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Cablegate: Panama Post: Edition Xi

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INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
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RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUMIAAA/HQ USSOUTHCOM MIAMI FL
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 001801

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/19/2017
TAGS: PREL PGOV PM
SUBJECT: PANAMA POST: EDITION XI

REF: PANAM 1474 (AND PREVIOUS)

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

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

1. (C) Back from an extended hiatus, the Panama Post now
brings you its Thanksgiving edition. Increasingly, the
Panama Post is the hearing these days from all quarters that,
despite her protests to the contrary, current Minister of
Housing Balbina Herrera will be the governing Democratic
Revolutionary Party (PRD) candidate for president. Herrera
continues to maintain that she wishes to run for Mayor of
Panama, not President of the Republic. Meanwhile, in the
opposition, newly re-minted Panamenista member Alberto
Vallarino is working behind the scenes with his party's and
the opposition's elites to form a coalition to support his
presidential candidacy. Enthusiasm for a prospective
Vallarino run is tempered though. Finally, there is
unhappiness inside the PRD's junior governing coalition
partner, the Popular Party. For this edition, the Panama
Post brings you four stories:

-- Three-way race for President -- Balbina Herrera, Ricardo
Martinelli, and Alberto Vallarino -- coming, Samuel "Don
Sammy" Lewis Galindo asserts;
-- Elite opposition coalition for Alberto Vallarino begins to
form;
-- Will the Christian Democrats re-emerge on Panama's
political scene and does it matter?; and
-- Ambassador's anti-corruption applauded remarks, but
"business is business."

End summary.

---------- ----------------------------
Don Sammy: Three-Way Race for President
---------- ----------------------------

2. (C) "I foresee a three-way race for President of the
Republic: (current Minister of Housing) Balbina Hererra (for
the governing Democratic Revolutionary Party (PRD)),
(supermarket magnate) Ricardo Martinelli (for Democratic
Change (CD)), and (son-in-law and businessman) Alberto
Vallarino (for the Panamenista party and its eventual
coalition partners)," Panamanian behind-the-scenes power
broker Samuel "Don Sammy" Lewis Galindo told POLCOUNS on
November 19. Dismissive of his nephew First VP and FM Samuel
Lewis Navarro's presidential prospects, Don Sammy said, "The
way my nephew and President Torrijos handled Pedro Miguel
Gonzalez's election as President of the National Assembly was
a clumsy stupidity (torpeza). They failed to see it coming,
did nothing to stop it, and now have lost the (U.S.-Panama)
Trade Promotion Agreement (TPA)." Regarding his son-in-law,
Don Sammy said, "It's hard to tell how much Alberto wants to
be president. He needs to get to work, yet he has headed off
to Spain this week when he should be working hard here. I
think he wants to be president, but he is going about it like
a corporate CEO, not by working the grassroots." Believing
that the PRD would be shifting leftward, Don Sammy said,
"Watch out for Balbina. She's going to try to run a populist
campaign and will try to turn the clock back on Torrijos'
achievements." "The 'tendency (tendencia) faction' is
stronger than Torrijos' camp, and Torrijos can no longer
bridge the gap between (Ernesto) 'El Toro' (Perez Balladares)
and Balbina (Herrera) of the tendencia and the modernizers
that he brought into the fold." While conceding that Herrera
was a "sphinx" of whose views little is know, Don Sammy
asserted, "She's hard-core tendencia and will be bad for
Panama."

3. (C) Comment: Politically, Don Sammy is a true survivor
and, like a cat of nine lives, always lands on his feet. An
extraordinarily successful businessman, this oligarch is well
positioned through family and business ties to come out on
top regardless of who becomes Panama's next president. While
he sees his nephew First VP and FM Samuel Lewis' prospects
waning, he sees his son-in-law Alberto Vallarino's star
rising. Convinced that Herrera would take Panama in the
wrong direction, Don Sammy finds himself in the uncomfortable
position of wondering whether his son-in-law really has the
fire in the belly to run for president, something that is in
the forefront of many opposition leaders' minds.

