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The US Department of State recently granted an extradition request filed by the government of Panamanian President Juan Carlos Varela to extradite his predecessor – former President Ricardo Martinelli (2009 – 2014), often described as a supermarket tycoon. The extradition request appears to focus primarily on allegations of illegal surveillance and political espionage during Martinelli’s presidential term. Although Martinelli is the subject of several corruption claims in Panama (to which he has already returned), it is unclear if he will be tried solely for illegal surveillance and espionage or if he will face additional corruption charges

After Martinelli’s presidential term ended in 2014, he moved to Southern Florida and applied for political asylum claiming that President Varela was targeting Martinelli due to political motivations. Varela was previously the Foreign Minister (2009 – 2011) and Vice President (2009 - 2014) under Martinelli, though the two represented different political parties. In 2011 Martinelli dismissed Varela from the position of Foreign Minister, a move that resulted in widely-publicized tension between the two politicians and their respective political parties.  In May 2014 Varela was elected president and his Government started inquiries into Martinelli. In June 2015 the Panamanian Supreme Court opened corruption investigations into Martinelli and by December 2015 the Court had issued a warrant for Martinelli’s arrest.  

 

In May 2017 Interpol issued a red notice for Martinelli alerting its member countries that Panama had issued an arrest warrant for Martinelli. He was subsequently arrested in Coral Gables, Florida in June 2017.    

According to various sources, Martinelli allegedly used c. US $13.4 million of public funding, originally designated for social welfare programs, to conduct illegal surveillance on more than 150 individuals including journalists, prominent businessmen, political opponents, and union activists. He reportedly used the state funds to purchase software that accessed individual’s private computers and cellphones in an attempt to collect potential blackmail material. It is not unusual for manufacturers of such software to restrict the use of their product for purposes including counter-terrorist efforts and combatting criminal groups. Media reports from 2017 state that officials in Mexico and Colombia were also suspected of exploiting wiretapping practices and abusing surveillance software. 

It is always important to conduct due diligence on potential business partners. However, it is equally important to conduct a background check on potential clients to ensure that your products or services are not misused. Whether you are working with private businesses, public companies, government agencies, or even state representatives, an effective compliance program is paramount to establishing good business practices and protecting yourself from serious liabilities. Smith Brandon International has a wealth of experience working around the globe and can help your business protect its interests, no matter where your business takes you.

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