HomeNewsBriefWhat Happened to Money Laundering Claims Against Panama’s President-Elect?
BRIEF

What Happened to Money Laundering Claims Against Panama's President-Elect?

MONEY LAUNDERING / 7 MAY 2014 BY CHARLES PARKINSON EN

Panama's vice-president has been elected to the country's top office, but amid the congratulations accusations of laundered money funding his campaign less than a month ago seem to have disappeared.

After receiving around 39 percent of the popular vote in the election held on May 4, Juan Carlos Varela was declared the winner among seven candidates, including incumbent President Ricardo Martinelli's hand-picked successor, Jose Domingo Arias. The result saw US Vice President Joe Biden call Varela to personally congratulate him.

SEE ALSO: Coverage of Panama

Yet throughout the fanfare, very little mention has been made of recent accusations against Varela that his presidential campaign was partially funded by laundered money. Even Diario las Americas, which broke the story on April 13 and followed it up a week later with a report including documents (pdf) that allegedly proved the veracity of the claims, failed to mention the scandal in its reporting of his victory.

InSight Crime Analysis

The controversy that hit Varela revolved around claims his campaign had accepted money from a global betting ring accused of moving up to $27.5 million through multiple bank accounts and sham companies. Panama is a renowned money laundering hub in Latin America, as well as a transit nation for drugs passing through Central America and the Caribbean. 

The disappearance of the accusations -- which have generally received nothing more than a late passing mention among most international reports of his victory -- begs the question of whether a formal investigation will be opened into Varela before he takes office on June 1.  

Varela has vigorously denied the accusations, claiming they were a political attack by his rival Arias. While this remains entirely feasible, it is perhaps surprising no official process appears to have been opened to establish the validity of the claims.

Yet presidents taking office amid controversy and accusations of wrongdoing are nothing new for the region. Colombian ex-President Ernesto Samper famously won the presidency in 1994 amid accusations he received funds from the Cali Cartel. More recently, current Paraguay President Horacio Cartes was elected in 2013 despite allegations of money laundering, contraband smuggling, drug trafficking and criminal ties.

However, holding the top office is not always protection against prosecution on such charges. Former Guatemalan President Alfonso Portillo was recently convicted of corruption and money laundering in the United States, while former El Salvador President Guillermo Flores Perez is now a fugitive after courts recently issued an arrest warrant on corruption charges.

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