MARTINELLI AND VARELA STAND BEHIND SAN JOSE ACCORD

UNCLAS PANAMA 000698

SENSITIVE
SIPDIS

FOR WHA AND ISN/RA

E.O. 12958: N/A
TAGS: PREL PGOV KNNP MNUC ECON HO AA IR PM
SUBJECT: MARTINELLI AND VARELA STAND BEHIND SAN JOSE ACCORD

REF: STATE 95073


1. (SBU) At a September 16 breakfast meeting with Panamanian
President Ricardo Martinelli and Vice President/Foreign
Minister Juan Carlos Varela, WHA Principal Deputy Assistant
Secretary Craig Kelly reviewed in detail the situation in
Honduras, looking forward to the meeting between Costa Rican
President Arias and the Honduran presidential candidates in
San Jose later the same day. Martinelli fully backed the
U.S. approach. He said the de facto regime had legitimate
fears about Zelaya, but added "They shouldn't have done what
they did." Martinelli agreed it was necessary to send a
strong signal that this sort of change in government was
unacceptable, saying, "This could happen to anyone, even me."
He was in full agreement that the San Jose Accord was the
best vehicle to do this.


2. (SBU) VP/FM Varela said one possible way forward was to
have both parties sign the accord, but leave open the date of
Zelaya's return. P/DAS Kelly stressed that ideally we would
get Zelaya to return well before the election, to send the
signal that we had corrected the unconstitutional change in
government, and with controls in place to ensure the de facto
government that Zelaya would not be able to create
disturbances and undermine the electoral process. Martinell
and Varela both agreed the de facto regime had more
assurances under the San Jose Accord than in going forward
alone. P/DAS Kelly pointed out that by continuing the crisis,
the de factos were playing into Venezuelan President Chavez's
hands. Martinelli responded, "That's a very good point."


3. (SBU) Martinelli and Varela had returned from Italy on
September 15, and said the Vatican seemed very strong in
supporting the Cardinal in Tegucigalpa. Martinelli did not
think the visa revocations were an effective tool, and only
created resentment. Separately, Varela disagreed, saying he
thought the visa revocations were motivating people in the
regime to urge Micheletti to seek a solution. Varela told
Kelly that he would follow up by reaching out to the de facto
regime, arguing that they are better off with the San Jose
Accord than without it. Varela and Kelly also agreed it was
vital to involve the region's private sectors in seeking an
enduring solution.


4. (SBU) P/DAS Kelly made a similar pitch and obtained a
similar positive response with the American Chamber of
Commerce. Former AmCham president Urriola spoke for all when
he said "We will support you" by carrying the message to
business leaders in Honduras and throughout the region that
the San Jose Accord is the best way forward. The business
leaders voiced concern that Zelaya would not be a responsible
actor and that Chavez would benefit from Zelaya,s return in
the short run, but accepted that it would be worse to
continue to have to discuss Honduras and to provide Chavez
the opportunity to exploit the coup. Executive Director
David Hunt said he greatly benefited from having a
face-to-face conversation about the issue, and suggested
using DVCs to increase the number of interactions between
Washington officials and regional AmChams on this subject.

Iran
--------------

5. (SBU) P/DAS Kelly encouraged Martinelli and Varela to
press Iran, publicly and/or privately, to accept the P5 1
offer to meet and to fully cooperate with IAEA inspections.
Martinelli said Panama would be supportive.

This message has been cleared by WHA P/DAS Kelly.
STEPHENSON