PANAMA: SHOWDOWN AT THE ARNULFISTA CONVENTION

UNCLAS SECTION 01 OF 03 PANAMA 000350

SIPDIS

SENSITIVE

DEPARTMENT FOR WHA/CEN
SOUTHCOM ALSO FOR POLAD
VANCOUVER FOR CG ARREAGA

E.O. 12958: N/A
TAGS: PGOV PREL PM POLITICS FOREIGN POLICY
SUBJECT: PANAMA: SHOWDOWN AT THE ARNULFISTA CONVENTION
LEAVES MOSCOSO ON TOP


SUMMARY
--------------

1. (SBU) Defying expectations, former president Mireya
Moscoso retained her position as Arnulfista Party (PA)
president at a January 16 closed-door convention, co-opting
one of her main antagonists, Marco Ameglio, while defeating
the other key challenger, liquor magnate Juan Carlos Varela.
Now renamed Partido Panamenista, the PA convention was to
decide leadership issues in the wake of its crushing May 2004
electoral loss of executive and legislative power to the
Democratic Revolutionary Party (PRD) of President Martin
Torrijos. Through an adroit if unlikely alliance with
erstwhile opponent Marco Ameglio (now vice president),
Moscoso survived with her powers temporarily intact, pledging
to step down in April (though many observers remain skeptical
that she will surrender complete control). Varela, who was
widely expected to dominate the convention in alliance with
Ameglio and to oust Moscoso, was left out in the cold after a
series of costly blunders. The convention's unexpected
outcome signifies a tactical power shift within the party, as
Varela's chance for a 2009 presidential candidacy seems all
but lost, while those of former presidential candidate Jose
Miguel Aleman and Moscoso-confidant and former Foreign
Minister Harmodio Arias got a boost. Whether Moscoso
actually gives up control of the party, however, is the key
factor in the near term and could determine how the party
adjusts to the ruling PRD's current dominance of the
political scene. End Summary.

Frustrated Payback
--------------

2. (SBU) Prior to the January 16 convention both Marco
Ameglio and Juan Carlos Varela had severely criticized Mireya
Moscoso for her leadership of the PA up to and including the
2004 Presidential election and had campaigned vocally for her
resignation. PA candidate Jose Miguel Aleman polled a dismal
16% of the popular vote on May 2, 2004 and lost the election
by more than 31 percentage points, finishing third in a race
of four candidates. Many Arnulfistas attributed the debacle
to Moscoso's unpopularity and meddling in the campaign. Many
Panamanians inside and outside the PA believed that stripping
Moscoso of her prominent party position would be an
appropriate outcome.

Unlikely Alliances
--------------

3. (SBU) But it was not to be. Moscoso was able to back her
way out of trouble on January 16 by negotiating a deal with
Marco Ameglio after Juan Carlos Varela committed a series of
errors that doomed his faction to defeat. At a January 24
meeting with POL Counselor, 2009 Arnulfista presidential
hopeful Harmodio Arias said that Moscoso had offered first to
ally herself with Varela, especially as Ameglio, who had
shown disloyalty to the party in the past, is not a "true"
Arnulfista. Arias added that Varela, by rejecting
opportunities to negotiate a political deal with Moscoso, had
ignored the rule of "Politics 101," which is negotiate,
negotiate, and negotiate. In the end, Varela refused to
negotiate. Ameglio, on the other hand, according to former
Public Works Minister Eduardo Quiros, started negotiating
with Moscoso "as soon as he stepped inside the room" at the
convention. For his part, Varela later claimed, in a
conversation with POL Counselor, that his support would have
evaporated if he had struck any deals with Moscoso.

JC'S "Three Strikes"
--------------

4. (SBU) According to both Arias and Quiros, Varela committed
three fatal errors that created confusion among his
supporters and alienated potentially sympathetic delegates.
(Note: Varela himself was not a delegate and was barred from
the convention floor. At the outset of the convention, the
party was split into four groups under Moscoso, Varela,
Ameglio, and a group of undecideds expected to vote with
whomever they thought would win. Quiros, Jose Miguel Aleman,
and Carlos Raul Piad, who did not want Moscoso to be forced
out, served as mediators between the groups.) Varela's first
proposal (on internal party bylaws, board elections, and
holding mandatory primaries) would have been a initial test
of his voting strength but, due to a technicality, never made
it to the convention floor. The convention committee
rejected the proposal because it lacked the necessary
supporting signatures. Arias said that this oversight was
committed by Varela's assistant, who forgot to attach the
signature page to the proposal when she handed it in.

