MARTINELLI MOUNTS DOMESTIC SPY OPERATION, PUTS DEA

S E C R E T PANAMA 000699

NOFORN
SIPDIS

E.O. 12958: DECL: 09/16/2029
TAGS: PGOV PREL SNAR PM
SUBJECT: MARTINELLI MOUNTS DOMESTIC SPY OPERATION, PUTS DEA
WIRETAP PROGRAM AT RISK

REF: PANAMA 639

Classified By: Ambassador Barbara J. Stephenson for reasons 1.4 (b) and
(d)

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Summary
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1. (S//NF) President Martinelli is following through on his
intention to expand the duties of Panama's Council of Public
Security and National Defense ("Consejo") to include spying
on domestic political enemies (reftel). Martinelli has told
the Ambassador that he no longer needs USG help to establish
a wiretap program to eavesdrop on his enemies, and that he
can do so with help from other sources. He has replaced the
director of Consejo and fired some 25 Consejo professionals
for alleged links to Consejo's former managers under the
Torrijos administration, with indications of more firings to
come. Among those fired was the manager of DEA's Matador
judicialized wiretap program. The loss of that person and
the re-orientation of Consejo to domestic political targets
puts at risk the integrity of the Matador program, and we
believe that Consejo is no longer an appropriate home for
Matador. We are exploring options for transferring control
of Matador to Panama's drug prosecutor and removing Consejo
from operational involvement in the program. End summary.

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Where's the Dirt?
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2. (S//NF) Following the Ambassador's August 12 meeting in
which Martinelli requested USG help with establishing a
politically-oriented wiretap program (reftel),the president
again raised the subject with Ambassador on September 16.
This time, Martinelli announced that he no longer needed USG
help to set up his wiretap operation, and that he would be
doing so with help from other sources. Martinelli complained
that after 75 days in office, he was still not receiving the
kind of information he wanted about perceived domestic
threats and political enemies. For that reason, he said he
had removed Consejo chief Jaime Trujillo and replaced him
with Olmedo Alfaro, head of the Institutional Protection
Service (SPI),the GOP's VIP protection service. Trujillo
will move to SPI and take over Alfaro's position. Martinelli
said that Trujillo was a "good guy" who was "completely
honest" and had worked for Martinelli for 22 years, but that
he could not provide the kind of information the president
wanted because he was "too honest." At the same time,
Martinelli told Ambassador he had fired 25 Consejo employees
because of their connections to former Consejo deputy
director Javier Fletcher.
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We Can't Help You
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3. (S//NF) As she had done in the August 12 meeting, the
Ambassador made clear to Martinelli that DEA's wiretap
program cnnot be compromised by involvement with a domestic
political surveillance operation. The Ambassador noted that
one of those fired was the veteran Consejo staffer who
managed the Matador wire room, and she asked whether the
president would consider reinstating that person. Martinelli
refused, saying that the person had maintained a personal
relationship with Fletcher's brother and was therefore
untrustworthy.
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Who's Sleeping With Whom?
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4. (S//NF) Separately, DEA chief met with new Consejo head
Alfaro on September 16. Alfaro told DEA chief, "I know why
you are here. I made some changes and I am not going to
change them." Alfaro said he had orders from the president to
find out who "was sleeping with his wife." At the same time,
he wanted to make sure he and the president were "covered"
and that someone else would be responsible if something bad

happened. He said that he was trying to change the process
for approving the judicial wiretaps by bringing a special
judge into the wireroom to approve taps. (Comment: This would
cut DEA out of the approval process. End Comment.) Alfaro
made it clear that Martinelli had tasked him to collect
information on the president's political adversaries, and
that Trujillo had been removed for failing to deliver what
the president wanted.
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Comment
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5. (S//NF) In light of Martinelli's actions, it is clear to
us that Consejo is no longer an appropriate home for the DEA
Matador program. We believe it will be more appropriately
housed with the office of the drug prosecutor, under Panama's
independent Attorney General. We will be discussing options
with senior GOP leaders for removing Consejo from operational
involvement with Matador, and permanently replacing the fired
Consejo manager with a vetted officer from the Attorney
General's office. That change of supervision would be the
minimum requirement to maintain operation of Matador, and if
the GOP does not agree to that change, we will be compelled
to suspend operations until a permanent solution can be found.
STEPHENSON