Cablegate: Panam Post: Edition Xii


DE RUEHZP #1484/01 2481823
R 051823Z SEP 07

C O N F I D E N T I A L PANAMA 001484



E.O. 12958: DECL: 09/05/2017

Classified By: POLCOUNS Brian R. Naranjo. Reasons: 1.4 (b)
and (d)


1. (C) The election and aftermath of Pedro Miguel Gonzalez
-- wanted in the U.S. in connection with the 1992 murder of a
U.S. serviceman -- dominated political discussions in Panama
this week. Nonetheless, the Panama Post's editor nonetheless
found the time for a sit-down with presidential aspirant
Alberto Vallarino.

-- PRD Majority Leader says PMG affair was the result of a
"total rebellion" by governing Revolutionary Democratic Party
(PRD) National Assembly deputies; and
-- Newly re-enlisted as a Panamanista, Alberto Vallarino
waits in the wings of the presidential race.

This week's edition of the Panama Post is coming to you early
as your editor will be departing on leave. Until your
editor's return at the end of September, the Panama Post will
be on hiatus.

-------------------- --------------------------------------
PRD Majority Leader: PMG Affair Result of "Total Rebellion"
-------------------- --------------------------------------

2. (C) "The election last Saturday of Pedro Miguel was not
a nationalist act, but rather was an act of total rebellion.
Unfortunately, given his problems with the U.S., it had to be
Pedro Miguel who was elected. We rebeled not against the
U.S., but rather against Martin Torrijos," governing
Revolutionary Democratic Party (PRD) Majority Leader Deputy
Leandro Avila told the Panama Post on September 5. (Note:
PMG is under U.S. indictment in connection with the 1992
murder of U.S. serviceman Zak Hernandez.) Avila then
recounted the following series of events:

Saturday, September 1:

-- 7:00 a.m.: Summoned to the President's residence, PMG and
PRD Deputy Hector Aleman met with President Torrijos. This
meeting was brief as it quickly devolved into a blame game.
Aleman later told Avila that Torrijos blamed PMG for "trying
to destroy the PRD" and putting the prospects for a PRD
victory in 2009 at risk. Allegedly, PMG blamed Torrijos for
betraying him by telling PMG to go and secure the votes for
his candidacy only to abandon PMG later in the face of
pressure regarding PMG's legal problems in the U.S.

-- 8:00 a.m.: First VP and FM Samuel Lewis and 2nd VP and
Minister of the President Ruben Arosemena met with PMG at the
National Assembly. Allegedly, PMG frantically paced the room
and even yelled at Lewis. Nonetheless, Lewis and Arosemena
secured PMG's promise "to renounce at the end of his speech."

-- 11:00 a.m.-3:00 p.m.: (Note: PMG was elected in a
landslide securing the votes of all PRD deputies present
(including Avila's), was sworn in, and delivered a polemical
speech peppered with anti-American rhetoric. Torrijos
followed PMG's address with a "state of Panama" speech that
was overshadowed by PMG's remarks.)

-- 3:00 p.m.: During a lunch in honor of PMG at Panama's
Marriott Hotel, Minister of Housing Balbina Herrera, incensed
that PMG had not stepped down as promised, got into a heated
discussion that eroded into a yelling match. PRD Deputy Juan
Hernandez reportedly confronted Herrera, and the argument
nearly came to blows.

Sunday, September 2:

-- Morning: Allegedly, Torrijos personally phoned about 25
PRD deputies to tell them that PMG had not honored his pledge
to step down during his acceptance speech. Torrijos invited
these deputies to the Presidential palace on September 4
after the invited VIP guests (including former President
Carter and Senator Byrd) had departed Panama following the
commemoration of the thirieth anniversary of the signing of
the Panama Canal Treaties and the initiation of the Panama
Canal expansion project.

Tuesday, September 4:

-- 7:00 a.m.: PRD deputies stood up Torrijos' breakfast
invitation, passing word back to Palace staffers, "Sorry, but
National Assembly President Pedro Miguel Gonzalez has called
a meeting to discuss committee assignments." Torrijos
attempted to recover by hosting a lunch in lieu of the
breakfast, but, as PMG's meeting endured until 3:00 p.m.,
lunch too was cancelled.

-- 5:00 p.m.: Torrijos summoned all PRD deputies to the Casa
Amarilla (Yellow House, a conference center on the
presidential compound), telling them that he would first meet
with PMG in his office after which both would join the
assembled deputies at the Casa Amarilla.

-- 6:00 p.m.: PRD Deputies began arriving at the Casa Amarilla

-- 8:00 p.m.: Torrijos appeared at the Casa Amarilla and
announced that PMG never showed up. PRD Deputy Yassir
Purcait, his campaign manager, never showed either.

