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PR Pushing Through The Panama Canal Expansion


Council On Hemispheric Affairs
MONITORING POLITICAL, ECONOMIC AND DIPLOMATIC
ISSUES AFFECTING THE WESTERN HEMISPHERE
Friday, October 20th, 2006
Opinion, Panama

Panamanians have only been given a 3-month period to decide on a crucial canal expansion project that will have a major impact on the country’s economic future. The pro-expansion camp, consisting of government and business elites, have quickly pooled their resources and consulted foreign PR firms to help make the constituent’s minds up for them

COHA Opinion: Multi-Million Dollar Public Relations Campaign to Push the Panama Canal Expansion Proposal Through to Certain Victory

What will later be seen as a massive propaganda campaign is helping to define the “yes” vote for the Panama Canal expansion proposal to be decided in Sunday’s October 22 referendum. The pro-expansion bloc - consisting of the Panama Canal Advisory Board (ACP), President Martín Torrijos’ Revolutionary Democratic Party (PRD) and other global trade, banking, and shipping interests - is funding the drive to expand the existing 50-mile long canal and looks ready to harvest a victory. Polls commissioned by Panama’s La Prensa suggest that it is inevitable that the pro-canal expansion vote will win, with estimates now indicating that as many as 80 percent of all Panamanians will vote in favor of constructing new locks at either end of the facility.

“Yes” votes will be favoring a plan to enlarge the canal, while “no” voters are mainly calling for renovation, an upgrade of ports and value added services - not reconstruction – and want to see the spare funds allocated to social justice programs, including anti-poverty initiatives. In any event, Panamanians should be wary before casting their votes; what they are now being told will cost them just over $5 billion could in fact turn out to be priced at four times that figure, for which they will be left holding the bag. Panamanians would also be wise to recognize that the canal expansion battle might possibly be no more than an all-out effort to facilitate a questionable transfer of public funds towards private and governmental elites in the “yes” camp, even though the few real benefits that ultimately reach the general public will later be seen as cancelled by unforeseen liabilities.

It is no secret that the ACP has a lot invested in its PR gun-slingers, who have aimed their pro-expansion message towards a generally susceptible Panamanian public. The ACP has already spent US $5 million on its campaign, and has raised an additional $6 million, if needed, in a war-of-attrition-styled campaign to relentlessly push Panamanians towards the pro-expansion column. The ACP is predictably promoting the business-dominant agendas of the board’s global members, its expensive consultants, and grasping government officials, many of whom may have huge personal investment stakes in the venture. Edelman– the global PR firm responsible for attacking several anti-expansionist research projects, including one by the Council on Hemispheric Affairs (COHA) - has just been awarded an extra $250 thousand by its current client, the ACP, in order to marginalize the “no” campaign. Edelman’s tactics include online intervention in internet chat rooms and blog-sites to debate the expansion issue. This adds up to tough competition for the ill-funded grass-roots based “no” movement, which lacks the funds and political resources of its adversaries, that would otherwise allow it to compete on the same level.

In its pro-expansion propaganda, the PR power of the ACP dominates the debate both abroad and at home. For example, hidden inside Aaron J. Gellman’s “Panama Canal at the crossroads” October 11 op-ed in the Washington Times is an idealized vision of how this ACP advisory board member sees the canal as a “great and vital Panamanian asset.” The ACP has also placed an article in the Panama News enshrining expansion benefits. The article, “Canal Advisors Urge ‘Yes’” maintains that growing global maritime traffic will boost the national economy. Amidst all the pro-expansion hoopla (most of it paid for from a multi-million dollar PR slush fund), the ACP is frequently claiming that canal expansion is inevitable because of complaints made by two major commercial players– China and the United States – who maintain that it is obsolete and cannot handle more than the current 24,000 transits a year. They also insist that there is no downside to what the ACP and its allies are advocating.

