Published On: Mon, Dec 21st, 2015

Panama government and banks riddled with organized crime, says president

juan_carlos_varelaMIAMI - Juan Carlos Varela, Panama's beleaguered reform president, has asserted that his country's financial institutions and government have both been long infiltrated by powerful organized crime groups, a situation that he will not tolerate.

Varela came into office on a reformist platform and immediately began an anti-corruption campaign, seeking to cashier corrupt judges and government officials from the administration of his predecessor, Ricardo Martinelli, now himself facing criminal charges.

In a recent large bulk cash seizure that took place in Panama, the individual arrested was a government employee and was only the latest in a string of offences committed by corrupt government officials and staff members, whose affiliation with known drug gangs is a fact of political life in Panama.

Likewise, the fact that Panama's firmly entrenched organized crime group, composed largely of individuals of Middle Eastern extraction, owns or controls many of Panama's money laundering banks, has frustrated any efforts to control financial crime in the country.

Mainstream Panama City newspapers and television stations refused to carry the president's outspoken remarks, reinforcing the fact that corrupt influence extends to the media as well.

Some observers, who have questioned why the United States is not very active in the current anti-corruption efforts, and in money laundering investigations, have concluded that the Panamanian financial and governmental structures are so rotten with criminal infiltration that any effective clean-up is impossible. Foreign capital has been leaving Panama in significant amounts of late, and it is not being replaced by new "flight capital" that is legitimate.

By Kenneth Rijock

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