PANAM POST: EDITION XII

C O N F I D E N T I A L PANAMA 001484 SIPDIS SIPDIS E.O. 12958: DECL: 09/05/2017 TAGS: PREL PGOV KCRM KJUS PM SUBJECT: PANAM POST: EDITION XII Classified By: POLCOUNS Brian R. Naranjo. Reasons: 1.4 (b) and (d) -------------- Summary -------------- ¶1. (C) The election and aftermath of Pedro Miguel Gonzalez -- wanted in the U.S. in connection with the 1992 murder of a U.S. serviceman -- dominated political discussions in Panama this week. Nonetheless, the Panama Post's editor nonetheless found the time for a sit-down with presidential aspirant Alberto Vallarino. -- PRD Majority Leader says PMG affair was the result of a "total rebellion" by governing Revolutionary Democratic Party (PRD) National Assembly deputies; and -- Newly re-enlisted as a Panamanista, Alberto Vallarino waits in the wings of the presidential race. This week's edition of the Panama Post is coming to you early as your editor will be departing on leave. Until your editor's return at the end of September, the Panama Post will be on hiatus. -------------- -------------- PRD Majority Leader: PMG Affair Result of "Total Rebellion" -------------- -------------- ¶2. (C) "The election last Saturday of Pedro Miguel was not a nationalist act, but rather was an act of total rebellion. Unfortunately, given his problems with the U.S., it had to be Pedro Miguel who was elected. We rebeled not against the U.S., but rather against Martin Torrijos," governing Revolutionary Democratic Party (PRD) Majority Leader Deputy Leandro Avila told the Panama Post on September 5. (Note: PMG is under U.S. indictment in connection with the 1992 murder of U.S. serviceman Zak Hernandez.) Avila then recounted the following series of events: Saturday, September 1: -------------- -- 7:00 a.m.: Summoned to the President's residence, PMG and PRD Deputy Hector Aleman met with President Torrijos. This meeting was brief as it quickly devolved into a blame game. Aleman later told Avila that Torrijos blamed PMG for "trying to destroy the PRD" and putting the prospects for a PRD victory in 2009 at risk. Allegedly, PMG blamed Torrijos for betraying him by telling PMG to go and secure the votes for his candidacy only to abandon PMG later in the face of pressure regarding PMG's legal problems in the U.S. -- 8:00 a.m.: First VP and FM Samuel Lewis and 2nd VP and Minister of the President Ruben Arosemena met with PMG at the National Assembly. Allegedly, PMG frantically paced the room and even yelled at Lewis. Nonetheless, Lewis and Arosemena secured PMG's promise "to renounce at the end of his speech." -- 11:00 a.m.-3:00 p.m.: (Note: PMG was elected in a landslide securing the votes of all PRD deputies present (including Avila's),was sworn in, and delivered a polemical speech peppered with anti-American rhetoric. Torrijos followed PMG's address with a "state of Panama" speech that was overshadowed by PMG's remarks.) -- 3:00 p.m.: During a lunch in honor of PMG at Panama's Marriott Hotel, Minister of Housing Balbina Herrera, incensed that PMG had not stepped down as promised, got into a heated discussion that eroded into a yelling match. PRD Deputy Juan Hernandez reportedly confronted Herrera, and the argument nearly came to blows. Sunday, September 2: -------------- -- Morning: Allegedly, Torrijos personally phoned about 25 PRD deputies to tell them that PMG had not honored his pledge to step down during his acceptance speech. Torrijos invited these deputies to the Presidential palace on September 4 after the invited VIP guests (including former President Carter and Senator Byrd) had departed Panama following the commemoration of the thirieth anniversary of the signing of the Panama Canal Treaties and the initiation of the Panama Canal expansion project. Tuesday, September 4: -------------- -- 7:00 a.m.: PRD deputies stood up Torrijos' breakfast invitation, passing word back to Palace staffers, "Sorry, but National Assembly President Pedro Miguel Gonzalez has called a meeting to discuss committee assignments." Torrijos attempted to recover by hosting a lunch in lieu of the breakfast, but, as PMG's meeting endured until 3:00 p.m., lunch too was cancelled. -- 5:00 p.m.: Torrijos summoned all PRD deputies to the Casa Amarilla (Yellow House, a conference center on the presidential compound),telling them that he would first meet with PMG in his office after which both would join the assembled deputies at the Casa Amarilla. -- 6:00 p.m.: PRD Deputies began arriving at the Casa Amarilla -- 8:00 p.m.: Torrijos appeared at the Casa Amarilla and announced that PMG never showed up. PRD Deputy Yassir Purcait, his campaign manager, never showed either. ¶3. (C) Addressing the PRD bloc on the evening of September 4, Torrjios admitted that he had made many mistakes, including not taking the calls of PRD deputies and generally ignoring them, Avila said. Torrijos swore that he had not received any pressure from the USG regarding PMG's candidacy. He promised more funds for the PRD deputies' districts and