Yet, their arguments fail to observe that it is the average Panamanian who is likely to inherit a rash of economic problems if cost estimates are dramatically off or if allegations of major environmental disasters will prove true. The British Guardian cites Professor Carlos Guevara as observing that Panamanians could be burdened by a grinding debt spike that will witness a climb from the current $10.27 billion to an estimated $16 billion by 2011 due to canal construction excesses. Also, the ACP needs to borrow at least an additional $2.3 billion from abroad to help fund its expansion plans. Panamanians should be particularly skeptical over the projected cost figures. The canal’s former chief engineer, who oversaw the earlier phases of planning for canal expansion, maintains that the $5.25 billion cost approximation represented a considerable distortion of what the final price would turn out to be, which he estimates will add to more than Panama’s annual budget of $6.5 billion. Thus, it could be that the government exceeding its financial resources may not be the only bad news omitted from pro-expansion arguments, with more accurate construction costs being purposively skewed in order to make the project more palatable to the public.

The canal expansion project would not be the first expansive venture in which tainted Panamanian officials channeled public monies their way, if that eventually proves to be the plot. A previous report by COHA on the canal project cited a Panamanian sociologist, Marcos Gandásegui, who speculated that a tithe on canal revenues from 2000 to 2006 have already been illicitly flowing to individuals in the Torrijos administration as well as its predecessor, since none of the intake of revenues seems to have reached the public. Furthermore, the ACP retained the services of an arguably questionable U.S. consulting firm, Parsons Brinckerhoff (PB) who gave the cost estimation for the third set of canal locks needed in the expansion process. This same company is currently under investigation in the U.S. on fraud charges. PB, in a consortium with Bechtel, was responsible for overseeing the management of the scandal-ridden Big Dig tunnel in Boston, and provided the alluringly low cost estimate of $2.6 billion for that project. Not only did this figure eventually balloon to $14.6 billion - with monies predictably flowing into the pockets of those, like PB, close to the project - but the tunnel was so poorly designed and constructed that part of the concrete slabs making up the ceiling collapsed this past July 6, killing a motorist. A few days after the tragic event, ACP extended PB’s consulting contract for 10 years.

PB’s involvement in the canal project has alarmed expansion critics, such as Miguel Antonio Bernal of the University of Panama, who in a recent issue of the Panama News argued that the same scenario could very well repeat itself with the Canal project. The Panamanian government should not want to foster an association with such a compromised company, if it is to uphold the concept of integrity in carrying out the project in the minds of the public.

Yet, the PB’s compromised history has not been denounced by any ranking official of the ruling PRD party, which had originally won office on a platform of “zero tolerance” of corruption. While Torrijos has pushed through various measures on transparency and formed the National Anti-Corruption Council, his commitment to these initiatives remains questionable. The globally respected Transparency International is headed by PRD supporter and La Prensa founder and stoke holder I. Roberto Eisenmann. According to Okke Ornstein from the Noriegaville News, Eisenmann has joined the ACP and Torrijos’ authorities in promoting the expansion project. Eisenmann’s Transparency chapter has neglected to assess the corruption factor surrounding Canal expansion. He has instead proposed a National Development Plan that will be released after construction commences rather than at the present time, when it would be of vital importance to the current debate. What is clear is that Panamanians have not had adequate access to all government reports on the project, and as such as they will be making important decisions based upon insufficient information or time.

Even more alarming are rumors circulating that the PRD has already begun to manipulate the outcome of Sunday’s vote. SUNTRACS, the strongest labor union in Panama, has accused the PRD of buying out some of its members to vote in support of the “yes” campaign. SUNTRACS’ officials also protested against the PRD’s efforts to register the union as a supporter of canal expansion with the Electoral Tribunal. The Noriegaville News reported on September 13 that individual voters in small groups were being bought out at $35 a pop with a free lunch on the side, presenting “a significant threat to the transparency of the referendum.” The Panama News also adds that the 882 voters, who mainly come from starving families, accepted such deals from the President’s own hand in the streets.

