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Cablegate: Panama Attorney General Tests Torrijos

This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 PANAMA 000778

SIPDIS

DEPARTMENT FOR WHA/CEN
SOUTHCOM ALSO FOR POLAD
VANCOUVER FOR CG ARREAGA

E.O. 12958: DECL: 03/18/2015
TAGS: PGOV PREL PM POLITICS FOREIGN POLICY
SUBJECT: PANAMA ATTORNEY GENERAL TESTS TORRIJOS
ADMINISTRATION, REOPENS CEMIS AND SUPREME COURT BRIBERY
CASES

REF: PANAMA 629

Classified By: Ambassador Linda E. Watt for Reasons 1.4 (b) & (d)

SUMMARY
--------
1. (C) Panama's independent Attorney General Ana Matilde
Gomez may have put the government of Martin Torrijos in an
uncomfortable position in March when she asked the Supreme
Court to reopen two three-year-old bribery investigations
into a government contract for Centro Multimodal, Industrial
y de Servicios (CEMIS), along with the January 9, 2002
legislative confirmation of two Supreme Court judges. Both
investigations date from the Moscoso administration. Many
observers believe that the CEMIS bribery scandal -- allegedly
more than $1m in cash changed hands -- may implicate many
sitting and former legislators (including GOP Ministers
Balbina Herrera and Hector Aleman), as well as President
Martin Torrijos and former President Mireya Moscoso. How the
GOP handles the two investigations could become a litmus test
for the current government's dedication to improving
transparency and combating corruption. Torrijos has not
commented publicly on the two cases. By popular calculation
the cases heavily involve PRD members, which highlights the
Attorney General's intention to act unhindered by the
government. Thus far, we have not seen compelling evidence
that would implicate him in the CEMIS scandal. End Summary.

TV Drama and a Little Piece of Paper
--------------------------------------------
2. (SBU) The CEMIS case is not the biggest corruption scandal
in Panamanian history, but it probably is the one that evoked
the most public revulsion. CEMIS is identified with
Democratic Revolutionary Party (PRD) Legislator Carlos Afu
and his fifteen minutes of fame. On January 16, 2002 Afu
appeared on TV waving a large wad of cash, which he claimed
was a $6,000 down payment on a $20,000 bribe to vote for
CEMIS. Afu was trying to make the point that a large number
of PRD legislators had received CEMIS bribes. Afu's
extraordinary public revelation and the lack of any arrests
following it brought public confidence in government
officials to new lows.

3. (SBU) Afu's dramatic TV escapade came after the Assembly
had been roiled by contentious and controversial Supreme
Court confirmation votes for Moscoso nominees Alberto
Cigarruista and Winston Spadafora, in which Moscoso allegedly
bribed several PRD legislators (Afu included) in the
PRD-controlled Assembly to ensure their confirmations. On
January 14, 2002, the day before the Assembly voted to
approve CEMIS, then-opposition PRD legislator Balbina Herrera
publicly denounced Afu for taking a bribe to vote for
Cigarruista and Spadafora. In retaliation, Afu went on TV on
January 15 to wave the cash and claim that he was not the
only PRD legislator whose vote had been bought.

4. (SBU) (Note: The genesis of the Supreme Court case is that
at the end of 2001 Arnulfistas needed PRD votes for Spadafora
and Cigarruista in the PRD-controlled Assembly. Spadafora
reportedly had been involved romantically with President
Moscoso. Cigarruista and Spadafora were confirmed with the
support of three PRD votes, Afu's included. Later, the PRD
expelled Afu, who won re-election in May 2004 to the National
Assembly as an Arnulfista. During the campaign Afu and
then-President Moscoso posed on the dance floor for press
cameras. Complicating the CEMIS case is the legislative
immunity Panamanian legislators then enjoyed, which later
constitutional changes removed. End note.)

5. (SBU) The CEMIS bribes allegedly came from the privately
owned San Lorenzo Consortium. Public Ministry investigators
later came across a piece of paper in San Lorenzo's files
with nothing more than names and amounts scribbled on it.
"Martin," "La Dona," and "Aleman" (possibly Martin Torrijos,
Mireya Moscoso or Balbina Herrera, and Hector Aleman) were to
receive $150,000 each. The rest were to receive smaller
amounts. That piece of paper is the only concrete evidence
turned up by CEMIS investigators directly indicating who was
paid off, and it is unclear at best.

