PANAMA POST: EDITION X - "THE PEDRO MIGUEL

C O N F I D E N T I A L PANAMA 001474

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/29/2016
TAGS: PREL PGOV KCRM KJUS PM
SUBJECT: PANAMA POST: EDITION X - "THE PEDRO MIGUEL
GONZALEZ EDITION"

REF: PANAMA 1430 (AND PREVIOUS)

Classified By: Ambassador William A. Eaton. Reasons:
1.4 (b) and (d)

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Summary
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1. (C) This week's politics -- and in turn this week's
edition of the Panama Post -- was dominated by the race to
become the next President of the National Assembly and the
prospects that Pedro Miguel Gonzalez (PMG),a fugitive from
U.S. justice in connection with the 1992 murder of U.S.
serviceman Zak Hernandez, would prevail. The following are
our PMG-related stories that were not reported elsewhere:

-- former President Ernesto "El Toro" Perez Balladares
reaches out to Panamenista Secretary General and National
Assembly Deputy Francisco "Pancho" Aleman to propose a
"governability pact" for the legislature;
-- former President Mireya Moscoso's aide Eduardo Quiros
dishes PMG-related dirt;
-- Panama City Mayor Juan Carlos Navarro's emissary passes
message that Navarro opposes PMG and remains friend of U.S.

In other news, Ambassador hosted a lunch in honor of
Democratic Change (CD) President and current opposition
presidential front-runner Ricardo Martinelli:

-- Moscoso believes former President Guillermo Endara and
presidential aspirant Alberto Vallarino need to come to terms;
-- Martinelli seeks to lead opposition in new direction; and
-- Panamanian politics and the George Costanza effect.


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"Governability" Pact for National Assembly
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2. (C) Former President Ernesto "El Toro" Perez Balladares
"reached out to me to see if I was interested in seeking to
establish a governability pact for the National Assembly,"
Panamenista Secretary General and National Assembly Deputy
Francisco "Pancho" Aleman told POLCOUNS on August 29. "El
Toro said he could deliver ten PRD deputies." Aleman
explained that he believed that El Toro reached out to him
since both had reached a similar arrangement during the
Moscoso Administration to form a majority in the National
Assembly. While non-commital, Aleman said that he told Perez
Balladares that they should stay in touch as the race for
National Assembly President continued to evolve. "Our
candidate for National Assembly President will be Wigberto
Quintero," a Movement of Liberal Republic Nationalists
(MOLIRENA) Deputy, according to Aleman. "We will be looking
for a rebellion in the PRD rank and file; they're not all
happy with how the PRD bloc selected Pedro Miguel Gonzalez."
Agreeing that First VP and FM Samuel Lewis' presidential
aspirations were at stake in the outcome of the race for
President of the National Assembly, Aleman also asserted that
President Torrijos' position as PRD Secretary General was
also hanging in the balance.


3. (C) Inquiring whether the U.S. suggested that Torrijos
shuffle his cabinet to open political space to resolve his
PMG problem, POLCOUNS assured Aleman that Torrijos flew solo
on his decision to request the resignations of all of his
ministers. Aleman said that he had heard rumblings that
Torrijos would name all of his new ministers, except for one
that he would set aside for PMG. Once elected National
Assembly President, PMG would be offered the remaining
ministerial portfolio thereby allowing PMG to win election
but then be moved out of the way, Aleman explained. POLCOUNS
noted that PMG's legal problems would remain the same
regardless of which high-level position he held.


4. (C) Comment: Such a national governability pact is an
extremely long shot that would require the PRD to break
ranks, a possibility that is inconceivable for most PRD
loyalists. If true though, this development suggests that
the PRD's internal troubles are more profound and the
willingness of important PRD leaders to maneuver for
political advantage is greater than previously believed.
Important PRD players -- for example, Torrijos, Lewis,
Minister of Housing Balbina Herrera, current Assembly
President Elias Castillo, Perez Balladares, Panama City Mayor
Juan Carlos Navarro, Assembly Deputy Hector Aleman and
Assembly Majority Leader Leandro Avila -- are all on the move
and angling for advantage. If the race for President of the
National Assembly plays out in a bloody fashion, then
Torrijos' claim to lead the PRD will be in question.

