Panama gripped by millionaire ex-president's graft scandal

When he ran for office, Panama's former president Ricardo Martinelli promised graft-weary voters he would never steal a cent: Why would he need to, since he was already a millionaire?, he asked.

Six years later, he is at the eye of a swirling scandal that has taken down several close allies, including two former ministers jailed for stealing public money.

The mounting accusations of massive corruption during his presidency (2009-2014) are now closing in on Martinelli, a white-haired supermarket magnate who is already under investigation for skimming money off the top of a school lunch contract.

"It's like a line of dominoes. They're knocking down the first ones to get to Martinelli," said political analyst Jaime Porcell.

Martinelli, 63, disappeared from the country in January.

His whereabouts are unknown, but he keeps up an active presence on Twitter, where he recently posted a picture of himself with a palm-tree-lined beach in the background, with the caption: "Watching a beautiful sunset with two of my sisters."

He also uses the platform to taunt his successor and former ally, President Juan Carlos Varela, whom he accuses of "politically persecuting" him.

Varela once served as Martinelli's vice president and foreign minister, but they had a nasty falling out in 2011, when Martinelli sacked Varela from his cabinet, saying he was more focused on preparing for the 2014 presidential election than on doing his job.

Varela hit back, accusing Martinelli of massive corruption.

He continued to hector his boss from the vice president's office, an elected post that Martinelli was powerless to force him from.

Today, Martinelli's tweets include smiling pictures of himself and Varela pre-rift that he has promised to post every week on "#ThrowbackThursday, when we remember the happy family we were."

It is all a far cry from 2009, when the pair teamed up to oust a center-left government and bring business-friendly policies back to Panama.

Varela, the scion of a rum dynasty, promised to back Martinelli for president if Martinelli would back him in 2014.

Martinelli won with vows to put an end to the corruption that has long dogged Panama, which has a reputation as a tax haven and ranks 94th out of 175 countries on watchdog group Transparency International's corruption perceptions index.

But now Martinelli is being investigated on suspicion of stealing money from a $45-million contract to buy food for schoolchildren as part of a National Action Plan (PAN) against poverty.

- Luxury cars, apartments, yacht -

Investigators also allege corruption on an airport parking lot program and a contract with a tax collection firm.

Varela says the total stolen during his predecessor's administration is nearly $100 million.

Prosecution documents seen by AFP say that money was used to buy luxury cars, apartments and a yacht.

As the graft charges have mounted, Martinelli's allies have been falling one by one.

His former economy minister, Frank De Lima, was arrested this week as part of a probe into allegations that up to $1.7 million was skimmed from PAN grain contracts.

Prosecutors say De Lima oversaw purchases of rice, lentils and beans at twice the actual price, carefully keeping the amounts below $300,000 to avoid congressional oversight.

Former social development minister Guillermo Ferrufino is serving jail time for stealing public funds, as are two former directors of PAN, Giacomo Tamburelli and Rafael Guardia.

Other top Martinelli allies are under investigation, including business executives, a former Supreme Court judge and his own brother.

"They are closing in on Martinelli. There will probably be more (scandals) because there was no oversight," political analyst Mario Rognoni told AFP, saying Martinelli's government pocketed "fist-fulls" of public money.

"Martinelli's future must be in prison, given all the known cases, the accusations and the evidence that is coming out," said Magaly Castillo, the director of the Citizens Alliance for Justice, a watchdog group.

But Martinelli, who is now a member of the Central American Parliament, maintains it is a smear campaign. He has filed a complaint with the Inter-American Commission on Human Rights, claiming rights violations.