PANAMA POST: EDITION XI

C O N F I D E N T I A L PANAMA 001801 SIPDIS SIPDIS E.O. 12958: DECL: 11/19/2017 TAGS: PREL PGOV PM SUBJECT: PANAMA POST: EDITION XI REF: PANAM 1474 (AND PREVIOUS) Classified By: POLCOUNS Brian R. Naranjo. Reasons: 1.4 (b) and (d). -------------- Summary -------------- ¶1. (C) Back from an extended hiatus, the Panama Post now brings you its Thanksgiving edition. Increasingly, the Panama Post is the hearing these days from all quarters that, despite her protests to the contrary, current Minister of Housing Balbina Herrera will be the governing Democratic Revolutionary Party (PRD) candidate for president. Herrera continues to maintain that she wishes to run for Mayor of Panama, not President of the Republic. Meanwhile, in the opposition, newly re-minted Panamenista member Alberto Vallarino is working behind the scenes with his party's and the opposition's elites to form a coalition to support his presidential candidacy. Enthusiasm for a prospective Vallarino run is tempered though. Finally, there is unhappiness inside the PRD's junior governing coalition partner, the Popular Party. For this edition, the Panama Post brings you four stories: -- Three-way race for President -- Balbina Herrera, Ricardo Martinelli, and Alberto Vallarino -- coming, Samuel "Don Sammy" Lewis Galindo asserts; -- Elite opposition coalition for Alberto Vallarino begins to form; -- Will the Christian Democrats re-emerge on Panama's political scene and does it matter?; and -- Ambassador's anti-corruption applauded remarks, but "business is business." End summary. -------------- -------------- Don Sammy: Three-Way Race for President -------------- -------------- ¶2. (C) "I foresee a three-way race for President of the Republic: (current Minister of Housing) Balbina Hererra (for the governing Democratic Revolutionary Party (PRD)), (supermarket magnate) Ricardo Martinelli (for Democratic Change (CD)),and (son-in-law and businessman) Alberto Vallarino (for the Panamenista party and its eventual coalition partners)," Panamanian behind-the-scenes power broker Samuel "Don Sammy" Lewis Galindo told POLCOUNS on November 19. Dismissive of his nephew First VP and FM Samuel Lewis Navarro's presidential prospects, Don Sammy said, "The way my nephew and President Torrijos handled Pedro Miguel Gonzalez's election as President of the National Assembly was a clumsy stupidity (torpeza). They failed to see it coming, did nothing to stop it, and now have lost the (U.S.-Panama) Trade Promotion Agreement (TPA)." Regarding his son-in-law, Don Sammy said, "It's hard to tell how much Alberto wants to be president. He needs to get to work, yet he has headed off to Spain this week when he should be working hard here. I think he wants to be president, but he is going about it like a corporate CEO, not by working the grassroots." Believing that the PRD would be shifting leftward, Don Sammy said, "Watch out for Balbina. She's going to try to run a populist campaign and will try to turn the clock back on Torrijos' achievements." "The 'tendency (tendencia) faction' is stronger than Torrijos' camp, and Torrijos can no longer bridge the gap between (Ernesto) 'El Toro' (Perez Balladares) and Balbina (Herrera) of the tendencia and the modernizers that he brought into the fold." While conceding that Herrera was a "sphinx" of whose views little is know, Don Sammy asserted, "She's hard-core tendencia and will be bad for Panama." ¶3. (C) Comment: Politically, Don Sammy is a true survivor and, like a cat of nine lives, always lands on his feet. An extraordinarily successful businessman, this oligarch is well positioned through family and business ties to come out on top regardless of who becomes Panama's next president. While he sees his nephew First VP and FM Samuel Lewis' prospects waning, he sees his son-in-law Alberto Vallarino's star rising. Convinced that Herrera would take Panama in the wrong direction, Don Sammy finds himself in the uncomfortable position of wondering whether his son-in-law really has the fire in the belly to run for president, something that is in the forefront of many opposition leaders' minds. -------------- -------------- Pro-Alberto Vallarino Coalition Forming in Opposition -------------- -------------- ¶4. (C) "A substantial coalition supporting prospective candidate