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Harrington, Los Papeles Panamá

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The Panama Papers

por Kevin Harrington Shelton
De la rosa de ayer, solo perdura el nombre;
nos atenemos a palabras huecas de significado

Umberto Eco (“El Nombre de la Rosa”)

 

Cuando finalmente se escriba la (verdadera) historia de Panamá, se hará en términos de oportunidades-perdidas. Los grandes cambios en Panamá provienen desde el exterior. Después de la Invasión, perdimos la oportunidad de hacer borrón y cuenta nueva del cesarismo de 1968. Hoy vamos por igual camino. La oportunidad presentada por los “Papeles de Panamá” para diagnosticar nuestros problemas de impunidad, no la aprovechamos. Se pierde tiempo en minucias (el nombre del esfuerzo, billones de megabytes, colaboración de un montón de medios, sensacionalismo sobre personalidades de relieve internacional, etc), pero no se enfoca sobre el fallo de raíz que tiene esta campaña que ha indignado artificialmente a demasiados patriotas panameños. Para que las bases no se sobrepongan a la dirigencia, al conocer la raíz del problema.

En la legalidad tributaria territorial panameña los impuestos se pagan donde se generan las utilidades. Lo demás son maromas contables. Lo recalca el profesor Thomas Piketty, especialista en la distribución de riquezas tanto en la École des hautes etudes en sciences sociales de París, como en el London School of Economics. La inclusión de Panamá en la lista negra francesa sin duda obedece a su lógica expuesta en The Guardian.

No hay riesgo de oposición masiva, puesto que generacionalmente en el panameño se le viene cultivando lo opuesto a la democracia, mediante lo que el sicólogo Martín Seligman tildó de “indefensión aprendida“. Apatía colectiva que Demetrio Herrera Sevillano inmortalizó así: “Paisano mío panameño, tú siempre respondes “sí”, Pero no para luchar, Que no para protestar, Cuando te ultrajan a tí.”

El gobierno actual intentó inocularse contra respuestas a esta realidad cuando afecte a sus allegados, sacando de los medios masivos a comprobados forjadores de opinión como Miguel Antonio Bernal, Julio Miller, Candelario Santana, José Blandón Castillo, entre otros.

Pero el talón de Aquiles de la organización que fijará la agenda de tantos medios mundiales fue al seleccionar a La Prensa como participante en Panamá, en el en el ojo de la tormenta, donde está ubicada la caja de Pandora que constituye su piedra angular. Ahora que transita por dificultades económicas. Porque más que un periódico, La Prensa es un partido político. Su profesionalismo (e independencia) ha sido muy cuestionado. Con razón. Muchos de su entorno están hoy emplanillados en el gobierno. Al inicio de cualquier gestión de gobierno le brinda un cheque en blanco de 6-12 meses, aunque se trate de un asunto sumamente grave como el que consignó en su autobiografía su ex-director. Al renunciar un subdirector hace algunos años, informó de la existencia de un listado de temas y personalidades que tenía vedados mencionar. Tampoco da seguimiento a primicias que involucren a accionistas, bonohabientes y/o anunciantes. Su derecho a réplica es selectivo. Hasta pagado un emitido no lo publican; sin embargo sí publican a diario anuncios de protitutos(as). Sin mencionar el lapidario caso del soborno atribuido por La Prensa a un ex-Procurador General de la República, que ilustra el grado de impunidad otorgado a nuestro periódico de referencia.

No ha rectificado rumbo, a juzgar por recientes declaraciones del ministro de Gobierno que parecieran echarle kerosene al fuego. E indicar un poco importa de Panamá a la raíz del problema, que es tan sólo una manifestación más de lo inepto del gobierno actual. Tituló así El Mundo: “Milton Henríquez: ‘No entiendo por qué la evasión fiscal tiene que ser delito en mi país'”. Se observará que dentro del artículo el Premier dice de viva voz: “No entiendo por que Panamá tiene que convertir en delito todo aquello que los demás países quieren o no hacer delito”. El hecho de que el principal aliado del gobierno en el poder haya dicho semejante burrada de por sí es noticioso (aunque fuera tan sólo para negar lo dicho….). Esa entrevista presumiblemente tuvo lugar en nuestra sede diplomática en Madrid, por lo que le habría sido (extraordinariamente ) fácil para La Prensa corroborar lo que constituye un hecho noticioso relevante (que inclusive La Estrella de Panamá pasó por alto).

Mañana ese mismo diario español publicará otro elemento de alto valor noticioso: “El Gobierno español firmó en 2013 con Panamá un convenio para la lucha contra la delincuencia cuyo listado de delitos a perseguir ‘en particular’ omite la delincuencia económica y en especial el de blanqueo….”. Cabrá ver cómo trata La Prensa esta faceta relevante: a saber cuantos de los demás convenios atribuidos como triunfos en las salidas de diversas listas adolecen de similares “omisiones”….

Además de la falta de voluntad de demasiados panameños (incluida toda la clase politica) de someterse a la ley, el meollo del problema involucra una falta generalizada de transparencia. Pese a que el gobierno cimenta la defensa de sus aliados en la transparencia, en Panamá esta es más lírica que real. En parte atribuible a La Prensa. Ejemplo. Existen documentos que comprueban cómo, en dos habeas data identicos, contra dos ministros por separado, nuestra Corte Suprema ha concedido uno y negado el otro. Pero ese hecho noticioso no lo ha difundido.

Tenemos la obligación de dar a comer a cuatro millones de panameños. Y para eso, como un pequeño país en un mundo de rápidos cambios, debemos asegurarnos que Panamá funcione transparentemente y con la mejor información posible — para “desfazer entuertos”. En esto, todos sí debemos poner nuestro granito de arena.

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Who is and who isn’t touched by the Panama Papers

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Nowhere to hide?Those who are (or who are not) sheltered from the Panama Papers

by STRATFOR

Summary

On April 3, the Panama Papers hit media outlets around the world, and the fallout was swift. A prime minister lost his job, and other global leaders are under mounting pressure to account for their actions. But the effects of the leaks are not evenly spread; the documents contained far more information about the offshore activities of individuals in the developing world than in the developed world. Whatever the reasons for the imbalance, it will likely limit the papers’ impact. In the developing world, long histories of corruption have dulled the public’s sensitivity to scandal, and repressive governments leave little room for popular backlash.

