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Cablegate: Panama Post: Edition Ix

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R 242122Z AUG 07
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC 1044
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RHMFISS/CDR USSOUTHCOM MIAMI FL
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/JOINT STAFF WASHINGTON DC
RHEHAAA/NSC WASHDC
RUEKJCS/OSD WASHDC
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L PANAMA 001430

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/24/2017
TAGS: PREL PGOV ECON ELAB PM
SUBJECT: PANAMA POST: EDITION IX

REF: PANAMA 1346 (AND PREVIOUS)

Classified By: Ambassador William A. Eaton. Reasons: 1.4 (b) and (d).

-------
Summary
-------

1. (C) For the ninth edition of the Panama Post, our top
stories are:

-- Ernesto "El Toro" Perez Balladares will run for president,
wants to face Vallarino;
-- Jose Manuel Teran: opposition needs to rally around
Vallarino;
-- Juan Carlos Varela and his campaign team lunch with
Ambassador;
-- Democratic Change (CD) party to surpass Patriotic Union
(UP) to be Panama's second largest opposition party?;
-- radical construction union SUNTRACS seeks confrontation;
and
-- Panama prepares accommodations for Noriega

--------------------------------------------- ---------
El Toro to Run for President Regardless of PRD Primary
--------------------------------------------- ---------

2. (U) Regardless of what happens in the governing
Democratic Revolutionary Party (PRD) primaries, former
President Ernest "El Toro" Perez Balladares told assembled
mass media leaders at the City Club on August 22, that he
would run for president again. Furthermore, El Toro said he
wanted to run against Alberto Vallarino, who recently joined
the Panamenista Party. "I'd like to run against Alberto
because he is a capable man, and it would give the public a
chance to choose between a proven person (Perez Balladares)
and a successful businessman." Summarizing his views of the
rest of field in the race for president, "El Toro" said: (1)
former President and President of the Moral Vanguard of the
Nation (VMP) party Guillermo Endara would withdraw; (2)
Democratic Change (CD) President Ricardo Martinelli "had
bought himself a party and now wants to buy the presidency;"
and (3) "I don't care which of the cousins (First VP and FM
Samuel Lewis or Panama City Mayor Juan Carlos Navarro) I
face" in the PRD primaries. The following day, Minister of
Housing Balbina Herrera underscored that she would continue
her campaign to be elected president of the PRD.

3. (C) Comment: After a flurry of activity a few months ago
launching his campaign to be the next President of the PRD,
the Panama Post has not really heard much from El Toro until
now. Joining the lunch-o-mania (the purposefully visible
meal encounters by political notables) that has gripped
Panama City over the past couple of weeks, Perez Balladares
decided to inject some vigor into his political profile by
hosting a gab-fab at the City Club for media leaders, not PRD
faithful or leaders. His prospects for reeling in the PRD
Presidency have evaporated since Minister of Housing Balbina
Herrera was penciled in for that job. By announcing that
regardless of the results of the PRD primaries that he will
run independent of the PRD, El Toro has for the first time
publicly stated a willingness to break with the PRD to
advance his efforts to return to the Presidential Palace.
Up-and-coming PRD stars who met with Ambassador on August 23
indicated that they were not all surprised that El Toro was
prepared to break with the PRD, and none of the five
mid-level PRD officials thought El Toro would have much of a
chance at success. Many Panamanians will wonder if a leopard
-- especially a PRD leopard and particularly especially this
PRD leopard -- can convincingly change its spots.

--------------------------------------------
Teran: Vallarino is the Opposition's Answer
--------------------------------------------

