TOUR D'HORIZON WITH PANAMANIAN FOREIGN MINISTER

O N F I D E N T I A L SECTION 01 OF 03 PANAMA 002392

SIPDIS

DEPARTMENT FOR WHA/CEN, WHA/CCA, WHA/AND
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 12/09/2015
TAGS: PREL PGOV ETRD PM POL CHIEF
SUBJECT: TOUR D'HORIZON WITH PANAMANIAN FOREIGN MINISTER


Classified By: Ambassador William A. Eaton for reasons 1.4 (b) and (d)


1. (C) SUMMARY: Over a 3-hour private dinner December 5 at
the Residence, Ambassador held a wide-ranging discussion with
Panamanian Foreign Minister (FM) Samuel Lewis Navarro on
subjects including U.S. concerns about the integrity of the
Panamanian judicial system (including the recent revocation
of the U.S. visa of Supreme Court Magistrate Winston
Spadafora); the urgency (and perhaps last chance) of
concluding a free-trade agreement at the January 10-12
meetings in Washington; troubling recent developments that
could hamper Panama's investment climate; President Torrijos'
recent trip to Cuba; and upcoming UN issues that we hope
Panama will support. END SUMMARY.

Concerns about Panamanian Judiciary
-------------- -

2. (C) FM Lewis expressed to Ambassador Eaton December 5
President Torrijos' concern that the growing public uproar
about corruption in the Supreme Court -- exacerbated by the
recent revocation of Supreme Court Magistrate Winston
Spadafora's U.S. visa -- could lead to a constitutional
crisis, pitting the Executive and Legislative Branches of
government against the Judiciary. Wringing his hands, Lewis
repeatedly emphasized that the Executive has no role in
prosecuting Spadafora and others since the Constitution
reserves that role for the Legislative Branch, which had
decided to do nothing. Lewis self-consciously brushed aside
Ambassador's rejoinder that the Legislative Branch remains
under control of the PRD, Torrijos' party. Lewis added that
Torrijos plans to name two new well-respected magistrates
shortly to fill upcoming vacancies. Torrijos had declined to
involve civil-society groups in the magistrate selection
process as recommended by the Comision de Estado Pro Justicia
that he appointed last spring, saying that the selection
process is the prerogative of the Executive Branch. Lewis
said Torrijos is working with incoming Supreme Court Chief
Justice Graciela Dixon to pressure at least two more
resignations from the court, thereby changing the balance of
power on the court. (Comment: Lewis did not name names.
Also, Lewis's quip about changing the "balance of power" on
the Court is ambiguous. End Comment.)


3. (C) Ambassador Eaton told Lewis that even though the
Embassy does not plan to make further public statements about
Spadafora's visa, we would continue to speak out about the
corrosive effect corruption and a discredited judiciary have
on democracy and Panama's investment climate. The Ambassador
then gave Lewis a heads-up about a brewing controversy
involving a U.S. company (Panama Canal Railroad) that had won
an international arbitration panel,s favorable ruling in a
$1.3 million dispute with an Israeli communications firm over
fiber-optic lines. The Panamanian Supreme Court must
validate the enforceability of the decision in Panama before
the company can actually be paid. However, we have heard
that one of the magistrates on the Court's 3-judge panel had
pocketed a draft decision in favor of the award for 3 months
already, awaiting a change in court membership that might
shift the balance and overturn the decision. Panama Canal
Railroad alleges that this magistrate had accepted a $90,000
bribe to solidify his support against the U.S. company.
Ambassador warned that such behavior, if verified, would
generate vigorous and vocal protests from the embassy, as
well as prominent mention in the annual investment climate
report we will issue in January. Ambassador urged Lewis to
use whatever influence he had to avoid an incident in which
Panama was seen as undermining international arbitration
decisions. An uncomfortable, agitated and angry Lewis
gritted his teeth and said, almost to himself, "We've got so
many bright opportunities for our country on the horizon and
our own damned citizens are screwing it up." (Note:
Ambassador received word two days later that the arbitration
action had suddenly and miraculously emerged from the Supreme
Court. During Ambassador's call of thanks to Lewis December
7, Lewis mentioned that he had immediately raised this issue
with Torrijos, who had then launched into action. Clearly,
Torrijos has influence over the court, despite his
protestations to the contrary.)