So although less information was released on Western leaders, it is already doing more damage. Iceland’s leader has left his post, and relatively minor revelations have had a disporportionately large impact in the United Kingdom and France. Meanwhile, in the developing world, the Panama Papers’ effects have been most strongly felt in the former Soviet Union, a region in which political tensions were already high. The leaks’ results have been more mixed in China, where they have provided new targets for the anti-corruption drive already underway but have also implicated figures close to the administration’s upper ranks.

This is only the beginning. The Panama Papers are the largest information dump of their kind, and the information that has been released so far appears to be just the tip of the iceberg. They are also the latest in a string of public leaks that seem to be happening more and more frequently. As revelations continue to surface, calls for greater global transparency will only get louder.

Analysis

Former Soviet Union

The publication of the Panama Papers has drawn leaders and elites from five former Soviet states into corruption scandals. In Ukraine, Russia, Kazakhstan, Georgia and Azerbaijan, politicians — or their family members or friends — have been accused of having ties to offshore accounts or corruption. This will be worse news for some leaders than for others.

Azerbaijan

As in Russia and Kazakhstan, corruption charges are a perennial feature of Azerbaijani politics. President Ilham Aliyev, the son of Azerbaijan’s third president, and his wife, Mehriban, both come from influential families with extensive business connections at home and abroad. Several members of the president’s family, including his wife, children and sister, have now been linked to secret offshore companies.

Nonetheless, little will come of the reports in Azerbaijan. The political opposition is too weak to challenge the Aliyevs, and the media have already begun to spin the accusations as Western propaganda. Given the country’s poor economic conditions, the scandal could spark protests, which Baku can quickly quell.

Georgia

Former Prime Minister Bidzina Ivanishvili’s foreign business dealings are also included in the Panama Papers. Allegations of corruption have plagued Ivanishvili ever since he threw his hat into the political arena in 2011. But until now, the accusations had centered on his activities in Russia.

Ivanishvili’s power in Georgia has been steady for the past four years. In Tbilisi, he remains a kingmaker, planting his followers in all the country’s top positions. His Georgian Dream coalition is fracturing, however, holding only a slight majority in the legislature. With parliamentary elections set for this fall, accusations are already flying between Georgia’s various political parties. Although most of the country’s population has ignored the news so far, the Panama Papers will fuel the opposition’s politicking. Moreover, if it gains more traction among the people, the scandal could erode Ivanishvili’s influence at a time when his ruling coalition is already falling apart.

Kazakhstan

Allegations of corruption, particularly concerning President Nursultan Nazarbayev and his family and friends, are constant and widespread in Kazakhstan. But because the country is on the verge of both economic recession and a succession of power, the fresh accusations could have greater impact than usual.

Nazarbayev’s grandson Nurali Aliyev is accused of ties to offshore accounts. Just two weeks ago, Aliyev stepped down as deputy mayor of Astana to return to business, inviting speculation within the Kazakh media over his motives. Aliyev has long been considered a possible eventual successor to the presidency, although he is still too young to take a top government position.

On the other hand, his mother, Dariga, is a viable successor and already one of the most powerful figures in Kazakh politics. Following the March 20 parliamentary elections, she unexpectedly did not take a position in the legislature. This has led to speculation that she is jockeying for a more influential position before the formal succession commences. As the power struggle in Kazakhstan begins in earnest, rival political elites could use corruption charges provided by the Panama Papers against Aliyev or his mother.

Russia

In Russia, the loudest corruption allegations concern President Vladimir Putin. Although the president’s name does not appear in any of the 11.5 million documents published, those of three of his closest friends — Sergei Roldugin, Arkady Rotenberg and Boris Rotenberg — do.

Longtime intermediaries for Putin’s business, the Rotenberg brothers are unsurprising inclusions in the Panama Papers. Among Russia’s elite, the brothers are not decision-makers. Nonetheless, they are considered to be some of the country’s highest-ranked loyalists, trusted to handle Putin’s furtive financial and business affairs. Roldugin, a cellist, is also outside of Russian politics. But he, too, is a loyalist and one of Putin’s trusted associates; in fact, he is godfather to Putin’s eldest daughter. Following the Panama Papers leaks, Roldugin stands accused of moving more than $2 billion for the president.

The Kremlin’s reaction to the Panama Papers actually anticipated their release. Nearly two weeks ago, presidential spokesman Dmitry Peskov warned journalists that a Western “information attack” on Putin was forthcoming but that it would not be factually accurate. On April 5, two days after the release, Peskov went a step further, denouncing the Panama Papers as a demonstration of “Putinphobia” and claiming that the journalists’ allegations were nothing new. Indeed, corruption charges against Putin and his close friends predate the president’s rise to power. By now, they have been assimilated into the Russian people’s mindset.

Peskov also called the papers an attempt to undermine Russia before its elections in September. In this, too, there is a hint of truth. Putin’s administration has been concerned about the possibility of protests after the elections, on a scale comparable to — or perhaps worse than — the mass demonstrations that followed the 2011 parliamentary elections. In the 2011 protests, corruption in the Kremlin was a central theme. Renewed corruption accusations could compound public resentment over the weak economy in Russia, fueling larger protests.

To reduce the risk of protest, the Kremlin is trying to turn the Panama Papers into a rallying point. Russian media and the government continually highlight this as another attack on the country and its president. After the West imposed sanctions on Russia, similar rhetoric was used successfully, reviving nationalism across the country.

Ukraine

Of all the former Soviet states, Ukraine will likely see the greatest fallout from the Panama Papers, which allege that President Petro Poroshenko holds accounts offshore. In response to the revelations, Ukrainian politicians are already calling for an investigation into Poroshenko’s hidden funds. The head of the Radical Party has even pushed for the president’s impeachment. But Ukraine’s Office of the Prosecutor General said the papers contain no evidence that Poroshenko committed any crimes. For his part, Poroshenko has gone on the defensive. In a string of tweets, the president called himself the first of Ukraine’s leaders to take corruption seriously. At the same time, he has skirted the issue of his culpability, claiming that he handed management of his assets over to a consulting firm upon taking office.

The papers’ publication came at an inconvenient time for Poroshenko. Over the past week, the president had been close to a deal on a parliamentary coalition between his party, Prime Minister Arseniy Yatsenyuk’s People’s Front and a group of independent lawmakers. In light of the scandal, Poroshenko’s faction now believes the deal may not come through after all. Poroshenko had been lobbying for the new government, a prerequisite for Ukraine to receive its next tranche of money from the International Monetary Fund and increased financial assistance from the United States. Poroshenko’s mention in the Panama Papers could not only further destabilize the fragile government, but it may also weaken the president’s rule.

