PANAMA'S MAY 2004 ELECTIONS

UNCLAS SECTION 01 OF 04 PANAMA 000040

SIPDIS


SENSITIVE


DEPARTMENT FOR WHA/CEN/BRIGHAM


E.O. 12958: N/A
TAGS: PGOV PINR PM POLITICS FOREIGN POLICY POL SPECIALIST
SUBJECT: PANAMA'S MAY 2004 ELECTIONS


REF: A. 03 PANAMA 1416

B. 03 PANAMA 2713

C. 03 PANAMA 3009

D. 03 PANAMA 3173


SUMMARY: SAME HORSES, DIFFERENT RACE
--------------

1. (SBU) Panamanians nationwide will go to the polls on May
2, 2004 to choose a president, 78 legislators, 75 mayors, 619
local representatives, and 20 representatives to the Central
American Parliament. The presidential campaign currently is
a two-man race (in a field of four candidates) with the
economy (especially unemployment),corruption, and personal
security (common crime) at the top of the campaign agenda.
Despite calls from civic organizations for reforms to
Panama's constitution, which all candidates have said that
they favor, prospects are increasingly remote that voters
will be consulted on that issue on May 2 via an extra ballot
(para 11). A December 15, 2003 La Prensa poll shows
Revolutionary Democratic Party (PRD) candidate Martin
Torrijos with a comfortable lead (49%-31%) over former
President (1989-94) Guillermo Endara, the Solidarity Party
candidate. Trailing the two front-runners are Arnulfista
candidate Jose Miguel Aleman (8%) and Cambio Democratico
candidate Ricardo Martinelli (5%). All the candidates are
pro-American and can be expected to continue the current
government's excellent cooperation on security and law
enforcement issues. Embassy is focusing on the campaign
teams to identify any potential ministerial appointees who
might be less compatible with U.S. interests. Dominating
international issues are upcoming Panama-U.S. FTA
negotiations and Colombian border security. End Summary.


THE PARTIES AND THEIR ALLIANCES
--------------

2. (U) Official Electoral Tribunal (TE) records identified
just over 2 million registered voters (Panama's population is
2.9 million),many of whom are independents. Seven
legally-registered parties currently are backing the four
official presidential candidates. The most recent
registration figures show that by far Panama's biggest
political party is the PRD (see below):


Party Membership Candidate
-------------- -------------- --------------


Revolutionary Democratic Party (PRD) 445,000 Torrijos


Arnulfista Party (PA) 198,000 Aleman


National Liberal Republican Movement 110,000 Aleman
(MOLIRENA)


National Liberal Party (PLN) 74,000 Aleman


Solidarity Party (PS) 72,000 Endara


Cambio Democratico Party (CD) 52,000 Martinelli


Popular Party (PP) 50,000 Torrijos


The PRD-PP coalition backing Torrijos counts 495,000 party
members; the coalition backing Aleman counts 382,000.



3. (SBU) Frictions between alliance partners have already
developed at the legislative and local representative level
but are most notable within the Arnulfista alliance, where
candidates from all three parties may be competing for one
spot in important districts. Endara, an Arnulfista Party
founding member who has nominal support from the Solidarity
Party's weak base, is welcoming "refugees" from other
parties. Polling data show support for Torrijos has remained
strong after the PRD's August 10 primaries, despite minor
hiccups over sharing electoral space with PP members. Party
alliances notwithstanding, gauging support for legislative
and local candidates will remain problematic until after
February 2, when the parties must name their candidates.


(SBU) MARTIN TORRIJOS: NOT HIS FATHER'S PRD
--------------

4. (SBU) Martin Torrijos is the only presidential candidate
nominated by his party via nationwide primaries. His strong
lead in the polls, which has persisted for many months,
suggests that he has convinced many voters that his PRD is
very different than the party that once was the political
vehicle for Panama's military dictators (Ref. A). On the
other hand, many observers believe that Martin is in hock
politically to the PRD's discredited old guard. A Torrijos
presidency may offer Panama its best chance for efficient
administration. He has distinguished himself by his soaring
ambition to make Panama a "first world" country in 20-30
years and by having the brightest and best ideas on how to do
it. The PRD is more democratic than it was before Martin
controlled it. He has less credibility on anti-corruption,
having failed to distance himself from his campaign manager,
Hugo Torrijos, despite evidence of malfeasance brought to
light in the recent PECC scandal. Torrijos' two VP
candidates, who he will announce publicly on January 15, will
most likely be businessman Samuel Lewis Navarro and Popular
Party President and current Legislator Ruben Arosemena.


