El Faro first published this article in Spanish in June 2018.
It is not easy to get into Club Unión. First, there’s the thin stucco wall, several meters tall, encircling the premises. Then the steel-slat fence, a security booth, and a guard who sets the rules: “Are you a member?” “It’s private,” “No, not everyone can enter.” Then you call ahead and ask if they can please let you in. They tell you the same thing: members only, private, not for everyone. If you’re a member, the doors to the Club will open for you, along with the business done inside. Perhaps this will entice you to join. With the right contacts and two members to back you up, you can submit your application to management and let the wheeling and dealing begin: hobnobbing with members of the Admissions Board; inviting them to private parties, to an afternoon on your yacht, to participate in a promising investment; asking them to put in a good word with the 32 voting members, then waiting patiently for the ballot box to fill up while praying that no more than five members will reject your petition, preventing you from joining.
It’s true, chances are you’ll never make it in: Club Unión is not looking for people just for the sake of it. But if they do finally grant you access, a new story begins: you pay the $100,000 membership fee, then another $180 every month, then $3,200 more in dues, and on top of the financial contributions you agree to abide by the Club’s strict rules. Only then do you get your membership card. And thus, as if ascending the stage to accept an Oscar, you enter the exclusive world of La Gente Conocida — Panama’s wealthy and famous.
If none of that works, there’s always a seat in the waiting room. Perhaps one day a member will invite you to a Sunday brunch, a pasta night, or a wedding: a brief taste of exclusivity. After greeting the guard, you cross the front courtyard with its large fountain and on the other end, after passing through the wide portico entrance, you are warmly welcomed in the foyer. Once inside, you might run into people with the same surnames that fought for Colombia’s independence in 1903, or who backed the U.S. protectorate. Or the owners of banks, law firms, insurance companies, casinos, media outlets, private schools, security companies, ports, or —less aristocratic but just as lucrative— pawnshops. You might also meet a handful of Panama Canal administrators, half of the current government ministers, several members of past cabinets, a former president or two, and maybe the current president himself.
That place on the other side of the wall brings together the few who define the lives of the many. Here, they are called rabiblancos (“whitetails”) to distinguish them, but they are all El Poder, The Powerful, plain and simple. This is their Eden, their paradise, their Olympus, and they call it Club Unión.
* * *
Panama City is a place of contrasts. In ten blocks you travel from Singapore to Rwanda, from buildings made of mirrors and marked with international brand logos to others that look like the ruins from an earthquake. The most sought-after neighborhoods are on the coast, studded with steel and glass towers and speckled with square-plan mansions with large foyers and perfect palm trees: Casco Antiguo, Avenida Balboa, Punta Pacífica. Or the home of Club Unión: Punta Paitilla. Until 1957, Paitilla was pure, undeveloped scrubland and belonged, like another one-third of the country, to the United States. But when the gringos returned it, the Panamanian government decreed by law that it should become “one of the most picturesque and attractive places in the capital.”
Paitilla today is a belly of land stretching over the Pacific Ocean in a privileged part of the bay, where buildings compete in height and avenues explode with trees. There are beauty salons, organic stores selling expensive fruit, and uniformed nannies wrangling children as they get off school buses. It’s one of the few neighborhoods in the city where you can walk with ease, because there are sidewalks, but most of Paitilla’s inhabitants prefer to get around in Mercedes, Toyotas, and Porsches.
Club Unión occupies an entire block in this corner of the city, where property sells for $2,000 a square meter — nearly as much as in Beijing or Buenos Aires. The Club’s original building has a modern, tropical style of red terracotta roof tiles and wide verandas, with a bright, warm feel. The entrance is an arcade without a door, with an open view of the lobby, the terrace, and beyond, the sea. But less and less remains of its idyllic banana plantation construction, as expansions and remodeling —salons and spas with metal roofs like airplane fuselages— have made way for more of a shopping mall aesthetic, giving the Club its current appearance of architecture that could be from anywhere.
