Contralor desencantado con Torrijos

C O N F I D E N T I A L SECTION 01 OF 03 PANAMA 001613



SIPDIS



DEPARTMENT FOR WHA/CEN

SOUTHCOM ALSO FOR POLAD



E.O. 12958: DECL: 08/02/2015

TAGS: PREL, PGOV, EFIN, PM, POL CHIEF

SUBJECT: PANAMANIAN COMPTROLLER GENERAL DANI KUZNIECKY

DISENCHANTED WITH TORRIJOS, MULLS CALLING IT QUITS



REF: PANAMA 1553



Classified By: CDA JDANILOWICZ FOR REASONS 1.4 (B) AND (D).



SUMMARY

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1. (C) Disturbed by an administration he sees as rudderless

and by President Torrijos's lack of attention to his reform

agenda, especially anti-corruption, Comptroller Dani

Kuzniecky is considering throwing in the towel. Kuzniecky's

defection would deprive Torrijos of one of his most able

reform activists, although his loyalty to Torrijos and his

ambitious plans for the Contraloria probably make a sudden

departure unlikely. Nonetheless, Kuzniecky's frustration was

plain in recent talks with Ambassador Watt, POL Counselor,

and POL Specialist. Kuzniecky wants Torrijos to devote much

more attention to the Contraloria to help Kuzniecky stem the

theft of public funds, which he says continues unabated at

all levels of government. In private, Kuzniecky often has

accused Torrijos of failing to lead and having no plan for

governing. While Kuzniecky sharply criticized Torrijos and

several ministers, he praised others, including Government

and Justice Minister Hector Aleman and Foreign Minister

Samuel Lewis. Kuzniecky's awkward position illustrates the

GOP's contradiction, between the technocrats who nominally

are in power and the Democratic Revolutionary Party's

political realties, which the president is doing little to

change. End Summary.



An Aloof President

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2. (C) In a July 22 conversation with POL Specialist, an

obviously depressed Kuzniecky made no bones about his

disappointment with Torrijos and with the GOP in general.

Kuzniecky said that Torrijos pays scant attention to him. As

he briefs the president on his plans, Kuzniecky complained,

Torrijos stares at the ceiling, takes phone calls, gives me

the thumbs up and says "good job, good plan, let's discuss

this next week," but the time for that discussion never

comes. Kuzniecky pointed out that the Comptroller General

must approve every expenditure in the country. A close

relationship with the president is vital for the Comptroller

to do his job, he believes, yet he and Torrijos hadn't spoken

in three weeks. "How can that be?" he asked sarcastically.



"So That's It?"

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3. (C) Kuzniecky particularly would like to get rid of his

Deputy Comptroller General, PRD stalwart Luis Amado, whom he

suspects of demanding "commissions." Amado can be removed

only with Torrijos's OK. Contraloria officials have gotten

used to demanding commissions or kickbacks from vendors in

return for making legitimate payments, Kuzniecky explained.

Kuzniecky can prevent Amado from stealing if he watches him

but, he added, he cannot watch him all the time. For

example, Kuzniecky recently signed a $9 million check for the

Nikos Cafe restaurant chain, which has a contract to provide

meals for Panamanian police officers. A few days later,

Kuzniecky got a phone call from Nikos' owner, saying "So

that's it? You mean, you don't want a commission?"



We Need To Put People In Jail

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4. (C) The people's level of frustration level with

corruption and impunity is very high, Kuzniecky told

Ambassador Watt in late July. That frustration is

exacerbated due to recent problematic Supreme Court rulings

(see Reftel) and scandals involving legislators accused of

selling their right to import tax-free vehicles to car

dealerships. People in Panama cheat everywhere, Kuzniecky

said, from the Court's "ridiculous rulings" to the lowest

level of the government. Scratch and you'll find something,"

he said. "We need to send people to jail soon."

5. (C) Kuzniecky is reluctant to leave Torrijos in the

middle of the CSS reform crisis but vows that unless he

starts paying more attention, he won't put up with this.

Kuzniecky planted a story in a local daily that he might be

quitting soon, he confided to POL Specialist. When he ran

into Minister of the Presidency Ubaldino Real on July 22, he

asked Real "have you guys found a new Comptroller General?"

