FECHA: 0000-00-00 00:00:00
FUENTE: Embassy Panama
PRIVACIDAD: CONFIDENTIAL
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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, PREL, PINR, ETRD, KPAO, PM, VE, CU
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