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Moscoso Aide Dishes
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5. (C) The Panama Post sat down with former President Mireya
Moscoso's closest aide and former Minister of Public Works,
Eduardo Quiros. The following are some of the morsels that
Quiros shared with the Panama Post:

-- Pedro Miguel Gonzalez (PMG) Serving as President Martin
Torrijos' Intermediary in Land Deal: "Martin is buying land
in Pedro Miguel's district in Santa Fe, Veraguas, and Pedro
Miguel is his 'realtor' in the area," Quiros asserted.
Apparently, well-known traditional Panamanian musician Sammy
Sandoval was interested in buying a small island in Veraguas
and was making significant progress with the owner in closing
the deal. That was until Sandoval got a call from the owner
who stated that he had been visited by "a deputy" who offered
a "bit more" than Sandoval, so the island's owner was going
to sell to the new offerer. Allegedly, Sandoval said that
the new purchaser was none other than Torrijos and that the
deputy in question was PMG.

-- PMG Promising Panamenista National Assembly Deputies
Access to Funds, If Elected: Inquiring with Panamenista
deputies as to why they were not making more political hay
out of PMG's candidacy to be the next President of the
National Assembly, Quiros said that he learned that PMG was
offering Panamenista deputies who stayed quiet access to the
chamber's USD 38 million/year allotment. As these
Panamenistas' votes were irrelevant to the ultimate election
of the National Assembly President (the governing
Revolutionary Democratic Party (PRD) holds 45 of the
chamber's 75 seats),Quiros explained that the deputies would
just as soon take the funds that they would need for
reelection.


6. (C) Comment. Who knows if it is true that PMG is acting
as Torrijos' "realtor" in Veraguas; while believable, the
Panama Post has no independent confirmation. Knowing that
Torrijos and PMG have long-standing, close personal ties, it
is indeed possible that the two are cooperating in this
fashion. As for rumors that PMG is handing out IOUs backed
by the Assembly's annual allotment, these rumors also are
believable but not confirmable. If PMG ends up facing only
token opposition rejection, then one does not need to reach
far to surmise that muted opposition came with a high price.

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Navarro Sends Message That He is Still a Friend of the U.S.
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7. (C) "The mayor wants the Embassy to know that he is still
a friend of the United States and opposes the election of
Pedro Miguel Gonzalez for President of the National
Assembly," Panama City Mayor Juan Carlos Navarro's aide Ivan
Gonzalez told POLCOUNS on August 29. Noting that the Panama
City Council had unanimously adopted a resolution supporting
PMG's candidacy to head the legislature, Gonzalez -- no
relation to PMG -- pointed out that this resolution was put
forward by PMG's cousin and that Navarro had refused to sign
it. "The PRD is making a big mistake in giving Pedro Miguel
this leadership position. The mayor remains a strong
proponent of the Trade Promotion Agreement a fears that this
development will jeopardize it," Gonzalez added.


8. (C) Comment: Navarro smelled a political opportunity to
outflank his cousin, First VP and FM Samuel Lewis, by laying
claim to the "most pro-U.S. PRD politician" title. Indeed
Navarro's emissary went to great lengths to stress that
Navarro wanted the Ambassador to receive this message before
the PRD's National Assembly bloc dubbed PMG its nominee to be
President of the National Assembly. The Panama Post also
notes, however, that Navarro has made no public statements
regarding his opposition to PMG or his desire to remain a

close friend of the U.S. He did, however, attend the PRD
bloc's meeting at which PMG was elected by 41 yes votes, zero
no votes, one abstention, and three absences.

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Moscoso: Endara and Vallarino Need to Come to Terms
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9. (C) Moscoso was "convinced that the PRD will win again in
2009 if former President and President of the Moral Vanguard
of the Nation (VMP) Guillermo Endara and former presidential
candidate and recently re-enlisted Panamenista member Alberto
Vallarino did not come to terms and agree not to oppose one
another, Moscoso aide Eduardo Quiros told the Panama Post on
August 28. "Because he is in a better position in the polls,
Endara is in a better position to lay claim to being the
opposition's presidential candidate, but Vallarino's ego will
not let him be Endara's vice presidential running mate,"
Quiros explained. On the other hand, however, when Endara
found out that Vallarino would be the keynote speaker at
Moscoso's graveside event to commemorate the death of her
husband and Panamenista Party founder Arnulfo Arias, Endara
felt sufficiently threatened to demand to speak as well.
Quiros said that Moscoso believed that the opposition should
persuade Endara's wife -- Ana Mae Diaz de Endara -- to
convince Endara to be Vallarino's running mate. (Rather like
Cher or Madonna, Endara's wife is simply known as Ana Mae, a
nod to her diva-esque reputation.) In turn, Moscoso believed
that the Panamenistas would then finance her campaign for
mayor of Panama City, "what she really wants."


