Your Bananama Republic has long maintained that Panama is not a place anyone would want to do business for, among other reasons, its lack of legal security and abundance of corruption. Today, El Panama America started publishing from the WikiLeaks diplomatic cables, and it turns out that only eight weeks into the Martinelli administration, US ambassador Barbara Stephenson harbored similar feelings.
In a cable dated August 27, 2009, Stephenson relates how Martinelli unilaterally changes terms of contracts and concessions granted to foreign corporations operating in Panama. To energy giant AES, he rose the price of using water for hydroelectric power generation by no less than 14,000%, supposedly to be able to lower electricity prices for consumers:
According to AES reps and newspaper reports, President Martinelli and his cabinet on August 23 adopted measures to raise the price of water for hydroelectric plant operators to 2 cents per kilowatt hour (a 14,000 % increase for AES) and to lower the cost of power for electricity consumers.
AES reps believe the 2 cent per kilowatt hour increase in payments will cost AES $35 million and will dramatically change the cost structure for their significant investments in Panama. Depending on the hydroelectric generation plant, AES's profit will either drop to zero or go negative. The effect on AES is greater than simply profits on operations in Panama; rating agency Fitch already requested a meeting to discuss Fitch's rating on $300 million dollars worth of bonds which are financing AES's largest project in Panama. AES reps are worried that their bonds will lose their current investment grade rating and their stock price will fall.
When the measure was then implemented, government officials showed little understanding of how things would work:
According to AES reps, AES accepted a $10 million loss on electricity sold this August, in order that the cost savings would be directly passed to consumers and help Martinelli. Government officials were upset when electricity bills mailed to consumers in August had higher electricity rates than in July and blamed AES and other suppliers of manipulating the market. AES reps counter that they do control the transmission nor the distribution of electricity and that their August reduction would not show up until September billing cycles. AES reps speculated GOP officials do not understand the market and/or have an overly simplistic view of their operations.
This is supposedly a business oriented government?
But it gets better. Stephenson also writes on how the embassy had to intervene to prevent Martinelli from changing the contractual arrangements with the Manzanillo International Terminal in Colón. The ambassador, who later described Martinelli as a bullying blackmailer and a threat to Panama's democracy and institutions, outlines Martinelli's procedure to shake down businesses and opponents:
AES's situation is not unique under the eight week old Martinelli Administration. To applause from a majority of the public, Martinelli has methodically rolled out similar efforts and tactics against owners of property in the former Canal Zone (specifically the Amador Causeway), the Casino Industry, the Colon Free Trade Zone, and the Port Operators. Generally, Martinelli's modus operendi is to make a very public, bombastic announcement against a certain group that outlines the government's possible actions against the group. He does not communicate with the group for several days, in order to exert pressure and create uncertainty. He then grants an audience with the group and negotiates an agreement, then announces it while publicly chastising his perceived foe.
Why would Martinelli, who keeps telling the world that "Panama is open for business", act in a way that destroys business? The ambassador doesn't know, but speculates:
The Martinelli Administration takes the position that, under previous administrations, concessions and other contracts awarded were tainted due to cronyism, bribery, and incompetence - GOP attorneys and experts were bested by professional private-sector contract attorneys and experts. The newly collected money is apparently destined for Martinelli's ambitious public investment plans and support his campaign promise to lower consumer prices. Non-official attributions of Martinelli's motivations are often less flattering and range from settling old business and political scores, to Martinelli supporters wanting to take over the now "less profitable" business.
At the time, most of the (foreign and domestic) business community was still cheering Martinelli as a pro-business president who would open up the country to investors and thus spur development. But the US ambassador was not to be fooled. Concludes Stephenson:
While Martinelli has a pro-business reputation due to his campaign rhetoric and self-made fortune, his actions have the potential to significantly erode one of Panama's competitive advantages -- a predictable investment environment that consistently attracts 10% of its GDP in foreign direct investment.
Martinelli, true to form, came out today and commented that basically he couldn't care less about the allegations.
The full text of the cable is here.
As long as the company agreed to the price increase (as a cost of doing business and exploiting local resources) what is the problem? Perhaps they will make 10 million profit instead of a 100? Of all the asinine things RM has done, if the intent was to raise the rate of this multi-million dollar operation and lower the rate of the masses, I say bravo! When BS is worried about Panama losing its competitive edge, she worries about environmental laws being enforced, labor prices going up and and taxes being increased, thus harming the profit potential of US based businesses. I do not believe she is actually concerned about RM per se. If he was doing her bidding, he would be a great old boy. Dont get me wrong, I believe this dangerous egomaniac needs to go, but some of his critics have even less credibility than he does. If you want to go play ball in a third world country because it is cheaper to operate that way (and we all know why it is cheaper) then you should be ready to pay third world consequences.