admitted that the people were demanding social action that the deputies had been unable to provide. According to Avila, several PRD deputies told Torrijos that only Torrijos could convince PMG to step down; "You are friends with Pedro Miguel, not us." ¶4. (C) Avila asserted to the Panama Post that Torrijos' September 4 mea culpa speech might have turned the tide for the President. "Easily 35 deputies are willing to push for PMG to go," Avila said. "But Pedro Miguel needs to renounce since he was legally elected. Unless he steps down, nothing will happen." Avila asserted that Torrijos "sloppy management and political style" directly caused the PMG affair. "Pedro Miguel asked Torrijos if he could be the one, and Torrijos told him, 'Yes, go ahead and get the votes,'" Avila explained. Yet when PMG was able to secure the votes, something Torrijos thought would never happen, Avila said that Torrijos could not "turn things around." As for whether PMG would step down, Avila said he did not believe PMG would step down soon, "if at all. PMG is crazier than ever, but he is a believer. He will have to be convinced for reasons other than money to step down." ¶5. (C) Comment: Avila's recounting of these four days of the PMG affair tracks well with reports that the Panama Post has picked up elsewhere. The PMG affair has revealed fissures and divisions with the PRD ranks that are deeper and more complex than most political observers would have imagined before September 1. The PRD though remains a disciplined party; indeed PRD deputies delivered a landslide victory (50 yes - 25 no - 2 absences) for PMG, a candidate, if Avila is to be believed, that they did not want. There are few winners in this affair, except perhaps for former President Ernesto "El Toro" Perez Balladares who might gain political force in relative terms as Torrijos and others have been weakened by this debacle. Ultimately, if it is resolved, the PMG affair will be resolved in a typically PRD fashion. Stay tuned. -------------- Vallarino Waiting in the Wings -------------- ¶6. (C) "I am prepared to enter the presidential race if I can contribute to fostering opposition unity," presidential aspirant Alberto Vallarino told POLCOUNSQSeptember 4. Careful to state that he was not a candidate, Vallarino nonethless acknowledged that he was in constant contact with fellow Panamenista Party leaders and other opposition leaders. Vallarino professed to be on excellent terms with former President Mireya Moscoso, current Panamenista Party President Juan Carlos Varela (who was Vallarino's campaign manager in 2004),and former party president Marco Ameglio as well as the Moral Vanguard of the Nation (VMP) Party President and former President Guillermo Endara and Patriotic Union (UP) Party President Guillermo "Billy" Ford. "You need to be rich or get the nomination of a rich party to successfully run for president," explained Vallarino, a multimillionaire banker and investor. Seen in the light of who had the economic wherewithal to make a presidential run, Vallarino acknowledged that three serious candidates would be: Cambio Democratico's Ricardo Martinelli, whoever the PRD runs, and himself. "Endara -- a nice and honest man -- will never succeed; he has no money and he would be a return to the past." Were he to throw his hat into the ring, Vallarino said that he would position himself as a "new alternative" to the old politics. "I have never been in government, but I have been extremely successful in business. I will appeal to the young who aspire for an optimistic future." Asked why he rejoined the Panamenista Party, Vallarino said that he had always been a Panamenista; "I grew up around Arnulfo Arias. Being Panamenista in my family is nearly a matter of genetics." As an aside, Vallarino noted that he had been offered the presidency of the UP, but "I wouldn't work well in a small party." ¶7. (C) Comment: Vallarino caused quite a stir when he re-joined the Panamenista party in mid-August and increased speculation that he would throw his hat into the presidential race. To date, however, Vallarino has been careful to manage his profile and to not appear to be a declared candidate. Understanding that Martinelli will definitely run for president, Vallarino is positioning himself to be the obvious unity candidate for the rest of the opposition. Panamenista Party President Juan Carlos Varela's continuing feud with Moscoso leaves Varela vulnerable to Vallarino who would like to take from Varela the mantle of being the face of a "renewed" Panamenista party. Vallarino, who has been under an ethical cloud in the wake of his windfall profits secured as the result of special tax breaks for the sale of Banistmo bank, will have to deal with Endara's "honest Abe" reputation. Finally, he will need grapple with Martinelli's already well staked claim to be the new alternative to Panama's politics as usual. Vallarino's deep pockets and deliberate and calculating manner though make him a candidate to watch. EATON