The letter, which says that the dispute could have "repercussions" for the reputation of the Panamanian state, marks a remarkable warning by the president's company to the leader of a U.S. ally.
PANAMA CITY — Lawyers representing President Donald Trump’s company last month wrote directly to the president of Panama, asking him to intervene in a legal fight over the Trump International Hotel in the capital – and warning that the case could have “repercussions” for Panama’s reputation.
The law firm, Panama-based Britton and Iglesias, wrote in Spanish to President Juan Carlos Varela on March 22 to “urgently request your influence in relation to a commercial dispute regarding the Trump hotel.”
At the time, the majority owner of the Trump hotel – Cypriot-born investor Orestes Fintiklis – had kicked out the Trump Organization as the hotel’s manager, after a ruling from a low-level Panamanian judge. The president’s company was seeking to retake control.
The request was extraordinary: The U.S. president’s company was asking the leader of a U.S. ally to intercede on its behalf, disregarding Panama’s separation of powers.
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It is the first known instance of the Trump Organization asking directly for a foreign leader’s help with a business dispute since Trump was elected.
In their letter, the Trump Organization’s lawyers did not say explicitly how they wanted the Panamanian president to help. Varela, through a spokesman, has said he has not yet taken any action.
The letter, obtained by The Washington Post, does not explicitly refer to President Trump or threaten any actions by the U.S. government. The letter refers to his company as the “well-known Trump Organization.”
A spokesman for Varela, Vladimir Rodriguez, said that the president had seen the letter and was “evaluating the issue” but had made no decisions about whether to take action. Rodriguez said the issue is “in the hands of the corresponding authorities” but did not elaborate.
A spokesman for Panama’s Ministry of Foreign Affairs told The Post that “this is about differences between businesses, a case already attended by the court. This is not a bilateral matter between governments and not even a political issue.”
On Monday, Panama’s foreign secretary, Isabel de Saint Malo, told the Associated Press that her office had also received a copy.
“It is a letter that urges Panama’s executive branch to interfere in an issue clearly of the judicial branch,” de Saint Malo said. “I don’t believe the executive branch has a position to take while the issue is in the judicial process.”
The letter from the Trump Organization’s lawyers was first reported in the United States by the Associated Press. At Britton and Iglesias, a staffer confirmed to The Post that the letter was legitimate.
The White House and the U.S. Embassy in Panama referred questions to the Trump Organization.
Late Monday evening, the Trump Organization released a statement on behalf of Britton and Iglesias, which said that the letter was a “common” and “routine” legal tactic for them.
In fact, they said, it was so routine that they had not sought the Trump Organization’s approval before sending it.
“We categorically reject any assumption or assertion that the letter sought to ‘pressure’ the President of the Republic of Panama,” or other officials, the firm said. It continued: “The authorization of Trump Organization for its delivery was not requested, and nobody at Trump Organization was aware [of] the letter until today.”
Trump has said he gave up day-to-day control of the business when he took office, but he remains its owner and can withdraw money from it at any time.
The dispute in Panama began with struggles at the Trump hotel – a soaring building on the waterfront designed to resemble a billowing sail.
It opened in 2011. In the past year, it began to struggle, according to investors who owned its hotel rooms. Its troubles included an increasingly crowded hotel market in Panama. But owners also blamed the Trump Organization, saying the president’s polarizing brand was driving away customers from Latin America.
“A financial bloodbath,” one owner called it: Rooms that he had purchased as an investment were rented out less than 10 nights a month.
Then came Fintiklis, who bought a huge block of rooms last year and became the hotel’s majority owner. Within weeks, he was seeking to fire the Trump Organization as manager, saying it was “attached to our property like a leech.”
The Trump Organization had argued that its contract to run the hotel did not expire until 2031 and that Fintiklis had no legal cause to break it.
The dispute went to international arbitration. Then, though, Fintiklis simply showed up at the hotel in February, seeking to fire the Trump Organization in person.
After a multiday standoff, Panamanian Judge Miriam Cheng effectively handed control over to Fintiklis. Fintiklis renamed the hotel the Bahia Grand and added cheeky jabs at its past operator: At the hotel bar, there are drinks called the “Stormy Jack Daniels” and the “Fire and Fury.”
In the letter to Panama’s president, the Trump Organization’s attorneys said Trump’s company had been treated poorly by the Panamanian courts – so poorly, in fact, that its mistreatment violated a 1983 treaty between the United States and Panama governing investments.
In particular, the letter cites “irregularities” in decisions by Cheng. The lawyers say that Cheng had moved too quickly and had ignored an existing international arbitration case over the hotel.
“This situation is currently before the courts, but it has repercussions for the Panamanian state, which is your responsibility,” said the letter, signed by attorney Eric Britton.
Since the letter was sent, the Trump Organization’s prospects of regaining control of the Panama hotel have only declined.
In late March, an international arbitrator rejected a request by Trump executives that they be reinstated as the operators of the hotel. The arbitrator ruled that Trump’s team should not have been evicted – but, now that it had been, he would not undo its ejection.
“The facts on the ground now militate against forcibly undoing the steps that have been taken,” arbitrator Joel Richler wrote, according to the AP.
The arbitration case itself is continuing, as Trump’s company and Fintiklis’s company are still seeking damages from the other. Fintiklis declined to comment on Monday.
“What kind of position does that put the Panamanian government in?” said Don Fox, who was a top official at the U.S. Office of Government Ethics from 2008 to 2013. He said the letter would raise questions about whether the Trump Organization’s requests were, in effect, requests by the U.S. government.
“You don’t know how that may affect Panama’s relationship with us going forward. What might they not ask for? You can’t unring this bell.”