Citizens Against Impunity (CCI) lampoon Comptroller General Federico Humbert for riding horses in parades. Later the high court struck down Humbert’s decree to legalize private contributions to legislator circuit funds. These are often pocketed but are expected to finance cash and goods distributed during election campaigns.

“A prolonged and warned-about institutional crisis”

by Eric Jackson

Whose fault?

PRD secretary general and legislator Pedro Miguel González told La Estrella that there is “a prolonged and warned-about institutional crisis” underway. He blames President Varela and his Panameñista Party for causing it, above all to distract attention from the allegations of Varela’s erstwhile right-hand man, jailed offshore corporate lawyer Ramón Fonseca Mora, that the president took payoffs from the Brazilian construction conglomerate and bribery mill that’s the Odebrecht group of companies.

González’s Panameñista colleague and political adversary in the legislature, Adolfo “Beby” Valderrama, acknowledges that there is a crisis. He blames it on the PRD for bringing up and exaggerating scandals to enhance their own positions in intra-party faction fighting.

Ricardo Martinelli, from his exile in Miami, uses the media whose purchase he financed with government advertising while president to gleefully report all of the nasty things that the PRD and the Panameñistas say about each other and dismiss the many criminal charges against himself and his entourage for their five-year spree as baseless persecution. To add to the crisis atmosphere the ex-president sends in lawyers to jam up the court system and make new claims against Varela in those media that will accept them as possibly credible sources.

A confluence of scandals

We now see mergers of major scandals, affecting all major branches of the national government, with individual players and different institutions pointing fingers at one another.

In the 2014 election campaign a pack of private donors financed vote-buying campaign in which politicians passed out cash, building materials, household appliances, bags of groceries and other valuable in exchange for votes.

A huge sum of money by Panamanian historical standards was siphoned off from government coffers to support the candidates of the then-ruling faction, often under the guise of legislator’s circuit funds to be spent on social projects in their communities — but a current in this stream of illicit campaign funding flowed to politicians who then held no offices and could not pretend that they were circuit funds.

La Prensa ran a series of stories about legislative circuit funds that were just pocketed by the legislators, as in made out in checks to close aides, cashed and thereafter not on any readily documented paper trail. At least, lost without a trace but for extrinsic evidence, some of which is coming out. The daily’s main documentary evidence was from the Martinelli years but its cutting edge of inquiry was about what has gone on since. It turns out that in the Martinelli years more than $403 million in state funds went to legislators to distribute more or less at their discretion. It was not equal, but notoriously used as a tool to get deputies to jump to Martinelli’s Cambio Democratico party or its minor MOLIRENA ally. From a number of cases over the years it appears that private donations — often kicked back from government contractors who had overpriced contracts — were commingled with these funds.

Did Odebrecht money go into this mix? Comptroller General Federico Humbert dramatically announced that the Brazilian combine’s money that went to Panamanians in high places or those in their families or entourages was a lot more than the $59 million and four individuals reported in the US plea bargain. It would have been in keeping with Odebrecht’s modus operandi to have given to legislators of all parties in various fashions. But that we do not yet know, nor have we heard it specifically alleged.

Odebrecht’s presidential bets

There are two lawyers who say that Odebrecht money went into Juan Carlos Varela’s 2014 presidential campaigns — Ramón Fonseca Mora of Mossack Fonseca disrepute (now incarcerated awaiting trial) and Martinelli mouthpiece Sidney Sitton. Neither is a totally trustworthy source but current and former Odebrecht slush fund managers are talking and may corroborate what they say. Meanwhile Odebrecht exec Hilberto Mascarenhas testified to a Brazilian electoral court that the company paid millions of dollars for the services of political consultants João Santana and Mónica Moura — a husband and wife team, now both behind bars — in the presidential election campaigns of six countries, including that of Martinelli’s 2014 stand-in, José Domingo “Mimito” Arias. The PRD’s 2014 presidential candidate, Juan Carlos Navarro, denies taking money from Odebrecht and has released official campaign reports that do not indicate any such funding source. However, many of Navarro’s funders were anonymous corporations with which we would not know if there were an Odebrecht tie. So far none of the reported testimony of Odebrecht people has implicated the Navarro campaign.

