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Saturday, August 24 2019 @ 09:36 am EDT

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Former US BizJet Executives Convicted For Paying Bribes in Panama

CorruptionTwo of the four executives of the company Bizjet International Sales and Support Inc., formerly responsible for the maintenance of the presidential aircraft of Panama, were sentenced to eight months of home arrest, with the possibility of probation, after pleading guilty to paying bribes to government officials in Panama.

A report from the US Department of Justice revealed their original sentences of 108 and 120 months in prison were modified, because last year BizJet admitted to having paid bribes to government officials in Mexico, Brazil, and Panama.

In addition, to resolve the charges for their "corrupt behavior" the company paid fine of 11.8 million dollars.

This is the second U.S. conviction related to corruption in Panama. The first was against a director of Ports Engineering & Consultants Corp. (PECC).

Bizjet International identified an officer of the Civil Aviation Authority (AAC) who they described as the "Chief Mechanic" as the person who received the bribes from the company in order to obtain the contracts to perform maintenance on the Gulfstream II aircraft, which has since been sold by the current administration.

The report reveals that this "Chief Mechanic" - who was not identified by name, but rather as "Official Number 6" - received $10,000 dollars and a cellular telephone in 2006 for his "decisive role" to ensure that BizJet was awarded the contract in Panama.

This office+r was considered to be someone who had "broad influence" in the making of decisions, the report said.

La Prensa attempted to obtain information about the investigation that the Special Prosecutor for Organized Crime should have started in February 2012, after the Attorney General at the time, José Ayú Prado, was forwarded a report about this crime that occurred in Panama.

However, as of press time we still have not received a response.

Consulted by telephone, the current Director of the AAC, Rafael Bárcenas, was asked if he had filed a complaint about the investigations, in order to identify the so called "Officer Number 6" or to see if he had taken action in the organization to identify the officer, and in response he said he was not going to make a statement.

A source said the officer who received the bribes from BizJet has remained in his post at the ACC and he has never been called for an investigation.

The company, according to reports from the AAC, was paid more than $ 2.8 million between 2004 and 2009. According to official records, the highest payment was $ 995, 862 in 2008.

For now, the U.S. authorities have the former Vice Presidents of Sales and Finance of BizJet in prison, while the former President and a former Executive Director of the company, who are accused of "conspiring" to violate the Foreign Corrupt Practices Act (FCPA) and "money laundering" remain at large and are wanted by the authorities.

"It is believed the former directors are out of the country (outside of the United States)," says the report.

"The charges announced allege a conspiracy by senior executives of Bizjet to win contracts in Latin America, through bribes and illegal tactics," said the Assistant Director of the Federal Bureau of Investigation (FBI) in the report.

New articles published in Mexico revealed the existence of accounting reports, invoices, checks and the existence of another company based in Mexico that would have been used to "justify the cash flow, not only in this country but to Panama."


In another case, U.S. authorities sentenced Charles Jumet and John Warwich, managers of Ports Engineering & Consultants Corp. (PECC), for "corrupt practices" in Panama.

The case, under Supreme Court Justice Alejandro Moncada, still remains without action in the Third Division of the Supreme Court of Panama,

Warwich and Jumet pleaded guilty of having "paid bribes" to Panamanian officers for the concession of service of lighthouses and buoys to the Port Authority in 1997.

Jumet was sentenced to 87 months in prison and fined $ 15,000, while Warwich, to five years and ordered to pay $ 250,000 for violating the FCPA in the country.

In 2004 and 2006, U.S. authorities responded judicial assistance requested by the Comptroller General of the time, but the case remained shelved during the administration of Martin Torrijos. (Prensa)

Editor's Comment: The bribes in the PECC case were paid in 1997 during the administration of Ernesto Perez Balladares of the PRD. So of course when the United States provided the details about the case to the government of Panama in 2004 and 2006 when the PRD's Martin Torrijos was in charge, the didn't do anything to investigate those charges. Now in this case BizJet paid their bribes apparently in 2006 - also during the administration of Martin Torrijos. The bottom line is that when these cases are exposed outside of Panama the local government here does nothing. All of the politicians are corrupt, and they just take turns feeding...

