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You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

You've just hit a "pay wall." Panama-Guide subscribers who have logged in to their user accounts can see the full text of this article. However non-members can only see this short introduction. If you would like to subscribe, please click this link to subscribe via PayPal.

The Italian Mauro Velocci, who was also a business partner of Valter Lavitola, in a brief communication from Italy with the La Estrella newspaper said Angelo Capriotti was arrested yesterday and "than means there is strong evidence."

Velocci told La Estrella that despite this "Panama continues with closed eyes, evidence of corruption."

The Italian businessman who is one of the main witnesses for the Prosecutor in Naples believes that if one year after the fact, the Italian courts have ordered the arrest of Capriotti and they are keeping Lavitola confined then "in this case there is evidence."

The latest arrest - The arrest of Angelo Capriotti arrest on Thursday in Switzerland and his subsequent extradition to Italy again generated a number of concerns about the possibility that Panamanian officials had received bribes in exchange for giving the company Svemark a contract for the construction of modular prisons in Colon, Chorrera, and Panama.

Joan Solés, the correspondent from Radio Panama, said yesterday from Italy that there is information in the record indicating there were plans to increase the contract for the construction of prisons for up to $28 million to be paid as bribes.

She said in the record, is mentioned the version that there was money that was transferred in a briefcase and it was delivered to an official who is not identified.

When the scandal about the prisons broke, the person who was in charge of negotiating the contract with Capriottii, who was the representative of the company Svemark, was the then Minister of Government and current Mayor of Panama City, Roxana Mendez.

Solés made it clear that the processes being advanced by the Prosecutor of Naples is only against Italians, and that Panamanians cannot be included. (Estrella)

Editor's Comment: So, first question in court. To whom did you hand the briefcase filled with $700,000 in cash?

Her lawyer Zulay Rodriguez is claiming the government is violating her client's human rights.

Recently, Pellegrini was transferred to the Women's Rehabilitation Center despite a request from the prosecutor's office asking for her not to be moved from the temporary detention facility located within the Directorate of Judicial Investigation.

Rodriguez said her client has been locked up for 19 straight hours without even being let out to go into the patio.

The lawyer said they are trying to intimidate her client, because she is the only person who managed the "High Spirit" account, supposedly owned by President Ricardo Martinelli. (Telemetro)

Editor's Comment: Pellegrini's lawyer Zulay Rodriguez is this rabid PRD lawyer who is anti-CD and who was ultimately responsible for the resignation of a Supreme Court justice appointed by Ricardo Martinelli. Rodriguez can be counted on to make as many headlines as possible with this case, so at the very least it's going to be interesting. Rodriguez has been targeted by the administration in the past, they illegally intercepted an intimate cell phone conversation between her and her husband, and released it via YouTube in an attempt to keep her in a box. Well, she's back, and she's going to be using this case to get some revenge...

The company APM is Supplies, S.A. - founded in 2008 - whose owner, Poulett Morales Montero, revealed yesterday that within the boutique property she has an area reserved and two desks for the operation of this company.

The PAN has received about $80 million between 2010 and 2011 of the funds given to the Deputies of the National Assembly, one of whom, José Muńoz (CD) - has spent nearly a million dollars on things for the people in his circuit.

The Anti Corruption Prosecutor Will Investigate The Projects Of The PAN - The First Anti Corruption Prosecutor has opened an investigation into the alleged irregularities in the construction of roads funded by the National Assistance Program during the administration of Giacomo Tamburrelli, between July 2009 and August 2012.

This investigation was initiated after a complaint filed last October, by the Panameńista Deputy Grimaldo Cordoba, who thought there were anomalies in the roads built in the provinces of Los Santos and Veraguas.

The Public Ministry reported that the prosecutor Rosa Elvira Pinzon is waiting for a report from the Comptroller on the projects approved during Tamburrelli's administration. (Prensa)

Editor's Comment: There's no doubt a degree of corruption exists in the granting of these government contracts. The Martinelli administration has handed out billions of dollars in contacts since 2009, and most of the people are running around with big smiles on their faces because of the money they have made off of these government contracts. However they also tend to steer the contracts to their friends and relatives, and the people who support the CD or Molirena party. The La Prensa newspaper and the Panameńista party is now on the "outside" and they are hammering away on these issues in an attempt to create as much smoke and friction as they can, for political reasons. Just recognize the bias. If the Panameńistas were running the show, then the La Prensa newspaper would be ignoring these things, and attacking the PRD and CD politicians instead.

The Ombudsman blasted against the officials who work at this prison, stating there is a high degree of human rights violations and corruption by the staff working there.

"Whoever does not pay (bribes) for their items to enter, does not enter. The public jail in David is the worst in the country. These people do not just suffer from the heat but rather they are suffocating. The inhuman conditions in which they live is a shame for a prison system that has given them several million dollars," she said.

In response, Ismael Flores, the Warden of the Prison, said they are dealing with a building that has collapsed, and during his administration they have improved conditions.

"If the Ombudsman has the evidence of corruption against me or my officials she should present them. I understand she is doing her job, but she just listened to and then repeated what was being said by the detainees," said Flores.

The Ombudsman called on the Government, because the conditions in the prison found across the country are a shame, and this is becoming a situation that puts the State of Panama with a very high degree of violation of human rights.

