CALDERON EYING EXPANDED CONTROL OVER PAN

C O N F I D E N T I A L SECTION 01 OF 03 MEXICO 005984

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/28/2027
TAGS: PGOV PREL PINR MX
SUBJECT: CALDERON EYING EXPANDED CONTROL OVER PAN

Classified By: Political Counselor Charles Barclay. Reason: 1.4 (b),(d)
.


1. (C) Summary: President Calderon is poised to take control
of the PAN--a party shaken by his rivalry with PAN President
Manuel Espino--with the uncontested election of former
cabinet member German Martinez for party president on
December 8-9. Tensions between Calderon and Espino reflect a
broader struggle over whether the party should become more
pragmatic or remain loyal to its more
conservative,traditional roots. Martinez's anticipated
election will represent a victory for the pragmatic voices.
Some observers worry that although the PAN will have clearer
direction under Martinez (and the de facto control of
Calderon),its long tradition of democratic governance could
be undermined. Internal tensions have contributed to losses
for the PAN at the local level. Without demonstrable
progress on job creation and poverty reduction, a leading PAN
Senator worried the party would suffer continued losses in
the 2009 midterm elections. End summary.

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Calderon Overcomes Espino
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2. (C) The Calderon administration showed early on a
determination to take control over the party. The June
National Assembly marked a turning point in the longstanding
rivalry between Calderon and Espino, when the majority of PAN
delegates favored more moderate, progressive elements of the
party over the traditional, conservative faction. Tensions
between the pragmatic Calderon and the more conservative
Espino have been a constant irritant in intra-party dynamics
since Calderon entered office, straining relations between
the party and the presidency and negatively affecting party
morale. Comments made by both Espino and former President
Fox on matters of state have also sometimes distracted the
media and Calderon's attention.


3. (C) On September 28, German Martinez, who is one of
Calderon's closest confidants, resigned from his cabinet
position as Secretary of Public Function and announced he
would seek the party presidency. Political analyst Juan
Pardinas commented that the PAN elections, to be held
December 8-9, would be "pay back time" for Calderon who is
well positioned to take control of the party through German
Martinez. Espino's decision to move party elections forward
from March 2008 to December 2007 may have been motivated by
his belief that he or one of his allies would benefit from
limiting the time Martinez could campaign. Yet the
disastrous performance of Espino and his supporters at the
June Assembly signaled that neither he nor any of his
supporters could marshal significant support in the upcoming
elections. As a result, Espino has decided not to run for
re-election, and none of his supporters has agreed to stand
against Martinez. The new election date suits Calderon and
his inner circle fine, as they are unlikely to shed any tears
with an earlier removal of Espino.

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A Party Realigning Itself
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4. (SBU) The PAN is presently Mexico's dominant party at the
national level insofar as it has maintained the presidency
since 2000 and held a plurality in both houses of Congress
since 2006. Although the party's original base of support
came primarily from urban middle classes in the northern and
central states, this base has widened over time as the PAN
has sought to project a more modern image. Tensions between
Calderon and Espino are, in large part, a reflection of a
broader struggle for the direction and appeal of the party,
one that is more progressive and open to compromise versus
one that remains more traditional and values-based. Poloff
has been told there are divisions within the party's
conservative camp, as well.


5. (SBU) The PAN remains to the right of the political
spectrum, advocating free enterprise, privatization, smaller
government, and liberal reforms, as well as opposition to
same-sex marriage and abortions. Martinez has spoken of
making the PAN a more centrist party. The realignment taking
place within the PAN has important implications not just for
the PAN's political orientation, but also for prospects of
democratic governance within the party and for Mexico more
generally.