Europe

France

In France, the fallout from the papers has landed mostly on the National Front, a right-wing party that has found some electoral success of late. They implicate former party adviser Frederic Chatillon, who was previously charged with electoral fraud related to the 2012 election. The National Front has already distanced itself from Chatillon. Evidence of offshore financing would be particularly detrimental if it was linked to party leaders, who have crafted an image of their party as honorable alternatives to their corrupt establishment counterparts.

Iceland

The Panama Papers have had the biggest impact in one of Europe’s smallest countries: Iceland. The papers revealed that Prime Minister Sigmundur David Gunnlaugsson made suspicious transactions of some bank shares before the global financial crisis of 2008. Icelanders took to the streets in protest, and the prime minister resigned. (He would later say he had merely “stepped aside for an unknown period.”) His coalition in parliament now appears insecure. A snap election could bring to power the Pirate Party, an anti-establishment party that currently leads in polls and advocates a system of direct democracy.

United Kingdom

In the United Kingdom, Prime Minister David Cameron has borne the brunt of the anger over the papers. His father was listed among those who held offshore accounts, and Cameron has now had to admit to owning a tax-efficient product before his premiership began. The media have begun to question actions he took in 2013 that appeared to hinder the process of increasing the transparency of offshore havens. Cameron’s interference might have been in Britain’s interest, since the United Kingdom could be said to have benefited from the global tax avoidance industry. Regardless of Cameron’s intentions, the subject has added fire to an already heated atmosphere surrounding the Brexit referendum. Though the latest leaks are unlikely to unseat Cameron on their own, further revelations could, and any damage done to the British prime minister’s reputation will hurt his campaign to remain in the European Union as well.

Latin America

Argentina

In Argentina, the Panama Papers linked President Mauricio Macri to an offshore company, although he has since denied being a shareholder in the company. An Argentine prosecutor has already requested the opening of an investigation into Macri’s involvement with the company. The opposition Front for Victory, which has been dealing with internal divisions, is eager to keep the spotlight on the Macri offshore company scandal ahead of legislative elections in 2017, and the opposition would use the investigation against the Macri administration.

Brazil

Brazil has enough political turmoil going on already that revelations in the Panama Papers will probably have minimal effect. The leaks have linked lower house leader Eduardo Cunha to an offshore company, but Cunha and other Brazilian politicians are already tied up in the graft scandal at state-owned energy firm Petrobras. Ongoing criminal investigations against members of the ruling Workers’ Party, such as former President Luiz Inacio Lula da Silva, and the impeachment attempt against President Dilma Rousseff will probably have a more immediate political effect than the Panama Papers will.

Guatemala

In Guatemala, the release of information through the leaked documents will draw greater scrutiny from the government investigative commission known as the International Commission Against Impunity in Guatemala (CICIG). The United Nations-sponsored body announced it would investigate the documents for evidence of wrongdoing. A CICIG investigation led to the indictment of former President Otto Perez Molina on corruption charges in 2015, and further evidence of Guatemalan officials’ corruption, if found, could kick off additional investigations by CICIG in the country.

Venezuela

The fallout from the Panama Papers leaks in Venezuela is likely to be minimal. None of the key individuals in the ruling United Socialist Party of Venezuela are named in the leaks. The ongoing political standoff between the government and opposition, growing divisions in the ruling party, and the country’s extreme inflation are all likely to more immediately influence the country’s political future than corruption allegations.

Asia-Pacific

China

Beijing imposed an almost total media blackout on the Panama Papers: The only state media coverage on the subject was a print edition of Global Times claiming that the Panama Papers were a way for the West to attack its enemies.

The papers uncovered at least eight cases of family members of current or serving Politburo members who have done business with Mossack Fonseca. These include President Xi Jinping’s brother-in-law (though his accounts have been inactive since before Xi took power), family members of current Politburo Standing Committee members Liu Yunshan and Zhang Gaoli, the daughter of former Premier Li Peng, a granddaughter of former Standing Committee member Jia Qinglin, and a business partner of purged Politburo member Bo Xilai.

The papers are unlikely to affect the Politburo, whose members are all from the ruling class and are aware that other members of the same class tend to be wealthy (with some possessing ill-gotten gains). Given the pervasive anti-corruption campaign and the intense political struggle as Xi Jinping ascended to the presidency, there was incentive for factions to dig up any dirt on each other long ago. As a result, much of the political effect of any of the revelations is likely already tapped out. The revelations might, however, spotlight some lower-level or midlevel officials who have not yet become targets of anti-corruption investigations.

Chinese law enforcement and anti-graft authorities have shown a fair amount of skill in tracking down illegal capital flows abroad as part of fugitive hunting campaigns such as Operation Fox Hunt and Operation Skynet, uprooting Chinese underground banks that handled upward of $100 billion in transactions from April to November last year. These were domestic operations; whether Chinese law enforcement is good at tracing shell companies in offshore accounts remains unclear. Presumably, though, investigators have encountered the problem while handling the assets of fugitives — generally Party members and their families who flee China, bringing with them large amounts of embezzled or otherwise illegal wealth.

Chinese intelligence and anti-graft services will sift through the documents to identify potential new targets. To the extent that the papers shed light on how Chinese citizens like to hide their wealth, they may be able to seal off further escape options for fugitives and their assets. More interesting is the question of how much the Chinese already knew but never shared, both in terms of dirt on perpetrators and in understanding their tactics.

Middle East and North Africa

In many countries in the Middle East and North Africa, corruption charges will not create much of a stir because of media restrictions and because it is widely known that wealth often primarily benefits the royal family or ruling elite. Given the lenient tax structures in those countries, the kinds of things described in the Panama Papers may not even be considered crimes. In countries such as Iraq, Jordan, Syria and Egypt, however, the charges against prominent former politicians will fuel distrust of the establishment.

Egypt

In Egypt, the papers indicate that Mossack Fonseca did not conduct due diligence in identifying and cutting ties with Alaa Mubarak, the son of deposed President Hosni Mubarak, quickly enough after the 2011 Egyptian revolution. (Alaa used the firm to hold cash in a British Virgin Islands firm.)

Gulf States

While Saudi King Salman and UAE President Sheikh Khalifa bin Zayed al-Nuhayyan were both implicated in Virgin Island shell companies, Gulf media coverage has focused on how the Panama Papers affect other places, such as Iran, and has not touched on domestic implications. It is unlikely that the revelations will instigate a serious challenge to the Saudi or UAE governments.

Iran

In Iran, the papers revealed that Mossack Fonseca conducted business for Iranian oil companies such as Petropars despite US sanctions, a revelation more damning for Mossack Fonseca than for Iran.

