Insider dealings alleged for quick fix prison project

Panama’s Minister of Government, Roxana Mendez, confirmed Friday that she met several times with the now justice fugitive Lavítola Valter, who  represented the Italian consortium planning to build jails in Panama.

The  project for four modular prisons, costing $176 million was originally pushed  by Security Minister, Jose Raul Mulino, and was part of the agreement signed by President, Ricardo Martinelli and the now former Italian Prime Minister Silvio Berlusconi.

Despite the initial enthusiasm of Mulino for what he called a "quick fix" to prison overcrowding, the project did not materialize because the government argued that it was "too expensive".

Mendez  told La Prensa, that  Lavítola attended company meetings with Mauro Velocci, president of the Svemark consortium that was to build the prisons.

Velocci, who contacted La Prensa from Italy, accused the minister of applying "pressure" to buy land that would cost $3 million for four prisons.

Velocci said  Mendez insisted on payment of  $300,000 for the purchase of land -10% of its total value, without having signed the contract for the construction of prisons.

He  also alleged that the owner of the land is a friend of the minister, while the real estate developer is the husband of a ministry official under Mendez.

Asked about it, the minister insisted that she was not  directly involved in the issue of land, and did not know her colleague's husband was involved in the process.

The minister also claimed that her ministry, in coordination with President Martinelli, and after consultation with the Ministry of Economy and Finance and the Comptroller, rejected theSvemark proposal as too expensive.

Velocci said the company was unable to meet its commitments due to the arrest in Italy of one of the representatives of the consortium, for crimes unrelated to the contract with Panama.

 Velocci also told La Prensa that the Italian ambassador in Panama, Giancarlo Curcio, was  told – on October 14, 2011 – that to resume negotiations he  should "donate" a hospital inVeraguas, a work that had been offered by Berlusconi in 2009.