Strike Two
--------------

5. (SBU) Varela then decided to ask his supporters to abstain
from voting on any other proposal. That decision was
wrongheaded, his critics agree, for two reasons. First, it
prevented them from speaking at all or giving voice to their
frustrations and opinions. It also backfired, reducing his
support. In Arias's version of events, Varela vacillated on
whether his supporters should abstain or vote for other
proposals. As a result of that confusion and because Ameglio
by then had made his pact with Moscoso, Varela's group was
confused about how to vote. The convention then took the
small number of abstentions (74) as proof of Varela's
weakness, compared with the combined Moscoso-Ameglio vote of
256 (with 215 opposing). In fact, the abstentions did not
reflect Varela's real strength (about 230) going into the
convention. Meanwhile, many undecided delegates sided with
Moscoso.

Strike Three
--------------

6. (SBU) Finally, Moscoso sent a messenger to Varela's hotel
asking him to come to the convention from which he was
officially barred. Rumor has it among party members that
Moscoso offered to let Varela in through a back door to meet
with her. Varela, shy of being caught on camera sneaking in
through a back door to meet Moscoso, wanted to enter through
the front one. The meeting never happened. Strike three.

The Panamenista Future: Juan Carlos Out, Jose Miguel In?
-------------- --------------

7. (SBU) Quiros said that many in the party were "shocked and
disappointed" with Ameglio's ascendency, and blamed Varela
for the outcome. Quiros expects many in the party to
campaign for other candidates to prevent Ameglio, now seen as
an opportunist, from winning board elections in 2006. Now
widely perceived as a loser inside the party, Varela's
prospects for a 2009 presidential run seem dead. That
unexpected turn of events gives new hope to Jose Miguel
Aleman, the party's failed standard bearer in 2004, and
possibly to the supremely confident Arias.


8. (SBU) At a January 31 reception, Varela claimed he had
never intended to team up with Moscoso. On the contrary, his
strength depended on distancing himself from Moscoso in favor
of a "new" Arnulfista Party that would capture and hold the
support of the younger generation, a group that was
successfully courted by Torrijos, but one that did not have
strong ties to any particular party.

Moscoso: Leaving Through The Front Door
--------------

9. (SBU) Moscoso's success was due to her shrewd management
of her residual strength and her offer to step down as PA
leader in April, when a new board will be elected, Arias and
Quiros said. As Arias stated: "she wanted to leave through
the front door, not the back." Given the PA's putative
new-found aversion to back room politics, it was most likely
a good way to maintain party unity. In addition, Moscoso
came to the convention well-prepared to garner wider support.
According to Quiros, she surprised the 500-plus delegates by
delivering a non-scheduled speech at the opening of the
convention. In her speech, she put all the board positions
at the party's disposition, allowed for secret voting on
every decision, and appointed a representative of each wing
to every commission.


11. (SBU) The new Moscoso-Ameglio alliance gives Ameglio ten
supporters on the new internal board of directors, and
Moscoso only five (although some observers still believe that
Moscoso might outmaneuver Ameglio). Assuming that Moscoso
resigns in April, Ameglio would take over as temporary
president until early 2006 when the party holds new
elections. Ameglio, now Panamenista vice-president, told
reporters that Moscoso deserves the respect of the party
after the convention. When POL Counselor asked what the
alliance means for the party, Harmodio Arias said, "Nothing;
it was a victory for her."

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

12. (SBU) The Partido Panamenista's transition to a united,
transparent and democratic post-Moscoso future is going to
take longer than some pre-Convention optimists -- Varela
among them -- thought. Only 4% of Panamanians identified
themselves as Arnulfistas (Panamenistas) in a recent Gallup
poll. That shows the party's public disarray but does not
reflect the party's inherent or potential strength. (The
party has some strong young leaders who have been blocked out
or manipulated by Moscoso, a "caudilla" in the tradition of
her revered late husband and party founder, Arnulfo Arias.)
The PA presidential candidate, Jose Miguel Aleman, polled
only 16% of the vote in May 2004 but Arnulfistas also voted
for Guillermo Endara, who got 31%. The combined
Aleman-Endara vote equaled the 47% of voters who gave the
presidency to Martin Torrijos. While it is too early to
count the Arnulfistas out, it is also too early to predict
whether the party will succeed in finding a way to repackage
and modernize itself to become a relevant force for the
future.
WATT