Exposing Corruption When Illegal Activity Is Business as Usual: 'Unveiling Corruption throughout Latin America Awakens Dreadful Instincts in Powerful Politicians While Judicial Systems ... Have Repeatedly Turned Their Backs on Journalists or, in Some Cases, Even Helped to Suppress Them.'
Berguido, Fernando, Nieman Reports
La Prensa was able to publish a series of articles on casino licenses granted in 1999 by Panamanian government officials, but only after its investigation took a decade to complete. Still, when we broke this story in 2009, the initial installment cast only a blurry picture of what ended up becoming an expose about an intricate network of payments that benefited an intimate circle of one, if not two, former Panamanian presidents.
On October 8, 2010, District Attorney Jose Ayu Prado's criminal investigations--inquiries that only started after stories appeared in La Prensa ("The Press")--concluded that there was enough evidence to press money laundering charges against former President Ernesto Perez Balladares, who served from 1994 to 1999. If the trial does take place, it will be the first time that a Panamanian head of state will face justice for money laundering, corruption or similar crimes.
Perez Balladares is a clever, Wharton-educated politician who modernized
Panama's economy by privatizing public utilities and obsolete state-owned enterprises. From the outset, his administration was plagued with rumors about dishonesty. He wasted no time in co-opting the Supreme Court of Justice by filling it with obedient appointees and blazing a shameful path imitated by other presidents who followed. By the time his term was coming to an end, casinos were privatized. The fact that the Constitution mandated that gambling and games of chance could only be run by the state was no impediment for securing a law allowing licenses "for the management" of casinos and gaming houses through a Congress controlled by his party. A provision was enacted, however, requiring that ownership of the private companies licensed to operate casinos be fully disclosed to the Gaming Control Board (Junta de Control de Juegos, JCJ).
More than a decade ago, the first tips reached reporters in our newsroom. They indicated that behind Perez Balladares's efforts to modernize gambling, there was a hidden and more personal interest that should be investigated. Flashy, Las Vegas-inspired casinos mushroomed in Panama City and other metropolises. Even though a few tourists might be spotted inside, the usual gambling crowd consisted of middle- and low-income Panamanians. Gambling revenues burgeoned from less that $200 million in 1999 to $1.25 billion in 2010.
Opposition candidate Mireya Moscoso succeeded Perez Balladares as president from 1999 to 2004. Her administration's initial investigation revealed that the JCJ had requested Spanish gambling conglomerate Cirsa, one of the licensees, to disclose the ownership of an obscure 24 percent belonging to some anonymous corporations. But this kind of regulatory pressure did not last long. The Moscoso administration ended up granting Cirsa additional licenses to operate gambling facilities, mainly more modest slot machine houses to be set up close to transportation hubs and shopping centers in low-income neighborhoods on the margins of the capital city and in rural towns.
Until 2002, Panama had no Freedom of Information Act (FOIA), as remains the case throughout most of Latin America. [See accompanying box about Latin American transparency laws.] Unless they received leaked information, journalists had virtually no way to gain access to relevant documents. For two years prior to the law's enactment, a coalition of civil rights and international organizations demanded transparency and free access to government records. By the end of 2001, they had succeeded in getting a FOIA passed by the Congress, in large part because the opposition party controlled the legislature.
Moscoso was reluctant to sign the FOIA bill until a major corruption scandal erupted in Panama. Then she had no recourse but to sign Law 6 of 2002--known as the "Transparency Law--as a way to diffuse the public outcry over serious accusations of bribery by several politicians on both sides of the aisle. …