Fighting Corruption through Diplomacy

A Review by Claudia Escobar

anatomia de una trampa
Anatomía de una Trampa
by Fernando Berguido (Penguin Random House Grupo Editorial México, 2017) 

While campaigning, many politicians in Latin America use the rhetoric of dignity and rectitude to sway voters. However, in power, they often forget electoral promises, abusing their position for their own beneft and that of their close circle. Ricardo Marti- nelli was no exception. The successful businessman was elected president of Panama in 2009, with a platform of honesty and personal integrity: “I am a rich man, and I have no need to rob,” he declared. But his actions were a far cry from his words, and when he reached the presidency, he dedicated himself to multiplying his already great fortune.

In Anatomía de una Trampa, journalist and former Harvard Nieman Fellow Fernando Berguido relates, with a wealth of details, one of the greatest scandals of international corruption involving Presidente Martinelli: a case known as Finmeccanica. The story—a blend of journalistic investigation and historical novel—is also the testimony of a citizen ghting a battle against corruption. The author shares his experience as Panama’s ambas- sador to Italy, sent by current President Juan Carlos Varela to unravel the judicial wrongs which arose from the shady business dealings of the Martinelli govern- ment with several Italian rms.

Berguido declares that when Martinelli ended his mandate in 2014, cases of corruption were sprouting like mushrooms: “Corruption was drowning the country. It was not the first corrupt government. Unfortunately, we have had four administrations, democratically elected, in which the cheating was coordinated from the presidential office. But in the previous governments, to some degree, an effort was made to guard appearances and to show certain restraint. Martinelli broke the mold. It was plunder. There was not a single public works project without the shadow of corruption.”

When Martinelli took office, he sought out Italian Prime Minister and media tycoon Silvio Berlusconi to seek business with Italian firms. Panama made the largest direct purchase in its history from Finmeccanica, avoiding the legality of a bidding process. The transactions included radars, helicopters, boats and digital maps. The author calls this deal “literally a dance of millions of dollars,” in which million-dollar commissions were destined to a business—an intermediary—by the name of Aga a, whose purpose was to enrich the president, his family and business partners.

Those of us who have lived in countries where corruption is a habitual practice recognize in this narrative a history of our own realities. We can, through this recounting, look the monster directly in the eyes. The agreements signed between the Panamanian government and Finmeccanica and its affiliates represent, according to Berguido, “a modern version of greediness without limits or shame.” The negotiation for luxurious helicopters; the way in which government officials organize to coopt the state; and the political appointments that permit the justice system to become an accomplice of corruption are all situations to which we are accustomed.

With rare exception, corruption has been a constant in the history of Latin American countries, with justice systems often as accomplices to the looting of state coffers. Spineless judges have not been capable
of putting a brake on the abuse of power by the government of the day. Because of this, it is easy to identify with the frustration Berguido expresses, “To confirm, with concrete facts, the great plunder of my country was very painful. Even harder was to know, with the very poor system of Panamanian justice, eternal pimp to impunity, probably the embezzlement would have remained a simple anecdote. Without punishment.” This appropiation of funds during Martinelli’s administration was very similar to that which took place in Guatemala, my country, during the government of Otto Pérez Molina. There the former president has faced multiple judicial processes on corruption charges since 2015, although up until now with impunity because of the legal artifices of his lawyers and because of the obstacles the judicial system set up precisely to protect the corrupt. 

Like other Central American countries, Panama lacks a solid system of justice that guarantees the impartiality of the courts. The case of Finmeccanica, like others in which powerful government officials are under investigation, demonstrates that where the system of justice is weak and is used to protect the corrupt, international judicial cooperation is needed to investigate in an objective and impartial manner. Berguido’s narrative demonstrates the difference between an independent system of justice like that of Italy, capable of investigating its country’s top authorities, and that of Panama, used to cloaking its officials with impunity.

The author relates how the Panamanian judicial system during Martinelli’s government was used to block the investigation. The Attorney General himself asked that the case be closed for lack of evidence. Meanwhile, in Italy, the ongoing investigation produced mounting evidence about the corruption surrounding the contracts with Panama. At the same time, the investigation was going nowhere in Panama with the government defending the legality of the contracts, while concealing information on grounds of national security. In Italy, the prosecutors, legal experts, judges and officials in the Bureau of Financial Oversight demonstrated with irrefutable evidence the shady role of officials, intermediaries and contractors in the deals with Panama. “Without mincing words, the Italian prosecutor was directly pointing the finger at Presidente Martinelli for bribery.”

Due to Berguido’s diligent and timely efforts as ambassador, the Republic of Panama was legally recognized as an affected party within the judicial process for the crime of international corruption, as it is known in Italy. Moreover, because Berguido is both a lawyer and investigative journalist, he managed to carry out successfully the complex diplomatic negotiations that voided the contracts with Finmeccanica and obligated the Italian firms to recognize the surcharges and reimburse the amount to Panama. This process of resolving a problem through diplomatic negotiations marked the beginning of a new era in the commercial relations between the two nations, one in which the goal is to develop projects in accordance with the law and the spirit of transparency.

When President Varela disclosed the results of the negotiations, he stressed it was a commercial agreement that did not impede the criminal prosecution of those responsible. Many Panamanians demonstrated unconditional support of these efforts, since the case exemplified that with political will and honest officials, it is the country and its inhabitants who reap the benefits.

Anatomía de una trampa is a thorough documentation of how some rulers enrich themselves through government business, but it is also a tale about the effectiveness of diplomacy when handled with expertise.

The way in which the annulment of the contracts was negotiated with the resulting return of the surcharges can serve as an inspiration to other Latin American countries still under the shadow of multimillion bribes paid by the Odebrecht firm to public officials. It is not enough to initiate criminal proceedings against those responsible for these illegal deals; it is also necessary to require that the company return the over-priced surcharges to the state.

As Berguido aptly illustrates in his compelling and well- written narrative, it is necessary to nd mechanisms to break the vicious circle of those Latin American rulers protected by “an unwritten Mafia pact of impunity” in which new presidents end up covering for the previous one so that the next will do the same.

Berguido’s book ought to be required reading for those who recognize that corruption is one of the greatest obstacles to the development of countries. It should also be required reading for those honest officials who are willing to work for the good of their country and for those of us who push for reforms in the justice systems in the hope that someday the courts will have the tools to punish those who abuse power.

Claudia Escobar is a former magistrate of the Court of Appeals of Guatemala and a respected legal scholar. She became the lead whistleblower in a case of grand corruption that revealed illegal interference in Guatemala’s judiciary by high-ranking political officials including the country’s vice-president and the former president of Congress. She was the 2015–2016 Scholar at Risk Fellow at the Radcliffe Institute for Advanced Study. During 2016 -2017 she was a fellow at the National Endowment for Democracy (NED) in Washington DC, examining the impact of international institutions on the fight against corruption in Guatemala. She is now affiliated with Georgetown University as a Centennial Fellow in the Walsh School of Foreign Services. She can be reached at claudiaescobarm@alumni. harvard.edu