Iraq

In Iraq, former Prime Minister Ayad Allawi’s name surfaced in the Panama Papers in connection to various London properties. Allawi was removed from office in August 2015 when Prime Minister Haider al-Abadi abolished the vice presidencies in a bid to stem protests. The leaks could undermine any attempt by Allawi to re-enter the government in the event that al-Abadi’s government collapsed. Iraq’s central government has already been overwhelmed by protests demanding a purge of corrupt officials, though recent reshufflings to install technocrats are more likely to deepen Iran’s influence in Baghdad than defuse anger at the government.

Israel, Palestinian Territories

In Israel, the papers implicated some major banks that have been linked to corruption before. Idan Ofer, the majority shareholder in Israel Corp., the largest private joint stock company on Tel Aviv’s stock exchange, was also named in the papers. Moreover, Tareq Abbas, the son of Palestinian Authority President Mahmoud Abbas, held shares worth nearly $1 million in a company associated with the Palestinian Authority.

Jordan

In Jordan, it was revealed that former Prime Minister and Defense Minister Ali Abu al-Ragheb became the director of an offshore British Virgin Islands firm before leaving office.

Syria

In Syria, Mossack Fonseca cut ties in 2011 with the Makhlouf brothers — cousins of President Bashar al Assad — after nearly 15 years of using offshore entities to invest in the brothers’ Syrian tech firms.

Sub-Saharan Africa

Though several prominent politicians of African countries or their close associates have been linked to the scandal, it will have little effect on the continent’s governments. The threshold of corruption in many places in Africa, whose history is littered with elites who engaged in egregious acts of self-enrichment, is higher than in other places in the world. More important, many of those mentioned in the leaks are either no longer in office or are related to former leaders. Moreover, some of the people named with links to current rulers likely used offshore companies with their governments’ blessing.

Angola

Angola Minister of Petroleum Jose Maria Botelho de Vasconcelos, a former president of the OPEC, held interest in an offshore company that was deactivated in 2009. The revelation may damage his career in the image-sensitive country. He likely had implicit or explicit sanction from the regime.

Republic of the Congo

The Republic of the Congo’s current minister of science research and former energy minister, Bruno Jean-Richard Itoua, requested that Mossack Fonseca create an offshore company in the British Virgin Islands. In a 2003 lawsuit, Itoua was accused of diverting oil revenues, but the case was dismissed. Itoua has close ties to President Denis Sassou-Nguesso, so any blowback on Itoua will likely be limited.

Rwanda

General Emmanuel Ndahiro, Rwanda’s former head of intelligence, is listed as the director of an offshore company owned by a former military colleague. Ndahiro is a close confidant of President Paul Kagame.

South Africa

Clive Khulubuse Zuma, the nephew of President Jacob Zuma, was linked to a company involved in acquisitions of oil fields in the Democratic Republic of the Congo. He has a reputation for being involved in shady business deals, and claims against him go back at least five years. He has denied any wrongdoing.

South Asia

Pakistan

Some 500 Indians and 200 Pakistanis were implicated in the Panama Papers, the most prominent of them being three of Pakistani Prime Minister Nawaz Sharif’s children. Although Sharif himself was not implicated, he went so far as to give a televised national address on April 5 to exonerate his family and announce the launch of a judicial probe to investigate the matter. But opposition lawmaker Imran Khan of the Tehreek-e-Insaf party quickly demanded that the prime minister allow the National Accountability Bureau, which leads Pakistan’s anti-corruption efforts, to take charge of the probe. The leak is unlikely to lead to Sharif’s resignation, but opposition parties will make political gains at the expense of the premier’s Pakistan Muslim League-Nawaz party.

Those Who Are (and Are Not) Sheltered From the Panama Papers is republished with permission of Stratfor.

 

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¿Wappin? Bound and determined…

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Joss
Joss Stone.

Music for the bound and determined

Led Zeppelin – No Quarter
https://youtu.be/T3m_cPuhEPk

Peter Gabriel – The Rhythm of the Heat
https://youtu.be/rzwMe-3XVn4

Aswad – Warrior Charge
https://youtu.be/23qWXIqIogs

Sinéad O’Connor – This is a Rebel Song
https://youtu.be/wbre5Fs9m8I

Dixie Chicks – Travelin’ Soldier
https://youtu.be/AbfgxznPmZM

Linda Ronstadt, Emmylou Harris & Neil Young – Across the Border
https://youtu.be/OfCS1yXg8gk

Los Ángeles Azules & Denise Gutiérrez – El Listón de Tu Pelo
https://youtu.be/daL7_QWYdkk

Grupo La Meta – El Quemazón
https://youtu.be/ZcaCL4OfoLM

Enrique Bunbury & León Larregui – La Chispa Adecuada
https://youtu.be/cOaO14GFCe4

Shakira & Mercedes Sosa – La Maza
https://youtu.be/TxzPPQvHIZo

Luci & The Soul Brokers – Surprise
https://youtu.be/baDYjoCQ-Ek

Johnny Cash – I Won’t Back Down
https://youtu.be/N8i5NLyXZdc

Eric Clapton, Roger Waters & Nick Mason – Get Up, Stand Up
https://youtu.be/F3buDdZbvZs

Joss Stone – Karma
https://youtu.be/eZ6xjTA8VoA

Bruce Springsteen – The Promised Land
https://youtu.be/A6I9BQzI4WE

 

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Varela, Message to the nation

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President VarelaMessage to the nation

by President Juan Carlos Varela

Since the discovery of the Isthmus of Panama we have always been a meeting point of civilizations at the service of the world and global trade. Today we are the most stable and growing economy in Latin America. We are the Hub of the Americas, which facilitates communication and connectivity of the continent with the rest of the world. Panama is the regional headquarters to more than 100 multinationals and we are a country where the law and legal security reign, with an economy open to foreign investment and a government committed to transparency, accountability, the separation of powers and the strengthening of democratic institutions.

The massive leak of coprporate documents from a Panamanian law firm with operations in different jurisdictions has resulted in a controversy that reflects a global problem.

Panama wants to make it very clear that this situation, which has been misnamed “Panama Papers,” is not a problem in our country, but in many countries of the world, whose legal and financial structures are still vulnerable to be used for purposes which they do not represent the common good of the citizens.

