Report May 2019 PANAMA Presidential and legislative elections Post-election report Political Analysis Regulatory Information Service EXECUTIVE SUMMARY The presidential and legislative elections of the Republic of Panama took place May 5. Laurentino Cortizo (Revolutionary Democratic Party) is emerging as winner with 33.18% of the vote, versus 31.04% so far for Rómulo Roux (Democratic Change). If the trend continues as the remaining votes are counted, Cortizo is set to become President of Panama for the 2019-2024. DL4AMERICAS.ORG The elections took place amid widespread public disapproval of the government of Juan Carlos Varela, who is seen as having been too preoccupied with infrastructure projects to the detriment of social policies to tackle inequality. Against this backdrop, citizens were drawn to the presidential candidate that was most committed to narrowing the wealth gap across the country. DIRECTORIOLEGISLATIVO.ORG What was the vote for? On Sunday, May 5, presidential and legislative elections were held in Panama to elect the President of the Republic, two Vice Presidents and 71 Deputies for the 2019-2024 term. Electoral calendar The Political Constitution of the Republic of Panama dictates that the President should hold office for five years (Sec. 142). According to the Panamanian Electoral Code, elections shall be held "on the first Sunday of May in the year in which they are to be held" (Sec. 286). This year's vote was held Sunday, May 5. Will there be a second round? In line with the Constitution, the President is elected by majority and direct vote (Sec. 172). Therefore, there is no second round of elections for the presidential elections of the Republic of Panama. How are presidents voted in? By free, equal, universal, secret and direct suffrage. Who were the candidates? There were seven candidates for the presidency: Laurentino Cortizo (Revolutionary Democratic Party), José Blandón (Panamanian Party), Rómulo Roux (Democratic Change), Saúl Méndez Rodríguez (Broad Front for Democracy); and Ana Matilde Gomez, Marco Ameglio and Ricardo Lombana as independent candidates. When does the next administration take office? The winning presidential candidate, along with the elected legislators, are set to take office Monday, July 1, 2019, for a five-year term. DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Political context ● Varela's relationship with the National Assembly. Throughout his term in office, President of the Republic Juan Carlos Varela has only had the support of 16 of the Assembly’s 71 deputies. From 2014 to 2018 he was able, however, to mitigate this via a parliamentary alliance with the opposition - specifically, 26 legislators of the Democratic Revolutionary Party (Partido Revolucionario Democrático -PRD). However this changed when, in early 2018, the National Assembly rejected Varlea’s picks for new Supreme Court justices. The Comptroller General's Office launched an investigation into PRD legislators as a result of this, criticised by the ruling party as an act of "political persecution". PRD consequently went on to break its parliamentary alliance with the ruling party in mid-2018. In response, Varela sought to align with another opposition party, Democratic Change (Cambio Democrático) which holds 23 seats. However, this was to little avail since Democratic Change, too, was under investigation by the Comptroller's Office, which led to tensions between the two parties. The overall disconnect between the Executive and Assembly led to the latter failing to approve a law to criminalise tax evasion - a priority for the government - and to a hasty last-minute approval of the national budget for 2019. In sum, Varela has had governance problems in the National Assembly throughout his tenure, which were further accentuated in the past year. Due to this, most of the government’s main actions were driven by the Executive branch as opposed to the legislature, such as concerning public works projects and price caps on foods. DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Political context ● Panama Papers. On April 3, 2016, the German newspaper Süddeutsche Zeitung published leaked encrypted confidential documents belonging to Panama-based law firm Mossack Fonseca, revealing the concealment of company properties, assets, profits and tax evasion of heads of state and government, world political leaders, politically exposed persons and personalities from finance, business, sports and art. Several of Mossack Fonseca’s clients had hired it to set up “shell corporations” in tax havens which were revealed to have been used for illegal purposes, including fraud, tax evasion and the avoidance of international sanctions. The fallout from this led to a drop in global confidence in Panama’s financial system, which as a result contributed less to its GDP in 2017. In turn, this caused Panama to be blacklisted for money laundering, with both the Financial Action Task Force against Money Laundering (FATF) and the Organization for Economic Cooperation and Development (OECD) urging the Panamanian government to tighten national laws on tax evasion. Varela spoke