PANAMA: POLITICAL COMMENTATOR PROVIDES INSIGHT ON

C O N F I D E N T I A L PANAMA 000347

SIPDIS

E.O. 12958: DECL: 04/24/2019
TAGS: PGOV PM PREL
SUBJECT: PANAMA: POLITICAL COMMENTATOR PROVIDES INSIGHT ON
POST-ELECTION LANDSCAPE

Classified By: Classified by: Ambassador Barbara J. Stephenson for reas
ons 1.4(b) and (d).

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Summary
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1. (C) Ricardo Martinelli's Alliance for Change movement
will perform well in next weekend's elections, and the PRD
will be weakened but will regain strength and prepare for
2014, political commentator Alfredo Castillero told POLOFFS
during lunch on April 23. Castillero noted that a Martinelli
Administration, nonetheless, will have some surprises,
probably referring to unexpected Cabinet appointments from
various political parties. He also provided commentary on
the individuals surrounding Martinelli's campaign and noted
that Martinelli will have to realize that he cannot run the
presidency like a business "because the public sector simply
does not work that way." Castillero's assessment reiterates
themes that Post has heard from other contacts in the run-up
to the May 3 elections. His comments regarding a rocky
transition period track with Post's impressions. The
transition will be chaotic, and the Martinelli team is solely
focused on winning the election on May 3, and has not begun
thinking seriously about governing the country.


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PRD: Weakened, But Still Important Force
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2. (C) "The ruling PRD will be weakened in the elections
next weekend, but the party's strong history and large base
of support will allow it to regain strength," political
analyst Alfredo Castillero told political officers during
lunch on April 23. The party's core values such as
discipline, loyalty, and organization have helped its
cohesiveness and allowed it to retain its large membership.
(Note: The Electoral Tribunal statistics from December 2008
show PRD membership at over 660,000, making it by far
Panama's largest party.) He explained that the dynamics of
the PRD's presidential bid changed considerably after
President Martin Torrijos decreed the security reforms in
August 2008 and Balbina Herrera defeated Juan Carlos Navarro
to win the party's presidential primary in September 2008.
"Balbina's checkered past has hurt her campaign because
Panamanians associate her with former Panamanian dictator
Manuel Noriega," Castillero commented. Infighting within the
PRD has weakened the normally disciplined party, and centrist
members of the party -- such as Juan Carlos Navarro -- had
difficulty in accepting her as the party's candidate. "Juan
Carlos Navarro may emerge even stronger within the party as a
result of an opposition presidential win," he explained.
(Note: La Estrella daily published an article on April 23
which outlined four supposed factions in the PRD, which the
daily claimed were led by Ernesto "El Toro" Perez Balladarez,
Martin Torrijos, Balbina Herrera, and Juan Carlos Navarro.)


3. (C) Castillero predicted that the PRD would win
approximately 30 National Assembly seats, which he
characterized as a large opposition bloc, though short of a
majority. (Note: The total number of National Assembly
Deputies will decrease from 78 to 71 with this election, and
36 Deputies will constitute a majority). Although he would
not predict the number of National Assembly Deputies that the
Panamenista Party would win, he noted that the Panamenista
Party will be essential to a probable opposition majority in
the National Assembly. Castillero noted that it has been
difficult for the Panamenista Party to assume second billing
to a Democratic Change candidate for the national ticket, but
the party is looking forward. "Mireya Moscoso has already
touted herself as the candidate to assume the party
presidency in 2011," Castillero said.


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Martinelli's Decisionmaking Style, Advisors
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4. (C) "Although Martinelli has a reputation of not listening
to anyone before he makes decisions, he actually does listen
to those around him, but then retreats to make his own
decisions. A Martinelli Administration, nonetheless, will
have some surprises," Castillero commented, probably
referring to unexpected Cabinet appointments from various
political parties. Key individuals who have surrounded