There are 1,037 detainees in the public prison in David. (Critica)

Editor's Comment: And if William Dathan "Wild Bill" Holbert pays enough in bribes, then he can have a cell phone with an Internet connection which he uses to update his Facebook page. Agreed. Corruption at that prison is rampant. Holbert posted photos of his jail house buddies drinking bottles of Seco in the open during visitation sessions, among other things. I would like to see the government of Panama conduct a sting operation which results in the arrest of all of these corrupt officials.

That was the phrase used to define the legal status of the controversial mayor, who has been sentenced to three years in prison for collecting bribes.

Batista confirmed that he filed an appeal on behalf of Mayorga to the Criminal Chamber of the Supreme Court. This, he explained, "has a suspensive effect", allowing him to stay in office.

The lawyer said he will sue all of the judges in the first and second instances, over the way in which they have handled the Mayor's case.

"They ignored the law," he said. (Estrella)

Editor's Comment: Fact: The Mayor of Chame has been convicted of crimes related to corruption and of having collected bribes for the titling of municipal lands, and his conviction was upheld on appeal. He only remains a free man (and in office) until all of his appeals run their course.

The Finmeccanica chairman and chief executive, Giuseppe Orsi, was taken in for questioning by prosecutors, as was Bruno Spagnolini, head of Finmeccanica’s Augusta Westland helicopter unit. Prosecutors also raided the Augusta Westland corporate offices in Milan.

The investigation is focused on whether company executives violated bribery and corruption laws in seeking the helicopter deal with the Indian military.

Prime Minister Mario Monti said Tuesday that the government — owner of a 30 percent stake in Finmeccanica – was prepared to do whatever necessary to clean up the company, the second-largest industrial group in Italy after Fiat.

“There is a problem with the governance of Finmeccanica at the moment and we will face up to it," Reuters quoted Mr. Monti as saying on RAI television.

Finmeccanica said Tuesday that “the operating activities and ongoing projects of the company will continue as usual.” In addition, the company expressed “support for its chairman and C.E.O., with the hope that clarity is established quickly,” while “reaffirming its confidence in the judges.”

The Indian Defense Ministry said in a statement that in “view of media reports” linking it with Finmeccanica’s Augusta Westland unit in Britain, it “had sought information” from the Italian and British governments, but that “no specific inputs” were received substantiating the allegations. The ministry said it was referring the case to the Central Bureau of Investigation, the Indian agency responsible for investigating corruption cases.

Italian press reports said two others, residents of Switzerland, were being sought by Milan prosecutors on suspicion that they had acted as middlemen.

A spokeswoman for Finmeccanica in London, Clare Roberts, declined to comment beyond the company’s official statement.

Prosecutors could not immediately be reached for comment.

Consob, the Italian stock market regulator, banned short selling of Finmeccanica shares for Tuesday and Wednesday, after the company's shares fell more than 10 percent in early trading.

The news was first reported by the Italian newspaper Corriere della Sera.

With national elections just two weeks away, the Italian establishment has been unnerved recently by a series of high-profile corporate investigations.

In one, Banca Monte dei Paschi di Siena, a Tuscan bank, has acknowledged using secret derivatives deals to mask hundreds of millions of euros in losses.

That investigation has focused attention on the role played by the Bank of Italy and its then-chairman, Mario Draghi, who is now president of the European Central Bank.

It has also given the former prime minister, Silvio Berlusconi, an issue with which to attack his political enemies as he angles for a comeback. The bank is based in Siena, in a part of northern Italy that is a stronghold of the leftist Democratic Party. Mr. Berlusconi, the conservative former prime minister who hopes to be a spoiler in the elections this month, has been trying to lay blame for the scandal at the Democratic Party’s doorstep.

Mr. Draghi asserted last week that the Bank of Italy had “done everything it should” with respect to the bank, adding that much of the criticism was “part of the regular noise that elections produce.”

In another case, Eni, the country’s biggest oil company, said last week that Milan prosecutors had expanded an investigation of alleged corruption at one of its subsidiries, Saipem, to include the parent company and its chief executive, Paolo Scaroni.

In a country that is rarely held up as a technological leader, Finmeccanica’s trendsetting AgustaWestland helicopter division and Alenia Aermacchi aeronautics unit are sources of national pride. Finmeccanica is among the world’s largest aerospace, defense and security companies, employing 70,000 people worldwide and reporting first-half 2012 revenue of about €8 billion, or about $10.7 billion.

Since taking over in May 2011, Mr. Orsi has sought to restore investor confidence by cutting debt and selling off nonstrategic operations, but the restructuring has lagged behind market hopes. On Jan. 18, Standard & Poor’s cut Finmeccanica’s credit rating to junk status and said the outlook was negative, citing the company’s failure to reduce its debt more quickly.

Mr. Orsi’s problems mark just the latest troubling chapter for Finmeccanica. He took over in May 2011 after his predecessor, Pier Francesco Guarguaglini, was himself felled by allegations involving the role of his wife, Marina Grossi, while she was chief executive of Finmeccanica’s Selex unit.