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Transparency International Calls For New Anti Corruption Czar To Be Truly Independent

CorruptionAngelica Maytín, the Executive President of the Foundation for the Panamanian Chapter of Transparency International, questioned the government's decision to create the new National Authority for Transparency and Access to Information, replacing the old office of the Secretary of Transparency Against Corruption.

"Frankly, I'm not surprised by the government's decision to create this Authority for Transparency and Access to Information," she said.

She said she was sure the reason for this measure is that in the end of November 2013 the V Conference of the States who are Party to the UN Convention Against Corruption will be held in Panama, as will the VII Conference and Annual Meeting of the International Association of Anti-Corruption Authorities, "and the national government needs to show some progress, so they think that be creating this new 'body' they will achieve that goal."

She thinks there are other issues that should be higher priorities in the issues of improving transparency and fighting corruption.

"From our point of view, rather than passing this law, passing a law to protect those persons who file complaints and report corruption would have had more of an impact, and to reform Law 59 of 1999, to expand the base of government officials who are required to file a Declaration of Real Estate and personal holdings - for example to include the Deputies in the National Assembly - because right now only the President is required to file, and to allow the office of the Comptroller General to audit such statements, measures that are part of the Inter-American Convention against Corruption and that we have not complied," she added.

"It is true that it was recommended that the Anti Corruption Secretariat be independent, but if the person who selected to be in charge of that office is not subject to a review and scrutiny, and if people with little academic preparation and no experience in this area are appointed, as has been the case in the past, this will not achieve the desired goal. The person who directs the Authority should reach the office based on their merits, and not because of their proximity to the current government," she questioned. (Prensa)

Editor's Comment: Yeah, right. Distance from the president. Martinelli appointed his cousin. The creation of this new National Authority for Transparency and Access to Information is another ploy by the administration of Ricardo Martinelli to practically extend his time in office. He will appoint the new Director of this National Authority, and I'm sure the law will be written in such a way as to make it practically impossible for the next president to remove or replace that person after the 2014 elections. So, Martinelli is locking down one of the major organizations that's supposed to be charged with reporting and investigating and denouncing corruption. This is the way the game is played on this field - it's as simple as that.

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Is There Corruption In The Tow Truck Business?

CorruptionPanamanian citizens whose cars have been moved by tow trucks due to traffic violations, have complained they are victims of theft because their personal belongings that were in the their vehicles have gone missing.

Alexis González is one of the victims. He paid the tow truck company $75 to move his car to a secure area and left his car at the impound lot for only one day.

Arriving the next day to recover his belongings from the vehicle, he noticed that his personal camera was missing, and since the tow truck company did not make González sign any contract, they did not take responsibility for his loss.

This has happened many times, it is known a common complaint by citizens who happen to be in car accidents or if they have car issues, leaving the situation up to the tow truck company.

Due to these occurrences, the National Transit Authority will open an investigation to verify the situation. (Telemetro)

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Political Turncoats Go Shopping For Apartments After Switching Parties

CorruptionSix apartments worth almost a million dollars were purchased by the deputies Abraham Martínez (San Miguelito) and Nelson Jackson (Colón) shortly after they jumped ship and jointed the Democratic Change (CD) political party.

All of the apartments, pre-purchased through private foundations, are located in a tower in Condado del Rey.

Martínez bought four apartments, valued at a total of $ 712,000, and Jackson, two apartments at a total of $ 293,000.

In just two months (June and July 2011), Martínez paid $ 284,000, while Jackson, $ 98,000. This would be equivalent to 20 months salary.

Martínez backed away from his property and Jackson refused to talk about the subject.


The government deputy Miguel Fanovich attacked the founder of La Prensa (Roberto Eisenmann Jr) yesterday in the National Assembly.

The politician reacted after the newspaper published that he and Jonathan Aguilar, aspiring to be the representative of David (Chiriquí), for the Molirena political party, were handing out solar lamps during a political event that had been purchased with the funds of the National Assistance Program (PAN). (Prensa)

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Pellegrini Claims To Have Evidence Linking Senior Government Officials To Financial Pacific Case

CorruptionMayte Pellegrini, who has been accused in the "Financial Pacific" case, sent a letter of her own hand writing to the La Estrella newspaper, in which she states that on 26 December 2012 she was 'forced' to retract her statements about the High Spirit account.

