Money, religion and power: the close entourage of President Varela

Since entering politics in 2008, when he first ran for president, Juan Carlos Varela worked with a parallel organization within his own party.  “He never trusted the official party structure”, confesses a person who is today very close to the president. According to some of his closest associates interviewed by this newspaper, Mr. Varela is an obstinate and pig-headed leader, who finds it hard to listen and to accept that he may be in the wrong. Some go as far as to describe him as “a despot”, and now that he is president as someone who is “utterly inaccessible”. “He bears little resemblance to the man we got to know during the election campaign”, says one of his political associates: “He only looks up for me when he needs to go to my electoral district, but he otherwise sticks to his close entourage”. Still riding the wave of the social programs that he inherited from the administration of Ricardo Martinelli, Mr. Varela seems in reality more focused on exploiting countless business opportunities with the state on behalf of his political friends.  As soon as he took power in 2014, Mr. Varela took immediate action to remove from the Panamanian market the only company that represented direct competition to his family business:  Varela Hermanos S.A.. Such was the fate of Campos de Pesé S.A., a company belonging to Grupo Pellas, one of Central America largest business groups.  Campos de Pesé had made an incursion into ethanol production, but as of 2014 it had also launched two products that were in direct competition with those of Varela Hermanos: Seco SL and Ron Canalero. Having seen its operations suspended since 2014, Campos de Pesé has been fighting a legal battle to have them re-established via the courts. 900 people have lost their jobs as a result of the company government-ordered shut down.   Having taken out of the competition, President Varela proceeded to favour his family business further by passing Law 126, which raised the duties applicable to beer to the same level as those for hard liqueurs. The president also went as far as to promote the interests of Varela Hermanos S.A.  internationally: In September 2015, Mr. Varela invited his own brother and general manager of the family company, Luis “Fulo” Varela, on an official visit to Cuba, so that he could make the initial contacts aimed at launching operations in that market. This confidential information was provided by a close associate of the president on condition of anonymity.    The close entourage of President Varela is made up of five people.  Its undisputed head is millionaire businessman Stanley Motta, who happens to be Mr. Varela’s principal campaign donor. People related to the presidential entourage have been placed in key decision-making positions across government institutions. From their relative positions, these actors exert virtually accountable power and control.  President Varela’s strategy to silence public opinion on these matters has been to buy the silence of opinion makers. Mr. Varela has done so by appointing key voices of civic society to government positions, thereby raining in their criticisms. Such is the fate of at least 19 so-called representatives of civic society: their critical voices, which could not be silenced during the Martinelli administration, have now gone silent.  Gone is the criticism even of directly awarded contracts, apparently a great source of corruption in the previous administration, but not so in the current. Amongst the now notably silent anti-corruption fighters are Angélica Maytín and Fernando Berguido, of Transparency International, as well as Fernando Aramburu Porras, former president of Apede. Ms. Maytin was put in charge of the government's anti-corruption agency, while Mr. Berguido was promoted to the position of ambassador for Panama in Rome, Italy. Other civic societies voices that have been silenced by the government’s generosity are: Mariano Mena, David Ramírez, Félix Win, Idalia Martínez, Samuel Rivera, María Mercedes Corró, Bernardino Jiménez, Zuleyka Pinzón, and the journalist Castalia Pascual, to name but a few.  Cleverly, President Varela also appointed businessman Federico Humbert to the position of general  comptroller, in spite of the fact that Mr. Humbert had been one of his campaign donors. Mr. Humbert himself didn’t waste any time in trying to favour his own businesses with state contracts: two of his companies were directly awarded contracts, one of which was worth $340,000, by the PAN shortly after he was named to his office. This first contract was later canceled after this newspaper brought the scandal to light, and before Mr. Humbert could take office. However, the second contract was fulfilled at a later date, once Mr. Humbert had taken office as comptroller general and could therefore personally endorse it in his new capacity. The contract in question, worth $52m, gave oil company Delta - which is owned by the Humbert and Motta families - the right to supply 75% of all the fuel needs of the motor fleet of the Panamanian state for 2015 and 2016. Mr. Motta and Mr. Humbert are also the principles financial backers of civil society movement "Movin", something which has allowed them to silence its criticisms in the face of such scandalous dealings. However, sources have reported that the relationship between President Varela and Movin was rocked by the appointment of Angela Russo and Cecilio Cedalise as Supreme Court Justices, as well as by the re-appointment of Jose Ayu Prado as president of the Supreme Court. Once again, this would boil down to President Varela’s own stubbornness: when faced with unfavorable situations, his approach is to apply pressure and twist arms.   Not many weeks ago, news anchor Alvaro Alvarado as well as political commentator Isabel Blandon, publicly denounced being at the receiving end of a smear campaign. The source of the media briefing would be the Security Council, which sits within the presidency. A key player in the smear campaign was allegedly Miguel Heras, a director of the pro government channel TVN, and a member of Mr. Motta’s circle. According to internal sources from the Panameñista party, the president's conduct is increasingly being influenced by the power exerted by the close members of his entourage, and driven by considerations of religion and the award of juicy business contracts with the state.