PANAMA: INTERNAL RULING-PARTY DYNAMICS AS JOSTLING

C O N F I D E N T I A L PANAMA 000502

SIPDIS

SIPDIS

DEPARTMENT FOR WHA/CEN
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 01/06/2016
TAGS: PGOV PREL PINR PM
SUBJECT: PANAMA: INTERNAL RULING-PARTY DYNAMICS AS JOSTLING
FOR 2009 ELECTIONS BEGINS -- PART I: THE FRONT RUNNERS


Classified By: DEPUTY CHIEF OF MISSION LUIS ARREAGA FOR REASONS 1.4 (B)
AND (D).


1. (U) This is part one in a three-part series.

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

2. (C) With over three years to go before the May 2009
presidential elections, the ruling Democratic Revolutionary
Party (PRD) is already full of ferment and rumors as
potential candidates joust for position. The U.S.-educated
current front runners are cousins -- Vice President/Foreign
Minister Samuel Lewis and Panama City Mayor Juan Carlos
Navarro. Given his ambition, political skills, and deep
pockets -- and despite his long list of negatives -- former
President Ernesto Perez Balladares (PB) should not be
underestimated in his bid for the largely ceremonial PRD
presidency, which many assume he will use as a stepping stone
for higher office (See Part II). Former anti-U.S. firebrands
Balbina Herrera (now Housing Minister) and Hector Aleman
(Minister of Government and Justice) are likely competitors
for the single vice presidential slot in 2009, although most
observers give Herrera the upper hand (See Part III). With
the Panamanian opposition parties in complete disarray, the
PRD -- Panama,s biggest and best organized party -- appears
well placed to gain back-to-back presidential terms. But in
Panama, as elsewhere, it ain't over till it's over. End
summary.

Vice President/Foreign Minister Lewis
--------------

3. (SBU) On March 14 VP/Foreign Minister Samuel Lewis went
out of his way with reporters to deny rumors that he is about
to step down to launch his 2009 presidential campaign. This
time the rumors may not be true, but Lewis will have to
contemplate leaving his posts to pursue Panama's presidency,
which he covets. President Torrijos allegedly chose Lewis as
his first VP running mate due to the financial power he could
bring to the campaign contributions and his international
connections in Washington and abroad. (Comment: No sonner
did the rumor about Lewis's resignation hit than MOGJ Hector
Aleman's name floated up as Lewis's purported replacement,
improbably, given that Aleman does not speak English. End
Comment.) Other observers claim that Lewis would like Panama
to open relations with China, at the expense of Taiwan, with
which Panama has maintained a diplomatic relationship for
many years.

Wanted: Wealthy Candidate With Good Connections
-------------- --

4. (SBU) A wealthy 48-year-old international businessman
with a distinguished pedigree of Panamanian forebears, Lewis
is a former Canal board member and strongly supports free
markets and Canal expansion. Lewis would be an appealing
presidential candidate for local businessmen who see him as
an ally. Many GOP insiders claim that Lewis is President
Torrijos,s choice for presidential candidate. A Lewis
presidency would continue the "technocratic" trend begun by
Torrijos. A Georgetown University graduate, Lewis is
pro-American, pro-free market and has been a close contact
and friend of the U.S. Government.

The Outsider
--------------

5. (C) Lewis has plenty of political experience but he lacks
a broad-based constituency. Also, whatever political clout
he may have within the PRD he mostly owes to Torrijos. Many
PRDistas see him as an outsider. In fact, according to
highly placed PRD sources, Lewis has not yet joined the PRD.
Lewis was most recently (until February 2003) vice president
of the Solidarity Party founded by his uncle, Samuel Lewis
Galindo. (Note: Lewis worked on his uncle's presidential
campaign and that of his relative Alberto Vallarino in 1999.
Interestingly, banker Vallarino's name pops up most often
among opposition presidential possibilities for 2009. End
note.) Lewis probably would win strong support from PRD
heavyweights such as presidential advisor Jorge Eduardo
Ritter and foreign ministry advisor Adolfo Ahumada. Also,
the PRD,s youngest board member, Samuel Buitrago, has

signaled his willingness to attract youth support for Lewis.

Panama City Mayor Navarro
--------------

6. (U) Lewis's most likely opponent for the 2009
presidential nomination is Panama City's highly popular,
photogenic mayor, Juan Carlos Navarro (45). Navarro was
re-elected in May 2004 by a broad margin to serve a second
five-year term. Harvard and Dartmouth educated, Navarro is
pro-American and pro-free markets. Navarro once was
considered Torrijos,s most likely rival for the PRD,s 2004
presidential nomination but after internal party conflicts,
Navarro decided to pursue re-election as mayor instead. This
time around, Navarro is not being discreet about his 2009
presidential ambitions and is carefully but vigorously
campaigning for the nomination.

Who Will Torrijos Back?
--------------

7. (SBU) Navarro,s first move was to get himself elected as
head of the National Mayors, Association. The Association
holds frequent meetings all over the country, giving Navarro
wide political exposure outside Panama City. Navarro does
not waste any opportunity to appear before the media and
constantly appears on TV/radio talk shows and live interviews
to discuss his mayoral projects. That exposure gives him a
leg up over Lewis, but the all important issue is who
Torrijos will back, and most observers give the edge to
Lewis. Still, the PRD is Panama's only party which uses a
democratic primary process to choose its leaders and
nominees, so support from Torrijos, while important, might
not be enough.

Open Warfare with PB
--------------

8. (SBU) Navarro's comments on a March 15 talk show --
attributing rising energy prices to PB's mid-1990s
privatizations -- sparked a stinging exchange of accusations
and counter accusations with Perez Balladares, who basically
said that Navarro didn't know what he was talking about,
while reminding the media of a fawning letter that Navarro
once wrote to former Panamanian dictator Manuel Noriega. In
return, Navarro lashed out at what he called PB's "egoism and
uncontrolable arrogance, his excessive fortune and his barely
concealed and unhealthy obsession to regain the presidency."
Navarro also did not fail to remind his audience that PB had
lost his U.S. visa -- "to the shame of all Panamanians."


9. (SBU) Despite some reluctance Navarro publicly defended
Torrijos,s unpopular fiscal and social security reforms to
gain Torrijos,s blessing for a potential 2009 presidential
run. Navarro,s political strategist, Ivan Gonzalez, told
Emboff that &Torrijos is not supporting us yet, but he is
not against us either, so we need to be careful.8 Not only
is Navarro looking over his shoulder at first cousin Samuel
Lewis, he also is concerned about the potential candidacy
former President Perez Balladares. There is a story that a
year or so ago, Navarro walked into PB's office just to tell
him that he planned to run for president.


10. (SBU) Navarro is an environmental pioneer in Panama. He
founded the National Association for Nature Conservation
(ANCON) in 1985, and served as its Executive Director.
Panama,s foremost environmental advocacy group, under
Navarro ANCON succeeded in preserving a large tract of Darien
province as a wilderness area and wildlife santuary.

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

11. (C) It is far too soon to place bets, but either Lewis
or Navarro are well-placed to become the PRD,s presidential
candidate. In addition to their party connections, they meet
several of the &traditional8 presidential requirements --
they both are upper class, white, good looking, influential,
and locally and internationally well-connected Panamanians.
Former President Perez Balladares (See part II) would be a
hard sell for the party -- he lost a 1998 referendum to allow
him to run for a second term, he is not well-liked and his
U.S. visa was revoked.


EATON