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Cable reference id: #06PANAMA1029
“All of them, those in power, and those who want the power, would pamper us, if we agreed to overlook their crookedness by wilfully restricting our activities.” — “Refus Global“, Paul-Émile Borduas

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Hide header C O N F I D E N T I A L PANAMA 001029 SIPDIS SIPDIS DEPARTMENT FOR WHA/CEN, SOUTHCOM FOR POLAD E.O. 12958: DECL: 06/01/2016 TAGS: PGOV [Internal Governmental Affairs], PREL [External Political Relations], PINR [Intelligence], ETRD [Foreign Trade], KPAO [Public Affairs Office], PM [Panama], VE [Venezuela], CU [Cuba] SUBJECT: PRD FORCES TORRIJOS TO GIVE GROUND REF: A. PANAMA 0919 B. PANAMA 0866 Classified By: AMBASSADOR WILLIAM A. EATON FOR REASONS 1.4(B) AND (D) SUMMARY AND ANALYSIS --------------------- ¶1. (C) President Torrijos's attention -- to the exclusion of virtually all else -- is consumed by political maneuvering within his party, the PRD, and the approaching must-win Canal expansion referendum (probably in October 2006). Torrijos has tried to sell Canal expansion as a non-political "matter of state," but despite the lofty rhetoric the referendum on the proposed $5.25-billion decade-long project (Reftel B) in fact is an irreplaceable political vehicle for Torrijos to ensure the victory of the ruling Democratic Revolutionary Party (PRD) in the 2009 election and to guarantee, if possible, the presidential aspirations of VP/Foreign Minister Samuel Lewis Navarro, his widely presumed choice to be his successor. Winning the referendum will position Torrijos to do both. Canal Referendum as Political Vehicle ------------------------------------- ¶2. (C) With his experience in diplomacy, politics, and international business, Lewis would be a good choice for president of Panama. But Lewis has two significant drawbacks -- (1) he is not popular within the PRD, which sees him, correctly, as an outsider, and (2) he lacks a political base outside the political and economic elite of Panama. Thus, his future depends largely on Torrijos's political strength and commitment to him. Torrijos's need to placate internal PRD opinion and interests (while defeating the internal PRD machinations of former president Perez Balladares) prior to the referendum vote explain the perceived change in the GOP's political trajectory and recent unsettling actions, such as a left-ish steps in its foreign policy, the April 28 naming of Noriega-era Dignity Battalion organizer Benjamin Colamarco as Public Works Minister, the GOP's all-but-evaporated political will to conclude a bilateral FTA. Political expediency also intensifies the PRD's penchant for non-transparency, its intolerance for criticism and use of its power to bully and control the media. Basically, the PRD is focused on getting reelected, maximizing its share of revenue and its hold on power. Limits to "Annoying" Behavior ----------------------------- ¶3. (C) Ironically, the president's decision to stand by Lewis, who like Torrijos is more pro-U.S. than the PRD old guard, is pushing Torrijos farther to the left. The PRD is Panama's largest, most experienced, best organized party. Many PRDistas want to found a multi-term electoral dynasty (a la Mexico's PRI) that will win election after election far into the future. But old guard PRD elements -- at base skeptical toward the pro-U.S. "tilt" of the Torrijos technocrats -- feel let down by what it sees as the failure of Torrijos and Lewis to deliver political benefits for the party. Torrijos's need to shore up his position within the PRD means that the United States could increasingly witness "annoying" behavior from the GOP, while at the same time maintaining its pro-U.S. tilt. Effects on U.S. Interests ------------------------- ¶4. (C) Core issues in U.S.-Panama relations have not been affected. For example, the GOP's cooperation on security and anti-narcotics matters continues to be excellent. We seriously doubt that the GOP is about to go "off the deep end," for instance, in its relations with Venezuela. The GOP has no plausible "Venezuela card" to play. More worrying are clear signs of official corruption (to be reported septel) and defacto limits on press freedoms. Judicial reform has made little progress. Virtually no senior official has been investigated or gone to jail. Nor, aside from handouts, has the GOP acted aggressively to reduce poverty and income inequality, aside from its overheated hype of Canal expansion, which it claims will create up to 250,000 jobs (two for every unemployed Panamanian) and cut poverty rolls by 150,000 by 2025. The shared interests and history which have bound Panama and the United States for the past century -- namely the Canal, investment (which is increasing), and interpersonal relations, not to mention "residential tourism" -- will continue to define the relationship. End Summary and Analysis. Referendum: Be All and End All ------------------------------ ¶5. (C) The GOP's overriding priority since late winter is a "yes" vote in the as-yet-unscheduled Canal referendum, by whatever means necessary. The Torrijos government's unwillingness so far to take any political risk in concluding a bilateral FTA and the near-collapse of talks in January 2006 marked the end of what could be called its "Gringo Track" and the start of a realignment that tilt more toward the PRD old guard. Torrijos is doing what he thinks he must to preserve an unchangeable hold on the PRD, to win the referendum vote, and to position Samuel Lewis as the PRD's presidential candidate