In 21 months of our administration the Republic of Panama has taken decisive steps in favor of transparency and the strengthening of our financial system and services platform, which have allowed us to leave the Financial Action Force (FATF) Gray List this year (2016) and move to Phase 2 of the Global Forum joint review, by which the international community has validated our legal framework as compliant with international standards. In addition, as of January 2016 we met the need to provide certainty in the identification of the owners of the shares of companies as a sign of our commitment to transparency.

We recognize that we need to move forward on the government agenda of that we have set to protect our institutions, but we are not going to allow this media situation define us as a country.

Serious and responsible governments do not negotiate the adoption of international obligations through the media, but through diplomacy — serious, responsible and constructive dialogue.

I have asked Foreign Minister Isabel de Saint Malo to go to Global Forum member countries and reiterate to the Organization for Cooperation and Economic Development (OECD) our willingness to talk respectfully and to reach agreements that will contribute to the economic development of our countries. And as it says on its own slogan, our country and our government are also committed to building a stronger, cleaner and more just world.

The government of Panama, through our Ministry of Foreign Relations, will create an independent committee of national and international experts of well-known experience to evaluate our current practices and propose the adoption of measures to share with other countries around the world, to strengthen the transparency of the financial and legal systems. We will work not only internally in our country but also we will lead an effort for the benefit of the rest of the world.

I would like to make it clear that Panama will continue to cooperate with other jurisdictions as we have been doing, both in judicial matters to prosecute crimes that are specified under our Penal Code as well as in the exchange of information to comply with international treaties ratified by Panama.

We reaffirm our commitment as a serious country, respectful of international law, cooperating with the efforts of the international community in finding solutions to this global problem. We call upon all countries to use diplomatic channels and mutual respect at this time.

Thank you very much.

 

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Oliva Corado, ¿Quién quiere ser humano?

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Nairobi
Huyendo el masacre del centro comercial Westgate en Nairobi, Kenia.

“Todos somos Bélgica,” ¿quién quiere ser humano?

por Ilka Oliva Corado — Crónicas de una Inquilina

Cada vez que nos enteramos de un atentado terrorista en países desarrollados -conforme el sistema- sentimos como nuestra esa tragedia, y no se debe a nuestro carácter humano porque claro está que carecemos de éste. Reaccionamos claramente acorde a nuestra doble moral, racismo y clasismo. A la negación lo que somos como sociedad.

Las reacciones en masa son alarmantes por esa falsa indignación. ¿Cuántos de nosotros fuimos Je suis Charlie cuando el asesinato de 12 caricaturistas en Francia? Nos indignamos y exigimos que se respetara la libertad de expresión. ¿Lo recuerdan? Sin embargo en México han asesinado a más de 103 periodistas desde el año 2000, ¿y cuántos de nosotros nos hemos pronunciado? ¿Acaso la libertad de expresión en México nos vale lo que en Francia?

¿Cuántos fuimos nuevamente Francia cuando el atentado sucedió en la sala de conciertos Bataclan? ¿Cuántos fuimos Túnez cuando terroristas entraron al Museo Nacional de El Bardo y mataron a 23 personas?

¿Cuántos de nosotros hemos sido Estados Unidos cada vez que se realizan masacres en las escuelas y universidades del país? Bueno, ¿cuántos de nosotros fuimos Kenia cuando terroristas asesinaron a 148 estudiantes en la Universidad de Garissa? ¿Cuántos fuimos Kenia cuando terroristas asesinaron a 67 personas en un centro comercial de Nairobi? ¿Cuántos de nosotros fuimos las víctimas de la Guarimbas en Venezuela? ¿Las fosas clandestinas en Colombia?

¿Recuerdan la epidemia de ébola?, ¿cuántos de nosotros sentimos las muertes de esos puños que caían en las calles de Guinea, Liberia y Sierra Leona? ¿Cuántos de nosotros sentenciamos lo inhumano de los países desarrollados que se negaron a brindar atención médica? ¿Cuántos nos indignamos por el secuestro de 219 niñas en Nigeria? ¿Tenemos noción de lo que esas criaturas están pasando en manos de terroristas de Boko Haram? ¿De qué estamos hechos que nos indignamos por unos y no por otros? ¿Acaso se trata de continentes, de clase social, de color de piel, de grado de escolaridad, de ideología? ¿De qué trata nuestra conciencia? ¿Tenemos conciencia acaso?

¿Cuántos de nosotros somos los 43 de Ayotzinapa, las desapariciones forzadas, los miles de feminicidios y el genocidio latente en México? ¿Cuántos de nosotros somos el triángulo norte de Centroamérica y las docenas de asesinatos diarios? ¿Cuántos somos los feminicidios y violaciones sexuales que sufren miles de mujeres diariamente alrededor del mundo? ¿Cuántos de nosotros somos las víctimas del tráfico de órganos y con fines de explotación sexual? ¿Tiene que haber un bombazo y en un país específico para que reaccionemos? ¿Así es como trabaja nuestra conciencia, por mapas?

¿Cuántos de nosotros hace unos días dijimos en coro “todos somos Bélgica”? ¿A cuántos nos indignó el atentado terrorista en un estadio en Irak donde murieron 26 personas? ¿A cuántos el atentado en Pakistán donde han muerto más de 70 personas? ¿A cuántos nos ha dolido en el alma la invasión y las innumerables masacres que hizo Estados Unidos en Libia, Somalia, Irak y Siria con la venia de la Unión Europea? ¿Y qué decimos de Israel en Palestina? ¿La de Arabia Saudita en Yemen? ¿Esas muertes no cuentan? A pero el muro de los lamentos es visitado por personas del mundo entero y lloran y oran en éste, pidiendo por la paz mundial. ¿De qué está hecha nuestra conciencia?

Autoridades del gobierno belgas anunciaron que atacarán Siria para “combatir” al Estado Islámico. ¿Qué más quieren hacer con Siria? ¿No es curioso que los atentados sucedieran a pocas semanas de acordarse el alto al fuego en Siria? ¿Qué tuvo que ver Jhon Kerry es decir, Estados Unidos- en esta decisión del gobierno belga? ¿Qué gobiernos capitalistas crearon al Estado Islámico? De la misma forma en que crearon enemigos imaginarios en tantos países alrededor del mundo para invadirlos y robarles la vid.

¿Cuál es la responsabilidad de la Unión Europea -en el contrabando de los diamantes de sangre-, en los genocidios y en los atentados terroristas en África y en la propia Europa? ¿Qué tiene que ver la política exterior de Estados Unidos con todo esto? ¿Qué responsabilidad tiene la Unión Europea y Estados Unidos de los mundos de refugiados que se ahogan en los mares buscando salvar sus vidas? ¿De los mundos que salen de Siria? ¿De los mundos de africanos que buscan sustento en España? ¿Quién es los mundos de inmigrantes centroamericanos que mueren en México y en la frontera con Estados Unidos? Que mueren por la misma razón, buscan salvar sus vidas, buscan sustento, buscan salvar sus vidas. ¿Qué tiene que ver Estados Unidos en las migraciones forzadas?

