The FBI Reports on a Possible Case of ‘Public Corruption’ and Extortion Involving Odila Castillo

On June 11, the Office of the Legal Attaché of the Federal Bureau of Investigation (FBI) of the United States, sent a letter to the Attorney General of the Nation, Javier Caraballo. After thanking the Public Ministry (MP) for its collaboration with the FBI, the attaché got to the point. It was about Odila Castillo, the former official of the Comptroller General of the Republic who became a millionaire in two years.  As is now known, Castillo accumulated $13.6 million between 2021 and 2023, almost $11 million in the last year of that period alone— billed for her legal services, provided through the firm Castillo, Guardia & Asociados, whose original name was Palacios, Vásquez & Asociados, a firm in which the current general secretary of the Comptroller’s Office, Zenia Vásquez, was also a partner.

“I hereby inform you that the FBI has identified a possible case of public corruption. According to information obtained through human and open sources, Ms. Castillo of Castillo, Guardia & Asociados, extorts businessmen by requesting that they pay a percentage in exchange for obtaining contracts with the government and obtaining approval and issuance of payments from various government agencies,” stated the letter, whose authenticity has been corroborated.  The Press does not know whether, as a result of this letter (which arrived to Caraballo via the United States Embassy in Panama), if the MP began an investigation, although in recent weeks there has been an ongoing process (the origin is unknown) in which businessmen have been summoned to give their testimonies.  Castillo and her lawyers would be aware of the FBI note, since they have access to the MP’s digital platform that allows them to examine the investigation file.

The FBI letter mentions one specific case, although it warns that there may be more.  “One of the victims is the company Trasa Thermo King, from whom Ms. Castillo requested a 10% payment in 2021 in exchange for obtaining the last payment owed to them from an original contract of approximately $1.3 million dollars with MiBus.”  The president and legal representative of Trasa Thermo King is Kathleen de McGrath, Odila Castillo’s former mother-in-law.  The letter to Caraballo ended by explaining that “today, Trasa Thermo King has not received that last payment since it did not agree to pay the extortion,” a fact that remains the same to date, according to sources from the MP. The letter adds that, “according to human sources, there are other people involved in this scheme along with Ms. Castillo, as well as other victims.”

This case coincides with the testimony of a person regarding a similar case.  Subject to strict confidentiality, the source explained that in December 2020, Castillo – who was then an advisor at the Comptroller’s Office – summoned her “to discuss a very important matter” at the headquarters of her former offices, in the building known as El Tornillo, on Calle 50. When she showed up at the reception, she received instructions to leave her phone there, before meeting with her.  “She pulled out a file from the Comptroller’s Office on a contract for which we had a scheduled payment on that date of almost $800,000. She informed me that they had found some observations in the contract and that, if I did not pay 10%, my payment would be cancelled.  At that time, I consulted with my family and they all said absolutely not,” the source said. Precisely, also in mid-April, lawyer Jorge Camarena denounced something very similar on the radio program of journalist Álvaro Alvarado – Noticias 180 minutes –, indicating that a former official of the Comptroller’s Office demanded a bribe of 10% of the value of the contract agreed with the State from a contractor, which, to this day, has not been cancelled because the contractor refused to pay the bribe.

Camarena knows this case because the contractor he talked about on Alvarado’s program is his client. He claimed that he was not the only one, that there were several contractors in the same situation, that is, that they have refused to pay so that the Comptroller’s Office delivers the checks owed by the government. There are several businessmen – national and foreign – who have suffered this harassment so that they pay bribes, ranging from 10% to 15%, in exchange for receiving the payments owed, he said. The lawyer said that his client was warned that if he “did not pay 10% of the total amount, the payments would be withheld. That was in 2020 and that client… to date has not received payment. Excuses and more excuses have always been given to him, but he has not been paid.”  Other witnesses report an alleged radius of action of Castillo’s legal services. 

These are contractors of the Ministry of Public Works (MOP), where a mid-level official allegedly received expensive gifts from Castillo.  And that’s not all. The National Council for Sustainable Development (Conades) is another of the institutions in which Castillo had interactions with some of his contractors. Witnesses who have spoken out under strict confidentiality of their identity have recounted this.  They have said that they had to pay large sums of money to Castillo for her collection efforts with the State.  After her intervention, they received the checks very soon after. This was in contrast to their previous situation, when their claims took years to receive payment.  The FBI letter which mentions only one case, is signed by the person at the U.S. Embassy who serves as legal attaché for the Office of the Legal Attaché, or FBI Republic of Panama.  Odila Castillo has not responded to questionnaires sent to her, but Castillo, Guardia & Asociados has issued statements in which it maintains that the accusations against her and the legal firm have the sole purpose of creating “causticism”, (A caustic remark is hurtful, critical, or intentionally unkind)  and “lacerating the good name” of the firm. (Severely critical or hurtful).