Juveniles

Lord Cobra – Fool Them

Ray Stevens – Guitarzan

Héroes Del Silencio – Maldito Duende

Mad Professor – Inverted Minds

Elvis Presley – Devil in Disguise

The Rolling Stones – Fool To Cry


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SENAFRONT firefight with Colombian paramilitary

Alto Limon
The Panamanian side of a Colombian-Panamanian border outpost at Alto Limon. Photo by SENAFRONT.

Firefight on the Colombian border

by Eric Jackson

On the morning of March 31 a National Frontier Service (SENAFRONT) outpost on the Colombian border was fired upon with rifles, mortars and grenades from the Colombian side. The Panamanian border forces returned the fire with rifles and nearby Colombian forces pursued the attackers. The clash lasted about 15 minutes and on the Panamanian side at least nobody was hurt. The incident took place at Alto Limon, a spot of the border where both Panama and Colombia station guards on their respective sides.

It was part of a day of violence accompanying an “armed strike” by Colombia’s Clan Usuga, an offshoot of the right-wing paramilitary movement that has long had a presence in the area. Literature calling for the strike cited political and economic complaints against the Colombian government in Bogota, but the official narrative of both the Panamanian and Colombian governments is that the Clan Usuga is merely a criminal gang without political motives. The Clan Usuga, which emerged out of the earlier Urabeños and before that the AUC and ACCU paramilitaries, does engage in drug trafficking, illegal gold mining and illegal logging, mostly on the Colombian side of the border but also in Panama. Panamanian police have shot it out with them on the Costa Arriba of Colon and rounded up some of their smugglers and money laundering operatives in the Panama City metro area. The politics of the organization aren’t so much about ideology as about rural warlords carving out turf on the Colombian periphery, a chronic problem for the Bogota government ever since Colombia’s independence from Spain. This challenge to central authority comes as Colombia’s Santos administration is moving to conclude peace talks with one leftist manifestation of rural wardlordism, the FARC guerrillas, and beginning talks with another leftist rebel band, the ELN guerrillas.

The armed strike shut down transportation, businesses and public services in several parts of eastern Colombia. Two police officers were killed. On the Panamanian side President Varela sent two National Aeronaval Service (SENAN) to the border area to strengthen defenses there.

Where the incident took place.


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Gandásegui, El crecimiento y la desigualdad


desigualdadEl crecimiento de “la desigualdad se está acelerando”

por Marco A. Gandásegui, hijo

Hace apenas seis años, en 2010, sólo 388 personas poseían la misma riqueza que la mitad más pobre de la población mundial. La mitad más pobre representa más de 3.5 mil millones de habitantes. Lo que es aún más increíble es que el año pasado –2015– sólo 65 personas concentraban la mitad de todas las riquezas en el mundo. Vivimos en un sistema concentrador y excluyente.

Según Winnie Byanyima, de Oxfam Internacional, “no podemos aceptar que la mitad más pobre de la población mundial posea la misma riqueza que un puñado de personas ricas que cabrían sin problemas en un autobús”. Señala que “la tendencia ascendente de la desigualdad se está acelerando. No podemos seguir permitiendo que cientos de millones de personas padezcan hambre mientras que las élites económicas absorben los recursos que podrían ayudar a estas personas”.

En el caso de Panamá, la situación es igual o peor. Según cifras gubernamentales, desde la invasión militar norteamericana de 1989, las remuneraciones de los trabajadores, profesionales y asalariados, en general, se duplicaron. En cambio, las ganancias de los empresarios se multiplicaron quince veces. Si un trabajador tenía un salario de 250 dólares al mes en 1990, era probable que en 2015 su salario podía ser era igual a 500 dólares. En cambio, si un empresario mediano tenía ganancias de 50 mil dólares al año en 1990, su ingreso sería 750 mil dólares en 2015.

Si incorporamos la inflación al cálculo, el trabajador estaría recibiendo, en la actualidad, un salario inferior al que tenía en 1989. Lo que las cifras no dicen en forma clara es que gracias a las políticas neoliberales (flexibilización, desregulación y tratados comerciales), el número de trabajadores ha disminuido significativamente. Mientras que en 1989 sólo el 10 por ciento de los trabajadores asalariados (incluyendo profesionales) eran informales (sin seguridad social o contrato de trabajo), en 2015 la cifra superaba el 40 por ciento. Es decir, conseguir un empleo formal remunerado en Panamá es muy difícil. Especialmente, si el que busca el empleo es un joven… y mujer.

La situación afecta también a los pequeños y medianos empresarios. Según cifras gubernamentales, cada vez hay menos panameños que incursionan en el mundo de la producción u otras actividades empresariales. Muchos emprendedores son expulsados del mercado por falta de crédito o por leyes que los desfavorecen. Sólo teniendo en cuenta el sector agropecuario, son miles de pequeños y medianos agricultores panameños que han tenido que abandonar sus fincas -incluyendo tierras, máquinas e infraestructura– por competencia desleal promovida por los gobiernos de turno.

El actual gobierno neoliberal cree, al igual que los anteriores, que con paliativos como “120 para 65” reducirá la pobreza y la creciente desigualdad. El equipo que trabaja con el presidente Varela conoce muy bien las cifras de la pauperización pero continúa aplicando medidas que sólo favorecen a los inversionistas más ricos del país y extranjeros. Ahora anuncia que pretende aumentar nuevamente la edad de jubilación, reducir el número de beneficiarios por asegurado y reducir los beneficios de los programas de salud. Obviamente los incrementos de las cuotas del Seguro y las medidas de austeridad beneficiarán directamente al 1 por ciento de los más ricos que ya se apropian sin trabajar del 30 por ciento de las riquezas del país.