¿Por qué la palabra refugiados no nos encona como la del terrorismo? ¿Por qué no nos indigna el bloqueo de Estados Unidos a Cuba? ¿Por qué no nos indignan las atrocidades y el genocidio que están haciendo en Palestina y Siria?

Para no ir tan lejos, ¿qué está sucediendo en nuestros países, colonias, comunidades, y pueblos que no es capaz de despertarnos en indignidad contra el sistema de políticas neoliberales que hace de nosotros un partida de títeres? Porque pensamos lo que es el sistema quiere que pensemos. Porque reaccionamos como la polarización lo manda. Porque somos incapaces de pensar por nosotros mismos, de sentir en el fondo del alma todo injusticia como nuestra. Respecto al terrorismo que se ejecuta en pro de los gobiernos de políticas capitalistas hay muchas cosas que decir. No nos quedemos callados, ante lo injusto no podemos ser neutrales.

“Todos somos Bélgica,” ¿pero, quién quiere ser humano?

 

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The Panama Papers context

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insufferable peopleThe Panama Papers context

by Eric Jackson

Panama is a small and anomalous Latin American country, with some things in common with her sister republics in the region, influences from all over the planet due to its role as a world crossroads, and certain things unique to it. Because it is so small — comparable in population with Jamaica with about four million people, roughly the size of the US state of North Carolina — there are few scholars in the English-speaking world who specialize in it and the large news organizations of the industrialized world don’t tend to treat it as an important outpost to staff and cover. But in shipping, boxing, finance and fraud we are a bigger player than our size would suggest. This is some of the background to the revelations that are rocking the world.

Who are these people?

Panamanian history did not start with the Spanish Conquest. There were people here when the first Europeans came. Archaeology, linguistics, metallurgy, paleobotany and DNA tell us of an ancient cultural and commercial crossroads. Manatees are a Caribbean animal — but their bones have been found in ancient trash heaps on the Pacific side of the isthmus. The cardinals and their distinctive red feathers — prized by many of the first nations of the Americas — have and had a range with its southernmost limits in northern Mexico. Cardinal feathers have been found far to the south, in an ancient rock ledge shelter in Panama. We now know that maize was first domesticated thousands of years ago in a valley in western Mexico — and that not long afterward made its way to the South American continent by way of Panama. We similarly know of hot peppers that the conquistadores found in the Bahamas, which originated in Bolivia and spread to Panama along the way. Panama has gold, generally found along with traces of copper and silver. Our ancient golden artifacts can be found in museums to the north, and mostly they have impurities typical to the isthmus. However, some artifacts have mixes of copper and silver that suggest the metal came from Colombia or other South American lands, and some of the artifacts are unmistakably ancient imports from the south. Most of our seven indigenous nations speak languages of the Chibchan family, with their roots in Colombia’s central plateau. When Spaniards came to Panama looking for gold, the people they encountered told them about and directed them to the golden empire of the Incas. Spain conquered an existing crossroads, and continued to employ it for that purpose.

Our dialects of Spanish may have more anglicisms than those of our neighbors, but for starters we don’t have the Castilian lisp. The Spanish that was established here came from southern Spain, with soldiers and sailors from places relatively recently conquered from the Moors at the time of the conquest of the Americas, places where most young men had no attractive future and every incentive to leave. The soldiers and priests of conquest were by and large led by the younger or out-of-wedlock sons of the nobility — hijos de algo or somebody’s sons, or as it has come down to us, Hidalgos.

Hidalgos didn’t work. They managed property and directed other people to work. If they were lucky or ambitious, they got some sinecure atop a cornered market for some essential or very popular good or service. But Panamanian soil is not so rich and before the world developed a taste for coffee and the technologies to usefully ship bananas and meat overseas being a plantation master was not such a lucrative Hidalgo pursuit. Roles in the shipping of Peru’s looted gold and of European luxury items to the Pacific outposts of the Spanish Empire were more profitable. A commercial culture arose around shipping and the fabulous annual trade fairs at Nombre de Dios and then Portobelo. But the exhaustion of Incan treasures to be easily had, along with the predations of the likes of Sir Francis Drake and Sir Henry Morgan, put an end to the era of trade fair prosperity. Most of those who became rich from that era of Panama’s prosperity left for Ecuador or other parts of the Spanish Empire. Panama still was a good overland shortcut to the Pacific, although the longer Mexican route was less pestilential. After the trade fairs we became a sleepy backwater and today’s rich Panamanians who trace an illustrious and prosperous family tree back to the Hidalgos generally sport a forged lineage.

It wasn’t until the middle of the 19th century, nearly two centuries after the trade fairs, that prosperity began to return to Panama. An American company build the Panama Railroad and Americans streamed across the isthmus going to and coming from the California Gold Rush. The French started, and then the Americans finished — in each case largely on the backs of West Indian labor — the Panama Canal. As Panama became a bit richer, British shipping took notice and established its outposts here. International commerce and financial services came as adjuncts to the canal. A new Panamanian aristocracy arose, generally on the strength of its ties with these international forces. These are the rabiblancos — Panamanian Spanish for the White-tailed hawk, but that origin is obscure to most of the people here. rabiblancos are oligarchs and they are infamous for their fraudulent family histories, academic credentials and representations to gullible foreigners whose fortunes they seek to appropriate.

The Hidalgos and the rabiblancos do, however, share a continuity. They embody a set of values, one that has diffused throughout most of Panamanian society. It’s not what you know, it’s who you know. Family values include theft if it makes the family a bit more comfortable, and mean that if you come into a public office with the power to hire people and you do not put as many relatives as possible on the payroll you have betrayed your family. The use of political or judicial power to promote somebody’s business, or to destroy somebody else’s business so that a favored party can move in and take over, is the essence of government. Panamanians are mostly of mixed race and are an international polyglot, but if there is advantage to invoking racism or xenophobia the general culture won’t take that as overly disgraceful.