@ FromBocas Did you electricity bill get cheaper??? It’s all BS. electricity is not cheaper!
A Panama company? Are you crazy?
I have a Panama company that owns very valuable land ($100´s of millions).
I was arbitrarily made a target, by persons responsible in a politically connected law firm.
PATTON, MORENO & ASVAT
and their subsidiary
ASSETS TRUST & CORPORATE SERVICES, INC.
Do you have a Trust with them?
From one day to the next I found myself out of my company.
In Panama, it´s as easy as deciding to do so, and knowing that you can count on your buddies in the Public Ministry and Tribunals to join in on the criminal enterprise.
In the offices of PATTON MORENO & ASVAT Documents were drawn up which they later registered in the record (ficha) of my company at the Public Registry, without my ever knowing.
Until it was to late.
First; They usurp the identity of one of the company Directors,(usually older person or sickly), who is not in Panama and attribute to this person, acts in Board of Director meetings which they fake in their offices and utilize to plant themselves in your companies administration to transfer shares to Trusts under their control.
It does not matter that these are impossible and illegal acts which are falsely attributed to these Directors.
Once they tie up your company in legal proceedings they are in a position to extort you by keeping you from developing and commercializing the assets which your company owns.
Second; They attribute to this Director, his participation in a reunion of the Board of Directors in which he presents, a ” Certificate of Resignation”, (usually of a “hands on” Director who is actually in Panama). This certificate does not bear the signature of the resigning Director, this fact is over ridden by attributing to this absent Director, whose identity is stolen a statement, as if it were true, “… that the other Director, resigned in a previous Reunion of the Board of Directors some years back….” With this bullshit and a friend in the Public Registry.
YOU ARE RESIGNED OF THE ADMINISTRATION IN WHICH YOU HAVE CONSIDERABLE INVESTMENT AND DID NOT EVEN KNOW IT!!! .
It gets better!!!
Third; The Director whose identity is stolen, holds another Board of Directors meeting, half an hour after the one, in which you are resigned, in which he claims that the company has never emitted shares!
And he proposes that the company should emit, all the shares authorized by the company charter, in his name. Certificates which were previously printed up, for this opportune occasion are provided in the act.
It does not matter if the company shares were previously emitted years ago by this same Director whose identity is stolen for this purpose.
That is something that the legitimate shareholders will have to prove in court!!!!
Fourth; With these fraudulent certificates in hand, this same Director whose identity is stolen is attributed with celebrating a Shareholders Meeting an hour after you were resigned, and a new Board of Directors is chosen which includes, the sickly absent Director and a Director of a Trust Company* which is a subsidiary of the law firm* that produces these false documents and registers them in your companies record (ficha) of the Public Registry.
*(PATTON, MORENO & ASVAT and ASSETS TRUST & CORPORATE SERVICES, INC.)
A family member of the sickly Director is also included in this bogus Board of Directors, as this Panamanian Trust Company which is a subsidiary of the law firm in which all these faked meetings took place and all these fake documents were elaborated and forged, set up a Trust in the name of the sickly Director whose identity is stolen for these purposes, and this family member of hers, who is now on the bogus Board of Directors, is named beneficiary of this Trust.
The property held in the Trust ?
Why the total of your companies shares of course! Represented by bogus certificates. You have to prove that!!! Well it really does nor matter if you do!!
Ja Ja!! We will keep you in court for decades and we have total impunity !!!!!!
The Trust Company ? Assets Trust & Corporate Services!!
Do you have a Trust with them? Watch your ass!
You may have nothing, and not even know it!
They did this to me.
In my case it was me, who was resigned to the Board of Directors by these criminal means.
Important Note; By emitting fraudulent certificates of the targeted company in the name of the sickly Director and transferring these to a Trust that they manage, the criminal activities, of those responsible in these firms, are hidden behind the guise acts of lawyers who represent a client, who is a beneficiaries of the Trust that they represent as Fiduciary Agents and which they claim holds all of your companies shares.
In this manner, they are allowed to utilize the Panamas Judiciary Organ as a weapon of “organized crime” and to conceal aggressions with criminal intent as the legal filing of all kinds of criminally intended lawsuits which keep you from your holdings in your company, as they put up a smoke screen of their feigned legal representation of a third party, who is a beneficiary of a Trust, whose entrusted property they secured with fraud, identity theft and forgeries.
Is someone forging your signature today, at PATTON, MORENO & ASVAT and ASSETS TRUST & CORPORATE SERVICES, INC.?
Well do you do business with them? Or will they, do you out of your business?