Martinelli include lead advisor Jimmy Papadimitriu, Frank de
Lima, Roxana Mendez, and Alma Cortez, according to
Castillero. Castillero insinuated that Frank de Lima was a
bit too rigid and young to be Minister of Economy and
Finance, a post for which de Lima had been rumored to be a
candidate. Roxana Mendez was a respected proponent of social
welfare, according to Castillero. (Note: Roxana Mendez is
the running mate of Alliance for Change mayoral candidate for
Panama City, Bosco Vallarino.) Castillero speculated that if
Vallarino wins the mayoral race and Mendez were offered a
Cabinet position -- most likely the Ministry of Social
Development -- she would resign from her mayoral duties to
serve in the Cabinet. Castillero described Alma Cortez as
one of Martinelli's main lawyers and the legal face of his
campaign. He said that in a Martinelli administration,
Cortez would probably be offered a legal appointment but
expressed misgivings about that prospect. "Cortez has made a
lot of enemies over the years because she has relentlessly
pushed legal cases to lengthy appeals processes in order to
reach settlements," Castillero said.


5. (C) "Martinelli and his running mate Juan Carlos Varela
have a good personal relationship, and they had been talking
to each other long before they made official their opposition
alliance," Castillero commented. He said that they had
agreed in January 2008 that the opposition candidate who was
leading in the polls by early 2009 would run as the
opposition presidential candidate while the other would
assume the VP role. (Note: This agreement is often referred
to as the Pese Pact (Pacto Pese).) Nonetheless, Castillero
acknowledged that Martinelli did not help the personal
relationship between the two when he publicly declared that
Varela would head the public transportation reform effort
because it sets Varela up to fail on a complicated project
and probably will prevent him from assuming a key Cabinet
position, such as Minister of Foreign Affairs.


6. (C) "Martinelli will need to realize that he cannot run
the presidency like a business. The public sector simply
does not work that way," Castillero noted. He commented that
he has heard from friends who are part of Martinelli's team
that Martinelli has run his campaign in a rigid manner. For
example, Castillero said his friend was afraid to arrive late
for work or make any personal calls during business hours.


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Political Background of Democratic Change Party
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7. (C) "Not all Panamanians who support Martinelli are in
favor of his liberal economic policies, but his promise of
repairing the country's problems through change drives his
popularity," Castillero said. He explained that the
Democratic Change (CD) party was not yet institutionalized
but rather was centered around Martinelli's personality, his
social promises, and dissatisfaction with the ruling PRD.
Politics in Panama are based on patronage rather than a
particular ideology, and Martinelli seems to be winning that
race, according to Castillero.


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Panama City's Mayoral Race: "A Sad State of Affairs"
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8. (C) Castillero lamented the "sad state of affairs" in the
contest for Panama City's mayoral seat; he had no doubt
(though no absolute proof) that PRD candidate Roberto "Bobby"
Velasquez received money from alleged Colombian
money-launderer David Murcia but noted that this would not be
a shock to most Panamanians and it would probably not greatly
affect the outcome of the race. He conceded that the
Alliance for Change candidate Bosco Vallarino was a terrible
candidate and noted that Vallarino's vigil pleading for
permission to run for mayor despite questions about his
U.S.-Panamanian dual citizenship was "shameless." (Note:
After controversy surrounding the possible disqualification
of Vallarino's candidacy due to his dual citizenship, the
Electoral Tribunal in mid-April declared Vallarino's mayoral
eligibility.) Castillero said that because of Panama's
centralized government system, it would strengthen the
opposition if the Alliance for Change won both the presidency
and the Panama City mayoral race. Nonetheless, the mayor of
Panama City does not have much power "other than collecting
the garbage," Castillero noted.



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Comment
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9. (C) Alfredo Castillero, whose last GOP position was
serving as MFA Director General for External Political
Affairs in the Moscoso Administration, professes not to be
registered with any political party, but his sympathies are
generally understood to lie with the opposition in general
and the Panamenista Party in particular. Castillero's
assessment reiterates themes that Post has heard from other
contacts -- such as the impending difficult transition period
and the trouble that the Panamenista Party has had in
assuming second billing to the CD on the election ballot.
Nonetheless, Castillero stopped short of calling this
election "revolutionary" and assessed that the PRD will
weather the current political storm, regroup, and prepare for

2014. His comments regarding a rocky transition period track
with Post's impressions and do not assuage our fears that the
transition will be chaotic. It is abundantly clear that the
Martinelli team is solely focused on the May 3 election date
and has not prepared to begin governing the country.
STEPHENSON