During questioning on 22 November 2012, Pellegrini said there was an alleged secret account linked to President Ricardo Martinelli which was used to manipulate the stock market with insider information about the Petaquilla gold mining company, but when these details were made public, a declaration was made on the evening of December 26th to the Thirteenth Circuit Prosecutor, and that's when this information was retracted.

However, Pellegrini is asking to be taken back to the prosecutor (so she can expand her statements once again) and she accuses the government of preventing this from happening, because she says she would provide more details about the alleged market manipulation and would be giving evidence.

"In my amplification I was going to provide evidence of what I spoke about with the High Spirit and other government accounts," said said Pellegrini.

She also denies there was a plan for her to escape last week when they were supposed to take her the office of the prosecutor to testify.

In her letter she also alleges that she was transferred to Women's Prison on 1 March 2013 without the consent of the prosecutor, and that the Director of the Prison System, Ángel Calderon, went "personally" to order her to be moved.

"He can lie, but I have 100 witnesses who can verify that he came," says Pellegrini in her letter, which is a page and a half long, written on paper from a spiral notebook, handwritten in blue ink and block letters.

It was also reported that through her testimony there will be details about the alleged relationship of Iván Clare, the manager of Financial Pacific, with the company Katutai, in which in appears the money from the brokerage firm went.

She also links the Financial Pacific brokerage firm to the savings of the Employees of the Social Security Fund (COAECSS).

According to her testimony she said "many things will be discovered."

"They have manipulated the record," said Pellegrini, arguing that she is a victim of political persecution, because with the information she has, she will expose the links to the senior government officials to this case.

"I have very sensitive information against senior government officials," she said. (Estrella)

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Electoral Prosecutor Opens Official Investigation On PAN Resource Usage

CorruptionAfter an investigation published today, April 1st, by the newspaper La Prensa, which discloses the use of public resources for political campaigning, the electoral prosecutor, Eduardo Peñaloza told La Prensa he has ordered the prosecutors in Chiriquí and Veraguas to open an official investigation starting today.

"With regard to the publication of the possible use of public funds, the prosecution has proceeded to open an investigation, and, if there is anyone responsible, we will ask the criminal courts to punish this conduct as an example," said Peñaloza.

Meanwhile, the prosecutor of Chiriquí, José Félix González, explained that the data provided by the publication, the photos and names, are enough to open an investigation.

But he said he cannot tell when the investigation can be completed, and he also could not speak about a sentence.

"We have to do some research first, then later there's the possible call for an inquiry," he said.

"The prosecution, immediately after they heard the complaint, activated and began an investigation," he said.

Thorough investigation

Sectors of civil society and the political opposition in the country agreed that the scandal should be investigated into the use of resources of the Assistance Program (PAN) to promote their political aspirations.

For both ex-magistrate Electoral Tribunal (TE), Guillermo Marquez, and the Director of the Justice and Peace Commission Maribel Jaén, are calling for a serious investigation by the Electoral Prosecutor, the Attorney General, the Comptroller General of the Republic, for the alleged misappropriate use of funds and embezzlement from the PAN for propaganda.

"This is a crime that proves the use of state assets to benefit a candidate, which is unauthorized. Therefore the investigation should be initiated," said Marquez to

For his part, Deputy José Luis Varela from the Panameñista political party said the Electoral Prosecutor must act with "real independence" and investigate immediately, with the evidence that has been presented in the publication of by the newspaper, and so should the Attorney General Ana Belfon, because "it shows criminal offense in the activity."

According to Deputy Varela these actions encourage corruption. "I urge the president Ricardo Martinelli to instruct the Director of the PAN to stop these acts," he said.

However, for the government deputy, José Muñoz, the one who should confirm if there was a possibly crime or not is the Electoral Prosecutor.

He added that anyone who feels affected must make a formal complaint.

According to the publication, not only the Deputies of the National Assembly use the resources of the PAN to advance in their political aspirations.

So do the candidates from the Cambio Democratico political party, who are seeking elected office, and who published photos on the various social media outlets of themselves handing out food, clothing, or solar lamps, all purchased by the PAN.

This was done by at least two candidates who are running for offices as Representatives or Deputies for the MOLIRENAL and Democratic Change parties. (Prensa)

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The Lavitola Case Splashes On Panama Again

CorruptionAlthough the complete contents of the file are not fully known, the Italian media insist that the investigations being conducted by the Prosecutor of Naples in Italy have revealed $700,000 in bribes may have been paid to Panamanian officials.