Alberto Vallarino is forming," Panamenista Party Secretary General Francisco "Pancho" Aleman told POLCOUNS on November 15. Former President Mireya "Moscoso, (Patriotic Union (UP) VP) Jose Raul Mulino, and myself are all working hard for Vallarino." "You watch," Pancho Aleman said, "We'll use the inter-party primary to knock out (former President and President of the Moral Vanguard of the Nation (VMP) Party President Guillermo) Endara out and to force Martinelli to come to terms with us." Pancho Aleman asserted that Panamenista Party President and presidential aspirant Juan Carlos Varela, with whom Aleman is on the outs, was "increasingly out of touch with political reality" and "no longer controls the party." Varela "was in for a surprise" when the Panamenista Directorate to meet on December 1 to set the party's internal election calendar, Pancho Aleman asserted, believing Varela's weakness would be demonstrated. In an otherwise unremarkable lunch conversation with Ambassador, newly re-minted Panamenista Party member and presidential aspirant Alberto Vallarino asserted, "I want the Panamenistas to hold their internal primaries in early May. That'll give us enough time for an inter-party primary and then to organize the campaign against the PRD." Meanwhile, Varela met November 20 with the party's leadership to tentatively plan on a primary for August 31, something that will have to be approved by the National Directorate of the Panamenista Party on December 1. ¶5. (C) The Latin American Institute for Advanced Studies (ILDEA) hosted former Mayor of Santiago, Chile Jaime Ravinet to discuss his experience in Chile's Concertacion, an alliance of Christian and Social Democratic parties. While long-shot Panamenista presidential aspirant Marco Ameglio attended, noticeably absent were Varela and any of his closest supporters. Former President Mireya Moscoso's acolytes were out in force as were close allies of Vallarino and Patriotic Union (UP) party VP Jose Raul Mulino who indeed served as the opposition's commentator on the dais sharing his reflections on Ravinet's remarks. On the margins of this event, Pancho Aleman asserted, "Juan Carlos (Varela) no longer controls the Panamenista rank and file. They're all moving towards Alberto." Separately, former Minister of Health and Vallarino ally Jose Manuel Teran, Pancho Aleman, and Panamenista activist and former FM Jose Miguel Aleman confirmed for POLCOUNS that the ILDEA event had been orchestrated by Vallarino as a show of force aimed at influencing the elites of the Panamenista Party and the wider opposition. ¶6. (C) "We have to get Endara to step down," Jose Miguel Aleman told POLCOUNS subsequently on November 19. "He's too old and weak. Perhaps we can buy him off by offering his wife (Anna Mae) the nomination to be our candidate for Mayor of Panama City." ¶7. (C) Comment: Key opposition forces are coalescing around Vallarino, but there is a lack of enthusiasm as support for Vallarino appears to be primarily limited to the elite movers and shakers within the Panamenista Party and its prospective coalition partners, particularly UP or at least the portion of UP led by Mulino. Moscoso stated outright to Ambassador on October 29 that she supported Vallarino, but also voiced concerns about his commitment to the race. Don Sammy stated on November 19 that he believed that Moscoso's support for Vallarino was a matter of political convenience rather than based upon any true heartfelt support for Vallarino. Questions regarding how solidly Vallarino is committed to running, assertions that Vallarino seeks a "coronation," and the widespread belief that he does not wish to sully his hands mixing it up with masses all feed a lack of enthusiasm for Vallarino. To date, to the best of the Panama Post's knowledge, Vallarino has reserved his political activities to boardroom maneuverings and has stayed off the campaign trail. Vallarino's strategy at this point appears to be to seek legitimacy through both a Panamenista Party primary and an inter-party primary while at the same time working behind the scenes to force competitors, like Endara, out of the race. Teran and Pancho Aleman even go so far as to assert that, presented with a strong enough pro-Vallarino front, Martinelli, who categorically refuses to participate