CONTROVERSY OVER NEW CONTROLLER GENERAL IN PANAMA

UNCLAS PANAMA 000807

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PM
SUBJECT: CONTROVERSY OVER NEW CONTROLLER GENERAL IN PANAMA

Summary

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1. (SBU) The National Assembly has selected Gioconda Torres de
Bianchini, a longtime associate of President Ricardo Martinelli in
both his public and private incarnations, as Controller General of
Panama, effective January 1, 2010. Despite de Bianchini's
qualifications, her close ties to Martinelli may compromise the
fight against corruption in the Panamanian government. Attendant
press reaction has been very negative. The loss of unqualified
press support for the new administration could begin to erode
Martinelli's 86 percent popularity ratings. End Summary.



Nolo Contendre

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2. (SBU) The Controller General, whose job is to provide
oversight of executive branch spending, occupies a critical place
in the government. All government contracts must pass through the
office, which is cabinet-level, regardless of the originating
ministry. This makes it a natural chokepoint for preventing
corruption, or not. De Bianchini began working with Martinelli in
1994 when he was director of the Social Security Administration and
she was the head of national audits there. From 2000 to 2009, she
was chief auditor at Ricamar, S.A., one of the companies in
Martinelli's sprawling business empire. De Bianchi served as
treasurer of the Cambio Democratico (Democratic Change) party
during Martinelli's successful presidential run this year. In
addition to her extensive personal ties to Martinelli, the media
reports that her daughter was also given one of Panama's lucrative
diplomatic postings. According to an Embassy contact, Martinelli
told governing coalition deputies several months ago that de
Bianchini was his choice, defending her credentials and stating
"she keeps me honest." She was the only candidate the coalition
put forward, and cleanly beat the opposition Democratic
Revolutionary Party (PRD) nominee 43 to 19. The deputies chose
Luis Icaza, a member of the coalition Panamenista party, as
sub-controller.



Consistent Criticism

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3. (SBU) De Bianchini submitted her bid for the controllership
October 14, on the day of the deadline, allowing effectively no
time for a public debate to emerge. She was confirmed to the post
on October 20. La Prensa, the country's leading daily newspaper,
ran a critical opinion piece on the front page, directly below the
story of her bid submission. The article pointed out the hypocrisy
of Martinelli's campaign promise to break the political traditions
of nepotism and cronyism, and then choosing such a close
collaborator to this important post. "The capabilities of de
Bianchini are unquestionable, but her independence generates
important doubts. Her appointment will condemn the country to five
more years of the same actions so criticized by the President
during his third presidential campaign." In response to the
allegations of a conflict of interest, President Martinelli said
that he trusts de Bianchini's work and honesty.




4. (SBU) La Prensa delivered another rebuke upon de
Bianchini's confirmation by the National Assembly in an even more
critical front page editorial. Citing broken promises by
Martinelli to change the culture of corruption in Panamanian
politics and lambasting the assembly for "abject" conduct in its

relations with the executive, the piece predicts that the same
pattern will hold with the crucial upcoming nominations for the
Supreme Court.



Comment

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5. (SBU) Despite de Bianchini's excellent resume from private
and public sector experience, the optic of a controller who is
beholden to the president, rather than one who will independently
examine the government's actions, does nothing to improve the poor
performance and reputation of Panama's weak institutions.
Observers told Emboffs they were shocked at how overtly Martinelli
controlled the nomination, which they said belongs to the
legislature, on whose behalf the controller's office provides
oversight of the executive branch. The fact that La Prensa, which
has been strongly supportive of the new government, has directly
challenged Martinelli on this appointment may signal the end of the
honeymoon with the media, which Martinelli's closest advisor
(Minister of the Presidency Papadimitriou) on October 20
characterized as unprecedented in Panama. The upcoming Supreme
Court nominations will be an important indicator of both
Martinelli's intentions, and the extent to which he has worn out
his image of "change."









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STEPHENSON