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?

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Pellegrini's Lawyer Denounces Intimidation In The Financial Pacific Case

CorruptionMayte Pellegrini is the only person who has been arrested so far in the case of the Financial Pacific brokerage house which is being investigated for alleged irregularities.

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...

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Selling School Backpacks From A "Boutique" in Marbella

CorruptionA company granted two contracts worth a total of $6 million dollars from the National Assistance Program and the Ministry of Education to provide backpacks for school children operates from a clothing boutique in Marbella.

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 Muñoz (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 Panameñista 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 Panameñista 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 Panameñistas were running the show, then the La Prensa newspaper would be ignoring these things, and attacking the PRD and CD politicians instead.

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Human Rights Ombudsman Rails Against Corruption At David Public Prison in Chiriqui

CorruptionThe Human Rights Ombudsman Patria Portugal said the worst penal institution that exists in Panama is the public jail in David, in the province of Chiriqui, after a visit.

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.

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"Euclides Mayorga is innocent": Miguel Batista

Corruption"Euclides Mayorga is innocent," said Miguel Batista, the defense lawyer who is representing the Mayor of Chame.

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.

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Head of Italian Defense Firm Is Arrested in Bribe Case

CorruptionBy DAVID JOLLY for the New York Times - Italy awoke Tuesday to yet another corporate scandal with political overtones, as Milan prosecutors arrested the head of the state-controlled aerospace company Finmeccanica in an investigation related to the sale of 12 helicopters to India in 2010.

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 Panameñista 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.

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Mulino Says Drug Money Might Infiltrate Political Campaigns

CorruptionPanama's Public Security Minister Jose Raul Mulino said drug traffickers might try to infiltrate the political campaigns of National Assembly Deputies, the Representatives of local municipal governments, and the Mayors in areas where there is a movement of narcotics.

"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)

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Mayor of Chame Returns To Office On A Technicality

CorruptionThe Mayor of Chame, Euclides Mayorga, resumed office yesterday after a legal move that revealed flaws in the process followed by the governor, Mayín Correa, to separate him from his post on Thursday.

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)

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Mayor of Chame Removed From Office After Corruption Conviction

CorruptionThe Mayor of Chame, Euclides Mayorga, said the Governor of Panama Mayin Correa succumbed to political pressure when she ordered his removal from office, after the Second Superior Tribunal confirmed a ruling by a lower court sentencing him to three years in prison, and disqualification from holding public office for the same length of time.

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 Panameñista 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 Panameñista 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 Panameñistas and the CD broke up, he changed from his Panameñista party to the CD, in order to save his ass. About a month ago he left the CD and went back to the Panameñistas, 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?

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Acquittals In Paitilla Land Scandal Upheld On Appeal

CorruptionThe Second Tribunal of Justice confirmed the acquittal of the three people who were involved in the scandal over the land in Paitilla, the florist César Segura, the former Director of Land Titling of the National Land Authority, Anabelle Villamonte, and the lawyer Francisco Perez.

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...

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Carrera: The Government Has Made A Mockery Of The Ngäbe People

CorruptionCarrera Silvia, chief of the Bugle Ngäbe region, said the people are preparing to remember the struggle they held last year to protest the execution of mining and hydroelectric projects within the region's boundaries.

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...

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Actions of Public Ministry Questioned In Disappearance of Vernon Ramos and Financial Pacific

CorruptionThe manager of the Panama Stock Exchange, Roberto Brenes, questioned this Monday, January 14, the performance of the Public Ministry in the investigation related to the scandal of the Financial Pacific brokerage house.

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.

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Financial Pacific Files A Complaint Against The Superintendent of Market Securities

CorruptionA fifth criminal file was opened this week by the Public Ministry in connection with alleged irregularities in the operations of Financial Pacific.

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.

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Canadian Regulators Could Investigate Financial Pacific / Petaquilla Case

CorruptionBecause of Petaquilla Minerals corporate offices are in Vancouver, Canada, investigations for the alleged improper use of inside information in the case of Financial Pacific could fall under the jurisdiction of the Securities Commission of British Columbia (BCSC).

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.

