Cablegate: Prd in Crisis


DE RUEHZP #0680/01 2541332
R 111332Z SEP 09

C O N F I D E N T I A L PANAMA 000680


E.O. 12958: DECL: 10/01/2020

Classified By: Ambassador Barbara J. Stephenson for reason 1.4 b and d.

1. (C) After suffering a humiliating electoral defeat in the
May presidential elections, leaders of the Revolutionary
Democratic Party (PRD) have been publicly lambasting one
another and fighting for control of the party amidst serious
corruption allegations. President Martinelli, like a shark
smelling blood, has moved swiftly and strongly to highlight,
and in some cases pressure the Attorney General to prosecute
alleged corruption in previous PRD governments, telling his
inner circle that he would like to destroy the PRD and govern
without a strong opposition. However, the dissolution of the
PRD could have long-lasting negative consequences for Panama,
by eliminating both a moderating voice for the left and a
strong check-and-balance on Martinelli's power. We are
encouraged by recent reports that the PRD is re-writing its
statutes and plans to elect a new slate of party officials in
early 2010. We continue to tell our interlocutors that our
vision of Panama as a secure, stable country includes strong
democratic institutions such as responsible political
parties. End summary.

A Brief History of the PRD
2. (SBU) The Democratic Revolutionary Party (PRD) of Panama
was created in 1979 by General Omar Torrijos as the civilian
political wing of the Panama Defense Forces (PDF), which held
de-facto political power at the time. Reflecting Gen.
Torrijos' governing style, the PRD embraced an eclectic set
of ideological positions running from the socialist left to
the nationalist right. Part of the Communist Party joined the
PRD and formed the "La Tendencia" faction. This group was
the incubator of many of today's PRD leaders, including the
party's losing candidate in the recent Panamanian
presidential elections, Balbina Herrera.

3. (SBU) Due to its associations with the disgraced military,
the PRD was close to death in the aftermath of the U.S.
invasion of Panama in 1989. Ernesto Perez Balladares, a
former Finance Minister under Gen. Torrijos who exiled
himself during the Noriega years, was able to rebuild the
party by re-casting it as the party of Omar Torrijos, not
Manuel Noriega. His investment in time and money in
rebuilding the party were rewarded when he won the
Presidency, and the PRD won control of the National Assembly,
in 1994. Near the end of his term in 1999, his efforts to
pass a constitutional referendum granting him the right to
run for immediate re-election were defeated in a national
referendum by a margin of 2 to 1. Perez Balladares
subsequently lost control of the PRD to Martin Torrijos, son
of Omar Torrijos.

4. (SBU) In the 1999 elections, Martin Torrijos lost the
presidency to Mireya Moscoso of the rival Panamenista Party.
The PRD was able to control the National Assembly for a
period of two years, however, giving the party tremendous
leverage over the government. In 2002, two related major
corruption scandals became public. One involved the alleged
bribery of a few PRD Deputies by the Moscoso government to
get the extra votes needed for the Assembly to approve two of
Moscoso's Supreme Court nominees, Winston Spadafora and
Alberto Cigarruista. This deal was allegedly cut by the PRD
deputies themselves, leading Balbina Herrera to publicly
accuse PRD Deputy Carlos "Tito" Afu on January 9 2002, of
having accepted a $1 million bribe. Several days later Afu
appeared on television dramatically waving $6,000 dollars
around and announcing that the entire PRD legislative block
had been bribed to approve a contract in favor of the CEMIS
corporation, and that party leaders Martin Torrijos and
Balbina Herrera had organized it, and received much larger
bribes. The two cases, which were seemingly unrelated, were
merged into one case, and then frozen by the Supreme Court
for alleged prosecutorial defects. It is generally assumed
that the fusing of the cases tied the fate of the PRD and the
Panamenistas together, and formed the basis of a political
agreement to bury the two cases.

5. (SBU) This scandal was only one of many that affected the
Moscoso administration, however, and in 2004 a frustrated
public elected Martin Torrijos as President with 47% of votes
cast, while the PRD also won a majority in the National
Assembly. Though Torrijos finished his term this year with
relatively high approval rates of 50%, and oversaw an
unprecedented period of economic growth, the PRD was
resoundingly defeated by Ricardo Martinelli on May 3, with
Herrera receiving fewer votes than the party's inscribed
membership. The defeat has been blamed on many factors,
including Herrera's high negative ratings and a grueling
primary process that began in 2008 and revealed a strong
personal animosity between Herrera and Juan Carlos Navarro,
leading to a split party after a very close finish in the
primary election. Following her devastating defeat, Herrera
refused to congratulate Martinelli, immediately declared
herself the leader of the opposition and the 2014 candidate,
and, in a speech to her supporters, implied that the U.S.
Embassy had conspired to defeat the PRD. She also claimed
that Torrijos, in his capacity as Secretary General of the
party, did not do enough to help her win. Several PRD
contacts have told EMBOFFs that they are relieved Herrera did
not win, given how badly she behaved in defeat.

