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Trump’s company is now threatening the president of Panama

The Trump Organization demanded that he intervene in a private business dispute — or pay the consequences.

The Trump Organization demanded that Panama’s president intervene in a private business dispute over a hotel in Panama City.
The Trump Organization demanded that Panama’s president intervene in a private business dispute over a hotel in Panama City.
Rodrigo Arangua/AFP/Getty Images

Trump Organization lawyers wrote a letter to Panamanian President Juan Carlos Varela requesting his “influence” in a private business dispute in Panama and implied that his government could pay consequences if he didn’t intervene.

The February letter serves as a vivid reminder of how President Trump’s global business holdings are a natural breeding ground for potential corruption — and of how Trump could theoretically work to enrich himself or his family by exploiting his power as president.

According to the Associated Press, lawyers at the firm Britton & Iglesias, which represents the Trump Organization in Panama, asked Varela to help them out in a bitter legal dispute over a hotel management contract between Trump’s company and a wealthy Cypriot businessman.

In February, Orestes Fintiklis, the majority owner of a luxury waterfront hotel in Panama City, attempted to fire a Trump Organization management team that was running his hotel. The Trump Organization pushed back against the move as a violation of its contract, but Panamanian courts ruled in favor of Fintiklis on March 5, and the Trump Organization staff was then kicked out, according to the AP.

Trump Organization lawyers then sent an aggressively worded letter to Varela on March 22, writing that they “URGENTLY request your influence in relation to a commercial dispute involving Trump Hotel aired before Panama’s judiciary.” The letter was copied to, among others, Varela’s cabinet officials and the heads of the supreme court and the National Assembly.

But the letter appears to be more than just a request — it also seems to be a thinly veiled threat. The lawyers wrote that the Panamanian court’s ruling violates a bilateral investment treaty between the US and Panama and hinted that Varela’s response could affect US-Panamanian relations more broadly.

“We appreciate your influence in order to avoid that these damages are attributed not to the other party, but to the Panamanian government,” the letter said, according to the AP, which suggests that Varela’s government would take the hit if he didn’t get involved in resolving the dispute.

The Trump organization letter reeks of potential corruption

The AP says it’s unclear if Trump himself knows about all this, but in a way, that doesn’t even matter. This is a clear example of how easily corruption can potentially arise when the most powerful head of state in the world owns businesses across the globe, regardless of whether he’s personally and actively trying to use the office of the presidency to enrich himself.

It seems likely that the Trump Organization lawyers are trying to leverage their relationship with the president himself to get Panama’s president to do something he has no business doing: interfering in a separate branch of government. “It is a letter that urges Panama’s executive branch to interfere in an issue clearly of the judicial branch,” Panama’s foreign minister Isabel de Saint Malo said, according to the AP. “I don’t believe the executive branch has a position to take while the issue is in the judicial process.”

Even if Varela decides to do nothing about this specific dispute, he could now feel obligated to curry favor with Trump in other ways to make up for the issue and keep US-Panamanian relations stable. That could lead to his government approving specific policies to placate Trump or perhaps covertly acting to ensure that the Trump Organization secures favorable business deals in Panama in the future.

Even if the Trump Organization’s pressure tactics fail to affect Varela, there’s still an optics issue. Going forward, it will be hard for the US and Panamanian governments to avoid accusations that they might have something besides the public’s best interest at heart when making policies.