Caribbean & Central America - January 2013 (ISSN 1741-4458)

President Ricardo Martinelli is once again stoking concerns about the independence of powers in Panama. In late 2012, he named Ana Belfón, a legal advisor to the presidency, as the new attorney general, replacing a close ally, José Ayú Prado, who was moved to the nine-member supreme court of justice (CSJ). Both appointments, since ratified by the legislature, are controversial.

Belfón, who previously served as chief prosecutor under the military regime led by Manuel Noriega (1983-1989), is Panama’s fourth attorney general since Martinelli first took office in July 2009. Ana Matilde Gómez was controversially removed in late January 2010 [RC-10-01] and her replacement, Guiseppe Bonissi, a close Martinelli ally, was forced to step down less than a year later over an alleged organised crime ring in the attorney general’s office [RC-11-01].

Ayú Prado, whose appointment to the CSJ now means that five of the justices are Martinelli appointees, was criticised as attorney general for a lack of progress in several high profile cases – particularly those implicating current government officials. These include a land titling scandal involving Anabelle Villamonte, the former director of the national land authority (Anati), and the former minister of the presidency, Jimmy Papadimitriu. While Villamonte was eventually forced out, the leading opposition daily, La Prensa, has it that the investigation into Papadimitriu (also forced out) has been closed [RC-12-09].

Along with the two main opposition parties, Partido Revolucionario Democrático (PRD) and Partido Panameñista (PPA), respected local civil society figures came out against the latest promotions for Belfón and Ayú Prado. These include Miguel Antonio Bernal, a well known lawyer and former candidate for the Panama City mayoralty who was jailed for his pro-democracy activism by Belfón under Noriega, and the Alianza Ciudadana Pro Justicia. The latter issued a press release warning that the appointments struck a further blow to the credibility of the justice system.

• First test for Belfón

Belfón took office on 2 January to a fresh scandal implicating President Martinelli. The scandal centres on his alleged links to Financial Pacific, a brokerage house under investigation for insider trading.

  The allegations first were made in late November 2012 by Mayte Pellegrini, an ex employee of Financial Pacific, who quit in May last year after the local market values superintendency (SMV) opened an investigation into embezzlement at the firm. Initially, the alleged wrongdoing was put at US$7.0m, but it’s now thought to be double that. Pellegrini alleged in court that Martinelli is (or was) the owner of High Spirit, a "secret account" at the brokerage house that the president allegedly used for insider trading in shares of a Canadian mining company, Petaquilla Minerals.

  The scandal was seized upon by La Prensa and other opposition newspapers, setting Martinelli on a fresh collision course with the media. It has provoked an outspoken reaction not only from the political opposition, which immediately called on Martinelli to clarify his links with Financial Pacific, but also private sector lobby groups such as the Asociación Panameña de Ejecutivos de Empresa (Apede), which warned of the implications for Panama’s reputation.

  While the government has vehemently denied any links between Martinelli and Financial Pacific, with Martinelli accusing La Prensa of deliberately “manipulating information”, Belfón has offered little reassurance as to whether the allegations will be investigated. In late December, just days after her appointment, she told reporters that the attorney general’s office was not the appropriate authority to investigate the President and that the responsibility lay with the legislature, which is controlled by Martinelli's Cambio Democrático.

• Canal revenue

According to the latest report by the Panama Canal Authority (ACP), the Panama Canal generated US$1.0bn in state revenues for FY 2012 (1 October 2011-30 September 2012).

• Unemployment

In his address to the nation, President Martinelli highlighted that unemployment, (4% in 2012) was the lowest ever in the country’s history. According to Economy Minister Frank De Lima, 180,338 new jobs have been created since September 2009. The Martinelli government took office in July 2009. Unemployment was 6.6% that year.