3. (C) Addressing the PRD bloc on the evening of September
4, Torrjios admitted that he had made many mistakes,
including not taking the calls of PRD deputies and generally
ignoring them, Avila said. Torrijos swore that he had not
received any pressure from the USG regarding PMG's candidacy.
He promised more funds for the PRD deputies' districts and
admitted that the people were demanding social action that
the deputies had been unable to provide. According to Avila,
several PRD deputies told Torrijos that only Torrijos could
convince PMG to step down; "You are friends with Pedro
Miguel, not us."

4. (C) Avila asserted to the Panama Post that Torrijos'
September 4 mea culpa speech might have turned the tide for
the President. "Easily 35 deputies are willing to push for
PMG to go," Avila said. "But Pedro Miguel needs to renounce
since he was legally elected. Unless he steps down, nothing
will happen." Avila asserted that Torrijos "sloppy
management and political style" directly caused the PMG
affair. "Pedro Miguel asked Torrijos if he could be the one,
and Torrijos told him, 'Yes, go ahead and get the votes,'"
Avila explained. Yet when PMG was able to secure the votes,
something Torrijos thought would never happen, Avila said
that Torrijos could not "turn things around." As for whether
PMG would step down, Avila said he did not believe PMG would
step down soon, "if at all. PMG is crazier than ever, but he
is a believer. He will have to be convinced for reasons
other than money to step down."

5. (C) Comment: Avila's recounting of these four days of
the PMG affair tracks well with reports that the Panama Post
has picked up elsewhere. The PMG affair has revealed
fissures and divisions with the PRD ranks that are deeper and
more complex than most political observers would have
imagined before September 1. The PRD though remains a
disciplined party; indeed PRD deputies delivered a landslide
victory (50 yes - 25 no - 2 absences) for PMG, a candidate,
if Avila is to be believed, that they did not want. There
are few winners in this affair, except perhaps for former
President Ernesto "El Toro" Perez Balladares who might gain
political force in relative terms as Torrijos and others have
been weakened by this debacle. Ultimately, if it is
resolved, the PMG affair will be resolved in a typically PRD
fashion. Stay tuned.

Vallarino Waiting in the Wings

6. (C) "I am prepared to enter the presidential race if I can
contribute to fostering opposition unity," presidential
aspirant Alberto Vallarino told POLCOUNSQSeptember 4.
Careful to state that he was not a candidate, Vallarino
nonethless acknowledged that he was in constant contact with
fellow Panamenista Party leaders and other opposition
leaders. Vallarino professed to be on excellent terms with
former President Mireya Moscoso, current Panamenista Party
President Juan Carlos Varela (who was Vallarino's campaign
manager in 2004), and former party president Marco Ameglio as
well as the Moral Vanguard of the Nation (VMP) Party
President and former President Guillermo Endara and Patriotic
Union (UP) Party President Guillermo "Billy" Ford. "You need
to be rich or get the nomination of a rich party to
successfully run for president," explained Vallarino, a
multimillionaire banker and investor. Seen in the light of
who had the economic wherewithal to make a presidential run,
Vallarino acknowledged that three serious candidates would
be: Cambio Democratico's Ricardo Martinelli, whoever the PRD
runs, and himself. "Endara -- a nice and honest man -- will
never succeed; he has no money and he would be a return to
the past." Were he to throw his hat into the ring, Vallarino
said that he would position himself as a "new alternative" to
the old politics. "I have never been in government, but I
have been extremely successful in business. I will appeal to
the young who aspire for an optimistic future." Asked why he
rejoined the Panamenista Party, Vallarino said that he had
always been a Panamenista; "I grew up around Arnulfo Arias.
Being Panamenista in my family is nearly a matter of
genetics." As an aside, Vallarino noted that he had been
offered the presidency of the UP, but "I wouldn't work well
in a small party."

7. (C) Comment: Vallarino caused quite a stir when he
re-joined the Panamenista party in mid-August and increased
speculation that he would throw his hat into the presidential
race. To date, however, Vallarino has been careful to manage
his profile and to not appear to be a declared candidate.
Understanding that Martinelli will definitely run for
president, Vallarino is positioning himself to be the obvious
unity candidate for the rest of the opposition. Panamenista
Party President Juan Carlos Varela's continuing feud with
Moscoso leaves Varela vulnerable to Vallarino who would like
to take from Varela the mantle of being the face of a
"renewed" Panamenista party. Vallarino, who has been under
an ethical cloud in the wake of his windfall profits secured
as the result of special tax breaks for the sale of Banistmo
bank, will have to deal with Endara's "honest Abe"
reputation. Finally, he will need grapple with Martinelli's
already well staked claim to be the new alternative to
Panama's politics as usual. Vallarino's deep pockets and
deliberate and calculating manner though make him a candidate
to watch.


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