Today is a Friday in February and I have finally managed to get into Club Unión; from time to time, being a journalist can open doors to places with otherwise strict admissions. For two months, I made several unsuccessful attempts to get past the front guards: I begged friends who were members of the Club to take me out to lunch; I asked others to show me around on a tour; I even offered to write as a social columnist for a high-class magazine. But in the end, all it took was one phone call to the organizer of a party to make the miracle happen.
As soon as you enter the Club you get a sense of its privileged position in a city where the most popular gathering spots are shopping malls: the rooms are spacious and bathed by the warm light of a soft sun; there is no noise, no loud, heart-attack-inducing music; and no matter where you go inside, you can always see the sea. The members have access to a total of 17 lounges, where they can invite anywhere from 12 to 1,000 people by paying management a modest rental fee of between $200 and $13,500. There are dining rooms, bars, dance clubs, a gymnasium equipped with state-of-the-art machines, an Olympic-size swimming pool, a game room, a billiards room, a bingo room, a reading room, squash and basketball courts, indoor and outdoor tennis courts, and, though it is still not a major sport in Panama, a soccer field.
It's eight o’clock at night. Outside, in the neighborhood of Paitilla, residents wearing kippahs and women pushing strollers are leaving the synagogues. Here, inside the Club, a designer has decorated the room with Tiffany chairs, orchids in baskets, and garlands of soft lights. A calypso plays in the background while people talk and laugh and waiters offer gin and tonics and champagne. The sea is an infinite line, black, joined to the sky. The breeze brushes the palm trees that soar several inches above the suffocating ground, which is the city on the other side of the wall.
The institution throwing the party claims to have progressive values and a commitment to science. In attendance are Costa Ricans, Caribbeans, Salvadorans, and gringos, all of whom have traveled here to celebrate with their Panamanian friends. The men wear white guayaberas; the women, cocktail dresses. Members mingle, welcome the newcomers —in English— and, when they run into people they know, hug them and say “Hey, good to see you!” and ask how their uncle Fulano is doing or if they have plans to go to the beach with cousin Mengano.
If they’re in a crowd, the habitués of Club Unión are experts in simulation. With the exception of issues that enjoy an undisputed social consensus among members of their class —the corruption of La Gente Desconocida, that mass of lesser-known others; the city’s impassibility during rush hour; the economic model— they never say anything compromising in public. In private, they would divulge the most tenebrous details about their own brother, but not to just anyone, because the consequences can be harsh and long-lasting. It’s not easy having enemies in the small world of La Gente Conocida.
After making a few rounds, I find the host: a blond man in glasses and a beret who looks like a French intellectual from the eighties. He greets me warmly, introduces several other members of his institution, and guides me to a table. He leaves me seated between a woman from Houston —pure gringa, blonde with a round face— and a Panamanian in his fifties, also blonde and very white, but almost completely bald. The 50-year-old looks like any other member of the Club, but he’s not: D. is a leftist environmentalist who is waging a battle against some very powerful people who want to alter the course of a river to build a real estate complex. D. orders a beer, the waiter tells him there aren’t any left, so he asks for wine.
“If you’re an outsider, you can’t buy beer, the bar won’t give it to you,” he tells me. “Do you know how it works?”
Only members are allowed to drink and dine in the Club’s restaurants and bars: the membership pass works like a credit card with a $2,000 limit. Club Unión does not accept cash. Apart from what you can’t buy, everything else is free and fair game: the wine that D. ordered, the ceviches and salads, and even local snacks like tamales, which on the streets are a pastiche of corn and spices but here are a glory of explosive flavors.
D. pokes with a fork at something on his plate, filled to the brim at the buffet. He tells me that his was always a country of pirates —Henry Morgan, most famously— and of stockpiling and exchanging goods, of merchants, and of mercantilism. Then it became a country tailor-made for Wall Street: a nation that is, in reality, a massive bank. Panama might be small but it was always a country of passage, of opportunists, and of people who dropped anchor and raised generations of their own. Wherever they were from, they all seemed to share the same vocation for adventure and power.
