On July 18, former Panamanian President Ricardo Martinelli was sentenced to 10 years and eight months in prison for money laundering. Martinelli, who served from 2009 to 2014, used approximately $44 million of funds funneled from companies that had won government contracts during his presidency to acquire national newspaper publisher Editora Panamá América (EPASA) in 2010. The case, known locally as “New Business,” after the shell company through which the funds were laundered, is not the first time a former Panamanian president has been charged for crimes from his time in office. But it does represent a crucial step toward restoring trust in Panama’s state institutions, which have struggled to curb a pervasive culture of corruption and impunity.
The road to justice, however, is long and winding—and it could get even longer. Martinelli, the front-runner in next year’s presidential election, maintains that he is the victim of political persecution and is expected to appeal his conviction. Even if he is found guilty by a superior court, he can file a cassation appeal before the Supreme Court of Justice, extending the legal process for months to come. So long as Martinelli’s conviction is not final, he remains eligible to run. But if the ruling holds, it will upend an already chaotic race to become Panama’s next president.
When he came to power following the 2009 election, Martinelli, the founder of the Democratic Change party (CD), positioned himself as a political outsider who would tackle corruption. His presidency was largely successful and popular: Martinelli implemented tax reforms and made substantial investments in infrastructure, including the construction of the Panama Metro. During his presidency, Panama experienced significant economic growth, reduced unemployment, and improved income equality.
Since leaving office, Martinelli has been plagued by scandal, fighting off allegations of espionage, wiretapping, and corruption. Chief among these is the recently decided New Business case. Since an investigation was launched in 2017, New Business has exposed unsurprising but deep corruption throughout Panamanian society, implicating 18 legal entities, including state contractors and Panamanian banks, as well as many members of the country’s political and economic elite.
New Business is only a fraction of the former president’s legal woes. He also faces charges for his involvement in what is known as the Odebrecht scandal. In 2016, Odebrecht, a Brazilian construction company, admitted guilt in a U.S. court to distributing over $788 million in bribes to mainly Latin American government officials and political parties, including $59 million to Panamanian officials in exchange for public works contracts. In 2022, a Panamanian court announced its own trial against 36 individuals for alleged money laundering for Odebrecht, including Martinelli and former President Juan Carlos Varela, who will go to trial in August of this year.
Although these scandals have cemented Martinelli’s reputation as a corrupt politician, he is often given a pass in the eyes of the public because he accomplished so much while in office. There’s a popular saying in Panama that summarizes this permissive attitude: “Robó pero hizo,” which loosely means, “He stole, but he also did something.” Voters seem to care more about Martinelli’s high economic performance and visible infrastructure advances than accusations of corruption. He is often compared favorably to the current administration, for example, which also faces corruption accusations amid a much worse economic performance.
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This may come as something of a surprise, given that corruption is seen by the Panamanian public as the country’s most pressing issue. A 2022 report by the Cyrus R. Vance Center for International Justice and the Central American Federation of Judges and Justices for Democracy shed light on corruption within Panama’s judiciary, exposing cases of bribery involving lawyers and judicial officials and revealing the undue influence of economic and political powers in appointing magistrates and judges. Critics consistently point out the judicial system’s opacity and insufficient autonomy. Though the legislature must approve judicial nominees, Panama’s judiciary is considered presidentialist in nature, meaning judges are appointed by the executive for limited terms as opposed to holding the position for life. There are strong quid pro quo incentives at play because judges appointed during a given president’s tenure are likely the ones who will deliver a verdict should any corruption come to light. Even though judges may be susceptible to the influence of those who appointed them, there is no independent tribunal overseeing the judiciary’s actions, exacerbating concerns about impartiality and integrity.
Corruption has been a serious problem in Panama for decades. Recently, however, there has been a growing demand across Panamanian society for change. Citizens protested against corruption in 2019 and again in 2022 in the country’s most extensive nationwide demonstrations since the ousting of dictator Manuel Antonio Noriega in 1989. This awareness has spilled onto the global stage and created consequences for leaders in Panama City. Major corruption scandals, including New Business, Odebrecht, and the Panama Papers cases have, for example, put Panama on the Financial Action Task Force gray list and gotten both Martinelli and Varela banned from entering the United States. This reputational damage has put pressure on Panama’s justice system to hold power to account.
In this context, Martinelli’s conviction has been praised by many, as it sends a message to the country—and the world—that Panama’s justice system is seeking to restore itself despite pressure from political actors. Though the verdict represents a promising bellwether for judicial reform, such reform is not guaranteed. Its most immediate impact, if the conviction holds, will be felt by Panama’s 2024 presidential candidates.
As the nominee for the Realizing Goals party, Martinelli currently leads the polls, surpassing other contenders including José Gabriel Carrizo, the current vice president and a member of the ruling Democratic Revolutionary Party (PRD); Martín Torrijos, president from 2004 to 2009, who is running with the smaller Popular Party; Rómulo Roux, chairman of CD who served under Martinelli as minister for canal affairs and later as minister of foreign affairs; and José Isabel Blandón, former mayor of Panama City from 2014 to 2019 and member of the Panameñista Party. Ricardo Lombana, a previously independent candidate who has since founded the Another Way Movement, is also expected to solidify his candidacy after a party primary. Both Blandón and Lombana, who aren’t popular enough to win on their own, are expected to eventually join tickets with leading contenders.
Martinelli’s conviction and disqualification could trigger a major shakeup in this field of candidates, forcing his would-be voters to split their votes among the pool of contenders. Of the major parties, PRD is poised to benefit most from Martinelli’s downfall.
Even if he gets the New Business conviction overturned, Martinelli may find himself in similarly troubled waters when the Odebrecht case goes to trial in August. Political parties must finalize their candidate nominations with the Electoral Tribunal by Oct. 31. If Panama’s Supreme Court convicts Martinelli before then, the tribunal cannot accept his nomination, effectively ending his political career—at least in a presidential or vice presidential role. If the conviction happens after Oct. 31, then even if he wins, Martinelli will still be barred from holding public office, per Panama’s constitution. In that case, his running mate would become the primary candidate. Although he hasn’t announced a running mate yet, many suspect that he will appoint his wife to the role to secure his hold on power.
Whether or not Martinelli can run—or win, for that matter—the pre-election year ahead will undoubtedly be messy. Panamanians are fed up with corruption, yet without reform they see few prospects for hope within this pool of candidates or from their country’s justice system writ large. Corruption scandals and all, Martinelli—a candidate with a strong economic and infrastructure record—may seem like the least-bad option to many voters.