6. (C) That nobody is willing to run against Martinez is seen
by some, like political commentator Rossana Fuentes, as a
setback for democratic governance within the PAN, which has
long been considered the most democratic of Mexico's
political parties. Martinez is considered a polarizing force
internally. He has the support of the majority of PANistas,

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but not those surrounding Espino. Pardinas likened him to
Calderon's "hit man" who is likely to alienate the party's
conservative wing rather than co-opt it. PAN Senator Adriana
Gonzalez argued it may not be wise to have President Calderon
effectively in charge of both the government and the party.
Given his "need for control", the time he would otherwise
spend leading the country could compete with time overseeing
the party.


7. (C) PAN's more conservative faction complains that
Calderon has begun to rule in a manner similar to what for
decades characterized the PRI--a ruling party controlled by a
president with authoritarian tendencies. Senator Gonzalez
said the president's reputation as a micromanager limits
freedom of thought within the party. Some PANistas, herself
included, feel the PAN needs a third way beyond the Calderon
and Espino camps. When asked about the substantive
difference between those camps, Gonzalez said the division is
more about who holds power than values or policies.


8. (C) There have been rumors that some members from the
party's so-called "El Yunque" (the secretive religious
organization to which some conservative PANistas apparently
belong) could seek to create its own conservative political
party. According to Rossana Fuentes, whether they do so
would depend on the composition of PAN leaders Martinez
chooses after the December election, and whether they
calculate that creating a new party would be effective.
(Note: Creating a new political party has become more
difficult under recently passed electoral reform. End note.)
Martinez will be able to name new members to the PAN's
National Executive Committee, which significantly influences
the PAN's membership in Congress, and it is possible he will
seek to isolate those PANistas who are not loyal to Calderon.
Senator Gonzalez commented that apparently no more than five
PANistas are seriously considering forming a new party.

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Poor Showing at Local Level
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9. (C) Some of the tensions between the pragmatic Calderon
and conservative Espino camps appear to be spilling over to
the state and local levels, where the PAN has had a tough
year, losing in traditional strongholds like Aguascalientes
and the Yucatan peninsula. In some cases, such as in the
Yucatan and Baja California, tensions between Calderon and
Espino have undermined coordinated party support for PAN
candidates. A number of political observers believe that
rather than fighting the PRI at the local level, Calderon has
chosen to accept PRI victories as the price for winning that
party's occasional political backing. Rossana Fuentes told
Poloff she believed Calderon had miscalculated in not
seriously taking on the PRI for its corrupt governors in
Oaxaca and Puebla, commenting that the failure to hold the
PRI accountable undermines Mexico's democratic progress.


10. (C) Senator Gonzalez told Poloff she was concerned that
Calderon's pragmatism was blurring the difference between the
PAN and the PRI, sacrificing some of the party's long-held
values. She further worried that neither the Calderon
administration nor the PAN offered a sufficiently clear
agenda, saying that while the administration has made good on
its pledge to improve security, it has done little in the
public eye to create jobs or reduce economic equalities.
Unless it does so, she worried the PAN would lose
congressional seats in the 2009 midterm elections, eroding
Calderon's future ability to pass legislation.

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Comment
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11. (C) Martinez's uncontested candidacy as party president
is a consequence of the political war between a waning Espino
and an ascendant Calderon. His almost assured victory will
significantly strengthen President Calderon's ability to
provide direction to a sometimes wandering and divided PAN.
The risk is that Calderon may have overreached in choosing
Martinez. It's one thing to find a high-level respected
PANista who is close to the administration to run for
president of the party; it's quite another to send one of
your former cabinet members and closest advisors to take over
the party. Espino went so far in the direction of alienating
Calderon's government that many PANistas are ready to hand
the party over to the administration, but in the long run
this may result in a president of the party who isn't
sufficiently representative of the PAN base and struggles to
resolve internal conflicts. It remains to be seen whether
Martinez will retain some independence from Calderon. All
party eyes will be watching for signals of whether they
intend to unite the party by reaching out to conservative PAN
elements, or seek to isolate that faction and steer the PAN

MEXICO 00005984 003 OF 003


away from its more traditional heritage.


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