Editor's Comment: This story could have repercussions in Panama. I still believe president Ricardo Martinelli fired his Vice President Juan Carlos Varela from his position as Foreign Minister - effectively booting him off of the Executive Cabinet and breaking his alliance with Varela's Panameńista political party - because Varela was the person primarily responsible for bringing the whole Finmeccanica scandal down on his doorstep. And I'm also sure the Finmecannica scandal in Panama was a case of "corruptus interuptus" meaning they were planning to execute the contract with some serious overpricing which were going to turn into kickbacks for the Panamanian government executives, but the scandal involving Valter Lavitola broke in Italy before they could consummate the deal. Panama's government then quietly changed the terms of the contract to lower the price - removing the overcharges that were going to pay for the kickbacks - and let the deal go through. Panama bought helicopters, radar sets, and digital mapping services from Finmeccanica and also received donated patrol boats from the government of Italy to sweeten the deal, all to be used in the fight against drug trafficking. So, the CEO of Finmeccanica has been arrested in yet another kickback scandal. It's becoming fairly obvious that this is how the company does business - they inflate the cost, write the inflated cost into the contract, then kick that money back to the corrupt local governments where they are doing business, all around the world. It's common for companies to get ahead by exploiting corrupt politicians to earn government contracts, and in this case it's the same thing, just on a larger scale. So yeah, thus far Martinelli has managed to dodge this bullet. Just barely.

"I know the names," said Mulino, and he said he was sure that now he would be asked to provide those names of those who could be sponsoring politicians and the politicians who are receiving drug money.

"Beware of this, and we are not immune," said Mulino in a conversation with reporters.

Mulino said it is relatively difficult for drug traffickers to penetrate a presidential campaign, but it is easier for them to hand over cash to the smaller campaigns where there is less control.

He said the government is making efforts to counter these illegal movements of money, but the drug dealers put who they want in the political campaigns in order to maintain control, and to make sure that the politicians are working for them. (Critica)

Mayorga's legal team filed an action before the Second Judge of Chorrera, Ricardo Mazza, alleging that Correa him from his position as the Mayor of Chame without ever having been notified of the decision made by the Second Superior Court of Justice confirming a decision by a lower court that sentenced him to three years in prison for crimes against public administration (in this case extortion and bribery).

Mayorga has been besieged by corruption scandals in the comminuty of Chame, including the sales of public lands in the central market, the airport, and municipal land.

"The resolution was not duly executed," said Mazza about Correa, as a reason to reinstate the mayor.

"Her advisers were not well informed, (Mayín Correa) acted lightly, due to a desire to give the position to (Jose) Pastor Solis the (Deputy Mayor)," said Mayorga, after returning to his office at City Hall in Chame shortly before noon.

According to the mayor, Correa promised Solis - who is also in the Democratic Change political party - that she would give him his office.

"I'm not going to be knocked out so easily ... because the problem is political," he insisted.

La Estrella tried to get a statement from the Governor, but she did not return repeated phone calls.

The Process - Now, the Second Court of La Chorrera should formally notice Mayorga of the decision made by the Second Superior Tribunal, and give him five business days to respond.

In this period of time (which would end the week after Carnival) the Mayor can file any action to try to stop the court's decision, according to judicial sources, which would mean filing an appeal.

Otherwise, Mayorga should be separated from office and go to prison for three years.

Mayorga also announced he would file a complaint against the Governor for failing to comply with "due process."

The Shooting Mayor - In the hours before Mayor Mayorga returned to office, Solis had entered the office. He was analyzing what changes he would make, and announced a "deep" audit in order to detect possible "flaws and illegalities."

"This has nothing to do with politics. It is a decision of the judicial sphere," Solis insisted, contrary to the excuses made by Mayorga, the five-time mayor of Chame.

The entry of the Deputy Mayor was bittersweet: the office staff, who were uncomfortable, denounced that they had been blocked from entering the Mayor's offices, and the Municipal Council of Chame said there would be "better days" to come. (Estrella)

Mayorca said he quit the Cambio Democratico political party about a month ago, and he said while speaking on the Telemetro morning news that he is "prepared for what will be coming against him." "Mrs. Correa acted desperately to keep her promise promise to my alternate Solis, to remove me from office in order to appoint him, and this was her opportunity," he said.

Mayorca denied that his decision to leave the Panameńista political party and to enroll in the Democratic Change was an attempt to avoid the sentence handed down by the Second Superior Tribunal, signed by Judge Ricardo Maza, and dated February 2012.

This comes after charges against him were dismissed following an allegation made in 2009, made against him by the citizen Lina María de Gracia, who said he allegedly charged a bribe through a lawyer, for the transfer of a parcel of land owned by the municipality.

He warned that the fight will continue to the end because he is not going to allow himself to be "knocked out" so easily.

Meanwhile Miguel Batista, the lawyer representing Mayorga, said they have not been provided any notice from the Court, saying the judgement against his client is being executed.

He said the decision has no legal effect until they have been formally and officially notified (served). (Panama America)

Editor's Comment: So this guy was a Panameńista politician. As soon as he tool office in 2009 an allegation was made against him for charging bribes. The case turned against him, and when the alliance between the Panameńistas and the CD broke up, he changed from his Panameńista party to the CD, in order to save his ass. About a month ago he left the CD and went back to the Panameńistas, and now the Governor of the Province of Panama removed him from office, in response to a court decision that was actually handed down a year ago. Why wasn't he removed from office in February 2012? Why was he only removed from office after he left the CD party? See what I mean? Justice in Panama is far from blind. It first checks to see what political party you're in.

