PANAMA: INCREASING URGENCY ON CANAL REFERENDUM

UNCLAS PANAMA 000190 SIPDIS C O R R E C T E D COPY TO ADD SIPDIS CAPTION SENSITIVE 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 -------------- ¶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 -------------- ¶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 -------------- ¶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 -------------- ¶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 #