“This country has always been controlled by these people, who run everything and have all the influence,” says D., before flagging down the waiter for more wine.
“Which people?” I ask.
“These people,” he says, raising a hand and waving his index finger around in a circle. “You know what these people are like.”
“No, I don’t.”
“They’re the owners. They do whatever they want.”
* * *
Club Unión was founded on May 23, 1909, six years after Panama’s independence, as the country was falling under the omnipotent shadow of the United States. A group of businessmen decided it would be nice to have a place to gather, have fun with their families, and talk business for the new era. The Club’s first headquarters was a building in Casco Antiguo, the old walled city with cobblestone streets, mansions, plazas, and government buildings. Today, Casco Antiguo is a tourist attraction, but back then, it was the home of distinguished locals, the people who, a hundred years later, are still called the rabiblancos. The era bequeathed the term that continues to distinguish Club Unión members from the rest of the country. The “whitetails” were the elite members of the political power structure who lived behind walls; everyone else, which is to say, the majority of the country, were rabiprietos — “blacktails,” outsiders.
Accounts from the time described Club Unión as the “center of light and joy of Panamanian society.” In reality, almost from its beginning, it was the center of absolute power. Seventy-five percent of Panama’s presidents came from Club Unión’s member roll. The first was Federico Boyd, a hero of the independence movement who made his fortune as a businessman. Two decades later, his brother Augusto assumed the presidency. Boyd was not the only surname repeated in the galleries of the country and the Club: Roberto Francisco Chiari’s father, Rodolfo, served as President of Panama thirty-six years before his son.
That world of seamless continuity was interrupted by Omar Torrijos’ coup in 1968. Torrijos, a handsome, charismatic, and hard-drinking military officer assumed historic status when he recovered national ownership over the Panama Canal in an agreement brokered with Jimmy Carter in 1977. Torrijos managed to impose presidents from outside the Club Unión circle from the moment he seized power until he died in a plane crash in 1981. The change was not a bloody one, but rather a result of a pact made by the powerful: the military would deal with politics; Club Unión’s rabiblancos, an increasingly vast economic power bloc, would focus on business.
When Manuel Antonio Noriega replaced Torrijos as Panama’s top boss, the members of Club Unión remained secluded in their world of business, but started having conversations with the United States about hastening the departure of “El Man,” as Noriega was known.
The moment came in 1989: on December 20, the U.S. invaded Panama, spilled blood and bullet casings across the neighborhood of El Chorrillo, and took Noriega away, ultimately sentencing him to forty years in prison, in a phenomenal display of who was in charge. La Gente Conocida of Club Unión were delighted, and they put on their best suits to take the helm of the nation once again.
Since then, and for the last thirty years, members of the Club have succeeded each other in the presidency and in cabinet positions. Guillermo Endara, Ernesto Pérez Balladares, Mireya Moscoso, Ricardo Martinelli and Juan Carlos Varela: all unionistas. The only extramural president was another blast from the past: Martín Torrijos, Omar’s son. But his administration took a relatively hands-off approach to the old plutocracy. Once the old unionistas were back in charge, however, everything flowed more seamlessly: the civil government returned with a renewed generosity toward the private sector and foreign investment came back by the billions.
This new era was marked by the emergence of a certain political alternation —from Panameñismo to the Democratic Revolutionary Party (PRD), then Panameñismo and the PRD again, then Cambio Democrático, and now, from 2014 to 2018, the Panameñista Party once more— but the rules of the game stayed the same. Influence peddling, nepotism, and bribery continued to be part of Panamanian politics. As did the consensus that guarantees class impunity.