SECURITY AGENDA
--------------

5. (SBU) Besides promising to improve Panama's economy,
indeed, to take economic and administrative measures to
propel Panama into the ranks of the first world, Martin
Torrijos' campaign has emphasized public/national security
issues. On the domestic front, the Torrijos team has focused
on neighborhood security and what they claim to be an
increase in violent crime. On the international front, the
PRD team has spoken frequently about how best to control the
Panama/Colombia border region. A Torrijos security brain
trust (including former PNP Director Asvat) meet regularly to
advise him on security. In October, the PRD held a public
conference on security matters (Ref D).


ENDARA: A SOLID SECOND
--------------

6. (SBU) Endara (like third-place Aleman) has already named
both vice presidential running mates, Guillermo (Billy) Ford
and Alejandro Posse. Both Ford and Posse served in the
Moscoso Administration -- Ford as Ambassador to the U.S.
(September 1999 - January 2003) and Posse as Minister of
Agriculture (September 1999 - August 2000). Endara and Ford
are logical running-mates, having served as President and
Vice President during 1989-94. They chose Posse for his
strong links to Panama's agriculture industry, which is also
a key constituency for Aleman's Arnulfista party. (Some
observers fear Posse's protectionist tendencies. During his
brief tenure in the Moscoso Administration, Posse increased
selected agricultural tariffs to their WTO-bound levels.)
Through Posse, Endara seems to be looking for support from
Panama's agricultural producers, a small but influential
lobby with its skeptical eye focused on bilateral FTA
negotiations with the US.



7. (SBU) Given his record and reputation, Endara is the
campaign's most plausible "anti-corruption" candidate. Some
of his most active followers are members of the
Anti-Corruption Front (Frente Anti-Corrupcion),who
constantly denounce corrupt practices. Endara favors calling
a constituent assembly to draft a new constitution to replace
the current 1972 constitution that was drafted under
Panamanian military dictator Omar Torrijos, father of
candidate Martin Torrijos. Endara also promises to
immediately repeal President Moscoso's executive order that
gutted Panama's freedom of information law, which gives only
parties with a "personal interest" a right to know specifics
about the internal workings of their government, including
budgetary and personnel matters. Endara's administration was
widely viewed as honest but ineffective; many Panamanians
frustrated by the current corruption choose to forget
Endara's shortcomings on the policy side. In economic
issues, Endara's populist campaign rhetoric raises concerns
about campaign commitments to agricultural constituents that
could complicate U.S. efforts to open up key components of
Panama's market.


ALEMAN A DISTANT THIRD
--------------

8. (SBU) Last to officially launch his candidacy, polls show
Arnulfista presidential candidate Jose Miguel Aleman's
support is still struggling in single digits (8%),according
to the latest polling data, and far behind front runners
Endara (31%) and Torrijos (49%). Despite effusive support
from President Moscoso, Aleman's campaign is not gaining
traction. Some key defectors from the MOLIRENA party --
including founding member and former Endara VP Guillermo
"Billy" Ford -- have withdrawn their support from the Aleman
coalition to back Endara. (PLN's support for Aleman may be
less dependable than MOLIRENA's since PLN backed Martin
Torrijos against Moscoso in 1999.) Aleman's first and second
vice-presidential running mates are MOLIRENA President Jesus
"Maco" Rosas and PLN President Anibal Galindo.



9. (SBU) Though tainted by the corruption charges levied
against this current administration, Aleman has been careful
not to criticize Moscoso, fearing the loss of the
Arnulfistas' formidable electoral machine. Aleman has
concentrated his campaign efforts outside Panama City in the
interior of the country, where the Arnulfistas hold an edge
over the PRD but face a fight with Endara. Aleman has
promised to continue Moscoso's social agenda to help the most
needy.


MARTINELLI: COURTING THE SWING VOTE
--------------

10. (SBU) Last in the polls with (5%) support, Cambio
Democratico candidate Ricardo Martinelli is a long shot but
will probably earn more than 4% of the popular vote, enough
for his party to officially survive past 2004. Having served
in the current and in previous administrations, Martinelli
could decide to throw his weight behind either Endara or
Torrijos in exchange for a presidential appointment, though
he denies such intentions. Martinelli, who visited
Washington during the week of December 8, markets himself as
a no-nonsense businessman and gifted administrator and
entrepreneur who can create jobs and effectively manage
Panama's government, particularly the troublesome Social
Security Fund (CSS). He is calling for a limited return of
U.S. Armed Forces to Panama, bashing his opponents for
corruption and vowing to wipe it out. He has proposed
creating a Hollywood-like cinematographic center ("Panawood")
at the former Howard AFB. Martinelli's platform is the most
straightforward of all the candidates. His running mates are
Roberto Henriquez, Moscoso's Vice Minister for Foreign Trade
early in her term (September 1999 - August 2000),and Casa
Esperanza activist Roxana Mendez Obarrio.


