This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 PANAMA 002363 
 
SIPDIS 
 
 
SENSITIVE 
 
 
DEPT. FOR WHA/CEN 
SOUTHCOM ALSO FOR POLAD 
 
 
E.O. 12958: DECL: 09/14/2014 
TAGS: PGOV PM POL FOREIGN POL
SUBJECT: PANAMA: ARNULFISTAS LOSE LEGISLATIVE SEAT TO PRD. 
LOSER MAY FACE MORE TROUBLE. 
 
 
REF: PANAMA 1224 
 
 
Classified By: Ambassador Linda E. Watt for Reasons 1.4 (b) & (d) 
 
 
SUMMARY: CASTILLO DEFEATS MILANES 
--------------------------------- 

¶1.  (SBU) Geovany Castillo of President Torrijos' Democratic 
Revolutionary Party (PRD) defeated Arnulfista Party (PA) 
legislative incumbent Haydee Milanes de Lay by an 11% margin 
in 9/12 partial elections in Panama's easternmost province of 
Darien.  Castillo will represent the La Palma region 
(electoral circuit 5-1) in Panama's Legislative Assembly. 
Milanes won the seat in the May 2, 2004 general election, but 
the Electoral Tribunal annulled her election due to 
indications that she had used government funds to "purchase 
votes," thus gaining an unfair advantage.  With the Castillo 
win, the PRD/Popular Party (PP) legislative majority has 
increased from 42 to 43 (42 PRD   1 PP) of 78 legislators. 
The PA has the largest minority contingent of 16 and the 
remaining 19 legislators from four other parties have united 
to form a single front.  Barring major PRD defections to the 
opposition, the PRD/PP coalition should have smooth sailing 
for the near future.  The Castillo win opens the door for a 
new investigation of Milanes, exactly what Electoral 
Prosecutor Gerardo Solis has proposed. END SUMMARY. 
 
 
WHAT DID MILANES DO? 
-------------------- 

¶2.  (C/NF) Haydee Milanes de Lay won the May 2004 election in 
all probability thanks to the use of public funds to 
encourage voters to support her. The brief that Electoral 
Prosecutor Gerardo Solis submitted to Panama's three 
Electoral Magistrates (based on evidence that Geovany 
Castillo collected) asserts that Milanes benefited from the 
emission of National Bank of Panama (BNP) checks issued 
immediately prior to the May 2 election by the La Palma 
Community Council.  According to media reports, an estimated 
600 of those checks were cashed the day after the election. 
One Electoral Magistrate told EmbOffs that Solis' brief 
indicted wrongdoing, but did not contain sufficient evidence 
to convict Milanes of an electoral crime.  While there is no 
way to know the exact correlation between the BNP checks and 
Milanes' win, the Electoral Tribunal annulled her election 
because she only defeated Castillo on May 2 by 148 votes. 
 
 
 
 
COMMENT: WILL MILANES LOSE MORE THAN HER SEAT? 
--------------------------------------------- - 

¶3.  (C) Critics have lambasted the Electoral Tribunal (TE) 
decision not to proceed with formal charges against Milanes, 
but all they had to do was wait.  On September 13, Electoral 
Prosecutor Gerardo Solis requested that the TE lift Milanes' 
immunity to authorize an investigation based on new evidence 
presented to his office.  Solis considers immaterial the fact 
that President Moscoso "pardoned" Milanes "for any crime for 
which she was being investigated" in August 2004 since a new 
investigation, by definition, wouldn't have been ongoing at 
the time of the August 2004 pardon.  Solis' decision to 
investigate Milanes (an Arnulfista) may not be thoroughly 
objective due to his strong PRD affiliation before becoming 
Electoral Prosecutor.  Based on an argument that neither the 
PRD nor the PP raised, Solis also sought (unsuccessfully) to 
have the Electoral Tribunal transfer a seat to the PRD that 
it had awarded to the PP in May 2004 based on a written 
PRD/PP agreement (which differed from the formula stipulated 
in Panama's convoluted electoral law). 
 
 
¶4.  (C) Particularly as they approach the second semester 
2006 end of their ten-year terms, none of the Electoral 
Magistrates are looking to anger the political class.  (NOTE: 
The executive, legislative, and judicial branch each appoint 
one Electoral Magistrate.  END NOTE.)  Prosecuting Milanes 
for an electoral crime could spur the Arnulfistas to 
blacklist the magistrates for re-appointment and would have 
opened a Pandora's box for the TE.  "Why," critics would ask, 
"did Gerardo Solis not investigate the PRD candidates accused 
of buying votes?"  They might also ask why the TE didn't 
further investigate other cases of vote-buying on behalf of 
Arnulfista candidates, including one instance in the 
heavily-populated San Miguelito district of Panama City where 
businessmen admitted having bought and distributed 
supermarket gift certificates to voters less than a month 
before the election.  Unfortunately, the latter 
transgressions, albeit thoroughly unethical, did not violate 
any law. 
 
 
WATT