* * *
At Club Unión, the rules are many and are well respected. It is against the rules to dress in sportswear in non-athletic areas; it is against the rules to walk through the lounges, the pool area, or the library with drinks or food; it is against the rules to enter with dogs, cats, or any food or beverages purchased on the other side of the wall. And it is against the rules to “publicly” utter “insults or threats against Club Unión or its membership in general.”
Nevertheless, badmouthing the Club behind its back is a widespread practice. The trick is to make sure you never get caught; in fact, of the twenty or so members I interviewed over the course of two months, many shared revealing anecdotes and details, but only on the condition that they were neither recorded nor identified by name. On top of the aforementioned Club ordinances, it is also against the rules to bring visitors to member-only events, like the carnivals or the Festival de las Debutantes, the Debutante Ball.
There are also rules that remain unwritten but are followed to the letter all the same: the rabiblancos move and act as a unified block. That’s why, over the years, as the old Casco Antiguo headquarters deteriorated and its streets filled with poor rabiprietos and their itinerant businesses, Club Unión members moved to new areas, like the aristocratic neighborhood of Obarrio —a plot of shady sidewalks and houses with patios and balconies in the heart of the city— or to Paitilla. In early 2000, Club member Stanley Motta (owner of Copa Airlines, along with various banks, media outlets, ports, insurance companies, shopping malls, and neighborhoods) convinced other Club members (multinational executives, politicians, and bankers) to move en masse to Costa del Este, a former garbage dump that Motta himself had flattened to build a myriad of gated communities and mirrored, mastodonic skyscrapers.
Another unwritten rule: members send their children to the Balboa international school or to the Inter-American Academy, run by a member of the Club. And yet another rule, as binding as a blood pact: rabiblancos marry within their own ranks. They might mess around with outsiders, but in the end, a wife or husband defines, to a large extent, who you are — the beach house, the car, the vacations, and above all, the economic alliances. The annual inbreeding ritual of La Gente Conocida is the Festival de las Debutantes, an exclusive event celebrated every year since 1955, without interruption, where the teenage daughters of Club members are publicly welcomed into the society. The Debutante Ball is like a machine that swallows girls and spits out ladies-ready-for-marriage and women in service of family.
The idea of familiarity and belonging is paramount. In addition to its own exclusive activities, Club Unión members can participate in the exclusive activities of other equally exclusive clubs. Thanks to “reciprocity,” with a Club Unión membership card you can enter the swanky El Nogal in Bogotá, the impenetrable Club de la Unión in Guayaquil, the posh Nacional de Perú, and the aristocratic Jockey Club in Argentina — along with 26 other venues across Asia, Europe, and the rest of the Americas, all of which share the same halo of discretion: secrecy and silence must always be respected. Which is why there are almost no stories published about any of these places. Of course, there are plenty of photos from events held behind closed doors, but these are catered for distribution on social media. Power always tries to control its narrative.
Despite these prodigious efforts to homogenize its membership and maintain order, there are also differences. Most notoriously, between the old members and the “new” ones. Like any institution intent on safeguarding a certain tradition, Club Unión has maintained its basic ways over time, but has been unable to prevent history from taking its course, and, with it, the vanishing of old fortunes and the arrival of new ones, in the hands of the noveau riche, who came to Panama and immediately thereafter began knocking on the Club’s doors in search of membership and the legitimacy that comes with it.
In the nineties, with the privatization boom and the increase in foreign investment, businessmen looking for their place in paradise landed on the isthmus. In tandem, a new homegrown bourgeoisie appeared as well. Exclusivity follows business; the old guard eventually began welcoming some of the newcomers. Over the course of the last quarter of the century, Club Unión became more heterogeneous: now, in addition to the rich-white-patricians and the white-patricians-without-a-penny, there are the rich-whites-without-noble-linage. And while there remains an unbridgeable gap between the old and the new, the panorama appears essentially the same: the old money and the new premises of Club Unión remain in the hands of white, elegant men who respect the rules.
