From Eric Jackson at The Panama News:
Panama is under worldwide economic pressure because a law firm, one of whose partners was President Varela’s minister without portfolio and right-hand man, was shown to have as one of its principal business activities the hiding of the proceeds of many criminal activities, tax evasion most of all but also a lot of bribery and theft of public assets by politically connected individuals (among other rackets). The response that all of this is legal under Panamanian law and the real crime is the disruption of attorney-client privilege inherent in the massive document leak leaves most of the world unmoved.
Now, as human rights activists from around the Americas gather in Panama for the hearings of the Inter-American Human Rights Commission at the same time as journalists and anti-corruption activists from around the world gather for an anti-corruption summit here, Panama has jailed Dutch journalist Okke Ornstein for unflattering stories about a Canadian career criminal, Monte Friesner, who has been represented by the law firm of Panama City mayor José Isabel Blandón, who is also a member of President Varela’s Panameñista Party. Friesner has deployed fake news specialist Kenneth Rijock, and various folks of the alt-right persuasion have piled on, to hail Ornstein’s imprisonment. One thing that they have not done, however, is point out any particular thing that Ornstein wrote about Friesner and demonstrate that it was untrue.
The news in Brazil is pausing for a moment of shock and morning following the world-class tragedy of one its soccer teams’ demise in a plane crash near Medellin. Put on hold for just a moment — but actually we can expect that certain things will continue to move in order to take advantage of a window of opportunity when the Brazilian press and public are not paying attention — is the drumbeat of corruption investigations and political scandals that’s rocking Brazil with no end in sight. The apparent defeat of a proposed impunity law means that the books will not be quickly slammed shut and the testimony silenced. That means that jailed Marcelo Odebrecht is going to testify for the public record about bribes paid by his giant construction company to Panamanian public officials, corporate records sent to Panama to disappear and illegal financial transactions laundered through chains of shell companies set up by Panamanian lawyers. The defeat of the immunity proposal means that even more Brazilian politicians — the folks behind the impeachment of former President Dilma Rousseff and installation of current President Michel Temer — are going to fall and it’s a very good bet that many of their stories will involve bribe money laundered through Panama.
And so it is and has been in Pakistan and Spain and Iceland and Malta and so many other jurisdictions.
The Varela administration’s response? A new law providing that whatever crimes involving corruption by companies doing business with the Panamanian government that are proven in other countries’ courts didn’t happen because the Panamanian courts that avoided looking at these companies did not rule against them. Such a convenient policy, given US, Italian and Brazilian courts’ and prosecutors’ revelations about the bribery of Panamanian public officials.
Not to worry, nothing out of the ordinary here, we are told. You see, Panama is a “privacy jurisdiction.” Perhaps the new administration coming into office in the United States will be friendly to that sort of thing.
To be a “privacy jurisdiction,” Panama not only has banking and corporate secrecy. We also have a Supreme Court decision by a now-imprisoned magistrate that legalizes insider trading of stock shares that are not traded on Panama’s little exchange, and another high court decision that Generally Accepted Accounting Principles are unconstitutional. Although there are some minimal disclosure rules for companies whose shares or bonds are traded on our Bolsa de Valores, those get routinely flouted with little or no consequence. If someone in this country, Panamanian or foreigener, runs an online swindle from these shores or a pyramid scheme within our borders police and prosecutors will not act if the victims are not Panamanian citizens. It’s a wonderful privacy jurisdiction, certified as such by “sovereign investor” Bob Bauman, who was this “family values” Republican congressman from Maryland until he got caught with that 16-year-old boy. Had he been a Panamanian politician, publication of a truthful account of that event would have been a crime under this country’s injuria law, one of the of the two laws that make up Panama’s calumnia e injuria criminal defamation statute. Nominally truth is a defense to calumnia, but it isn’t to injuria — but then in Panama, facts and law can mean almost nothing to many of our judges, especially if the price is right.
Varela appointed a commission to look at the Panama Papers situation and quickly offended its two international stars, American economist Joseph Stiglitz and Swiss criminologist Mark Pieth. They broke away and published a scathing report, calling for worldwide sanctions against “privacy jurisidictions” like Panama. A few days later the remaining members of the commission, with former Panama Canal administrator Alberto Alemán Zubeita speaking for them, announced a set of recommendations for mostly cosmetic changes, mostly to the ways that corporate secrecy laws are to be preserved with a tweak here and there.
Alemán Zubieta, of course, was the guy who oversaw the acceptance of a lowball bid for the design and construction of the new locks by the GUPC consortium, a junior partner of which was his family’s CUSA construction company. But don’t worry. There was no conflict of interest because the Panama Canal Authority under Alemán Zubieta’s leadership declared that there was no conflict of interest.
What if Donald Trump does not come to the rescue of Panama’s oligarchic law firms, banks and other businesses founded on money laundering of one sort or another? What do we do when all we have is a canal, some ports and adjacent warehouses and a railroad to connect them? What do we do when chanting “offshore” no longer passes for business journalism?
Then we will be left with a body of laws and customs, including the criminal defamation statute, which makes it rather like playing “heads I win, tails you lose” for those who would invest in straight-up business ventues here. The criminal element about which investors would want to know so as to steer clear would remain lurking in camouflage.
Okke Ornstein’s accuser
What President Juan Carlos Varela is telling the world by his govenment’s jailing of Dutch journalist Okke Ornstein is that career criminals have governmental protection against public and private scrutiny. Consider the half-century criminal record of accuser Monte Morris Friesner. My apologies to those of you who do not read Spanish for the untranslated Spanish in some of the links, and the Russian in one of them.
The COCECSS / Pronto Cash credit card scheme in Panama
Pronto Cash was registered in the name of his Russian wife, but it was Monte Friesner. This is but a small corner of a much larger Financial Pacific set of financial scandals.
See also, tangential but important background:
Laundering the Yeltsin entourage’s loot
The Russian Duma on Friesner — a bad translation that gets him as “Frizer” — as in
“… foreign nationals of Canada Monte Maurice Frizer, Lawrence Hiz, managers of Carlyle Coutts Capital Corpartion SA, etc. All these activities of Zagrebelniy and persons to whom he gave the right to receive credit, are constantly under the cover of the special services of Russia. …”
An attempted stock swindle in Canada
Ontario Securities Commission on Friesner and “First Federal Capital (Canada) Corporation” case:
… at the bottom of page 20:
“Friesner has a criminal record. In 1966 he received a suspended sentence and nine months probation for possession of property obtained by crime. He failed to comply with probation. In 1969 he was sentenced to two years less a day for uttering a forged document in attempted fraud. He was convicted of other offences, namely common assault, arson, assault causing bodily harm, theft over $200, on various occasions up to 1986. … [then they get into his US fraud conviction — see the appeals court opinion on that below].
Fraud and money laundering conviction upheld in the USA
The 10th Circuit US Court of Appeals called Friesner “a consummate fraud artist” in its decision at