in an inter-party primary, might be forced seek terms with Vallarino and pull out of the race. In some sense, Vallarino's strategy is rather like a hostile corporate take-over: buy up as many shares as you can, co-opt other major shareholders, take control of the share-holders convention, install new corporate management, and then dominate opposition market competitors (i.e., Martinelli) to reach a modus vivendi. -------------- New Christian Democratic Party on Horizon? -------------- ¶8. (C) "I am leading a faction within the Popular Party that is seeking to reconnect with our Christian Democratic roots," former Ambassador to Washington and Popular Party activities Eduardo Vallarino told POLCOUNS on November 19. "It is going to be difficult to pull the entire party out of the gravitational pull of the PRD, but perhaps the true Christian democrats would break away." Vallarino asserted that nobody had ever been able to explain how the Christian democrats could form a coalition with the PRD social democrats: "Ideologically and intellectually, the PRD is rooted in materialism, dialectics, and Marxian socialism -- they're a key part of the Socialist International for heaven's sake -- and lacks the moral and ethical traditions of the social Christians." Vallarino said that fights over the Torrijos Administration's handling of Pedro Miguel Gonzalez's election as President of the National Assembly, underestimating badly the impact that the election of this U.S. fugitive wanted in connection with the 1992 murder of a U.S. serviceman would have on efforts to ratify the TPA, and unwillingness to take on Venezuelan President Chavez's increasingly undemocratic behavior had strained relations within the Popular Party between those who seek continued accommodation with the PRD and those who wish to return to their Christian Democratic roots. ¶9. (C) Comment: The Popular Party essentially condemned itself to politically irrelevancy when it became the PRD's junior coalition party for the 2004 elections. If Christian Democrats were to split from the Popular Party, Torrijos would likely be subjected to a brief flurry of negative stories regarding his inability to hold together his coalition. The longer term impact though would be minimal: Panama would have two more boutique parties, one the remains of the Popular Party hopelessly trapped orbiting around the PRD and the other the Christian Democrats freed of the PRD's gravitational pull but doomed to wander the outer space of Panamanian politics. -------------- -------------- - ¶E. Vallarino: Applauds Corruption Remarks, Does Biz with Uba -------------- -------------- - ¶10. (C) "Even though they were technically an interference in internal Panamanian affairs, Ambassador Eaton's recent remarks condemning continued corruption and weakness in our judiciary deserve to be applauded; I liked them," Eduardo Vallarino told POLCOUNS on November 19. Vallarino, echoing the Ambassador's recent speech to the Chamber of Commerce, noted that Panama had to "protect its trademark and image." "We need to ensure an efficient judicial system that deals with disputes fairly and that is not subject to manipulation." At the conclusion of lunch however, after taking a call from former Minister of the Presidency Ubaldino "Uba" Real, Vallarino explained, "I'm doing a series of power generation projects, about a dozen. Uba and I and our 'phantom partner' (read: President Martin Torrijos) are involved in one deal in Veraguas state. It's kinda wierd to be doing business with the PRD, but business is business." ¶11. (C) Comment: While it is heartening to see that the Ambassador's anti-corruption message and calls to strengthen the judiciary are resonating positively even with the "sovereigntist" crowd that sees such remarks as interference, it is disheartening to hear the same supporters speak so blithely about business deals in which a partner, namely the sitting head of state and government, has to be referred to as a "phantom partner." While Vallarino noted that he believed that no serious in-roads against corruption would be made until Panamanians got serious about the problem themselves, Vallarino's own "business is business" remarks underscored the difficulties in forging such an essential anti-corruption political basis in Panama. ARREAGA