6. (SBU) Following the election defeat, influential PRD
members began calling publicly for the resignation of the
entire executive board of the party, the Centro Ejecutivo
Nacional (CEN). Of its nine members, only Juan Carlos
Navarro has publicly stated that he is willing to give up his
seat - but that is generally considered to be a ploy, since
he is not in the majority of the CEN, and has not hidden his
ambition to be the next PRD presidential candidate. The CEN
is dominated by allies of Martin Torrijos and Herrera, who
have joined ranks to defend their control of the party,
though they are not believed to be close political allies.
What brought them back together was their desire to maintain
control of the CEN, and the revival of the CEMIS scandal.
Perez Balladares, seeing a chance to regain control of the
party he lost in 1999, released tapes of several PRD members,
including Afu, discussing the CEMIS case, and the high
profile roles of Torrijos and Herrera in great detail. Under
this pressure, and additional pressure from President
Martinelli (septel), the Supreme Court voted on July 22 to
reopen the case. No definitive ruling has yet been made,
leading to speculation that the case may yet be mothballed
once again. Nonetheless, the revival of the case has cast a
long shadow on the credibility of the current PRD leadership.

7. (SBU) However, things have not gone well for Perez
Balladares either. The Panama City daily La Prensa broke a
story recently that detailed Perez Balladares' personal
enrichment from sweetheart deals to privatize casinos, and
published evidence all the way down to signed checks by Perez
Balladares. La Prensa Executive Director Fernando Berguido
told the Ambassador August 25 that Martinelli himself had
leaked the material to him, ending speculation that Torrijos
had leaked it to retaliate.

Rising from the Ashes
8. (C) National Assembly Deputies from ruling coalition
parties Democratic Change (Martinelli's Cambio
Democratico--CD), Panamanian (VP/FM Varela's Panamenistas),
and the Patriotic Union (Union Patriotica--UP) have told
emboffs not to be deceived by the seeming chaos within the
PRD. They said the PRD has always been a resilient party
which reaches far and wide through Panamanian society with a
very disciplined and activist membership base. There is
nothing like a common enemy to reunite a divided family, and
the governing parties could already see PRD ranks circling
the wagons to mount a unified opposition against Martinelli.
For example, the PRD is already putting out concerted
messaging such as "the government's anti-corruption moves are
nothing but a political show." CD deputies admitted
Martinelli would like to see the PRD splinter and disappear
as a counter to his own political power and popularity.
Those same deputies opined that would be bad outcome for
Panama, because Martinelli without a strong opposition could
be dangerous.

9. (C) Perhaps Martinelli overplayed his hand by pressuring
the A/G to arrest former education minister Belgis Castro as
part of a corruption investigation. In the unwritten rules
governing Panamanian politics, that is simply not done. It
may have spooked the PRD into feeling persecuted, and served
as a wake-up call that Martinelli's threats to help the party
self-destruct were not idle ones. PRD deputies told emboffs
September 8 that they had full confidence the party would
rise from the ashes with new leadership and new energy.
Martin Torrijos recently reached out to Ernesto Perez
Balladares (media reports say at the behest of Balbina
Herrera and Juan Carlos Navarro) to ask for a truce so the
party can reorganize; the two of them have led the party for
the past twenty years. Party Vice President Elias Castillo
said the PRD would write new statutes by December and elect a
new CEN in the first quarter of 2010. He blamed much of the
in-fighting on members posturing for leadership positions
within the party. Deputy Crecencia Prado, who represents the
Ngobe Bugle indigenous area, claimed the PRD membership base
in the countryside was fed up with the party leaders' public
squabbling, and were demanding more representation in the
party power structures.

10. (C) The PRD deputies pointed out that the party's
situation after the 1989 invasion to oust Noriega was much
worse than it is now; they were so stigmatized they had to
meet in hiding. Yet the party bounced back. They are
certain the PRD will rebound now as well. They plan to
examine every action of the Martinelli government and
publicly chastise every misstep, so they can retake the
presidency in 2014.

Comment: Why Should We Care About the PRD?

11. (C) The continued existence of a responsible opposition
party is an important counter-balance to Martinelli's
increasingly Presidentialist rule (septel). Our long-term
interest lies in developing democratic institutions -
including political parties - to ensure a Panama that is
secure, stable, prosperous and capable of effectively
administering the Panama Canal. The PRD, Panama's largest and
most disciplined political party, serves as a means of
legitimate, if imperfect, access to the political process for
a large part of Panama's population that still struggles with
economic and social difficulties. The alternative could be a
more extreme and polarizing leftist movement that sees the
U.S. as an imperial power.

12. (C) The post-election disputes that currently embroil the
PRD are partially the result of strong personality conflicts
among the leadership in the wake of a devastating loss mixed
with the corrosive effects of endemic Panamanian political
corruption. However, the PRD's problems are also the result
of the inherently wide ideological span of the party - from
the socialist "Tendencia" to the center-right pro-business
and transactional moderates. It is precisely the function
that the PRD performs in pulling these disparate groups
together that is valuable. As a moderator of extreme left
views and a legitimate outlet of popular socialist opinion,
the PRD plays a vital role in making Panamanian politics work.

13. (C) As the drama plays out, we will be encouraging our
PRD interlocutors to move towards our vision of a mature
party that serves as a check and balance - albeit with more
transparency and honesty than it has previously displayed.
We are reaching out to PRD members to counter their
perception that the U.S. Embassy supported the
Martinelli-Varela ticket and now stands blindly behind the
new government (a perception that Martinelli has actively
fueled). We are passing our own concerted message that,
rather than disintegrate in reaction to the rise of a new
caudillo in Panama, we hope to see the PRD survive and
continue to act as a responsible moderator of leftist
political sentiment in Panama.


© Scoop Media

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