4. (C) "Vallarino is the one who can unite the opposition
and defeat the PRD," Panamenista leader and former Ministry
of Health in the Mireya Moscoso Administration Jose Manuel
Teran told POLCOUNS on August 23. "Vallarino's re-joining
the Panamenista Party greatly clarified the opposition
scenario." Acknowledging a deepening struggle within the
Panamenista Party, Teran, who was clearly fronting for
Vallarino, said that the Panamenistas needed to find a way to
talk some sense into party president Juan Carlos Varela.
"Varela's presidential campaign will go nowhere. He cannot
continue to fight La Dona (Mireya Moscoso), and his campaign
team is too young and inexperienced. Many fear Varela simply
wants to accept the slot of vice presidential running mate to
Martinelli." Teran explained that Vallarino campaign would
collapse Endara's attempt to return to the presidency.
"Endara doesn't have enough members to legally establish a
party. The Vanguard is vulnerable to legal challenges."
Also, "Without the Panamenistas, Endara cannot succeed." The
Patriotic Union (UP) and the Movement of Liberal Republican
Nationals (MOLIRENA) would join the Panamenistas in broad
opposition coalition against the PRD. As for Martinelli,
Teran held out hope that Martinelli would support a broad
opposition coalition once it became evident that he could not
win but that he might deny the opposition a victory. Teran
asserted that Moscoso had done a wonderful job of renewing
her political power and clout and said Moscoso was behind
Vallarino's ascendance.

5. (C) Comment: Alberto Vallarino's re-joining the
Panamenista Party has had a broad ripple effect across the
opposition. As of yet, however, it is unclear what the end
result of that impact will be. Likely to jump into the
presidential race, Vallarino's political movements and action
bear close watching. A significant subplot to this drama
will be the machinations and maneuvering of former President
Moscoso who has been aggressively courting rank and file
Panamenistas (most recently joining the lunch-o-mania fervor
by hosting an August 22 lunch) and continues to pressure
Varela.

----------------------------------
Varela: Lunch with the Ambassador
----------------------------------

6. (C) While Moscoso was dining across town with various
and sundry Panamenista deputies and mid-level luminaries,
Panamenista President Juan Carlos Varela had lunch on August
22 with Ambassador. Varela sought to portray himself as an
agent of change who had renewed the Panamenista Party and
would seek to renew Panama. Presenting himself as "young,
fresh, and new," Varela was dismissive of old timers such as
Endara, Vallarino and former First VP and UP President-elect
Guillermo "Billy" Ford. Varela was accompanied by two young
Panamenistas who would play key roles on his campaign,
Meliton Arrocha and Carlos Duboy.

7. (C) Comment: Varela continues to struggle for political
relevance, not only on Panama's national political scene but
increasingly within his own party. He stubbornly will not
reconcile with Panamenista grande dame Moscoso, not just out
of a sense of personal pride, but also a sense of political
necessity. In trying to advance his message of renewal,
Moscoso is a useful foil for Varela enabling him to cast
himself in contrast to the corruption and mismanagement that
plagued her administration. The Panama Post is skeptical
about Varela's ability to sustain a viable run for the
presidency when confronted with the tough realities of
Panama's power politics, of which Moscoso is a master, and as
heavy hitters such as Vallarino start warming up their
engines. Even in the best of times and without relentless
pressure from Moscoso, Varela would face an uphill battle in
demonstrating that, as the head and product of Panama's
largest opposition party, which has deep roots in Panama's
history, that he truly offers something "young, fresh, and
new."

--------------------------------------------- --
Democratic Change Seeks to Pass Patriotic Union
--------------------------------------------- --

8. (C) "Democratic Change (CD) will surpass Patriotic Union
(UP) to be Panama's second largest opposition party," CD Vice
President Roberto Henriquez told POLCOUNS on August 22. The
Electoral Tribunal (TE) would release the July party
membership figures that would showed that the CD had grown to
about 90,000 members, Henriquez explained. "Since the
beginning of August, we have signed up 10,000 more members
and I think we'll have over 125,000 members by the end of the
year." Currently, UP is estimated to have 125,000 members.
More importantly though, Henriquez explained, CD is moving
ahead with structural and organizational work. "We'll have
candidates for every race across the country from councilman
to president. We have already established organizations in
half of the country's precincts (corregimientos) and soon
will be established in every precinct."

9. (C) On August 22, Panamenista luminary Jose Manuel Teran
showed POLCOUNS a bootleg of the TE's membership figures that
indeed showed CD gaining about 7,000 members to reach about
92,000 members. UP lost about 2,000 members in July. VMP
and the Panamenista Party also recorded losses.
Interestingly, MOLIRENA, which has been under a death watch
for months, actually gained some 5,000 members. "MOLIRENA
always appeals to the intellectuals," Teran claimed, "and
should not be discounted entirely as a political force,"
though admittedly its leadership was lost at sea.