So here's a piece of advice for all expats. Get your Panamanian citizenship. Join the political party that's in power. And then (do what they do) and change after every election. Make sure everyone knows that you're in their party. And you'll never have any problems with land, law, courts, legal, or otherwise. When in Rome, eh? Why not?

Charges against these three people had been dismissed by the Third Criminal Court for alleged crimes against the public administration in the form of embezzlement relating to the award of land in Paitilla.

The Third Court also acquitted Segura and Perez of crimes against the public trust.

The land No.35.9801, measuring 11,379 square meters was transferred to the State by the Public Registry. In the place, work began to build a park. (TVN)

Editor's Comment: Check the date. It's no coincidence that this decision was made public this afternoon, on the day before Carnival starts. Anabelle Villamonte is the same person who signed the documents for the land in Juan Hombron, Chame, and on Isla Bastimentos in Bocas del Toro. The former Minister of the Presidency Jimmy Papadimitriu was forced to resign because of this scandal, and since Villamonte was acting on his orders, she gets off. That was apparently the deal...

Carrera said on 5 February 2013 they will depart from various points in the province of Chiriqui to protest, and remember the slaughter against the people caused by members of the National Police during the clashes, in which the Indians Jerónimo Rodríguez Tugrí and Mauricio Méndez were killed.

She said despite the signing of agreement with the national government authorities they continue with the implementation of Barro Blanco hydroelectric project, although there is a report from the United Nations Organization (UN) which confirms that indigenous communities, close to the Tabasará river, will be affected by this project.

The chieftain said the government has made a mockery of the Ngäbe people and has not ordered the suspension of the construction of this hydroelectric project, in order to conduct a second international inspection by experts to determine the advantages and disadvantages of the project.

She warned that the Indians will continue their fight with intelligence because they will not allow the development of hydroelectric projects that affect the environment and the community environment. (Critica)

Editor's Comment: This is the woman who was given a pickup truck worth $29,000 dollars in exchange for leading the protests against the national government. Once again, members of the political opposition don't really care about the people, the environment, or the Ngäbe - but rather they are simply being used as pawns by those with money and political objectives to obtain. This woman has lost all credibility. She's just another corrupt politician, it's just that she happens to dress like an Indian. Shame, really...

Brenes said it is "a proof of incompetence or cover-up, the fact that in the 59 days that have passed since the disappearance of the Sub Director of Financial Analysis of the Audit Department of the Superintendency of Securities, Vernon Ramos, the Public Ministry has not commented on this."

Brenes said the Public Ministry has not reported yet whether Ramos "fled, is missing, or is dead."

"This is proof of either incompetence or a cover-up," said Brenes in TVN Noticias.

Ramos was one of the most important figures in the Financial Pacific case, since he had input into the reports that were prepared, which had certified the problems in the brokerage house, he said.

Therefore, the manager of the Stock Exchange wondered if Ramos's disappearance might have been programmed so he would not have to testify or to dismiss the reports.

"If Mr. Vernon Ramos does not appear, that which he described (in his reports) will not have any form, and this evidence will be discarded from the investigation," said Brenes.

Meanwhile, the former Minister of Economy and Finance, Fernando Aramburu Porras said it is necessary to clarify this scandal.

"Let's not play with the goose that lays the golden egg, this country is too valuable for three or four gentlemen to come to destroy it," he said. "Let us not allow it," he added.

So Aramburu Porras called for all serious forces to put a stop to this.

"This can then explode in our faces later, we should not play with these things," he said on Telemetro.

Meanwhile, Rolando Rodriguez, a lawyer for the Financial Pacific brokerage house, said the company is being responsible with investors.

He said further that it has recovered some of the money, what the record shows.

Rodriguez said the brokerage is not afraid to be investigated and denied that they have been given an opportunity to fix situations and destroy evidence.

"We want fair and correct rules in what is being investigated," said Rodriguez on TVN Noticias.

"We have maintained the respect of the public, following due process," said the lawyer. (Prensa)

Editor's Comment:Brenes is right. If there is a piece of evidence in a case, when it eventually goes to trial, then that person responsible for preparing the report has to appear to testify and to certify what is contained in the report. If Ramos never reappears, then whatever is contained in the reports he wrote and prepared will likely be tossed out. However, considering the circumstances, it will be possible for the Superintendency of Market Securities to do another inspection or audit, and simply repeat the work done earlier by Ramos.

However, this time the complainants are the managers of the brokerage firm and the defendant is the Superintendent of Securities, Alejandro Alfaro Abood, who opened administrative investigations against Financial Pacific in March 2012.

West Valdés, the legal representative and one of the executives of FP, filed this January 9th a criminal complaint against Alfaro Abood for allegedly committing crimes of abuse of authority and violation of the duties of the public servant.

According to sources in the Public Ministry, the action attacks Abood Alfaro for having issued resolutions 350-12 and 351-12 of October 15, 2012, in which he ordered to begin an administrative investigation into Financial Pacific for allegedly having committed violations of the laws regulating market securities in Panama.