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Ministers Ordered To Not Talk About Financial Pacific / Petaquilla Scandal

CorruptionThe silence maintained yesterday by President Ricardo Martinelli and some of his ministers on questions about the letter allegedly sent to the Attorney General, confirming the existence of his more than ten year old account in the Financial Pacific brokerage house, was a recommendation made by the Secretary of Communication.

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.

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Petaquilla Denies Connection To President Martinelli

CorruptionA new version appeared in the Financial Pacific scandal, in which the former employee Mayte Pellegrini has linked the president Ricardo Martinelli with using inside information to manipulate shares in Petaquilla Minerals.

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.

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Pellegrini Retracts And Admits She Can't Prove Her Accusations Against Martinelli

CorruptionThe Attorney General Jose Ayu Prado reported that in the expansion of the investigation of Mayte Pellegrini, the main person who has been accused in the embezzlement of the Pacific Financial brokerage house, said she could not provide proof or evidence of her claims on the use of insider information by the president, Ricardo Martinelli, to manipulate the shares of Petaquilla Minerals.

"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.

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Behind the scenes of Financial Pacific

CorruptionThe conditions to develop the mining sector in the country were created since 2009, when President of the Republic, Ricardo Martinelli took office.

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)

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Presidential Silence

CorruptionPresident Ricardo Martinelli has remained absolutely silent about the allegations linking him to the supposed use of privileged insider information to manipulate shares of the company Petaquilla Minerals.

Members of Martinelli's Cabinet have also not spoken or made any public statements about the accusations being made by Mayte Pellegrini, the principal person who has been charged with the embezzlement of about $14 million from the Financial Pacific brokerage firm.

Luis Eduardo Camacho, the Secretary of State Communications, was the only one who spoke, but he just explained their strategy of remaining silent.

The lack of a response from the president and his administration contrasts to the reaction from various sectors in the country, including politicians, business leaders and financial executives. The Panama Stock Exchange was blunt in a statement: "We demand action to safeguard the system."

Rolando De Leon, the former Commission of the now defunct National Securities Commission, said that "the country's institutions have been much affected."

And the financier Philip Chapman questioned the action taken by the Supreme Court to suspend the reorganization process of the brokerage firm, which had been ordered by the regulator.

Martinelli, in Financial Pacific (FP) Bank - Plans for the Pacific Financial brokerage firm included the creation of a bank called FP Bank. They had chosen a site in a building under construction in Obarrio.

According Mayte Pellegrini, partners in the operation would be the president, Ricardo Martinelli, and his son of the same name. Pellegrini even said the two, as well as the rest of the directors, were presented to the employees in the offices of Financial Pacific. Neither the president nor his son - who is out of the country - have replied to the accusations being made by Pellegrini. (Prensa)

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President Linked To The Use Of Privileged Information

CorruptionWhat was believed to be an isolated case of financial fraud in a brokerage house now is generating charges that point directly to the president of the Republic, Ricardo Martinelli.

An investigation against Financial Pacific started in March 2012. What can be seen is only a fraction of a complex financial organization.

Two criminal complaints have been presented. One of the complaints was against the company for possible money laundering, fraud and forgery of documents. The other complaint was made against a formerly trusted employee, Mayte Pellegrini.

Pellegrini has been arrested and is being investigated, and according to her the irregularities in the management of the brokerage firm included the existence of a secret account called "High Spirit," which was opened to manipulate shares. Pellegrini refers to the shares of the company Petaquilla Minerals.

She revealed that the managers of Financial Pacific, Iván Clare and West Valdés, had said publicly that the secret account "belongs to Mr. Ricardo Martinelli ...".

Immediately following Pellegrini's statement about the "secret account of Mr. Ricardo Martinelli", the prosecutor in charge of the investigation, Julio Laffaurie, questioned her about the time she was working at the brokerage firm.

The new question cut short the possibility of deepening the inquiry into her assertion of the existence of an account whose aim was to "manipulate the stock market with shares of Petaquilla."

In the extension of the investigation, five days later, again Pellegrini made allusions to the president, Ricardo Martinelli. This time with reference to the possible opening of a bank that would take the initial value of the brokerage house. They were going to call it "FP Bank."