* * *
In Panama, the state has long been an instrument of family business and politics a tool to stuff the piggybanks of the powerful. With the signing of the 1904 constitution, the urban elite sealed their allegiance to a mercantilist conception of the nation. The first president of Panama was appointed without an election, a candidate chosen through consensus by the powerful of that era. And of the twenty elections held in the country between 1904 and 1968, twelve were fraudulent, the results manipulated by various powerful groups, with six prompting the involvement of Panamanian police and four triggering intervention by the United States.
The economic powers that be understood, across many moments of history, that democracy was secondary, because Panama, in its own conception of the nation, is a market first and a nation second. And that market, for a good part of the country's independent existence, was The Zone. The Zone is the Canal Zone, a strip of 1,432 square kilometers that the United States dominated from 1903, when its construction began, until the last day of 1999, when it was returned to Panama in compliance with the Torrijos-Carter Treaties.
The Zone split Panama in two. During the years of U.S. control, there were sidewalks, but not in the city; hospitals where lives were saved, but not in the city; theaters with operatic acoustics, but not in the city; imported products, good salaries, a comfortable and easy life — but none of it in the city. And there were fences and soldiers blocking the way to locals who did not have permission to enter, and a market so enticing that La Gente Conocida never bothered to disrupt the stability they so appreciated, so long as it remained tied to the privileges they enjoyed there.
“The so-called Criollo aristocracy, the ruling classes, controlled the country’s political power,” says P., a former government minister and member of the Club, in a husky and mischievous voice. “The presidents came from Club Unión.”
P. is an old aristocrat with a folksy manner who seems like he knows everything: he’s always smiling. On a sunny December morning, sitting in the downtown bar where he usually takes his breakfast, P. asks me what I want, calls the waitress over, and orders a café con leche for the young lady if she would be so kind. Then he continues:
“Once, in the seventies, on my way into Club Unión, I ran into Mr. Ricardo Arias Espinosa, the former President of the Republic, and he told me: ‘Hey, P., do you know that guy they appointed president, that engineer Lakas? Who is he? Lakas, that last name...”
P. stops talking to laugh, then tells me how he told him that yes, he knew Lakas from the city of Colón, because he was a friend of a friend of his, and because he always made an effort to meet people from outside his circle.
“And Ricardo says to me: ‘Coño! Dammit, P., this is the first time in my life I don’t know who the President of the Republic is!”
Demetrio Basilio Lakas governed Panama between 1972 and 1978, and his name is part of Panamanian history thanks to Omar Torrijos, who ushered him into the presidency a few years after the coup. Lakas was accepted as a member of the elite —even if he was a Colonense and relatively unknown, he was still the president— but for the Panamanian aristocracy, his inclusion represented the inevitability of change: nothing would be as it was.
“Before, Panama was more friendly, more pleasant and humane; there was a sense of intimacy,” one Club member told me, extending the boundaries of the institution to include the whole country, as if the two were one and the same thing. “The military put an end to that, which generated resentment.” Another Club member, intent on preserving the old aristocratic character of the institution, offered a similar assessment: “It was cultural decadence.” As did Z., another distinguished member of the universe of La Gente Conocida who, like so many others with their complaints —“I go now and I don’t even know anyone. I don’t even know why I’m even a member anymore”— will nonetheless never disaffiliate. The reason? According to Z., his children like the swimming pool and playing with their friends. But in reality, just as no nobleman would voluntarily leave his imperial court, no member would ever willingly exile himself from Club Unión.
“Here, everything is for the benefit of friends,” says G., a businessman and a member of the Club, but one who diverges from its uniform way of thinking. “That’s why Omar Torrijos was so important in 1968: he was the only one to confront the aristocracy and seek a different path. Good or bad, that’s the truth.”