--------------------------------------------- --------
Pro-Alberto Vallarino Coalition Forming in Opposition
--------------------------------------------- --------

4. (C) "A substantial coalition supporting prospective
candidate Alberto Vallarino is forming," Panamenista Party
Secretary General Francisco "Pancho" Aleman told POLCOUNS on
November 15. Former President Mireya "Moscoso, (Patriotic
Union (UP) VP) Jose Raul Mulino, and myself are all working
hard for Vallarino." "You watch," Pancho Aleman said, "We'll
use the inter-party primary to knock out (former President
and President of the Moral Vanguard of the Nation (VMP) Party
President Guillermo) Endara out and to force Martinelli to
come to terms with us." Pancho Aleman asserted that
Panamenista Party President and presidential aspirant Juan
Carlos Varela, with whom Aleman is on the outs, was
"increasingly out of touch with political reality" and "no
longer controls the party." Varela "was in for a surprise"
when the Panamenista Directorate to meet on December 1 to set
the party's internal election calendar, Pancho Aleman
asserted, believing Varela's weakness would be demonstrated.
In an otherwise unremarkable lunch conversation with
Ambassador, newly re-minted Panamenista Party member and
presidential aspirant Alberto Vallarino asserted, "I want the
Panamenistas to hold their internal primaries in early May.
That'll give us enough time for an inter-party primary and
then to organize the campaign against the PRD." Meanwhile,
Varela met November 20 with the party's leadership to
tentatively plan on a primary for August 31, something that
will have to be approved by the National Directorate of the
Panamenista Party on December 1.

5. (C) The Latin American Institute for Advanced Studies
(ILDEA) hosted former Mayor of Santiago, Chile Jaime Ravinet
to discuss his experience in Chile's Concertacion, an
alliance of Christian and Social Democratic parties. While
long-shot Panamenista presidential aspirant Marco Ameglio
attended, noticeably absent were Varela and any of his
closest supporters. Former President Mireya Moscoso's
acolytes were out in force as were close allies of Vallarino
and Patriotic Union (UP) party VP Jose Raul Mulino who indeed
served as the opposition's commentator on the dais sharing
his reflections on Ravinet's remarks. On the margins of this
event, Pancho Aleman asserted, "Juan Carlos (Varela) no
longer controls the Panamenista rank and file. They're all
moving towards Alberto." Separately, former Minister of
Health and Vallarino ally Jose Manuel Teran, Pancho Aleman,
and Panamenista activist and former FM Jose Miguel Aleman
confirmed for POLCOUNS that the ILDEA event had been
orchestrated by Vallarino as a show of force aimed at
influencing the elites of the Panamenista Party and the wider
opposition.

6. (C) "We have to get Endara to step down," Jose Miguel
Aleman told POLCOUNS subsequently on November 19. "He's too
old and weak. Perhaps we can buy him off by offering his
wife (Anna Mae) the nomination to be our candidate for Mayor
of Panama City."

7. (C) Comment: Key opposition forces are coalescing around
Vallarino, but there is a lack of enthusiasm as support for
Vallarino appears to be primarily limited to the elite movers
and shakers within the Panamenista Party and its prospective
coalition partners, particularly UP or at least the portion
of UP led by Mulino. Moscoso stated outright to Ambassador
on October 29 that she supported Vallarino, but also voiced
concerns about his commitment to the race. Don Sammy stated
on November 19 that he believed that Moscoso's support for
Vallarino was a matter of political convenience rather than
based upon any true heartfelt support for Vallarino.
Questions regarding how solidly Vallarino is committed to
running, assertions that Vallarino seeks a "coronation," and
the widespread belief that he does not wish to sully his
hands mixing it up with masses all feed a lack of enthusiasm
for Vallarino. To date, to the best of the Panama Post's
knowledge, Vallarino has reserved his political activities to
boardroom maneuverings and has stayed off the campaign trail.
Vallarino's strategy at this point appears to be to seek
legitimacy through both a Panamenista Party primary and an
inter-party primary while at the same time working behind the
scenes to force competitors, like Endara, out of the race.
Teran and Pancho Aleman even go so far as to assert that,
presented with a strong enough pro-Vallarino front,
Martinelli, who categorically refuses to participate in an
inter-party primary, might be forced seek terms with
Vallarino and pull out of the race. In some sense,
Vallarino's strategy is rather like a hostile corporate
take-over: buy up as many shares as you can, co-opt other
major shareholders, take control of the share-holders
convention, install new corporate management, and then
dominate opposition market competitors (i.e., Martinelli) to
reach a modus vivendi.