The announcement of the imminent opening of the bank was done, according to Pellegrini, in June 2011. "We were introduced to some partners in the bank, at at the time physically present were Iván Clare, West Valdés, Jonathan Binder, Ori Zbeda, Ricardo Martinelli, Ricardo Martinelli's son who I think is also named Ricardo Martinelli, and there was an Arab whose name I don't recall."

Pellegrini told her story to the story to the prosecutor between 22 and 28 November 2012. The investigation procedure is part of the process of the complaint filed on 26 July 2012 by the directors of Financial Pacific, Clare and Valdés, before the Attorney General, for the embezzlement of $7 million, and according to the investigations as they advance now reaches some $14 million.

The case gained national notoriety and raised suspicions when Alejandro Moncada, the President of the Supreme Court, granted a guarantee protection in favor of Financial Pacific.

The decision completely halted the reorganization process that had been initiated by the Superintendency of Market Securities. This forced them to issue an order suspending the operations of the brokerage house.

This newspaper tried to get a reaction from President Martinelli in response to the accusations made against him in the Financial Pacific process, but at press time there was no response.

On Thursday 20 and Friday December 21 emails were sent to his personal account. Also calls were made to his private phone, but to no avail. His spokesman, Luis Eduardo Camacho, did not answer calls. And Astrid Salazar, one of his employees in issues of communication, never notified the feasibility of obtaining a response.

"For about two years, many people in the financial industry have been talking about investments being made by high profile officials in the mining business. It would be good for some authority to do the investigations," said a source close to the sector. (Prensa)

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PRD Representative Says "My People Need Hams Too..."

Corruption The representative of Rio Abajo, Javier Ortega, questioned this Friday, Dec. 14, that his colleague Chorrillo, Sergio Galvez - purchased with public funds - a total of 30,000 hams, which he then gave to residents of the 8-7 voting district in Panama City.

"In Rio Abajo, my people also need hams," said Ortega. In turn, the PRD politician wondered how it could be possible that Gálvez, who is also the President of the National Assembly, can take a million dollars from the funds of his community board in order to buy and distribute these hams.

Ortega said that he had done this the Comptroller General of the Republic would have been on him immediately. "But no one is looking to investigate him (Galvez) ... how can he do that?" he said.

He said that although he is happy for the people in El Chorrillo who received the hams, he said residents in other parts of the capital city also need such contributions, such as Curundú, Pedregal and Parque Lefevre.

Speaking on RPC Radio, Ortega also criticized that members of the ruling Democratic Change political party have given away houses, cars, and appliances in the sectors they represent "and nothing happens." However, the members of the opposition political parties "have no money" to do the same thing.

Yesterday, the president of the Assembly, Sergio Galvez said nothing will stop him from giving gifts to his constituents, after it was revealed that the 30,000 hams that were given to the people who live in his circuit had been paid for with state funds. The 30,000 hams cost $675,000 of public funds. (Prensa)

Editor's Comment: Amazing. Nothing will happen to Sergio Galvez. Those politicians who are party of the ruling CD group get funds to give away in their districts. Those in the PRD and Panameñista party get nothing. This is why many politicians jump ship from one party to another, to get money and stuff, so they can get reelected. Old school, buying votes with state funds.

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Ministry of Education Launches Investigation Into Forged Document

CorruptionThe Minister of Education, Lucy Molinar, reiterated on Wednesday, December 12, that they have already started investigations into the alleged forgery of a document from MEDUCA, and that those responsible will have to answer.

The MEDUCA submitted to the Attorney General a complaint for the falsification of a document by the Veraguas Educators Association (AEVE), in order to hold an event in the province of Veraguas in honor teachers, on 30 November, during working hours.

Molinar said on the Telemetro Report program that just by looking at the document one can see that it's not from the institution, and she said the Ministry of Education does not permit such activities to take place during school days because it hurts students.

"That note did not come out of the Meduca ... We will not tolerate this," she said.

Contrary to what was said by Molinar, the leader of the Veraguas Association of Teachers, Yadira Pino, said on the channel 2 TVN morning news that the note is legal, because it has the original seal and mark from the Ministry of Education (MEDUCA).

"The Minister of Education will have to explain publicly why she is accusing us," said Pino, reiterating that they will take legal action against Molinar for libel.

The leader insists that the AEVE is not mentioned in the content of the complaint.