10. (C) Comment: Moscoso is widely believed to be presently
backing Vallarino to be the opposition (aside from Martinelli
and his CD party) candidate for president, so it should come
as no surprise that she would like to see Endara become
Vallarino's vice presidential running mate. Why though would
Endara, who has already topped the ticket and who leads
Vallarino in the polls, take second billing? Quiros does,
however, provide a plausible reason for Endara and Vallarino
sharing the podium at the Arnulfo Arias commemoration, if
indeed Moscoso is trying to facilitate a coming to terms
between the two presidential aspirants.

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Martinelli Comes to Lunch
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11. (C) "If we don't find an alternative to Panama's
traditional politics that successfully addresses Panama's
challenges, then in five to ten years Panama will face a
social explosion," Democratic Change (CD) President and
presidential candidate Ricardo Martinelli told the Ambassador
on August 28. Accompanied by his closest advisors -- CD VP
Roberto Henriquez, Economic Advisor (and AMCIT) Frank de
Lima, and campaign manager Ricardo Quijano -- Martinelli
forcefully asserted that he was the viable alternative to
avert such a social explosion by fighting corruption,
creating jobs, and improving the lives of average
Panamanians. "We are going to reach out to average
Panamanians to advance our cause by giving them hope,"
Martinelli said. Regarding the proposed inter-party primary,
Martinelli said that he would not participate, even if those
Panamanians who were not members of opposition parties could
participate. (Note: Panamanian law permits only those
citizens who are members of an opposition party to
participate in an interparty primary.) Quijano explained
that an interparty primary would give a distinct advantage to
the Panamenista Party, the largest opposition party, that
would be out of proportion for the support for its
candidates. Also, Quijano said Panamanians who were not even
motivated to enlist with a party were unlikely to go to the
polls. Martinelli said that he did not think that Panama's
opposition politicians were mature enough to accept the
results and then fall in behind the interparty primary's
winner, "Instead, the winner would be left to try to
consolidate the opposition fractured by disgruntled losers.
It would be better to build political alliances that
strengthen the opposition candidate, not participate in an
electoral process that would weaken the opposition,"
Martinelli claimed. Leaving the door open to forming
alliance's on the CD's terms, Martinelli said that the focus
right now was on strengthening CD's structure and
organization. Henriquez added that the CD would soon surpass
Patriotic Union (UP) in terms of membership and that the CD
would have a nationwide, precinct-by-precinct organization
established.


12. (C) Comment: Martinelli remains supremely confident at
his prospects, and there is no doubt that he will run for
president in 2009. He is not, however, a shoo-in for to lead
the opposition or to defeat the PRD. Martinelli himself
acknowledged that the elections are still many months away,
and there is still much that can happen.

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Panamanian Politics and the George Costanza Method
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13. (C) "The worst political analysts and the last people
from whom anybody should take political advice in Panama are
the upper and middle class. They don't know what's really
going on," Democratic Change (CD) Vice President Roberto
Henriquez asserted during Martinelli's August 28 lunch with
Ambassador. "You should listen to them and do the exact
opposite if you want to succeed in Panamanian politics."
Asked by DCM who of the four CD pols present was a member of
the super elite Panama City social club "Club Union," all
four -- Martinelli, Henriquez, Frank de Lima and Ricardo
Quijano -- admitted to belonging to this bastion of Panama's
upper class.


14. (C) Comment: Essentially, Henriquez was proposing an
approach reminiscent of the strategy by George Costanza, the
hapless Seinfeld character who was constantly falling into
misfortune, who turned around his fortunes by doing the exact
opposite of what his instincts normally told him to do. It
remains to be seen, however, if adherence to such a George
Costanza effect would pay off or if Martinelli and his CD
elites have any true insight into Panama's "popular" sectors.

EATON