Panama inching toward indicting former President Martinelli on vast corruption charges
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Panama inching toward indicting former President Martinelli on vast corruption charges

Panama is nearing official indictments against former President Ricardo Martinelli on a series of historic allegations of corruption that would surpass the kleptocracy of the Central American country’s infamous military dictatorship.

In April, the country’s Supreme Court opened a criminal investigation against Martinelli over a $45 million school lunch program, alleging that public officials were bribed and handed out an inflated contract. Panama’s election authority lifted the prosecutorial immunity that elected officials such as Martinelli enjoyed, with a timeline of two months to bring charges, according to local media reports.

This week, the Supreme Court begins a second prosecution on allegations of illegal wiretapping and internet surveillance by Martinelli.

More accusations of misdeeds wait in the wings for Martinelli, as the indictments grow against former cabinet members and business associates. One case includes an almost cartoonish allegation of corruption in which a former business associate said he regularly delivered briefcases stuffed with cash, at Martinelli’s request.

According to Guido Rodríguez, one of Panama’s prosecutors in charge of overseeing public finances, the cost of Martinelli’s alleged corruption exceeded the corruption of the country’s notorious military dictatorship that included the rule of Manuel Noriega.

“Out of all the cases that were documented during the military dictatorship, the loss to the state reached $90 million,” Rodríguez told Latin Correspondent. “[The recent corruption] is difficult to calculate, but there are conservative calculations of $1.5 billion to $2 billion.”

The original case against Martinelli hangs on an alleged signature by the former president on a contract to a Panamanian company, Lerkshore International, which Martinelli has said is a forgery.

Rodríguez explained that the surveillance case is stronger, because, regardless of direct involvement, the president is always held responsible for the actions of his security ministers.

“This is the case that everyone – all the lawyers who I’ve spoken with who have experience in these cases – says is the easiest case,” Rodríguez said. “Because the law establishes – and the executive order as well establishes – that the head of the National Security Committee is the president of the Republic.”

Cabinet-wide corruption

Martinelli could face a lengthy prison sentence if tried and found guilty on all possible charges in the school lunch and wiretapping cases, according to Rodríguez. Corruption, bribery and dereliction of duty charges would total a maximum of a 29-year sentence, with a possible addition of 14 years due to the gravity of the ex-president’s alleged crimes.

Martinelli’s alleged corruption would represent a substantial blow to the small Central American country of 3.8 million people. Rodríguez’s estimates would mean that corruption cost the government between 10.4 percent and 17.3 percent of its annual budget, based on budget data from Panama’s Ministry of Economy and Finance.

For comparison, corruption at an equal level in the U.S. would total $370 billion, based on U.S. Congressional Budget Office numbers.

In addition to the wiretapping and school lunch investigations, helicopter rentals, an irrigation project and bribery by a debt collection agency have created an increasing dragnet for former Martinelli cabinet members, according to a roundup by the daily La Prensa (PDF). In total, six of the 14 government ministries have either their top minister or a vice minister under investigation or awaiting trial.

Ironically, one ex-minister sits atop the current investigative regime – current President Juan Carlos Varela. He was elected vice-president on the same ticket as Martinelli, and served as Foreign Minister until Martinelli ousted him from that ministry midway through the presidential term.

Varela ran for president on a promise of reforming corruption, and won in 2014.

His government began its first investigations last November, when looking into the outsized bank accounts and property of former National Aid Program Director Rafael Guardia. Every month, new revelations widen and deepen the corruption allegations.

On May 22, in the latest development, businessman Crístobal Salerno told prosecutors that he regularly delivered briefcases stuffed with $400,000 to $600,000 in cash “every two to three months” to the former president, in an attempt to cover tax income shortfalls, according to local media reports.

Martinelli, presumed guilty until proven otherwise

For the local press and many Panamanians, Martinelli’s guilt is a given.

Local news station TVN published a poll in January in which 79 percent of Panamanians responded that Martinelli was the principal culprit in the corruption cases. A month earlier, La Estrella published a scathing column titled “A tsunami of corruption.”

“What’s certain is that the dishonesty and inefficiency of the president and his ministers, the administrative chaos, the negligence of his directors, the brazenness of business owners and the shamelessness of politicians, produced an adequate environment that in the past five years has extracted impressive sums of public assets and everything for the benefit of corrupt administrators, crooked lawyers, depraved advisors, rapacious business owners and greedy politicians.”

A former Supreme Court judge, Esmerelda Arosemena, told La Prensa that she was certain of Martinelli’s involvement.

“There is no doubt that he [Martinelli] is part of this criminal situation,” Arosemena said. “He was the head of state and the head of state assumes the responsibility of being sworn in: to comply and enforce the Constitution and the law. The President of the Republic assumes the management of the state. And because of this, he is directly responsible.”

Martinelli, who left the country and is currently believed to be in Miami, has called the investigation by his former vice-president an attempt at political persecution.

On Twitter, Martinelli repeats this accusation almost daily.

“I am a persecuted politician, product of President Varela’s personal vendetta who wants to end me,” the above tweet reads.

However, few have come to Martinelli’s defense. Martinelli petitioned the Inter-American Comission on Human Rights to defend him against political persecution, but his case has not yet been admitted, according to Panamanian media reports.

Even some former ministers have come out to slam his current tactics, such as the former Minister of the Presidency, Demetrio Papadimitriu.

“He’s a coward,” Papadimitriu said at a May press conference. “He doesn’t want to come to Panama and hides in Miami with his millions of dollars and doesn’t dare come to confront the law.”


Based on information from Guido Rodríguez, Panama’s Ministry of Economics and Finance and the U.S. Congressional Budget Office. Image by Corey Kane.

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