Panama - Former President
About
Juan Carlos Varela ran his family-owned distillery, the largest in Panama, before entering politics. He joined the Panamanian government in 2009 as then-President Ricardo Martinelli’s vice president and foreign minister. At the time, Jaime Alemán, a partner of the Panamanian law firm Alemán, Cordero, Galindo & Lee (Alcogal), was Panama’s ambassador to the United States, reporting to Varela. The Pandora Papers include a trove of leaked files from Alcogal.
By 2011, Varela had broken with Martinelli over proposed election reforms, leading to his dismissal as foreign minister, although he remained vice president. Varela then declared himself “leader of the opposition” and accused Martinelli of taking bribes from an Italian company, which Martinelli denied.
Varela won the presidency in 2014, telling supporters on the day of the election, “We will not tolerate corruption in any way.” Jaime Alemán’s brother, Alvaro, was a key adviser to Varela’s campaign and became Varela’s chief of staff.
In 2016, shortly after ICIJ’s Panama Papers probe highlighted his country’s role as a tax haven for the rich and powerful, Varela wrote in Time Magazine that his government had taken steps to strengthen its anti-money-laundering regulations.
In 2017, Varela admitted that during his vice presidential campaign, he received donations from Odebrecht, a Brazilian company at the center of one of Latin America’s biggest corruption investigations, but he denied that the money was a bribe.
One of Varela’s former advisers, Ramón Fonseca, was arrested as part of the Odebrecht investigation. Fonseca is a co-founder of Mossack Fonseca, the law firm whose leaked files were at the center of the Panama Papers. Varela told ICIJ that he was unaware of Fonseca’s role in facilitating offshore structures and that Fonseca had not advised him on matters relating to Odebrecht.
Varela left office in 2019 after completing his five-year term. (Panama’s constitution prohibits presidents from running for re-election while in office.)
In 2021, Panama’s anti-corruption prosecutor published a report accusing Varela and 13 other former Panamanian public servants of corruption and money laundering related to their involvement with Odebrecht. In response, Varela posted a statement on Twitter saying that the money Odebrecht gave his campaign was a legitimate donation and that there was no evidence to support allegations of improper payments.
Political Career
President of Panama (2014–2019)
Vice President of Panama (2009–2014)
Minister of Foreign Relations (2009–2011)
In The Pandora Papers
The Pandora Papers identify Varela as one of the owners of VHS Capital Ltd., a company registered in the British Virgin Islands. Alcogal helped set up the company, and Varela, his father, his brother, and other associates, including two executives of a Panamanian bank, became owners and directors in 2001. Varela remained a director until April 2014, when Alcogal records show that he resigned from the board.
According to those records, VHS owned shares of another BVI company, Western Real Estate Ltd. Varela was a director and vice president of that company. He served on the company’s board from 2001 until 2012, when he resigned from those positions. After Varela’s resignation, another BVI company, Arak Holdings Ltd., merged with Western Real Estate. The documents do not contain information about Arak Holdings.
Three months into Varela’s presidency, leaked documents show, Alcogal conducted a due diligence review of VHS. The review referenced allegations made in April 2014 that Varela’s presidential campaign was funded in part by laundered money from illegal gambling operations. Varela’s campaign had denied those allegations, which were based on media publications rather than any inquiry by authorities, and in its review, Alcogal concluded that those reports did not require further investigation.
Public records from BVI financial authorities show that VHS remains active. Varela confirmed to ICIJ that he is still a shareholder of VHS.
He also said that he disclosed his interest in the company — which owns a farm in Panama — when he was running for president. At the time, Panamanian media reported that he had disclosed his VHS stake.
Secrecy Jurisdictions
British Virgin Islands
Secrecy Broker
At the heart of the Pandora Papers are 14 offshore firms that help clients establish companies in secrecy jurisdictions. This profile draws on leaked data from these providers:
Discover this Power Player’s offshore connections.
The information on this profile is current as of October 3, 2021. Read more about the Pandora Papers data.