------------------------------------------
New Christian Democratic Party on Horizon?
------------------------------------------

8. (C) "I am leading a faction within the Popular Party that
is seeking to reconnect with our Christian Democratic roots,"
former Ambassador to Washington and Popular Party activities
Eduardo Vallarino told POLCOUNS on November 19. "It is going
to be difficult to pull the entire party out of the
gravitational pull of the PRD, but perhaps the true Christian
democrats would break away." Vallarino asserted that nobody
had ever been able to explain how the Christian democrats
could form a coalition with the PRD social democrats:
"Ideologically and intellectually, the PRD is rooted in
materialism, dialectics, and Marxian socialism -- they're a
key part of the Socialist International for heaven's sake --
and lacks the moral and ethical traditions of the social
Christians." Vallarino said that fights over the Torrijos
Administration's handling of Pedro Miguel Gonzalez's election
as President of the National Assembly, underestimating badly
the impact that the election of this U.S. fugitive wanted in
connection with the 1992 murder of a U.S. serviceman would
have on efforts to ratify the TPA, and unwillingness to take
on Venezuelan President Chavez's increasingly undemocratic
behavior had strained relations within the Popular Party
between those who seek continued accommodation with the PRD
and those who wish to return to their Christian Democratic
roots.

9. (C) Comment: The Popular Party essentially condemned
itself to politically irrelevancy when it became the PRD's
junior coalition party for the 2004 elections. If Christian
Democrats were to split from the Popular Party, Torrijos
would likely be subjected to a brief flurry of negative
stories regarding his inability to hold together his
coalition. The longer term impact though would be minimal:
Panama would have two more boutique parties, one the remains
of the Popular Party hopelessly trapped orbiting around the
PRD and the other the Christian Democrats freed of the PRD's
gravitational pull but doomed to wander the outer space of
Panamanian politics.

------------- --------------------------------------------- -
E. Vallarino: Applauds Corruption Remarks, Does Biz with Uba
------------- --------------------------------------------- -

10. (C) "Even though they were technically an interference in
internal Panamanian affairs, Ambassador Eaton's recent
remarks condemning continued corruption and weakness in our
judiciary deserve to be applauded; I liked them," Eduardo
Vallarino told POLCOUNS on November 19. Vallarino, echoing
the Ambassador's recent speech to the Chamber of Commerce,
noted that Panama had to "protect its trademark and image."
"We need to ensure an efficient judicial system that deals
with disputes fairly and that is not subject to
manipulation." At the conclusion of lunch however, after
taking a call from former Minister of the Presidency Ubaldino
"Uba" Real, Vallarino explained, "I'm doing a series of power
generation projects, about a dozen. Uba and I and our
'phantom partner' (read: President Martin Torrijos) are
involved in one deal in Veraguas state. It's kinda wierd to
be doing business with the PRD, but business is business."

11. (C) Comment: While it is heartening to see that the
Ambassador's anti-corruption message and calls to strengthen
the judiciary are resonating positively even with the
"sovereigntist" crowd that sees such remarks as interference,
it is disheartening to hear the same supporters speak so
blithely about business deals in which a partner, namely the
sitting head of state and government, has to be referred to
as a "phantom partner." While Vallarino noted that he
believed that no serious in-roads against corruption would be
made until Panamanians got serious about the problem
themselves, Vallarino's own "business is business" remarks
underscored the difficulties in forging such an essential
anti-corruption political basis in Panama.

ARREAGA

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