The legal representative of Financial Pacific also considered as an act of abuse of authority of the Superintendency of Securities (VPS) a third decision issued on October 16, 2012, in which Alfaro Abood notified them of the internal investigation and a reorganization process of the company. Removal -

This new criminal complaint is in the office of the newly appointed Attorney General Ana Belfon, because Abood Alfaro is an officer with national level authority and jurisdiction, as established by Law 67 of 2011, which regulates the stock market.

The process must be submitted to the plenum of the Supreme Court for a final decision, because that is the body empowered to remove or dismiss Abood Alfaro, if the case warrants it.

Asked about the complaint against him, Abood Alfaro declined to comment.

However, Roberto Brenes, manager of the Panama Stock Exchange, warned that the organizations related to the financial sector are "extremely concerned" about the shift that the Financial Pacific case is taking.

In his view, it is clear that behind the charges against Alejandro Abood, the highest authority of the Securities, there is an interest in discrediting the institution and those who lead it.

"They want to remove Abood from the Superintendency. If this happens, it would be a really bad precedent for the system, its independence and power of action," said Brenes. Other Actions -

Financial Pacific's lawyers also filed against the decisions of the SMN an action under constitutional guarantees before the plenary of the Supreme Court of Justice on October 19, 2012, which was filed in the office of chief justice of that body of law, Alejandro Moncada.

The appeal was admitted by Moncada on 6 November, and that same day he ordered the suspension of the SMV orders to investigate and reorganize Financial Pacific internally, leaving the brokerage back in the hands of its managers.

Their appeal has been in Moncada's office for two months, and it has not been decided.

As in the criminal complaint filed this week, the Financial Pacific appeal questions the procedure followed by the SMV to notify them of the investigation, and the administrative reorganization of the company.

"Without a doubt, the procedure adopted certainly catches the eye, because the day our representative was notified of the decision of the administrative body to initiate an investigation against them for alleged violations of the Securities Exchange Act, the sanction decision was also issued, one that determines the need to force the reorganization of the Financial Pacific brokerage house, which was also reported on the same date, which shows clearly the lack of procedure stipulated in the law itself," says the appeal.

Similarly, FP held in this legal action that the person designated to manage the reorganization, Maruquel Pabón de Ramírez, is a "publicly stated enemy" of the managers of the brokerage firm.

They explain that in the reorganization effected by the SMV, Pabón was designated as the legal representative of the brokerage firm, "a power that the law does not allow the Superintendency of Securities."

Files - Besides the record that opened this January 9 in the Public Ministry, there are four other summaries related to Financial Pacific.

In July 2012, the directors of Financial Pacific, West Valdés and Iván Clare, presented a criminal complaint before the Public Ministry based on the alleged theft of $11.5 million dollars owned by several of its customers.

In this case there are 11 accused persons, of which 10 are in custody.

This file is in the office of the Thirteenth Circuit Prosecutor, and the case is being managed by Julio Cesar Laffaurie.

Then, on 20 November, Alfaro Abood filed a criminal complaint against Financial Pacific for allegedly committing crimes against the public trust (falsification of documents), against economic wealth (fraud) and against the economy (money laundering).

In that same case, the lawyers for the SMV presented on 3 January 2013 an expanded complaint with new evidence.

This process is in the office of the Third Circuit Prosecutor. So far there are no accused and no one has been arrested in this case.

Meanwhile, the comptroller of the Savings and Credit Cooperative of the Employees of the Social Security Fund, Martha Luna, filed on 27 November 2012 a criminal complaint against the former manager of the cooperative, the members of the board, the board of Directors, the Supervisory Council, and all administrative personnel associated with money management, for allegations of financial crimes perpetrated against the assets of the entity, an action in which Financial Pacific is also mentioned. This file is in the office of the Fourteenth Circuit Prosecutor, and no one has been arrested in this case.

Finally, the Auxiliary Prosecutor of the Republic opened an investigation on 17 November 2012 into the disappearance of the auditor of the SMV, Vernon Ramos Lopez, who was working on a report about Financial Pacific when he disappeared.

Upon completion on 28 December, this special report was the basis for expanding the complaint in the office of the Third Prosecutor.

Prosecutor Asks Moncada For a Report About The Appeal - The Third Circuit Prosecutor, Digna Castillo, asked the General Secretariat of the Supreme Court about the status of constitutional guarantees (appeal) admitted on 6 November 2012, by the President of the Supreme Court Alejandro Moncada, against by the Superintendency of Market Securities for having ordered the reorganization of Financial Pacific, due to alleged irregularities in the management of this fund brokerage, said sources linked to the investigation.

The offical's request was dated 8 January 2012 and was addressed to the secretary of the judiciary, Carlos Cuestas, and forms part of the investigation being conducted by the prosecution after the criminal complaint filed by the Superintendent of Market Securities Alejandro Abood Alfaro on 20 November 2012 and expanded on 3 January 2013, against the managers of Financial Pacific, for alleged offenses of forgery, fraud and money laundering.

In addition to admitting the motion filed by attorneys for Financial Pacific, Moncada notified the SMV that their resolution of 16 October 2012 was suspended, which ordered the administrative investigation and reorganization of that brokerage house.

According to Article 2615 of the Judicial Code, concerning collateral injunctions, the judge has 48 hours to decide the case, but sources in the judiciary confirmed yesterday that so far there is no decision being circulated among the other judges of the Supreme Court on this case.