Ten years later the courts don´t care that the legitimate shares were emitted 20 years ago and that I was targeted with forgeries and identity theft.
There are those responsible in the Public Ministry and Courts who have “joined in” to conceal criminal acts, in which persons responsible in this Law and Trust company are directly incriminated, and aid and abet them to prolong cases in which the evidence condemns them and to simulate non existing crimes against me by allowing them to use the forged documents and fraudulent shares to accuse me of the wrong doing, which they actually perpetrated on me to beget their acussing stance.
Assets Trust & Corporate Services, Inc. accuses me of not convening them to a Shareholders Meeting, and have obtained in the Fifth Civil Court , with the use of false documents, which were elaborated and forged in their offices and with fraudulent certificates of shares, “protective measures” to paralyze my development company, without having to place a bond or deposit of any kind in case of damages.
So, paralyzing your company with the use of fraud, in Panama is free!!!
No one seems to care that neither they nor their fraudulent certificates appear in the companies, “Registry of Shareholders” or that the company made public, its emission and sale of all of its authorized shares ten years before the bogus emission they faked in their law offices and transfered to their Trust Company.
Or that the sickly Director whose identity was stolen, actually emitted the legal shares ten years prior, making the act from which they claim benefit for their clients Trust and which they attribute to her, impossible!
Ebrahim Asvat and Guillermo Ford Sosa enacted a development company whose only purpose according to its charter is to develop the land owned by my company. The beneficiaries of the Trust who hold the false shares were paid an initial signers fee to contract this lucrative deal with said company.
This has no end, on one occasion, when I answered the Assets Trusts & Corporate Services lawsuit with my company books and forensic reports of the forgeries in hand, the courthouse was burned down just days before sentencing was to be announced.
The Superior court has not named a new Judge, since 2003, to handle the case. But, the protective measure without a bond to cover damages, which paralyzes my company, is maintained in force and there is nowhere to file for its revocation until a Judge is named.
I am the person being sued, and I have reconstructed the case with a complete copy of all the proceedings, authenticated by the “Tribunal Superior”.
There are, those responsible in the Judicial system that aid and abet extortion of foreigners with valuable assets in Panama. And if you make it impossible for them to steal you blind with Judicial Fraud, they refuse to settle the case filed against you with false documents riddled with proven forgeries, in order to maintain the protective measures that paralyze your company and afford your assailants the force with which to extort you to cut them into your commercial potential.
Nobody cares about evidence, it´s all about criminally applied political power.
There are those responsible in the Public Ministry and Judicial System in Panama, who make a “crime scene” and vehicles of “organized crime” out of these institutions, and there is nowhere to turn!
Expert witnesses are bought out and your lawyers are compromised with the outcome of their other cases.
I hear you Marisol.
What Stephenson was doing was typical but not heroic. She was functioning as an efficient representative of a government in Washington that is dominated by corporations.
In hindsight, Martinelli was the most dishonest character in the transaction of which this WikiLeak describes a part.
And WikiLeaks? An exclusive arrangement with the now pro-Martinelli EPASA? You KNOW how those things are going to be spun. I think that Assange has done the world a big favor with this, but the man does have some weird and often naive politics.
@Eric: El País already had an agreement with WikiLeaks that covered most of LatAm, but somehow they stopped publishing, or at least slowed it down considerably. WL has since been looking for local partners, which makes sense because local journalists can much better analyze these cables within the local context. BUT, they only want to work with established – and usually commercial – bigger media organizations and that sucks, because just like El País doesn’t know the details of Panama’s byzantine politics, Assange doesn’t know them either and thus most likely isn’t aware of what EPASA is these days. It would have been a much better idea – which is what I suggested to them – to have a group of journalists working on it together and then publish in Spanish and English.
@FromBocas: I don’t feel particularly sorry for AES or MIT, but it’s the precedent that counts. I know responsible companies that looked at Panama and decided to go elsewhere because they don’t want to be confronted with a maniacal president who might decide overnight that the contracts are null and void and you should pay more. I mean, that’s a kind of how Noriega worked.
@capt. This should be a feature story somewhere – not a mere entry in a comment section. Once in a while, the Panama Judicial system likes to make an example out of someone, and it helps if there is a political angle (get back at a political opponent). You need to fight this in all possible venues: legal,media and political.
@editor, well, we know there is no difference between right and left wing dictators, and although theoretically at opposite ends of the political spectrum, these two (MN and RM) are cut from the same cloth. Greedy, crazy egomaniacs. Initially, the US seems to just LOVE these people though. So I would say keep on helping to prop up these sort of people and then come and cry about their lack of ethics – come on!!!!!