Free Trade Agreement
--------------

4. (C) Ambassador reiterated his urging to Lewis pull out
all the stops to conclude a free trade agreement during the
January 10-12 meetings in Washington. Lewis assured
Ambassador that Panama was fully prepared to finalize the
agreement; he hoped, however, that the U.S. shared that
commitment. Lewis complained that he perceived a diminished
resolve in USTR to conclude a free trade agreement with
Panama, even despite intense supportive lobbying by
Panamanian officials on the Hill. Ambassador responded that
the U.S. still wants a free-trade agreement with Panama.
However, he said, protracted negotiations with Panama
inevitably cause some to weigh the respective advantages of
continuing to use scarce USTR resources on a bilateral free
trade agreement with a relatively small market like Panama or
begin to shift those resources to other, larger markets via
multilateral free-trade agreements.

Torrijos Trip to Cuba
--------------

5. (C) Ambassador expressed disappointment with President
Torrijos' recent trip to Cuba with a private group to seek
eye operations for Panamanians. This appearance of a cozying
relationship with Castro made it more difficult to enlist
support from, for example, the Florida delegation on the Hill
for a bilateral free-trade agreement. Ambassador added that
these concerns had been raised with him by senior-level USG
officials during the recent WHA Chiefs of Mission Conference
in Washington. Lewis pshawed, saying he had personally
culled Florida newspapers and had seen nary a comment about
the Torrijos trip.

UN Issues
--------------

6. (C) Ambassador pointed out that there were a number of
important issues on the table at the United Nations and that
the U.S. hoped we could count on Panama's support for these
issues which are of mutual interest. Those issues include
support for management reform initiatives, such as creation
of an independent inspector general and a thorough review of
mandated programs; solidarity with the U.S. on social issues
of common interest and concern; and support for efforts to
promote democracy and human rights. Lewis agreed that those
issues are also of interest to Panama, but offered no
specific pledges of support.

Comment
--------------

7. (C) The specter of a "constitutional crisis" that Lewis
and Torrijos fear has been years in the making. Each of the
three branches of government finds itself unable to take
action against corruption but that is not because of some
Catch 22 or accident. Essentially Panama has a judicial
system, corrupt and dysfunctional though it may be, that
works well for the people in power, protecting members of the
so-called "political class." Until it becomes possible to
prosecute wrongdoers for corruption in Panama -- that is,
until the people in power admit that they, their family or
their friends may be prosecuted for crimes that they commit
-- the threat of such a crisis is very real.


8. (C) On the Cuba visit, Torrijos's main reason for going
probably was nervousness about protecting his left flank,
buttering up Castro to keep Chavez at bay. If that was the
motive, it seems to have worked splendidly. Castro
apparently quipped that Torrijos reminded him of his father,
dictator Omar Torrijos, a very high compliment. The star of
the deceased Omar Torrijos still is high in Latin America's
leftist firmament, as he is credited with being the
nationalist and patriot who drove the gringos from the Canal
Zone. Whether Torrijos actually needs protection from Chavez
is less certain. GOP officials are nervous about Chavez,
although the Venezuelan President has little influence in
Panama or standing among Panamanians.


9. (C) Despite some difficult topics discussed during the
dinner, Lewis appeared in good spirits, buoyed by nearly a
month on the road. He had been impressed by his trip to
India and talked extensively about India's model of
service-oriented foreign trade while focusing its industrial
sector on the internal market. He also expressed admiration
for the seriousness and focus of the leaders at the APEC
Summit, contrasting it with the fractiousness and
parochialism at the Summit of the Americas in Mar del Plata.
"That's why we're pursuing membership in APEC," he said.
"They understand free trade."
EATON