This is why the return to democracy after the departure of Torrijos —or of the military, or of the men who made it so that nothing was the same— was so celebrated by the rabiblancos, who were focused exclusively on business. They sensed that they were recovering their old positions, and acted quickly to seize a seat at the table. Guillermo Endara, the president of Panama during the Club’s return to power in 1989, managed a law firm that represented large national and foreign companies, and his Minister of Finance partnered with the President of the Supreme Court of Justice to found another firm.
This hybridization of state and business continues to this day. Panama’s current Minister of Finance previously served as the financial director of Morgan & Morgan, the largest law firm in Panama; other partners at that firm include the Vice Chancellor and the former director of the Public Registry, the agency that registers the companies and foundations that hide the assets of millionaires from around the world. The Panamanian negotiator for the OECD is a partner at another renowned law firm, and his name appears a hundred or so times in the Panama Papers, as does the Vice Chancellor’s. The Ministry of the Presidency has its own firm, which is linked to a money laundering and corruption case that also implicated the Kirchner family in Argentina. After the shocking revelations of the Panama Papers in 2016, the minister’s own government hired the firm to provide “advice related to public finances, financial services, and the development of special laws.”
And so on: mixing, mingling, family, friends, alliances, marriages…
Ernesto Pérez Balladares, President of the Republic from 1994 to 1999, made a phenomenal gesture of support to Club Unión: he took 3,200 square meters of a public park and donated it to the institution to build a parking lot.
And so on:
Martín Torrijos, who took office in 2004, was not a member of the Club, but La Gente Conocida secured a place in his cabinet through his second in command. That man, the vice president, faced accusations, along with a government minister, of passing a law that benefited friends and relatives —including both the manager and the executive VP of Banitsmo, one of Panama’s largest banks— by helping them avoid paying $400 million in taxes.
And so on:
Ricardo Martinelli, recently extradited to Panama from the United States, assumed the presidency in 2009 as the owner of a supermarket chain with 33 branches: five years later, he left office with 46. Martinelli also managed to accumulate a number of court cases, along with some powerful enemies in the world of La Gente Conocida: he dueled for control over the country’s businesses with Stanley Motta, lord of the Malebranche that hold up the world both inside and outside Club Unión. Known for his politically incorrect quips, when he was president, Martinelli said: “I have come to realize that all of Panama’s great fortunes come from the state.”
Unlike other nations, throughout history, the private sector in Panama has not so much co-opted the state as coexisted in harmony with it — when not in absolute identification. The state assumed the role of reproducing capital and placed itself in the service of the country’s top fortunes and companies, with no apparent conflicts or reservations. When a president is not a businessman himself, he has direct links with the country’s most powerful families. Private sector executives fill key government positions, facilitate business deals and, at the end of their term, return to their corporate leadership positions.
All of that results in this: when the state abandons its role as regulator and focuses exclusively on favoring those with the most concentrated wealth, it becomes a mere appendage of capital. It ceases to be a state —and ceases to be concerned with the needs and possibilities of the nation as a whole— to become a broker for big business. And that’s Panama: a nation that acts as a bank.
* * *
“The Club members are rabiblancos. Do you know what rabiblancos are?” asks C. “Rabiblancos are Panama’s rich people. They have everything, and they’re the bosses.”
In the early afternoon of a Monday in January 2017, C. commands the living room of his home from a comfy armchair. He worked at the Club for many years, until finally retiring, and now he lives in a satellite city of Panama’s capital, where the sun is fierce and the air is filled with the noise of honking cars stuck in traffic on their way home from work.
“And what are the rabiblancos like?” I ask him.
“Most are like that,” C. says, raising his arm and tilting his hand side to side as if to say more or less. “A lot of them are really grotesque; they think they’re living in the time of slaves. The good ones are few and far between.”
C. is one of the quarter of Panamanians who earn barely enough to live on. After three decades of constant work, his last salary was just over a thousand dollars a month, in a country where the cost of living is much higher than the Central American average. Most of his patrons at Club Unión earn 30 times more than he does. Panama, the land of ports and passages that connects the world, is the tenth most unequal economy on the planet.