So, when voters accept such bribes and propaganda, they need to question whose interests they are really voting for. When the ACP claims that “the canal over the last six years has paid over [to] the government of Panama over $2.2 billion,” voters might further ask, where is this money going ? The World Bank reveals that the wealthiest 20 percent of the Panamanian population spends 60.3 percent of the overall GPD, meanwhile, according to USAID, 37 percent of the population lives in poverty. Hopefully, when Panamanians vote, they will look beyond the glossy array of benefits proposed by spin-masters such as the Torrijos administration and the ACP. It is imperative that they recognize that an unfolding scandal could be in the making, which would further rip-open Panama’s canal for the benefit, not only the Panamanian rich, but other global elites involved in trade.

SOUNDBITE: Who Are Killing Panamanians?

• Death toll points to poisoning after the administration of lethal government distributed medicine

The approaching October 22 referendum on Panama Canal expansion could be affected by the current wave of mysterious deaths caused by government-made medicines as the mounting number of mortalities continues to tarnish the government’s credibility. At least twenty-six people - maybe even more - have died and 44 have fallen ill from a lethal substance that has been identified as a cough and anti-allergy syrup that was mixed with diethylene glycol, a chemical used in the automobile industry. Health Minister Camilo Alleyne has dismissed government responsibility, while acknowledging that the medicine, which was produced in a local lab by Panama’s social security system (CSS), was deliberately tampered with.

Panama’s Attorney General Ana Matilde Gomez is investigating a “paper-front” Panamanian company - Grupo Comercial Medicom - which has allegedly been selling the medicines originating from Spain to the CSS, but no government entities have currently figured in the investigation. Panama America reports that the company front men are only street venders who sell fried food and questions: who are these men really working for? Julio Manduley from Equipo Illueca - a group which is highly critical of the rushed push for canal expansion by the government - said that people on the streets of Panama instinctively feel they are being lied to as well as being manipulated by the government’s tightly controlled release of information on the poisonings. Manduley believes that the people do not have much confidence in President Martín Torrijos’ administration for its past shady behaviour and recent demonstrations of incompetent management, so they will vote “no” against expansion. Eric Jackson, editor of the Panama News, stated that these events have shaken public confidence in the government and could adversely affect the referendum. Additionally, the anti-government Panama News coverage states that the opposition, FRENADESO coalition has criticized the government for “discounting apparently related cases that had been happening for weeks before the October 2 declaration of a health emergency.” It is possible Torrijos’ administration may be holding back additional information from the public, or perhaps, these poisoning are a sheer case of massive negligence on the part of dysfunctional government system. Either way, this is of great concern for the public that street venders can distribute deadly toxins to the public through the government health system.

It is yet far from certain whether or not these events will impact the referendum. Contrary to speculation that the people are losing faith in their government, polls published in newspapers worldwide suggest the referendum outcome may not necessarily be affected by such events. Before the poisonings, The Australian September 28 reports that a recent poll of 1, 200 Panamanians predicted a 64 percent win for the “yes” vote. El Panama America conducted a poll of 1, 210 people from September 28 to October 2, which indicates an even higher feat in which 77 percent would vote “yes”. More recently, between October 6 and 8, Dichter & Latin Neira Research Network conducted a poll around the same time the poisonings were being revealed to the public, which suggested 79 percent still in favor of canal expansion. Thus, the “no” camp has an all but insuperable challenge to prevent a massive move of most in favor of canal expansion and the deep-seated revulsion among many Panamanians that the Torrijos administration is just not up to the job of being able to manage such a Brobdingnagian task. The dissidents continue scrounging their way towards attempting to project their frustrated voice in an environment where the independent Electoral Tribunal contemptuously strips their particularly inadequate “no” campaign posters from the sides of buildings.

*************

This analysis was prepared by COHA Research Associate Danielle Ryan
October 20th, 2006
Word Count: 2300

The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being “one of the nation’s most respected bodies of scholars and policy makers.” For more information, please see our web page at www.coha.org; or contact our Washington offices by phone (202) 223-4975, fax (202) 223-4979, or email coha@coha.org.

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