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.

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Post Delivers Message - No Reduction in Billet Cost
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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.

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Aleman Disappointed and Concerned
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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.

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Official Termination and Next Steps
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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.

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COMMENT
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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