in 2009. Panama Reaches Out to Cuba -------------------------- ¶6. (C) As part of Torrijos's political balancing act, Panama has undertaken efforts to strengthen relations with Cuba. Torrijos has visited Havana twice since taking office. Increasing numbers of GOP officials, most recently by Vice President/Foreign Minister Samuel Lewis, (former MOGJ) Hector Aleman, Health Minister Camilo Alleyne, National Assembly President Elias Castillo, and Panama City Mayor (and 2009 Presidential hopeful) Juan Carlos Navarro. The GOP has eagerly backed the Cuban-Venezuelan Operacion Milagro and dropped visa restrictions on Cuban diplomats. On another front, the GOP only recently has apparently backed off its hinted support for Venezuela's bid for a UNSC seat next fall. The GOP also stymied U.S. intelligence-gathering efforts by preventing Emboffs from interviewing two Spanish citizens, one of them a U.S. dual-citizen, who allegedly were kidnapped and released by the FARC. Most recently, Panama voted for Cuba, Venezuela, and the PRC,s entry into the UN Human Rights Council. FTA in the Deep Freeze ---------------------- ¶7. (C) The GOP's January 2006 collapse of political will to conclude a bilateral FTA is a signpost of the change. Despite agreeing on 90-95% of the text after nine rounds of talks, the GOP-proposed bilateral Free Trade Agreement is in suspended animation, a disappointing outcome for a GOP which supposedly took office with strong free-trade credentials. VP Lewis told the Ambassador that the FTA is no longer on his "to do" list and that he no longer mentions it in Cabinet meetings because it merely serves as an excuse for his colleagues "to beat him up." Prolonged inaction on the FTA could kill what was an important bilateral agenda item, given the looming June 30, 2007, expiry date for "fast track" trade negotiating authority, not to mention a new U.S. Congress due to take office in January 2007 that may well be less favorable to free trade. "Gringo Track" Sputters ------------------------- ¶8. (C) The blow-up of the ninth round of bilateral FTA negotiations in January 2006 (during which Agriculture Minister Cortizo flamboyantly resigned) marked a political weakening of VP/Foreign Minister Samuel Lewis within the ruling PRD and a setback of the GOP's "Gringo track," which focused on political benefits to be had from the bilateral relationship. The GOP apparently had convinced itself that President Bush's November 2005 visit to Panama signaled the USG's willingness to bypass USTR's objections to Panama's discriminatory sanitary and phytosanitary (SPS) regulations in favor of a "political" solution. Another disappointment has been the lack of rapid tangible progress on the GOP's proposed "strategic alliance" with the U.S., centering on the Panama Secure Trade and Transportation Initiative (PST&TI). "Arregla la Vaina!" ------------------- ¶9. (C) Lewis has been upfront and vocal to Emboffs about the personal cost to him of failure in the FTA talks, complaining that USG's refusal to make concessions on SPS "was no way to treat your friends." In a March 2006 meeting with POL Counselor, Vice Foreign Minister Dickie Duran said Lewis was taking heat for the FTA's failure within the PRD because Lewis was the one who had sold the FTA internally. "Arregla la vaina" ("fix it!"), PRD opponents told Lewis. "I've never seen him so frustrated," Duran said. Negative PRD Tendencies ----------------------- ¶10. (C) At the same time, negative tendencies latent within the ruling PRD, founded as the political vehicle for Panama's 1968-1989 military dictatorship, increasingly are on display. Torrijos continues to place Noriega-era "dinosaurs" in positions of power and influence. The latest of these appointments is newly named Public Affairs Minister Benjamin Colamarco, the former leader of the 1987-1989 "Dignity Battalions." No More Consultations --------------------- ¶11. (C) Before taking office, Torrijos officials were careful to consult the Embassy before making appointments that might cause controversy or discomfort in Washington. However, the Embassy received no advance warning of recent appointments, including that of Colamarco perhaps they knew our reaction would be unfavorable. (Comment: The GOP continues to apprise us of its thinking on China/Taiwan relations and have started a discussion of possible changes in the Technical Judicial Police's key partner in our law enforcement programs. End Comment.) Dissing U.S. Intelligence Priorities ------------------------------------ ¶12. (C) In January, armed men with Colombian accents kidnapped Spanish naturapath Jose Vincete Colastra and his filmmaker son, Sergio Colastra (a dual-nationality AmCit), from a Darien beach, demanded a ransom, and held them for 77 days. After their early April release, Panamanian officials whisked the two men back to Spain and declared "case closed," ignoring repeated Embassy requests to see them and debrief them. Before the Colastras left Panama, they told a resident family member that they had been prisoners in a FARC camp where they had observed Cubans. ¶13. (C) Many questions remain unanswered: Did the FARC kidnap the Colastras to examine FARC soldiers? Did Colombian criminals kidnap them to "sell" them to the FARC? Or was it a straight ransom operation? Was ransom paid, and by whom? Did the Colastras collaborate in their own kidnapping? Did Havana play a role in their release? (Comment: Embassy opines there may be three reasons for the GOP's behavior: to deflect unwelcome attention from its failure to secure Darien province; to avoid