La solución para estos problemas es técnicamente sencilla. Sin embargo, hay una estructura social que impide que se tomen las medidas políticas necesarias. Los más ricos son quienes controlan los resortes gubernamentales, son también quienes hacen y ejecutan las leyes. La primera medida consiste en que el 1 por ciento más rico, pague sus impuestos. En la actualidad, no pagan impuestos sobre la renta, sobre las ganancias, sobre las propiedades que poseen ni sobre el patrimonio que declaran.

En segundo lugar, los miles de millones de dólares que recibe el fisco panameño en concepto de rentas que el mundo paga por el uso de nuestra posición geográfica tiene que invertirse en actividades productivas, tanto en la industria como en el agro. El modelo de desarrollo productivo generaría un desarrollo generalizado a lo largo del país. El crecimiento económico tendría un impacto sobre todas las regiones.

Por último, lo más importante, se crearía una fuerza de trabajo (‘capital humano’) altamente calificada que sería empleada formalmente, produciendo enormes riquezas, y consolidando familias y comunidades, capaces de aplastar el crimen organizado (corrupción) y el ‘pandillerismo’ (clientelismo).


El autor es profesor de sociología de la Universidad de Panamá e investigador asociado del CELA.


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Greco, Belgian awful

The latest European terrorist attacks redefined nuclear security. Cartoon by Khalil Bendib.

Belgian awful

by Emily Schwartz Greco — OtherWords

The ISIS supporters who attacked Brussels killed more than 30 people and injured hundreds more. Bombings at the city’s airport and a subway station blew up the notion that measures taken after the Paris siege were keeping Europe safe.

The scariest part of this story is something that hasn’t happened yet and hopefully never will: an act of nuclear terrorism.

World leaders and the experts who track the whereabouts of fissile material should see Belgium’s ordeal as a wakeup call. Nuclear reactors — as the Fukushima disaster proved five years ago in Japan — aren’t worth the risks they pose based on operational safety considerations alone. But security questions also render them unacceptably perilous.

Consider this news out of Europe that you may have missed.

Didier Prospero, a security guard at a Belgian reactor, was murdered in his own home two days after the March attacks. The killers shot the slain man’s dog too. After Prospero’s children found his body, authorities determined that his security pass was missing.

This gut-wrenching tragedy is even more troubling than it sounds.

Belgian authorities discovered hours of secretly recorded video footage of a nuclear scientist during a raid on a suspected terrorist late last year. Khalid and Ibrahim El Bakraoui, two brothers believed to have participated in the Brussels attacks, planted a camera in the bushes outside that scientist’s home.

Perhaps the suspected terrorists intended to sabotage one of Belgium’s aging nuclear reactors, turning it into a weapon of mass destruction — a tactic our government says the 9/11 attackers contemplated.

Or the suspected terrorists may have aimed to steal radioactive material for a “dirty bomb,” a conventional explosive that contaminates the area where it detonates with radiation. Either way, they’ve raised the bar for guaranteeing security at nuclear power plants.

Even before the attacks on Brussels and Prospero’s murder, Belgium was under pressure from Germany, the Netherlands, and Luxembourg to address lapses at the 11 aging nuclear reactors that generate half its electricity.

There were good reasons to be alarmed. The Belgian nuclear agency’s computer system has been hacked, intruders have stolen and sabotaged equipment, and two employees at a Belgian reactor joined ISIS after quitting their jobs.

Hundreds of thousands of Europeans had signed a petition calling for independent inspections of Belgium’s worrisome reactors weeks by late January. Their goal was to “avoid the next Chernobyl,” based on reports of leaks and cracks, along with assorted sabotage attempts.

Fifteen years after 9/11, how are reactor safety and security on our side of the pond? Not so hot, as seven engineers employed by the Nuclear Regulatory Commission recently made clear.

Upon finding the NRC unresponsive to their concerns about a dangerous design flaw at all but one US nuclear reactor, they filed a public complaint using the same channels available to all private citizens.

It’s not clear who has the power to do something about this problem.

New York Governor Andrew Cuomo apparently doesn’t. He wants the Indian Point power plant located 30 miles north of the Bronx closed. That’s easier said than done, even though its two active reactors — rife with security and safety issues — are so near our country’s biggest city.

Plant operator Entergy downplayed one recent outage after blaming it on — get this — bird droppings.

If the company can’t protect Indian Point’s equipment against natural threats like avian excrement, how well would it handle terrorists?

Columnist Emily Schwartz Greco is the managing editor of OtherWords, a non-profit national editorial service run by the Institute for Policy Studies. OtherWords.org.


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American Fair, April 9 on the US Embassy grounds

Fair 1
Archive photo by Eric Jackson.

2016 American Fair

Saturday, April 9 from 8 am until noon

American Embassy grounds in Clayton

American Fair 2
Archive photo by Eric Jackson.

Although we have yet to get the details on this, the rule at past American Fairs is that they want to see some sort of ID to get through the gate, preferably a US passport. If you are not a US citizen they will still want to see ID and may ask you with which group that has a stand at the fair you are affiliated. It’s a fair for Americans and friends, and for community organizations which may or may not be “American” per se but seek to involve US citizens.


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