Church and state

Among the illicit state funding for political campaigns allegations there is now a spectacular one about the Cambio Democratico mayor of San Miguelito, Evangelical pastor Gerald Cumberbatch. Journalist Jean Marcel Chéry, who was a member of the Templo Hosanna mega-church along with Cumberbatch, briefly worked on the latter’s campaign. He says that he resigned over corruption. Specifically alleged are the diversions of at least $700,000 in state funds, some through local governments in Darien. It allegedly went for items like construction materials and some $150,000 worth of bags of groceries for the Cumberbatch campaign to distribute.

Chéry also alleges that Cumberbatch’s wife got a paid leave of absence from a government job with the Martinelli administration to work on the campaign. Cumberbatch calls that latter charge a lie, claiming that his wife’s paid leave was not to campaign but to study to be an Evangelical pastor.

As to the specific charges of public funds diverted to his 2014 mayoral campaign, Cumberbatch won’t directly answer. He calls it old news and says that Chéry is out to destroy him and his church. Chéry said that he quit the Cumbebatch campaign when he realized what was going on and spoke of the matter with the Hosanna Temple’s Reverend Edwin Álvarez. According to Chéry, Álvarez’s response was to ask him how much money he needed to maintain silence. Unlike the many legislators whose uses of circuit funds are challenged as improper, Cumberbatch held no public office when he ran for mayor and would have no cover story comparable to that of the legislators.

Many investigations, some perhaps to block others

Attorney General Kenia Porcell says that her office is pursuing at least six Odebrecht investigations and is looking into the Cumberbatch matter. As to sitting legislators, the Supreme Court would have jurisdiction in those matters so she could not investigate them. Critics accuse her of dragging her feet on corruption cases in general and are particularly annoyed by an oral agreement she made with Odebrecht about them paying $59 million that’s the amount that the US government said that it paid in bribes to Panamanian officials, as part of a settlement with Panama. The objections are about letting the Brazilians off with a light penalty and the possibility that a deal could be used to argue that any investigation of Odebrecht or the officials they bribed here would be blocked as a form of double jeopardy.

Administrative Prosecutor Rigoberto González is investigating a complaint brought by Cambio Democratico attorney Alejandro Pérez, accusing her of abuse of authority and exceeding her powers in investigations against members of Ricardo Martinelli’s entourage. (She has not been investigating Martinelli himself, over whom the Supreme Court has exclusive jurisdiction.) Pérez brought a motion to disqualify González because en route to their current positions they worked together for many years at the Public Ministry, some of them with González as Porcell’s superior. The Supreme Court rejected that motion.

There are many complaints by anti-corruption activists of Comptroller General Federico Humbert failing to audit, or only incompletely auditing, cases involving public corruption. Now Humbert says that he’s looking into both the Odebrecht contracts — some of which he personally approved — and the matter of legislators’ circuit funds.

Perhaps the most serious of the activists’ complaints against Humbert is a decree he published earlier this year, purporting to legalize and regulate the circuit fund system. Attorney and anti-corruption activist Ernesto Cedeño challenged that decree and the Supreme Court struck it down in a ruling announced on March 16. The vote was 5-1, with three abstentions. But although the comptroller’s decree was thrown out, the system that it attempted to regulate was not.

The National Assembly has refused to look at the conduct of its own members with respect to circuit funds. The legislature’s president, Rubén De León, a PRD deputy, reacted to the La Prensa investigation by creating a numerical code to conceal how much went to which legislator for what in the public records. Ernesto Cedeño has filed criminal charges with the Supreme Court against De León for this maneuver.

The legislature has, however, begun its own investigation of all Odebrecht public works contracts since 2006. But the Public Ministry refuses to cooperate in any way with this. One of the reasons is suspicion that the legislature might give immunity to a witness or purport to make a deal with Odebrecht that would in effect preclude the work that the Attorney General’s office is doing. Great scorn is being heaped on the legislature and the members of its special committee, for one thing because eight of its 11 members are known to have received an aggregate of $47,845,295.00 in circuit funds between 2009 and 2014 and there has been no accounting of these funds nor of any possible private funding that may have been commingled with them. Independent legislator Ana Matilde Gómez, a former attorney general, says that there is ample evidence on the public record to begin an investigation of possible misappropriations of legislators’ circuit funds and questions the National Assembly’s moral authority to investigate Odebrecht under the circumstances.

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