* * *
“The Club Unión people have been really upset by the Panama Papers scandal,” says F., a historian and a member of the Club. “That was their business, and they’re defending it tooth and nail: banking, insurance, shell companies. Corporations are legal entities that resemble walled cities: they build a shield around the beneficiaries, who steal, in one way or another, from the people on the outside. But they want to make it look like they’re all Panamanian business.”
In the 1980s, Panama was an international corridor used by guerrillas, spies, and dictators to hide money, buy weapons, or exchange information. There are more stories than palm trees: Pablo Escobar’s escapades, money laundering by the FARC and Moammar Gadaffi, safes holding the winnings from the sale of the Soviet arsenal after the fall of the Berlin Wall.
Before and after, Panama was also a refuge for the overthrown. Former Argentine president Juan Domingo Perón came here in 1955, when, in a hotel in the city of Colón, he met his second wife — a dancer named Isabelita, who would succeed him as Argentina’s president. Former Guatemalan President Jorge Serrano Elías has lived here as a political asylee since 1993 after fleeing his country accused of a self-coup. Also on the list of political exiles are former Haitian dictator Raoul Cedrás, ousted Ecuadorian president Abdalá Bucaram, and María del Pilar Hurtado, accused of spying on more than 300 people as head of Colombia’s intelligence agency under Álvaro Uribe.
Even though the population of Panama had lived its whole life unconcerned with the money laundering, arms trafficking, drugs and so on, when the monumental leak from Mossack Fonseca law firm was published, the country was scandalized. Ever since the leak, every cab driver, receptionist, and TV news anchor seems to repeat the same war cries howled by millionaire lawyers and La Gente Conocida: “attack,” “sovereignty,” “international bullying.” An infinite series of shady business deals was covered under the convenient blanket of patriotic chauvinism. When the gears of power run so smoothly, they crush everything else.
* * *
In early 2017, Panama was thrust under the spotlight by another international scandal: Odebrecht. If the Panama Papers made Club Unión’s members even more sensitive to scrutiny, the bribes from the Brazilian construction company have set their skin on fire. In Panama, Odebrecht secured several multi-million-dollar contracts over the course of a decade, a period that includes the presidencies of Martín Torrijos, Ricardo Martinelli and Juan Carlos Varela. In the Martinelli era alone, the company paid bribes totaling at least $59 million. Many of those implicated are afraid that their names will be tarnished, with or without cause.
In February 2017, an unlikely whistleblower emerged: Ramón Fonseca Mora, the co-founder of Mossack Fonseca. A close friend of President Varela, Fonseca was a master of finding loopholes in tax havens to hide money for dictators, politicians, and drug traffickers, from Vladimir Putin to Rafael Caro Quintero. Even though he was a member and a millionaire —and, therefore, powerful— the Club’s old money never saw Ramón Fonseca Mora as one of us. “He’s not a rabiblanco,” one member told me. “He’s an outsider,” another said.
Perhaps that is why, when the Panamanian justice system summoned him to testify in the anti-corruption case known in borrowed Brazilian Portuguese as Lava Jato, or Operation Car Wash, Fonseca must have sensed that the power that lives and lurks in the Club was letting go of his hand. Upon arriving at the Public Prosecutor’s Office in Panama City, the lawyer with a thousand secrets stopped to speak to a crowd of journalists and, raising his finger and twisting his face, said: “President Varela told me —listen to this carefully, and may God strike me down if it’s a lie— that he had accepted donations from Odebrecht.” The statement shocked the political world as well as activists, who immediately took to the streets to demand transparency and justice. Operation Car Wash now threatens the demise of two former presidents of Panama, along with Varela, the current president.
To Fonseca’s mind, if he was to fall, so should the firms that created the companies to pay the bribes. The ten largest law firms in the country were implicated, all of them owned by members of the Club. Fonseca had already warned them on Twitter: “I’m not going to be the scapegoat.”