out against the FATF and OECD's labelling of Panama as a tax haven. He vowed that Mossack Fonseca would be investigated by the Attorney General of the Republic and promised to strengthen laws on money laundering. That last pledge turned out to be hard for Varela to keep, however, to the point that tax evasion as a criminal offence in Panama was only established by law as recently as January 2019, three years after the scandal. Legislators have defended this by claiming not to have been properly informed, notably by Minister of Economy and Finance, Eyda Varela de Chinchilla, that the new regulations were needed for Panama to remain an international financial center. Following the enactment of the new legislation, both the FATF and the OECD removed Panama from their tax haven blacklists. DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Main candidates Seven candidates were in the running for the May 5th elections. Below you will find a profile of the three main ones: Laurentino Rómulo Roux Democratic Cortizo Change Revolutionary Democratic Party 33,18% votes cast* 31,04% Businessman, age 66. Lawyer, age 54. votes cast* Cortizo received a bachelor's degree in Roux graduated from Babson University in business administration from the University of Boston with a Bachelor of Science degree. He Norwich, USA. Also he has a Master's degree in then graduated with a Doctor of Laws degree Business Administration and a PhD in from Miami University. He also earned a International Commerce and Marketing from master's degree in business law from Santa the University of Texas, USA. Maria La Antigua University and a master's degree in business administration from In 1981, Cortizo worked at the Organization of Northwestern University in the United States. American States (OAS). From 1986 to the present, Cortizo has held management In the private sector, Roux worked from 1994 to positions at Grupo Cortizo, Panablock (building 2009 as a lawyer at Morgan & Morgan, where materials company) and Hacienda Hermacor he represented public and private sector clients. (high genetics cattle). At the firm, he served as a representative for project finance, as well as in cross-border He was a member of the Legislative Assembly banking and telecommunications transactions. for the former Solidarity Party in two legislative periods (1994-1999 and 1999-2004), being During Ricardo Martinelli's administration president of the Assembly between 2000 and (Cambio Democrático - 2009-2014) he was 2001. As a deputy, Cortizo was president of the president of the Board of Directors of the Agricultural Affairs Committee and president of Panama Canal Authority. He was then Minister the Trade Committee. of Canal Affairs (2009-2012). In 2012, Roux assumed the chairmanship of the Committee In 2004, during the presidency of Martín for the Transformation of the Drinking Water Torrijos (Partido Revolucionario Democrático - and Sanitation Sector. That same year he 2004-2009), he was Minister of Agricultural became Minister of Foreign Affairs. Development, but resigned in 2006 because he disagreed with the clauses of the Free Trade In 2013 he resigned from the ministry to run as Agreement between the United States and a presidential pre-candidate in the Cambio Panama that urged Panama to relax its Democrático party. However, he was phytosanitary and zoosanitary measures vis- surpassed by José Domingo Arias. In 2018, à-vis the United States. Roux won his party's primaries, becoming the Centro Democrático's candidate for the 2019 general election. *Preliminary results published by the Electoral Tribunal. DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Main candidates (continuation) Ricardo Lombana Independent 19,15% votes cast* Lawyer, age 45. Lombana obtained a law degree from the University of Panama in 1998. He then completed a Master's Degree in International and Comparative Law at George Washington University (United States) in 2000, and completed two intensive programs in international law at Oxford University (England) and Harvard University (United States) during 2001. In April 2002, the candidate began working in the public sector as the first special delegate for freedom of expression for the Office of the People's Advocate. Between 2004 and 2007 he was first Counsellor and then Consul General at the Embassy of Panama in the United States. After completing his diplomatic duties, he served as Deputy Editor-in-Chief of the newspaper La Prensa between May 2007 and June 2008. Lombana continued in the private sector as an associate of Galindo, Arias & López for five years, until 2013 when he became managing partner of his own firm: Lombana Law & Media. Currently, he continues to practice as a lawyer, arbitrator and media consultant. *Preliminary results published by the Electoral Tribunal. DIRECTORIOLEGISLATIVO.ORG DL4AMERICAS.ORG Government Plan Laurentino Cortizo “Uniendo Fuerzas” (Uniting Forces) Action Plan 33,18% votes cast* ● Economy. Create a "Panama Mission" Plan to promote national growth and bolster the country's international image. This will be a public-private alliance that will attract investment.