10. (C) Comment: Panamanian politicians and observers love
to engage in the membership statistics parlor game measuring
and comparing the relative strengths of the different
parties. Seen in that light, the CD should gain more
credibility as a political party whereas today its seen as
the expensive adornment of a wealthy supermarket magnet,
Ricardo Martinelli. Martinelli has previously told the
Panama Post that he was investing serious money in building a
nationwide, precinct-by-precinct machine. If he is able to
actually establish such a machine, Martinelli will then
earned significant political street cred.

----------------------------
SUNTRACS Seeks Confrontation
----------------------------

11. (SBU) The shooting deaths of two construction union
workers in separate incidents within a 48-hour period
heightened tensions between the GOP and the radical union
SUNTRACS. On August 14, SUNTRACS members confronted workers
from rival construction union, SITICOOP, outside the Chilibre
office of Brazilian contractor Odebrecht, which is
constructing a highway extension between Panama City and
Colon. Odebrecht's private security guards allegedly opened
fire on SUNTRACS workers, wounding two and killing one. On
August 16, a Panamanian National Police (PNP) officer
allegedly killed a SUNTRACS member with a shotgun blast to
the head during a confrontation at a job site in the Pearl
Islands, a small archipelago in the Gulf of Panama. These
incidents prompted a series of protests on August 16 by
hundreds of SUNTRACS workers and their sympathizers,
culminating with a street march to the Presidential Palace.
Despite fears of further violence, the march ended without
incident.

12. (SBU) Comment: Our construction industry contacts have
alleged in recent months that SUNTRACS has displayed an
increasingly aggressive posture at job sites around the
country and in its street protests. The GOP has thus far
sought to avoid head-on clashes, prompting some in the
industry to complain that SUNTRACS has cowed law enforcement
authorities into giving them wide berth to intimidate
developers and the public. Suspicions about that SUNTRACS
enjoys financial and organizational support from Venezuela
and that their real interest is in fostering a climate of
crisis during the run-up to Panama's 2009 elections. Last
week's killings could foreshadow further violence and
certainly heighten tensions between SUNTRACS and other unions
and the GOP.

------------------------------------
Noriega Supporters and GOP Prepare
------------------------------------

13. (SBU) Panama's chattering class was a twitter this week
gabbing about the work being done on former dictator Manuel
Antonio Noriega's former residence in Panama City. News
outlets reported on the new paint being slapped on his
formerly posh residence and speculation was rampant as to who
was underwriting these efforts. Separately, Minister of
Government and Justice announced August 22 that Noriega would
be taken to the El Renacer ("the rebirth") Penitentiary
Center were he to be returned to Panama following completion
of his sentence in the U.S. on September 9. On August 22,
Vice Minister of Finance Orcila Vega de Constable underscored
that any work on Noriega's residence had to be authorized by
her ministry and, stated that once repaired, the residence
would be auctioned. Meanwhile, Noriega's residence will need
much more than a dusting and touch-up paint job. The
residence, and other properties, have essentially been
abandoned for seventeen years and require extensive work.

14. (C) A subdued, low level of nervousness that Noriega
might actually be returned to Panama is helping the media
sell papers and fill air time. There were echoes of this
nervousness in the halls of the MFA too. DCM and POLCOUNS
were called in to see MFA Senior Advisor Adolfo Ahumada on
August 21 for meeting that turned out to be essentially a
hand holding exercise to hear out Ahumada's inquiries as to
whether Noriega's legal challenges to his extradition might
prevail. DCM and POLCOUNS underscored that it remained the
policy of the U.S. to extradite Noriega to France and that
the USG and GOP would need to wait to see how the judge would
rule on Noriega's prisoner of war challenge to his
extradition. Ahumada noted that President Torrijos would
hold a senior level meeting on August 22 to discuss the
Noriega situation.
EATON

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