The prosecutor Castillo also asked the Superintendency of Banks to send to them as quickly as possible certifications on all of the information they have about Cayebank, supposedly headquartered in Belize, and that according to the allegations in this case, is one of those who has been most affected by the supposed irregular use of Financial Pacific's funds, sources said.

The executives of Cayebank have said they have on deposit more than $7 million in the accounts of Financial Pacific.

The prosecutor also asked to be informed if that bank has a license to operate in Panama.

Another of the judicial actions the prosecutor Castillo is prepared to conduct is to cite the four SMV inspectors who prepared the special audit report, which served as the basis of the amplification of the complaint that was filed on 3 January 2013 by that entity against the management of Financial Pacific.

They have been summoned to appear on 17 and 18 January 2013 - the inspectors with the last names of Gordón, Rodríguez, Carrasco and Chávez.

Meanwhile, the prosecutor suspended the taking of a sworn statement that had been programmed for yesterday with Sergio Barrios Martínez, a Financial Pacific employee, as part of this process, because their lawyers filed a certificate of incapacity.

Today Friday Mirna Serrano, another Financial Pacific employee, must appear before the prosecutor.

Meanwhile, one person with the last name of Castrellón was arrested yesterday, as part of the investigation being conducted by the Thirteenth prosecutor, as part of the complaint filed by the directors of Financial Pacific. (Prensa)

Editor's Comment: My only prediction in this case so far as that we would be hearing a lot more about it - rather than less. I don't know enough about Abood's political leanings yet to make a determination with regards to any possibilities that the actions taken by the Superintendency of Market Securities might have been politically motivated. Thus far it seems on the surface that he only acted in good faith, in an attempt to protect investors and to prevent them from losing their money - and that's his job. In any case there are now at least five different complaints being investigated, and it remains to be seen where all of this will land in the long haul.

Officials from the Securities and Exchange Commission of the United States refused to comment on whether the Petaquilla Minerals case would fall under the jurisdiction of this group.

But, in the past, the association has imposed substantial fines in cases originating outside the United States. (Prensa)

Editor's Comment: I called and spoke to the investigators of the BCSC last week about this case. When I called them they didn't know anything about it, so I alerted them to the headlines that have been dominating the Spanish language local Panamanian news outlets for weeks. It's safe to assume they are now examining those transactions in the Sept - Oct 2009 time frame carefully.

Luis Eduardo Camacho, communications secretary, confirmed that he told the ministers and heads of institutions not to talk about it. "The president himself told them not to respond to any publication of the newspaper La Prensa, because they are manipulating the information," said Camacho.

Both Martinelli and Security Minister Jose Raul Mulino spoke to the media until they were asked questions related to the letter sent by the president to the Attorney General.

But Alma Cortés, the Labor Minister, dared to speak and she said the recent publications were "passing the bill" from Martinelli's political opponents, for making them pay taxes.

"It is a meanness by political opponents. It hurts millionaires when you take money out of their pockets," she said.

The Attorney General appointed by Martinelli, Ana Belfon, only said the "management of investigations should be done in silence. Soon the results will be known."

Political analyst Renato Pereira said it is wrong to remain silent and that the president should reiterate his position and defend himself against all allegations that are being made. (Siglo)

Editor's Comment: So, Martinelli did in fact have an account at the Financial Pacific brokerage house. Since the Supreme Court ordered a halt to the "reorganization" that had been ordered by the Superintendent of Market Securities, I now don't have very much faith in the veracity or validity of whatever might be left in Financial Pacific's files.

Yesterday, the company president, Rodrigo Esquivel, issued a statement in which he claims that "Petaquilla Minerals, LTD. is a public company listed on the stock exchange in Canada, with 220 million shares issued and outstanding, with about four thousand (4,000) shareholders in four (4) continents. The shares of this company are not traded on the Stock Exchange of Panama, transactions occur in the stock market in Toronto, New York and Frankfurt."

In addition, the memorandum states: "According to the records of the Register of Shares of Petaquilla Minerals, LTD., Mr. Ricardo Martinelli Berrocal, the President of the Republic, has not been and is not a shareholder in this company, nor does he appear as a director of officer of any legal entity that is a shareholder of this company, nor have there been nor are there the presidents who preceded him."

The company's reaction came a day after the deputy minister of Mides, Niurka Palacios, said on Telemetro that "maybe" Martinelli had shares in Petaquilla, a statement she immediately recanted.

Meanwhile, Roberto Brenes, the executive vice president and manager of the Panama Stock Exchange, said the irregularities in this case is about the use of confidential information about the concession that was about to be given to Petaquilla Minerals so that the friends and relatives of the President could have bought shares in the company before they went up in price.

"Here there is no question whether or not the President has shares, the issue is the use of inside information to take advantage," he said. (Prensa)

Editor's Comment: On 7 September 2009 Richard Fifer had a private meeting with President Martinelli during which they discussed the future of the Petaquilla gold mining operation in Panama. Then someone purchased about 30 million shares of Petaquilla stock in September and October 2009. These purchases stand out because the normal volume on the stock is relatively low - at about 150,000 shares per day or so traded - so when there's a purchase of more than 10 million shares in one day that catches your attention, in hindsight. Then in early November 2009 Petaquilla announced that the government of Panama had granted them permission to begin operations and the price jumped from 22 cents per share to well over $1.20 per share. Anyone conducting even the most rudimentary investigation would start by closely examining the participants in those transactions to see if they had access to the information regarding the permission that was about to be granted to Petaquilla by the government of Panama.

