PANAMA: INCREASING URGENCY ON CANAL REFERENDUM

UNCLAS PANAMA 000190

SIPDIS

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SIPDIS

DEPARTMENT FOR WHA/CEN, AND INL
SOUTHCOM FOR POLAD

E.O. 12958:N/A
TAGS: PGOV PREL PINR SNAR PM
SUBJECT: PANAMA: INCREASING URGENCY ON CANAL REFERENDUM


SUMMARY
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1. (U) A flurry of recent detailed discussions at the Panama
Canal Authority (ACP) to discuss the proposed Canal
expansion suggest that the GOP is speeding up its internal
technical process, in order to hold a constitutionally
mandated referendum in 2006. Amid the hubbub at ACP
headquarters, one thing that has not gone unnoticed is ACP
board member and Minister of the Economy and Finance
Ricaurte Vasquez's alleged lobbying to be named to direct
the multi-billion-dollar project. Canal Administrator
Alberto Aleman January 30 held a special briefing on Canal
expansion planning for the Ambassador and Emboffs. (To be
reported septel.) Whatever the truth of Vazquez's
machinations, Aleman informed Emboffs that he himself would
oversee the project. End Summary.


2. (SBU) Emboff met privately with Panama Canal Authority
(ACP) board member Eduardo Quiros on January 13, an active
politician who served as Minister of Public Works under the
Moscoso Administration. Quiros commented that the ACP board
is meeting more often lately to move on with the Canal
expansion project, but confided that there may be an
additional motive for the rush than the project itself.
Quiros shared with Emboff that there is a strong rumor
within ACP board members that Minister of Economy and
Finance and (by default) President of the ACP Board Ricaurte
Vasquez "plans to present the board with a proposal to
appoint him Project Manager (with total autonomy) for the
Canal expansion project." (Note: This appointment would
allow Vasquez, a former Canal Deputy Administrator until
President Torrijos appointed him a Cabinet member, to return
to the Canal without the need to report to his former boss,
re-appointed Administrator Alberto Aleman. End note.)


3. (SBU) On January 3, President Torrijos showed up
unexpectedly at an ACP board meeting. Board members later
found out that board President (and Minister) Vasquez had
phoned President Torrijos during a break and invited him
over without informing the other board members. Torrijos's
presence was reportedly awkward, as the board is not used to
discussing issues in his presence and because Torrijos
himself was not prepared to address Canal issues. Board
members speculated that Vasquez might have invited Torrijos
to impress him with his work as ACP President and/or to make
the board believe that Torrijos fully supports him.
According to Quiros, President Torrijos listened to the
overall discussion for about an hour and at the end only
said that he would accept whatever the board decides on the
expansion project, but that he would also consult with the
country's political forces and the civil society. Then he
left the meeting.

The Power Behind
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4. (SBU) Quiros claimed that board member (and MFA Senior
Advisor and PRD member) Adolfo Ahumada would support
Vasquez' candidacy to run the Canal project if it is ever
submitted before the board. Quiros told Emboff that Ahumada
is more influential in this government than people think,
"an old-line PRDer who is quiet but smart. Foreign Minister
Samuel Lewis relies on him heavily and so does Minister
Vasquez as neither one of them is a traditional politician
nor a lawyer," Quiros added. Rumors have it that Ahumada
was behind Supreme Court Justice Graciela Dixon's candidacy
last October to become Chief Justice. Ahumada was
successful in his campaign as Dixon was sworn in as Chief
Justice on January 3, 2006, both Ahumada and Dixon are old
lefties.


5. (SBU) In a recent La Prensa daily interview Ahumada
spoke about Panama's need to have close ties "with
everybody" and is known for drafting speeches for Foreign
Ministry authorities calling for relationships with
different world blocks. Quiros claimed that Ahumada is
currently pushing the Canal board to travel to China in 2006
to attend the International Advisory Board meeting.
Allegedly, the trip to China has been pending for two years
now. Board members believe that a trip to China this year
is not recommended to avoid any misinterpretation.
GOP trust with Canal monies
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6. (SBU) In January 2006 through a special legislative
decree the GOP passed a law establishing a trust with US$50
million per year coming from Canal profits to be used for
social projects throughout the country. Smartly, Minister
Vasquez did not transfer the monies at the end of the year
as usual, but waited until the trust bill was signed in
January 2006 to transfer the first US$50 million. Board
members interpreted this action as an intelligent move from
Minister Vasquez to favor himself before President Torrijos.

COMMENT
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7. (U) GOP contacts continue to express their wish that the
mandated Canal referendum is held sometime mid-2006. It is
no secret that the GOP considers the Canal expansion as the
panacea of their administration. More than once, members of
the governing party have excitedly expressed their looking
forward for the project, which would create plenty of job
opportunities in the country, thus reducing Panama's
unemployment rate. (Local opinion polls identify
unemployment as Panama's worst problem.) The project would
also give the PRD party and its potential candidates an
ample boost in the 2009 national elections.

Eaton #