Real allegedly laughed and said "I am sure that you are

kidding." "I'm not kidding," Kuzniecky said he replied.



It's Not Happening

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6. (C) In separate conversations with POL Counselor,

Kuzniecky said that the GOP was doing a lousy job

communicating its "story" and its priorities. The government

constantly fails to get ahead of the news with its version of

events. The government has no real plan, Kuzniecky said, no

vision of how it wants to accomplish its objectives.

Torrijos could help himself if he gave more speeches and

began to outline his vision for the country, Kuzniecky said,

but he has not done so, perhaps because he has no plan.

Kuzniecky often reminds Torrijos that he has a unique

opportunity, perhaps not to be repeated, to accomplish great

things in Panama and to really put the country on a new

footing. The trouble is, Kuzniecky implied, it's just not

happening.



Comments on the Cabinet

-----------------------

7. (C) Kuzniecky had the following to say about the cabinet:



--Government and Justice Minister Hector Aleman, Minister of

Housing Balbina Herrera, and Minister of Public Works Carlos

Vallarino -- They are the ones who are really working. Not

only are they doing their "political" work, but they are

actually executing plans and programs.



--Social Development (formerly MINJUMFA) Minister Leonor

Calderon -- She is feeling down and has been very quiet and

uninterested lately. She feels that Torrijos ignores her

portfolio and keeps referring her to the First Lady's office.



--Tourism Minister Ruben Blades -- He has done nothing ("The

Moscoso government did much better in tourism that we are

doing") and he tries the ministers' patience by mentioning

his artistic career at every Cabinet meeting. The ministers

criticize him behind his back for sloppy presentations. His

ego was badly affected with last week's poll, which doesn't

reflect good on him and he has been rude to some recently."



--Vice President/Foreign Minister Samuel Lewis Navarro --

Lewis doesn't like him and Kuzniecky is not fond of Lewis but

he added "I have to admit that he does a good job. He would

be a better president than Torrijos. No doubt."



--Trade Minister Alejandro Ferrer -- "a smart guy." Once he

was approachable, Kuzniecky said, but his ego is growing.

Kuzniecky keeps sending documents back to Ferrer's office for

corrections before he approves them but Ferrer doesn't like

it, he said.



--Agriculture Minister Laurentino Cortizo -- "A total fake."



--Presidency Minister Ubaldino Real -- "Another true

disappointment," Kuzniecky said, adding that he and Uba are

friends and spent much time together during the campaign.

"He is reviewing everything and doing nothing." Given his

close relationship with Torrijos, Uba "should be the guy with

the whip" making sure that everyone does what they're

supposed to do, as he knows Martin would support him, but he

doesn't do it. "Uba knows that things are not going well and

he is not doing anything to help."



--Banco Nacional de Panama General Manager Juan De Dianous --

Kuzniecky praised De Dianous, pointing out that so far in

2005 the bank already has made $70-80 million in profits.



Most Unpopular Award

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8. (C) Kuzniecky said that he and Finance Minister Ricaurte

Vasquez, another straight-shooter, are the least liked people

in the GOP. Kuzniecky said PRD majority leader Freddi Torres

had asked him, "Are you Panama's new Mother Theresa?" for

Kuzniecky's insistence on transparency.



Comment

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9. (C) Unlike most of the cabinet, which took office on

September 1, 2004, Kuzniecky has been at his job as

Comptroller General barely seven months. A principal

technocratic appointee and one of Torrijos's childhood school

chums, Kuzniecky does not need his government job and could

return to his law practice at any time. But we doubt he will

do so, at least for now, despite his dissatisfaction.

Kuzniecky is an idealist and extremely able; government

service intrigues him precisely because it allows him to

"make a difference." His discomfort stems from the clash

between his idealism and the president's failure thus far to

change Panama's kleptocratic political culture or to show

much interest in Kuzniecky's work. Kuzniecky's degree of

dissatisfaction at his job is an indicator of the extent to

which Torrijos is succeeding in bringing change to Panama.

Given present trends, we would not be surprised if Kuzniecky

does not finish out his five-year term.



DANILOWICZ