U.S. COAST GUARD BILLET IN PANAMA CANAL TO END

UNCLAS PANAMA 001424 SIPDIS SIPDIS FOR STATE WHA/CEN - FEELEY AND TELLO FOR COAST GUARD - RDML SALERNO E.O. 12958: N/A TAGS: EWWT ECON ETRD PM SUBJECT: U.S. COAST GUARD BILLET IN PANAMA CANAL TO END REF: A. (A) PANAMA 1305 ¶B. (B) CHARGE/FEELEY TELCON ¶1. (U) SUMMARY. On August 17, 2007, Charge and EconOff told Panama Canal Authority (ACP) Administrator Alberto Aleman Zubieta that the USG cannot absorb the $60,000 in additional yearly costs to keep USCG billet embedded at the ACP under existing terms (Ref. A). Charge explained that Post had conveyed to Washington Aleman Zubieta's desire to keep the billet at the existing cost to the ACP and that Post was informed that if the ACP wanted the billet, it had to absorb the additional costs (Ref. B). ¶2. Aleman responded that he was left with no choice but to terminate the CG Billet as of September 30, 2007. (Comment: this would end ninety continuous years of direct U.S. involvement in Panama Canal Operations. End comment). Aleman added that the ACP's principal concern would be accessing the Coast Guard for assistance when necessary and finding a mechanism to give the Coast Guard ACP information. US Coast Guard informed Post on August 20 that the CG Billet would be terminated as of September 30 but that the CG Billet officer would begin work to establish a framework to enable the ACP to access Coast Guard assistance regarding, among other things, security related matters and periodic training requests. END SUMMARY. -------------- -------------- Post Delivers Message - No Reduction in Billet Cost -------------- -------------- ¶2. (U) On August 17, 2007, Charge and EconOff met with Alberto Aleman Zubieta, Administrator for the Panama Canal Authority, to inform him that the Coast Guard was not prepared to lower the amount that the CG would have pay to keep the Coast Guard Billet (see Ref. A). Charge further informed Aleman Zubieta that Coast Guard Rear Admiral Brian Salerno would be contacting Zubieta later August 17 to discuss the matter. -------------- Aleman Disappointed and Concerned -------------- ¶3. (U) Aleman said he was disappointed with the news. He said he could not agree to continue the CG Billet at $243,000 for FY 2008 and would have no choice but to terminate the CG Billet after its current termination date of September 30, 2007. In addition to claiming budgetary constraints, Aleman Zubieta said continuation of the CG Billet at the higher cost would require a new contract and new Board of Directors approval. He added that a new contract could not be negotiated, drafted and approved by September 30 and that he was unwilling to even undertake new contract negotiations. ¶4. (U) Aleman said the ACP's principal concern would be accessing Coast Guard information and assistance when necessary. He said keeping the CG Billet was his first option, but will know focus on "Alternative B". He expressed a desire to maintain some sort of consulting relationship with the Coast Guard as part of his "Alternate B." Charge encouraged Aleman to discuss with Salerno continued possible formal arrangements. When asked about other Coast Guard resources at Post, Charge informed Aleman that the remaining Coast Guard officer at Post was dedicated almost exclusively to drug trafficking matters. -------------- Official Termination and Next Steps -------------- ¶5. (U) On August 20, 2007, the current CG Billet officer informed Post that the CG Billet will terminate on September 30, 2007. The CG Billet officer will be reassigned. In the interim, he will begin work on a Memorandum of Understanding or other framework between the Coast Guard and the ACP to enable the ACP to access Coast Guard assistance regarding, among other things, security related matters and periodic training requests. -------------- COMMENT -------------- ¶6. (U) Termination of the CG Billet marks the end of over 90 years of official USG involvement in the Panama Canal. It is Post's understanding that the Coast Guard will work with the ACP to establish the necessary mechanisms to ensure ready and effective communication between the two agencies on all matters previously handled by the CG Billet officer. Post will assist, as necessary, the outgoing CG Billet officer and the Coast Guard with any transition matters. Post will also explore other ways to strengthen USG-ACP ties to partially offset the void created by the CG Billet's demise. EATON