6. (U) Following the Public Ministry investigation, in
September 2003, the Supreme Court voted 6-3 to close and
nullify the Public Ministry's investigation. CEMIS
construction never got under way. In her March 3 petition to
the Court, AG Gomez requested that the Court hold separate
investigations of the CEMIS and Supreme Court cases which her
predecessor, Jose Antonio Sossa, had ordered joined.

Why CEMIS?
----------
7. (SBU) On November 15, 2004 Article 155 of Panama's
constitution was amended to permit the Supreme Court to
investigate legislators while they remain active in the
National Assembly. The demise of legislative immunity became
the legal rallying ground for public officials and civil
society organizations demanding that AG Gomez formally
request the re-opening of the cases.

8. (C) Two heavy hitters in the private sector-- the powerful
Motta family and Hutchinson Whampoa/Panama Ports -- are
pushing to re-open CEMIS but for different reasons, according
to Embassy sources. The Motta family, holders of one of the
largest investment enterprises in the Colon Free Zone (CFZ),
want the case settled so they can buy part or all of CEMIS
from San Lorenzo and get the project restarted. The Mottas,
along with their U.S. partners in the Manzanillo
International Terminal port facility, are already
constructing a new "logistics park" on land adjacent to San
Lorenzo's property. Panama Ports Company (PPC) wants CEMIS
separated from the case against Spadafora and Cigarruista as
political payback against Justice Spadafora, who according to
Palace insiders wrote an opinion declaring PPC's
multi-decade, multi-billion-dollar tax exoneration
unconstitutional. (Note: PPC administers the Cristobal and
Balboa ports. The Moscoso administration, specifically
former Minister of Commerce Joaquin Jacome, granted PPC an
exoneration from paying $30 million a year in taxes for the
next 45 years. Current Minister of Commerce Alejandro Ferrer
asked the Supreme Court to strike down the exoneration upon
entering office. A decision is pending. Rumors abound of
huge PPC bribes paid to Moscoso officials and to Hugo
Torrijos, the president's cousin. Hugo Torrijos, known
popularly as "Mr. Ten Percent," has been implicated in at
least two major bribery scandals relating to abuse of his
former position as Director of the Maritime Authority of
Panama (AMP). End Note.)

Torrijos Is Silent on CEMIS
---------------------------
9. (C) Well-placed PRD sources informed Embassy personnel
that President Torrijos had allegedly asked his private
attorneys for advice on how to keep CEMIS closed. Senior
Solidarity party legislator Leopoldo Benedetti, who said he
"knows for a fact" that Torrijos accepted a large CEMIS bribe
while he was head of the PRD, told PolOffs recently that he
believes that the president would block any actual
investigation into CEMIS. On the other hand, Panamanian Bar
Association president Carlos Vasquez told PolOff that no
clear evidence exists to implicate any senior GOP officials.
Vasquez added that the government's handling of CEMIS would
be a defining moment for its leadership.

Comment:
--------

Politik-ing the Court
---------------------
10. (C) No one in Panama is clear on where CEMIS will wind up
or even why the GOP asked the Court to rule on the case when
it seems incapable of rendering impartial justice. The
pending Supreme Court decision on whether to re-open the
investigations into CEMIS and the buying of votes for
magistrates of the Court comes in the midst of public demands
for the dismissal of all nine justices. (See Reftel.) The
reemergence of the two corruption scandals has only sharpened
the overlapping and conflicting personal interests of the
parties involved, which presumably include present and former
GOP officials and the justices themselves.

Diminishing Support for the AG?
-------------------------------
11. (C) Torrijos's apolitical appointment of Gomez, who
serves for a ten-year term and who is independent of the
administration, undoubtedly is a key decision which he may
come to regret. Her active pursuit of Moscoso-era corruption
and illicit enrichment cases such as PECC, Panama Ports,
DuroDolares, and Fundacion Mar Del Sur comes on the heels of
a predecessor, Antonio Sossa, who took virtually no action
against corruption for ten years. Gomez has had the support
of the president, as well as that of Minister of the
Presidency Ulbaldino Real, and Comptroller General Dani
Kuzniecky. (Note: Kuzniecky, Gomez and Torrijos all attended
the same private grade school. End Note.) Though she
continues to act independently, Gomez's initial hesitation to
request the re-opening of CEMIS at first created a public
perception that she was either inexperienced or subject to
GOP pressure. After she willingly reversed her decision, she
regained public support for her actions. It is too early in
her term to determine how Gomez will respond to GOP pressure,
or how doggedly she will pursue cases that may be inimical to
the GOP's interests. We suspect that the president's support
for Gomez is now more tenuous than before the re-opening of
CEMIS.

WATT

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