Prosecutors in Panama have indicted former presidents Ricardo Martinelli and Juan Carlos Varela, who led the country between 2009 and 2019, on money laundering charges related to the Odebrecht corruption scandal that has engulfed much of Latin America since 2014.
The massive scale of the corruption network, with 49 public officials indicted in the case, has caused despair among Panamanians. An op-ed published by the largest local newspaper La Estrella de Panamá last week claimed that the local political establishment “did not care about involving their children, wives, lovers, friends, associates, and colleagues (…) the more accomplices the better to dilute their own responsibilities.”
An activist lawyer fighting corruption in Panama wasn’t surprised by the scale of the network of corruption, “Corruption is deeply rooted in Panama’s political system, culture and institutions. We are living in a vicious circle where our institutions have been weakened by the very corruption they are supposed to fight, meaning the entire political system is unable to clean itself.” Indeed, organisations such as the OECD and the Financial Action Task Force (“FATF”) have included Panama on grey lists as a consequence of the inefficiency of its justice system. “Justice is only applied for minor offences and to people who do not have money or political influence,” the lawyer continued.
“Corruption is deeply rooted in Panama’s political system, culture and institutions.”
Activist lawyer, Panama
Both Martinelli and Varela are accused of being part of a broader scheme which reportedly took and distributed bribes from the infamous Odebrecht Brazilian construction company from 2009 to 2014. During that period, Odebrecht carried out multiple large infrastructure projects including metro lines, airports, and motorways.
A former lawyer and executive of the Citizens’ Alliance for Justice said, “Odebrecht arrived in Panama in 2006 when the PRD, the party of the current president Laurentino Cortizo, was in power and the bribery began almost immediately. What is striking about the current indictments is that no official from the five-year period 2004-2009 has been called.”
“Odebrecht arrived in Panama in 2006 […] and the bribery began almost immediately.”
Former lawyer and executive, Citizens’ Alliance for Justice, Panama
The indictments do include two current senior officials of the current President Laurentino Cortizo’s administration. Carlos Salcedo, Minister of Agriculture, and Guillermo Salazar, head of the Planning Institute of the Presidency, allegedly inflated the final price for the USD 62 million Remigio Rojas watering system, originally valued at USD 54.2 million.
The activist lawyer hoped that the current investigations would be serious enough to change the culture of corruption in the country, “Panamanians are fed up with the corruption scandals that arise government after government without punishment. Until the Lava Jato corruption scandal broke in 2014, the parties had a kind of ‘unwritten pact’ not to investigate each other. Finally, this could be about to change.”
After weeks of preliminary hearings, the special Anti-corruption Prosecutors Office requested judge Baloísa Marquínez on 28 September to reject the arguments brought forward by the defence. The judge said it would take 30 days before deciding to call to trial those indicted in the case.
The coming weeks will be crucial to see if President Cortizo, who already had a 64% rejection rate in February, will manage to survive this political storm.