PANAMANIAN SUPREME COURT FRACAS BLURS GOVERNMENT

C O N F I D E N T I A L SECTION 01 OF 02 PANAMA 000629

SIPDIS

SENSITIVE

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

E.O. 12958: DECL: 03/17/2015
TAGS: PGOV PREL PHUM PM POL CHIEF
SUBJECT: PANAMANIAN SUPREME COURT FRACAS BLURS GOVERNMENT
FOCUS ON SOCIAL SECURITY REFORM
Classified By: Ambassador Linda E. Watt for reasons 1.4 (B) & (D).

1. (C) A public row pitting one Supreme Court Justice
against three others has incited vehement public demands for
the dismissal of all nine justices. On March 10 the
Panamanian government (GOP) institutionalized those demands
by forming a State Justice Commission (SJC) comprising state
officials and the National Bar Association president, with a
mandate requiring it to devise by early September a
structural solution to the Court "crisis." Panamanians
rightly view the Court as ineffectual, highly politicized,
and corrupt. Although the GOP could have seized this
opportunity to do some long‐overdue house cleaning at the
Court ‐‐ a key to fulfilling its anti‐corruption pledges ‐‐
it evidently fears spending political capital and distracting
its focus from its burgeoning, contentious domestic
legislative agenda. That agenda includes first of all reform
of Panama's Social Security system (CSS),which the GOP plans
to announce in coming weeks, as well as a planned referendum,
possibly early in 2006, to decide not‐yet‐announced plans to
widen the Panama Canal. The GOP is loath to endanger either
priority, which explains its reluctance at this moment to
take on the Court. End Summary.

2. (C) Unseemly public mudslinging among four Supreme Court
justices (three against one) in early March has provoked a
groundswell of popular demands for the dismissal of all nine
Justices. On March 2, Justices Hoyos, Salas, and Spadafora
publicly accused Justice Arjona of endangering the separation
of powers and the independence of the judicial branch of
government by engaging in "illegal" administrative practices.
Arjona shot back on March 3, charging the three with freeing
suspects in narcotrafficking and murder cases, impeding
access to public information, and countenancing international
arms trafficking. As charges and counter‐charges jostled for
space on the front pages of Panama's dailies, Attorney
General Ana Gomez in a March 4 letter asked National Assembly
President Jerry Wilson to invite Arjona to testify.

3. (C) Observers who thought AG Gomez's letter reflected a
concerted GOP strategy to eliminate Hoyos, Salas, and
Spadafora soon were proved wrong as media, NGOs, and
Panamanians from all walks of life vented their fury on the
Court's alleged incompetence and corruption. Amid strident
calls for the entire Court to resign, President Torrijos on
March 10 agreed to appoint Gomez and Wilson to a State
Justice Commission (SJC) that would include Chief Justice
Troyano, Ombudsman Tejada, and National Bar Association
President Carlos Vasquez. The SJC is charged with finding a
solution to the Court crisis within 180 days, that is by
early September 2005.

4. (C) (Comment: By forming the commission, Torrijos in
effect has decided to procrastinate. He has also given the
impression, which may not turn out to be true, that he will
give civil society a veto over his policy on the Court, when
it is eventually formulated. The Assembly has the
constitutional power to impeach Justices, who serve 10‐year
terms, but never successfully has exercised that power.
Salas and Spadafora are Moscoso nominees. Hoyos is a Perez
Balladares nominee whose term ends in December 2005. Arjona,
a Moscoso nominee who has proved to be an independent‐minded
political maverick, has been a long‐time Embassy confidant.
He has accused the other justices of accepting payoffs from
criminals and estimates that he has cast the lone dissent in
perhaps 50 Supreme Court votes where the majority showed "no
concern" for the evidence or the seriousness of the cases.
End comment.)
Where's the Beef?
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

5. (C) In a March 4 meeting with POL Counselor, Justice
Arjona claimed that the charges against him were frivolous
and based on personal vendettas stemming from the persistence
of his lone, dissenting votes on many Court decisions. The
other justices barely tolerate him, Arjona said. In a effort
to force him off the Court, Arjona recounted, former Supreme
Court President Pereira Burgos confiscated his Court‐paid car
in Spring 2004, then stopped paying his staff. In
desperation, Arjona turned to then‐Minister of Economy and
Finance Norberto Delgado, who proposed paying Arjona's staff
from the Attorney General's office. That is the purported
basis, Arjona explained, for the charges against him of
administrative impropriety and undermining the separation of
powers. Among Embassy contacts, none believe that the
accusations against Arjona are anything but political payback.

6. (C) Arjona's charges against Hoyos, Salas, and Spadafora
are much more serious and substantive. Specifically, Arjona
has questioned their April 2004 decision to free Lorena Henao
Montoya (sister of notorious drug trafficker Arcangel Henao
Montoya),who was subsequently arrested by Colombian
authorities. Also, Arjona is blaming the three for impeding
an investigation into the use of millions of dollars of
Taiwan‐donated funds in the Fundacion Mar del Sur, paid to
First Lady Ruby Moscoso, former President Moscoso's sister.
In addition, Arjona faults the three justices for freeing
suspected Israeli arms trafficker Shimon Yelinek in the
Otterloo case in March 2004,l presumably for payoffs.
Comment
‐‐‐‐‐‐‐

7. (C) The sudden and unexpected upsurge of popular
sentiment against Panama's Supreme Court presented the
Torrijos administration with an opportunity to grasp a
politically acceptable solution to its perceived corruption
and incompetence. Since winning office in May 2004, Torrijos
and his cabinet have agonized over the best way to reform the
Court in a way that would respect the constitution and be
seen as politically neutral while forcing some of the more
egregious Justices from the bench. Faced with the imminent
unfolding of one of its principal domestic priorities ‐‐ a
campaign to reform social security (CSS) is already underway,
while the details of the reforms and possibly violent street
demonstration are expected soon ‐‐ the GOP has refused to
allow itself to become distracted by lesser priorities, such
as the Court.
WATT