“This is a country owned by special interests,” says M., a politician who carries sway with all the parties in Panama and also has a close relationship with the United States. “Before putting someone in jail, they look at who you are, what you have, and who your family is, to see if you can do me any damage.”
“This is the country of cousins,” a businessman and a member of the Club told me later, in his office, surrounded by books. “Here, it’s all about the know-how, the how-much, and the who-you-know.”
One detail: in all the investigations opened in Panama regarding acts of corruption that took place between 2009 and 2014, not a single purebred rabiblanco is among those imprisoned, though two members of the Club have been convicted. And while corruption has always been a problem in the country, the cases that took place during Ricardo Martinelli’s administration are the most blatant, due to their premeditation. A well-known example is Cobranzas del Istmo, a case that implicated prestigious Club member and a former Minister of Finance, Alberto Vallarino, along with his colleague and fellow member of the board of directors of several banks, and current Minister of Economy under Varela, Dulcidio de la Guardia.
Under Vallarino, the Ministry of Finance hired the company Cobranzas del Istmo to recover delinquent taxes, a task for which it charged commissions totaling $47 million. The Prosecutor’s Office suspected corruption was at play in those profits, and began to investigate the four individuals implicated: Vallarino, De la Guardia, and two non-Club-members, one hired by Vallarino to work in the finance ministry, and the other the owner of Cobranzas. All four denied participating in the bribe scheme and blamed someone else. In the end, the two outsiders were accused and arrested; Vallarino and De la Guardia were exonerated of guilt and acquitted of all charges. “The gangsters were pardoned,” one Club member told me. “A rabiblanco never messes with a rabiblanco,” said another. And a third: “There’s nothing money can’t buy.” The cousins enjoy the same privileges as always, in a country where money is God and the Club, a purifier of murky waters.
* * *
The hours flew by that December morning in the bar with P., the old aristocrat with the folksy manner. The city streets were a mess of cars on the verge of colliding, the aromas of food carts and the blaring of Evangelical radio stations. P. asked for another café con leche for the young lady if she would be so kind.
“This used to be a community,” he told me later, laughing like crazy. “Whoever wasn’t of the same social status had employees, and was friends with the employees, and the employees’ children played with you.”
P. turns and sets his eyes on the table where his friends, with whom he takes breakfast almost every day, are seated. He stares at one of them, a dark-skinned man with thick hair.
“Look at El Monjo,” he says, and points him out. “There were huge differences between us in social and economic terms, but he was always on our side. We were like brothers.”
El Monjo has been a friend of P.’s since their days of militancy in the nationalist party. In the sixties, they were young and wild and wanted to do damage to the government. During one of their nights of activism and drinking, as they were returning from a political meeting that ended in a party in a working-class neighborhood, the police detained P. and El Monjo and took them to the barracks. Indignant, P. requested a reason for their arrest and, with all the respect in the world, told the sergeant he was wrong. The sergeant responded with a sentence of 90 days in detention in a shared cell. The difference between the two friends became clear the next day: P. was released in the morning. Monjo was held for a year.
Shortly thereafter, says P., an old friend of his father’s ran into the all-powerful head of the Panamanian Army, Bolívar Vallarino, at Club Unión. Vallarino was a rarity in his ranks: the only rich guy to ever join the Army, a world otherwise reserved for Panama’s poor and excluded. He greeted Vallarino with affection, then hit him with a question:
“Hey, Boli, how come they released P. from jail?”
“What, you didn’t know P. was a rabiblanco!” Vallerino replied.
As they chugged their drinks behind the walls of the Club, they let out a good laugh.
This story, translated by Max Granger, was originally published in Spanish in 2018 as part of a series of chronicles and essays on economic power in Central America, coordinated and edited for El Faro that year by journalist and writer Diego Fonseca.