In a Panama that doesn’t produce very much, much of the upward mobility is by way of a grasping political caste under rabiblanco or foreign sponsorship. At the top of this? General Noriega was a US-trained CIA asset on his way to power. After him? President Endara, an NYU-educated corporate lawyer. Then President Pérez Balladares, Notre Dame and Wharton and then CitiBank. Then President Moscoso, the poorly educated at a Miami community college widow of an old caudillo with powerful backers in the south Florida Cuban exile community. Then President Torrijos, the son of a military dictator and Texas A&M man. Then President Martinelli, a University of Arkansas grad and Wal-Mart intern, also by way of CitiBank. Now President Varela, scion of a liquor distilling family and Georgia Tech graduate. Did some of them acquire this or that along the way, so as to present themselves as “self-made?” Panamanian corporate and banking secrecy, and our historic and current criminal defamation laws, are well designed to limit any inquiries about the legitimacy of such claims.

What is Panama’s offshore industry?

Banking secrecy, providing refuge for criminals from around the world and the celebration of defrauding the tax man go way back in Panamanian culture and law. But the institutions from whence arose the Mossack Fonseca law firm — and a number of others in the “offshore asset protection” sector — mostly go back to the establishment of the international banking sector and the rise of the duty-free import/export industry.

International banks first came here so that ship owners could pay their crews. The large payrolls of the French and American canal construction efforts were largely handled and guarded in-house, without the need for a major banking presence. Once the canal was open the needs of shipping and commerce increased the demand for banking services.

Before that robbers created a huge problem, a public order dysfunction with which the authorities in Bogota — the seat of the the Spanish Empire’s Viceroyalty of New Granada of which Panama was a part, and then the capital of the greater Colombia, of which Panama was also a part until its November 1903 separation — could scarcely be bothered. Starting in the days of the Panama Railroad construction, Bogota authorized the Panama Railroad Company to create a private army, which in its heyday was famously under the direction of Ran Runnels, a former Texas Ranger. Through the French Canal construction days the New York corporation that owned the railroad was the main force for enforcing some sort of order in the transit zone between Colon on the Atlantic Side and Panama City on the Pacific, which was later to become the canal area.

As an independent republic under US tutelage, the need for private armies in Panama all but went away. There are still bank robbers to this day, but mostly they don’t get away with it. The ones who do tend to be those who run the banks, and some of these go on to become major actors on Panama’s political and financial scenes.

(Does anyone remember the acquisition of Banco del Istmo by HSBC? The big fuss here was how about a half-dozen men, including then Vice President Samuel Lewis Navarro, prevailed on the government to write a special capital gains tax exemption worth some $400 million for themselves just for that transaction. The heads of the HSBC branch in Panama and at the home office back in England were rewarded with large bonuses and took their retirement. Then HSBC’s office in London complained that they had not bought so much as had been represented and it wasn’t such a good deal after all. Panama, you see, has its own form of accounting. The Panamanian supreme court even ruled that Generally Accepted Accounting Principles that prevail in the rest of the world are unconstitutional here. Does HSBC allege that their man in Panama at the time didn’t know that?)

The surge in the import/export industry came with the duty-free Colon Free Zone, the businesses of which pay no taxes on the goods that they import and then export. (The business owners do pay income taxes on what they declare as their personal income, and if things imported into the free zone are bought there and taken out into Panama duty must be paid.) This walled part of the city of Colon had its humble beginnings in the late 1940s and its first superstars were the Motta family, Sephardic Jews who came to Panama via the Caribbean and soon had the world’s largest liquor distributorship based in the Colon Free Zone. They branched into different products, split the free zone business between alcohol and everything else, then went into other sectors such as Panama’s Copa Airlines, the TVN television network, a major behind-the-scenes presence in Panama’s boxing scene, a big share of Banco General and more. They are Panama’s richest family and quite influential in the nation’s politics, even if not as politicians themselves.

Panama’s rabiblanco elite was centered in Panama City and could not be bothered with hardscrabble, mostly black Colon. Was their old game to see businesses that others, often foreigners, develop, then use their political influence and maybe a bit of old fashioned bribery to shut those companies down so that they could take over? By the time that the Mottas got big enough for them to look up from Panama City and notice, the Motta family was too rich to be very vulnerable to those sorts of power plays.

Then came the coup in 1968 and many old power equations broke down with it. General Torrijos allowed the Free Zone to prosper. One of its early big customers was Cuba, which under the US embargo laws needed a place to shop for certain things. The duty free zone became the most important regional wholesaling and warehousing center as US exports were replaced by the products of Asian industry. Jews, Hindus, Arabs, Chinese and Colombians, ethnicities that had been disdained by the rabiblancos, went into business in the Colon Free Zone and prospered in a big way. With that commerce came the need for banking and insurance services. The highway robbery of buyers carrying large amounts of cash for Free Zone transactions still happens, but it would be a lot more common had the banks not set up outposts within the Free Zone walls or in any case not on the other side of the isthmus in Panama City’s banking district.

Under the 21-year dictatorship the banking system also prospered from the rise of the drug economy, and the world’s tax cheats and kleptocratic heads of state also took notice of what the drug lords were doing and began to park their ill-gotten fortunes in numbered Panamanian bank accounts as well. Panamanian corporate secrecy added extra layers of protection, the opportunity to play shell games with investigators from elsewhere. There arose an entire “offshore asset protection” industry, mostly centered in law firms but also including brokerages, banks, real estate, investment counselors and CPA firms. The Mossack Fonseca law firm, a merger of two small firms, traces its roots back to 1977, a time when General Omar Torrijos ran Panama.

So is Mossack Fonseca the center of world attention at the moment? With branches in nearly four dozen countries they may be the most widespread Panamanian “offshore asset protection” firm, but there are others and some of these may have more clients, or richer clients. You may have heard this European adage: “There is multilingual, trilingual, bilingual and American.” So many US citizens, including some very rich and supposedly sophisticated ones, only speak English and look for Anglo surnames when searching out a Panamanian law firm with which to do business. Do conspiracy theorists of the weird left and of the online paranoia profession make a big point of of the relatively few Americans mentioned in the Panama Papers? There are Americans named and their relative unimportance in this huge leak may be mostly a matter of US citizens with money to launder or big tax bills to evade prefer the services of other firms.

(One variant of the conspiracy theories about the Panama Papers is that Israel is shielded and thus the revelations must be some variety of Jewish plot. See the coverage of Israelis mentioned in the documents published in Ha’aretz to give the lie to that in the first instance. Then consider that Israelis argue among themselves about who is Jewish, and then in the Spanish Americas — most famously in Albuquerque, New Mexico, USA — there is the legacy of Crypto-Jews, those who hid their prohibited Jewish identity in the times of the Spanish Inquisition. Don’t the theoreticians of The International Jewish Conspiracy have a book burning to attend somewhere? They don’t belong in any serious discussion of the Panama Papers.)