"The Thirteenth Prosecutor Specializing in Financial Crime, charged with the investigation, told me that the woman did not certify any of her claims claims because she said it was a rumor she had heard. She further stated that she worked on one floor and the situation happened in another office, and she never heard a particular name," he told local media.

Pellegrini had also said that the brokerage firm Financial Pacific had plans to create a bank called FP Bank, and the partners were listed as the President of the Republic, Ricardo Martinelli, and his son of the same name. Both, along with the rest of the directors were presented to employees in the offices of Financial Pacific.

Meanwhile, Ayu Prado said the Public Ministry cannot and should not investigate the judges of the Supreme Court, the Deputies of the National Assembly, the President and the Vice President because it would be an abuse of authority. (Panama America)

Editor's Comment: Wow. Is anyone surprised that Jose Ayu Prado, who today is the Attorney General and who in four days will take his seat on the Supreme Court, would come out in defense of Ricardo Martinelli? None of this will ever be investigated within Panama. However the Canadian authorities on the TSX might take a different view. Easy question - who bought the shares at 22 cents then dumped them at $1.13? Someone turned about $500,000 into more than $2.5 million - and it certainly looks on the surface like it was insider trading. And it's funny how La Prensa says within the company it was "said publicly" that Martinelli owned the "High Spirit" account - while Jose Ayu Prado calls it a "rumor." Same thing? Don't expect any transparency, honesty, or actual investigation in Panama. At least until 2022 when Jose Ayu Prado leaves the Supreme Court, anyway. He will protect Martinelli in the same way that Spadafora protected Mireya Moscoso. It's the way the game is played in this country.

With only five months in office, the signal was given to Petaquilla Gold to market their products.

The decision was made after having negotiated "better benefits" for the Panamanian government, said Roberto Henriquez, who at that time was the Minister of Trade and Industry, and who today is the Minister of the Presidency.

Two years later, amid a major financial scandal in the Financial Pacific brokerage house, stories come to light related to the mining business and executive power.

Mayte Pellegrini is the prime suspect in an illegal transfer of money on a complaint lodged by the directors of Financial Pacific. She revealed to the prosecutor alleged links between high ranking government officials, the investments of the brokerage firm, and the shares of Petaquilla Minerals (Petaquilla Gold Holding).

Pellegrini remains in custody by order of the Thirteenth Circuit Prosecutor.

In a sworn affidavit given on 22 November 2012, Pellegrini said the Directors of Financial Pacific Iván Clare and West Valdés had said publicly a secret account called "High Spirit" was opened to "manipulate the stock market with shares of Petaquilla." And it belonged to the president, Ricardo Martinelli.

Such an accusation put tension into the Stock Market once again.

Industry executives, who are faithful believers in remaining anonymous in order to give confidence to their customers, are shy and fearful of the consequences of the Financial Pacific case.

They warn that what began as an isolated fraud could pose an imminent threat to market stability because of the alleged facts that are coming to light with each passing day.

The performance of the shares of Petaquilla Minerals is tied to the supply and demand for the company's products, the investment policies in the countries where it operates, to its administrative and economic and political environment, as it is with any other company, and market conditions.

If someone has privileged information and uses it to favor their investments, they would be able to expect with much confidence their money would multiply faster than those who are making their moves blindfolded.

And when there are imminent risks that would cause the price of these shares to drop, then they would be able to liquidate these instruments and emerge unscathed, while the other investors would lose their money.

In the hypothetical case that some official (of the Panamanian government) had negotiated shares of Petaquilla knowing that the decisions made by the State would impact the stock price, they could have taken much advantage. Let's see why.

Just before Petaquilla started taking gold from their mine in 2010, at almost the same time, the purchase and sale of shares of Petaquilla Minerals increased.

This unusual movement is observed from 26 October 2009.

On this date shares in Petaquilla Minerals achieved a total traded volume of 2,805,000 shares and was quoted at 22 cents per share.

On 13 November 2009 there was another great move in these shares. Reflected in the Toronto Stock Exchange, Canada was a total volume of 5,723,000 shares of Petaquilla Minerals, at 25 cents per share.

By the end of December 2009 the share price had risen to 80 cents per share, when the government had already negotiated a new relationship with Petaquilla Gold, to authorize the marketing of their products.

On 4 January 2010 the price rose to 88 cents per share, exactly in the same month that Petaquilla Gold had acquired the backing from the state to start exporting gold.

If a person has acquired using insider information a package of 100,000 shares in the end of October 2009 at 22 cents per share, by early 2010 their investment would have tripled.

When the Martinelli administration sanctioned the new mining law (which was later eventually withdrawn) on 11 February 2011 the stock was trading at $1.14 (or 1.22 Canadian). Anyone who invested in late 2009 kept winning.

At that time the protests by environmentalists, trade unionists, and opposition politicians, and especially the indigenous Ngäbe Bugle, in whose territories there are major deposits of copper and gold, intensified.