How is education? On another issue, Lucy Molinar said that 2012 was a year of updates, while 2013 will be a year of consolidation. She also said the most important thing is that they have created structures so that the changes will be maintained over time.

However, Pino said the education system in Panama is stagnant, and she said the statistics remain negative, and what's more they lack an education policy to improve these results, since in the end they always blame the teachers for the failures.

Pino insisted that Molinar has not been able to show in the reports the results of the curricular transformation process.

Today, this December 12, educators will march at 2:00 to the Supreme Court to file a complaint against Executive Order 920, which they say is trying to privatize education. (Estrella)

Editor's Comment: There is nothing, not one word, in Executive Order 920 that has anything to do with the privatization of the Panamanian public school system. It does contain a whole lot of stuff, on the other hand, about improving the school system and demanding excellence from teachers. The teachers don't want to be held accountable. Lucy Molinar is trying to make changes for the better, and the teacher's unions are resisting.

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Director of Public Registry Starts Internal Investigation

CorruptionThe Director of the Public Registry, Hernando Carrasquilla, announced the initiation of an investigation into an alleged corruption case, to define whether officials of the entity were involved.

Carrasquilla's statements occurred after the publication of articles in a local newspaper with claims about the operation of a "network of fraudsters in the Public Registry," which supposedly involved a Notary.

"In the chain of process to title a property, the Public Registry is the last step. The trust is deposited in the Notary. It is before him that both the buyer and the seller must appear to attest to the will of both sides," said Carrasquilla. (Critica)

Editor's Comment: This is the case that the Estrella newspaper was banging on all last week. When corrupt government officials set up these scams, they always leave themselves an "out" with a back door of "plausible deniability." No, it's not us. The problem is with the Notaries. Go after them...

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Coastal Land Sold For Pennies

Corruption The National Assembly Deputy from the ruling Cambio Democratico political party Yanibel Ábrego convinced the government of Panama to sell her a lot of land with white sand beaches, measuring more than 130,000 square meters, at a price of just 4 cents per square meter. The coastal farm is located in Majagual in Capira, in the province of Panama.

There was an impediment prohibiting the sale of the land, because it was declared to be in the "public interest" - but the deputy from the Democratic Change acquired the parcel of land one month before she enrolled in the CD political party. The purchase of the land, which had been rejected in August 2005 by the then director of Cadastre (Tax Office) Benjamin Colamarco, was approved on 22 October 2009.

The procedure took only two months. A resolution issued by the then Deputy Minister of Finance Dulcidio De la Guardia on 23 December 2009 approved Abrego's purchase of more than 13 hectares of land. Abrego, who said that if she won (as indeed she did in the elections of May 2009) it would resolve a "political problem" with the land that had been created, and she accused Colamarco and the former Vice Minister of Finance Rolando Mirones of trying to take the land from her.

Colamarco, who denied the allegations, regretted that this strategic parcel of land is no longer owned by the Nation, because it was sold using "political" criteria.

Last August Abrego also purchased two other parcels of land adjacent to her lot, through the National Authority of Land Management (ANATI). To sustain the possession of the land as required by Law 80 of 2009, which regulates the titling of coastal and island lands, the Deputy from the CD party provided the statement of three witnesses and certifications from the local Justice of the Peace of Cermeño. In the certification issued by the Justice of the Peace Eira Hernández dated 15 July 2010, failed to mention the number of years of residence in the area by Abrego, although it indicates that the applicant is bordered to the North and East by lands she herself owns, and to the South by the Pacific Ocean.

There are no permits for the beach house, a private road, or the installation of more than 20 utility poles on the coastal land, according to the Mayor of Capira, Iván Saurí. (Prensa)

Editor's Comment: Issues of land ownership frequently mix with politics in Panama. I understand that Yanibel Ábrego is from this area, and she's owned this land for a long time. Going back to 2005 she's been fighting with PRD politicians who kept her from getting a title, and she said they were trying to take it away from her. She wins, the CD is in charge. She gets her title, and then one month later she changes horses and joins the CD political party, helping Ricardo Martinelli solidify his control over the National Assembly. You can almost imagine the discussion. "Get me title on that land, and I'll switch" or something along those lines. Once the deed (literally) was done, presto change-o. In this case I'm just not all that convinced there was any real evil doings here. It's not like someone is complaining that she stole it from them - which is what the ANATI normally does.

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