Former Panama VP arrested in widening corruption probe

PANAMA CITY – Panama’s former Vice President Felipe Virzi has been arrested for alleged money laundering, adding to a lengthening list of former associates of ex-President Ricardo Martinelli jailed on corruption charges.

Virzi, who was arrested overnight, was Martinelli’s business partner and the vice president of Panama from 1994 to 1999.

Anti-corruption prosecutors ordered Virzi’s arrest, alleging he received a $5 million payment for winning an irrigation system contract for an Ecuadoran company, Hidalgo & Hidalgo.

Prosecutors allege he then distributed the money among various private and business accounts associated with Martinelli.

“They say it is money laundering. But there was no money laundering, even if you accept the premise on which the accusations are based,” Virzi’s lawyer, José María Castillo, told reporters.

According to prosecutors, the state paid the company more than $37 million with Virzi acting as the go-between. After Hidalgo & Hidalgo obtained the irrigation contract, it allegedly paid Virzi $5 million, which he shared with several others, including Martinelli, according to prosecutors.

Virzi’s arrest follows those of several former ministers and close associates of Martinelli, who was president from 2009 to 2014.

The 63-year-old Martinelli is himself under investigation by Panama‘s Supreme Court in a case involving multi-million dollar cost overruns in food contracts for the country’s public schools.