When and where did this story arise?

As the 11.5 million documents in the Panama Papers are more fully published, we shall see the window in time from which they come. Figure that they may not go back to the firm’s foundation in the 20th century, but just to the time when Mossack Fonseca went online. If they do get into the firm’s founding documents, that will be a sign of either an inside job, a product of a law enforcement investigation such as the one in Brazil that led to raids, seizures of documents and hard drives and criminal charges against two Mossack Fonseca lawyers, or of a profound hack that got way beyond the website and email accounts.

What we are told is that about a year ago a source came to a Munich newspaper and began sending them documents. The first of the documents sent, if they are ever identified, ought to indicate much about the source’s thinking, or possibly what she or he expected of the journalists’ thinking.

What was happening in the world of “offshore asset protection” a year ago? Panama was making some token concessions to avoid sanctions by various countries and international organizations. Were those European powers, the Americans and groups like the Organization for Economic Development and Cooperation so gullible as to believe that the problems with Panama were over, or on the road to being resolved? Or were cynical politicians, in the fashion of Iceland’s now former prime minister, David Gunnlaugsson, putting on insincere shows for public consumption? Probably more of the latter than the former, but in any case the Panama Papers are disrupting those shows.

The leaks went to a newspaper in Germany, where Transparency International began, where bankers and politicians have been taking stern postures against corruption and waste in southern Europe. The leaks came at a time when the United States, the European Union, China, Russia and Brazil are all suffering from serious economic problems. Markets may say one thing, but governments in these places are bleeding and massive tax evasion — let alone large-scale embezzlement and corrupt sales of important national assets — are not so easily afforded.

The source of the Panama Papers leak will have a particular world view and set of motives. So will the journalists and editors who report and publish the stories arising from them. But well beyond what anybody ever intended to affect, these revelations are bound to affect business and political reputations. Was it the NSA? Was it a rogue Brazilian prosecutor? Was it a hacker of the Anonymous genre? Was it someone at Mossack Fonseca who didn’t get the raise or promotion that he or she thought should be coming? That’s all beside the point and if Panamanian President Juan Carlos Varela, his cabinet minister and party comrade Ramón Fonseca Mora or persons whose bread and butter come from “offshore asset protection” complain that it’s unfair to call them “the Panama Papers,” pay them no heed. This is about Panama. About crooks in richer countries, too, but it’s about Panama and Panamanians would be well advised to deal with it.

 

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Jackson, Panama denies

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Cunha
Eduardo Cunha, president of Brazil’s Chamber of Deputies, has been leading the charge to impeach President Dilma Rousseff for alleged corruption. However, there has been a bump along his road: documents revealed in the Panama Papers show that the Panamanian law firm Mossack Fonseca set up a trail of shell companies leading to illegal Swiss bank accounts containing unexplained millions. Now he’s the one investigated for corruption. Photo by the Chamber of Deputies.

Panama denies

by Eric Jackson

Denial can be a way of life down here.

The Brazilian construction giant Odebrecht was decapitated in the middle of last year with the arrest of its CEO, Marcelo Odebrecht. It was about bribes paid to officials of the Brazilian state-owned Petrobras oil company. Marcelo was convicted and sentenced to a bit more than 19 years in prison. In a new round of raids police and prosecutors swept down on the premises of his successor. Brazilian authorities claimed that they found the new CEO in possession of a spread sheet detailing payoffs to some 200 public officials. It was old hat for the Odebrechts. In 1992 they were a clearinghouse for construction companies to rig bids and suppress competition. Politicians received kickbacks from the inflated contracts. President Fernando Collor de Mello was forced to resign.

This time, police and prosecutors say, Odebrecht was more sophisticated. The money that went back to Petrobras officials passed through a maze of corporate shells and numbered bank accounts in several jurisdictions, some of them British dependencies. These elaborate money laundering trails were designed by Panamanian lawyers who specialize in that sort of thing. Most of the companies were no more than conduits through which money flowed. Some were Panamanian, some were not.

This time Odebrecht’s activities were more widespread. Against the backdrop of continuing police raids on the offices and homes of construction executives, a political consultant power couple was called home from the Dominican Republic, where they were working on President Danilo Medina’s re-election campaign. João Santana and Mônica Moura were arrested when they got off the plane in São Paulo, formally on charges of using illegal (under Brazilian law) secret foreign bank accounts to receive millions of dollars. Under questioning Moura admitted that this was how she and her husband were paid — by whom she professed not to know — for managing the political campaigns of the MPLA in Angola, the Chavistas in Venezuela and former President Ricardo Martinelli’s Cambio Democratico in Panama. Prosecutors say that the money trails into those accounts lead back to Odebrecht.

A foreign company paying for a Panamanian election campaign? That violates Panama’s laws — which are not enforced. Meanwhile, under the Martinelli administration Odebrecht was paid $250,000 per square meter for a 4.5-kilometer extension of Panama City’s Coastal Strip road and park project. Under the present administration Odebrecht has won several more contracts, a couple of them by specifications rewritten so that only Odebrecht could “win” the “bidding.”

There was a hue and cry, and Varela introduced legislation to bar companies convicted of corrupt practices from bidding on public contracts in Panama — but the conviction has to be in a Panamanian court. The charges and convictions elsewhere are treated as foreign matters which have nothing to do with Panama.

Now come the Mossack Fonseca law firm’s embarrassing files. This is but one of Panama’s “offshore asset protection” operations — it has an impressive string of offices around the world, but others in the industry may have more clients, or richer clients

So is it a British scandal or a Panamanian scandal? UK Prime Minister David Cameron’s late father parked a fortune in offshore tax havens — some to be inherited by the politician son who rails against tax havens. The corporate shells were made in Panama.

It is easy to blame Panama for the corruption of the industrialized world. Faux nationalists now petition to change the phrase “Panama Papers” to “Mossack Fonseca Papers,” so as to protect the nation’s honor. But what honor? The law firm’s partner and co-founder, Ramón Fonseca Mora, is a minister in President Varela’s cabinet. He was the president of Varela’s Panameñista Party.

It is unfair to cast all blame on Panama. However, when other countries are looted, Panamanian lawyers help the crooks do it and proclaim that all is legal under Panamanian law. The natural response of many people around the world is to look at Panama as a variety of international nuisance.

 

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Latin America and the Panama Papers

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Fonseca
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.

Notes

[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?

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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

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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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