HOT POTATO: CONSTITUTIONAL REFORM
--------------

11. (SBU) With the Ecumenical Council, a consortium of
Christian religious leaders, leading the charge, civic groups
have pressed for reforms to Panama's constitution; however,
not all Panamanians feel that reforming the constitution is
the best way to resolve the country's problems. All four
candidates, eager to show that they're engaged on the issue,
have signed the Ecumenical Council's petition to hold a
non-binding referendum on whether constitutional reforms are
necessary. Of the four candidates, Endara's proposed
solution is the most drastic and probably unconstitutional.
He has stated that if elected, he will immediately convoke a
parallel constituent assembly. At first opposed to
constitutional reforms, Torrijos now backs them through
established constitutional procedures (which gives the
Legislative Assembly greater control over the process),and
remains opposed to convening a constituent assembly through a
"fifth ballot" on May 2, 2004). Legislators from Torrijos'
PRD party have proposed a bill to amend the constitution,
which two consecutive Legislative Assemblies would need to
approve. Aleman has said little, but another Arnulfista,
Legislator Jose Blandon, Jr., proposed a bill in the
Legislative Assembly to order the printing of a "fifth
ballot" for the May 2 elections to ask Panamanians whether
they want constitutional reforms. Although the first to sign
the Ecumenical Council's call for citizen consultations about
constitutional reform, Martinelli has not spoken much on the
subject. Embassy will report on the issue of constitutional
reforms septel, discussing further the feeble efforts to push
them forward in the Legislative Assembly.


(SBU) COMMENT: PANAMA'S CAMPAIGN AND U.S. INTERESTS
-------------- --------------

12. (SBU) In Panama's four national electoral events since
1990 (two presidential elections and two referenda),voters
have sided with the opposition every time. But, despite
mounting public dissatisfaction in Panama with official
corruption, the 2004 campaign has not produced any
Chavez-like, anti-system candidates. In fact, all the
candidates are friendly to the Embassy and pro-American in
their outlook. They all have professed their intent to
continue the GOP's excellent cooperation on law enforcement
and security matters. This is a two-man race. Martin
Torrijos' comfortable lead over Guillermo Endara in opinion
polls is not unassailable, as Mireya Moscoso demonstrated in
1999 when she overcame a similar disadvantage late in the
campaign to win an impressive come-from-behind victory. For
the campaign to become a real horse race, Endara must pick up
mass support from defecting Arnulfistas, if not from
Arnulfista candidate Jose Miguel Aleman himself, who may
gradually conclude that his party's best post-election
prospects lie in allying with Endara. Until then, Endara
must also hope for a gradual improvement in his own standing
in the polls and an erosion in support for Torrijos.
Torrijos, naturally, will do all he can to maintain his lead.
Most observers have written off Aleman. They may be right
but it is hardly inconceivable for Aleman's support to
increase (at Endara's expense),especially given the
Arnulfistas' formidable electoral machine and their control
of the government's pursestrings. Martinelli, the dark
horse, could conceivably throw his support one way or the
other, although he denies having that intention.



13. (SBU) The candidates are discussing vital national
issues, such as constitutional reform, unemployment, and
negotiating a bilateral Free Trade Agreement with the United
States. Despite broad support from civil society for
constitutional changes, the two big parties have effectively
stifled calls for a constituent assembly. Panama's
politicians do not want to be saddled with a new constitution
that may do away with legislative immunity, greatly reduce
what is by many accounts a grossly over-staffed and
overfunded legislature, or force the government (especially
the executive) to be more accountable to the citizens. With
regard to a U.S.-Panama FTA, the parties are all claiming
that their candidates will extract the most benefits for
Panama from the negotiations, rather than preparing the
electorate for more economic openness. President Moscoso has
even claimed, implausibly, that her administration will
conclude negotiations before she leaves office. The
constitution and the FTA, both of great import to the
US-Panama bilateral relationship and to Panama, will require
concerted thoughtful consideration and statesmanship, not
likely until after May 2, 2004.


WATT