confrontations with the FARC, a long-standing GOP policy; and pressure from the Spanish government. End Comment.) A Bought Press -------------- ¶14. (C) Intolerant of criticism, there is evidence that the GOP seems willing to muzzle, bribe, and intimidate Panama's news media to suppress unflattering or inconvenient information. The GOP accomplishes that by using its multi-million dollar advertising budget to reward friendly editors and reporters who give favorable coverage. If that doesn't work, the GOP uses threats to get its way. For example, former Deputy Foreign Minister Nivia Rossana Castrellon, then-managing editor at El Siglo, and two staff reporters lost their jobs immediately after a November 14, 2005 story identified by name a member of Martin Torrijos's private security detail as a drug trafficker. According to Embassy sources, Torrijos's media affairs director Jorge Sanchez had called Panamanian news outlets the day before to kill the story. After Castrellon let the story run, the Siglo board fired the two reporters, and Castrellon resigned in protest. El Siglo sources claim that the reporters' story was based on hearsay and not newsworthy. Operacion Milagro ----------------- ¶15. (C) The Torrijos government has extravagantly praised and embraced Operacion Milagro ("Operation Miracle"), a Cuban-Venezuelan joint venture that flies Panamanian cataract patients to Cuba for free "miracle" eye operations. Milagro is very popular among poor Panamanians and Cuba and Venezuela have reaped unprecedented public relations gains. Milagro fits in with the PRD's stated aim to make Panama "a friend to every nation." There are unconfirmed reports that the GOP has agreed to permit Milagro to open a Panama City office. Likewise, the GOP restored a reciprocal agreement that dropped visa requirements for Panamanian and Cuban officials. Panamanian ophthalmologists complain that their own free cataract operation for poor Panamanians get no attention or support from the Panamanian Government. These ophthalmologists also told us that when they attended a meeting with Health Minister Camilo Alleyne where they wanted to discuss their displeasure with Milagro, he turned the meeting over to the Venezuelan ambassador to uncork a long political stem-winder, while passing out leaflets on "Panama's Bolivarian Revolution." Alleyne later complained to the Ambassador that he had been instructed by the Panamanian First Lady and VP Lewis to host this encounter. (Comment: The GOP's main motive in supporting Milagro -- aside from seeing it as anti-Chavez "insurance" -- is to profit from its popularity. End Comment.) Growing Indices of Corruption ----------------------------- ¶16. (C) The recent appointment of the Colamarco to be Minister of Public Works, where large contracts give enormous opportunities for graft, doesn't mesh with the Torrijos Administration's pledge of "zero corruption." In recent discussions with Emboff, Comptroller Dani Kuzniecky said he had uncovered "plenty" of corrupt practices, saying that GOP officials are finding very "clever" ways to cover their tracks. Kuzniecky identified the Maritime Agency (AMP), where Torrijos's cousin, former AMP Director Hugo Torrijos, is an advisor, as the second-most corrupt GOP agency. (Comment: Hugo Torrijos was heavily implicated in the 2003 PECC scandal, which like most Panamanian scandals produced no indictments or arrests. Martin Torrijos himself is widely believed to have accepted a six-figure bribe in the 2002 CEMIS scandal. End Comment.) Kuzniecky added that the Panama Municipality, run by presidential hopeful Juan Carlos Navarro, is the most corrupt part of the government; Cambio Democratico head Ricardo Martinelli described Navarro as a petty thief. Martinelli also opined that while the Moscoso government stole thousands, the Torrijos government is quietly and cleverly stealing millions. Hector's Hand in the Till ------------------------- ¶17. (C) The Embassy has also heard of corrupt practices involving Hector Aleman prior to his stepping down as Minister of Government and Justice in late April. Aleman allegedly set up an importing business for Chinese motorcycles which he sold to the Panamanian National Police, with the connivance of former PNP Director General Gustavo Perez. Secondly, Aleman reportedly operated a catering business in Panamanian prisons that sold gourmet food and other products to prisoners with the means to pay. Comment: Is Torrijos Turning Left? ---------------------------------- ¶18. (C) Simply said: No. Since 2004, President Torrijos has led a government of mainly U.S.-educated technocrats, not traditional PRD politicos, but the politically well-connected "second tier" GOP officials have worse qualifications and backgrounds than the leaders. Torrijos believes that his principal political competition now comes not from the hapless, disorganized "opposition" parties but from within the PRD. For reasons of political expediency, Torrijos is now starting to bring that second tier to the fore and with some of them, their traditional anti-U.S. habits and attitudes. In our view, the changes we have described do not amount to a threatening change in ideological direction, but they are indeed troublesome and bear keen vigilance. Our challenge will be to support Torrijos and other pro-U.S. elements of the PRD, tolerating some annoying flirtations with Cuba and Venezuela, while continuing to deliver sharp messages, when appropriate, when we see U.S. interests being threatened or jeopardized. End Comment. EATON



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