Despite the clashes, which ended with street closings, people injured and arrested, the Government maintained its position to implement the newly adopted mining code.

With this scenario in favor of mining, on 15 February 2011, and just five days after the new mining law was enacted, the share price climbed to $1.20 (or 1.27 Canadian), its highest ever.

Anyone who purchased the stock at 22 cents per share had succeeded in upgrading their investments by nearly 600%.

The President held his position of not rolling back his decision on mining, despite the strong criticism and pressures inside the country.

In parallel, the share price of Petaquilla Minerals remained above $1 per share.

An interesting fact is that on 23 February 2011, when the mining reforms were still standing, there was a sale of 2,216,000 shares at the rate of $1.13 each.

On 3 March 2011 President Martinelli pledged to repeal the law that reformed the mining code. And then on 7 March 2011 the share that had reached a price of $1.20 collapsed to 95 cents per share.

Roberto Brenes, the Manager of the Panama Stock Exchange, believes that with Pellegrini's claims the market regulators in Canada should start an investigation, where shares of Petaquilla Minerals are traded.

From Ontario it can be determined whether the movements in the purchase and sale of the shares took place from Panama, and who ultimately own the accounts that are generally moved on behalf of third parties.

"It's very ugly what they are saying might be happening," said Brenes.

Ivan Clare, the Vice President of Financial Pacific, denies Pelligrini's indictments.

On Monday, 17 December 2012 at 11:30 am, Clare went to the offices of the La Prensa newspaper to give his version of the fraud in the brokerage house.

During the meeting he was asked questions about what Pellegrini revealed during the investigative process in her statements, the document to which this newspaper (La Prensa) had access.

Visibly affected by the concerns, Clare said he would answer the questions via email.

• According to the affidavit rendered by Mayte Pellegrini, in the Financial Pacific brokerage house you had senior government officials as clients. Is this true? Is President Ricardo Martinelli one of those clients?

• How and since when did the President of the Republic become your customer?

• Does the brokerage firm make sales and purchases of Petaquilla stock?

• Are the investments of these officials, including the President, also included the sale of shares of Petaquilla?

• Of whom, and for what is the account called "High Spirit" used?

Clare was sparse. He replied that "Article 65 (of stock confidentiality) of Law 67 of 2011 of securities, expressly prohibits him from answering the questions or revealing the names of customers, without an express order of a court or regulatory authority, so these questions must be submitted to the regulator."

"In any case, we can say expressly and unequivocally that the account referred to is not that of Mr. Ricardo Martinelli Berrocal or any of his relatives."

Ricardo Martinelli and Mining in Panama -

During the presidential campaign, Ricardo Martinelli said on 11 February 2009 how his administration would act on environmental issues if he won the election.

On page 32 of his government plan he said that among the main causes of deforestation was open pit metal mining.

In his regular media appearances, Martinelli also promised an audit of of the concessions that had been granted, including Petaquilla Gold.

To reporters of this newspaper (La Prensa), when he was still a candidate, Martinelli spoke against the environmental practices of Petaquilla.

He even said he would seek sanctions against the company owners.

However, as noted by the environmentalist Alida Spadafora, these measures had not been implemented as of 11 December 2009.

By March 2010 the President stated he was willing to amend the Code of Mineral Resources to facilitate foreign investment. He said the country could not miss a great opportunity, and was being left behind in mining due to lack of legislation.

During an official visit to Peru on August 27, 2010, the President said the environmental lobby in the world ignores the benefits of responsible mining in the development of a country.

On 4 October 2012 Martinelli announced the creation of a Ministry of Energy and Mines, because of the importance these economic activities will have on the country. In 2015 Panama will be "a mining country," he said.

An International Case - The use of privileged information in the purchase and sale of securities is punished in the country.

The issue is extensively detailed in Article 247 of the Securities Act, passed in 2012, which states that any person who provides information, as well as anyone who uses it, will be jointly and severally liable for the damages suffered by persons who are unfairly affected.

However, the revelations in the Financial Pacific case are complicated from a legal standpoint.

Carlos Barsallo, the former Commissioner of Securities, said Panamanian laws only apply when the misuse of inside information or insider trading in securities has been registered with the Panamanian regulator.

Shares in Petaquilla Minerals are not registered in Panama, which means that administratively, there would be no prohibited activity or event to investigate.

In criminal law, which the Public Ministry is investigating and pursing, the crime of manipulation of information (Art. 251 of the Penal Code) indicates that it is required, as in administrative matters, that the shares of stock be registered in the regulator.

Panamanian criminal law is applicable even if the crimes listed in Article 19 of the Criminal Code are committed outside of the country, which does not include financial crimes such as insider trading which are found in the Title on the order of economic offenses.

The issue, in any case, could be of paramount concern and competence of the administrative and criminal authorities of the markets where the violation occurred, specifically the province of Ontario in Canada. This is where the Toronto Stock Exchange (TSX) functions and where shares of Petaquilla Minerals are traded.

Those authorities should, upon seeing the news in Panama, determine whether or not to start their investigation, and to seek assistance from Panama, said Barsallo.

The assistance must be requested through the executive authorities, who would commission the Public Ministry, which today is under the command of Ana Belfon, the former Executive Secretary of Legal Affairs of the Presidency. (Prensa)