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 002641 
 
SIPDIS 
 
 
SENSITIVE 
 
 
DEPT. FOR WHA/CEN 
SOUTHCOM ALSO FOR POLAD 
 
 
E.O. 12958: DECL: 10/21/2014 
TAGS: PGOV PREL PINR PM POLITICS FOREIGN POLICY
SUBJECT: PANAMA'S ARNULFISTA PARTY: ELECTORAL SHELLACKING 
SPURS CALLS FOR REFORM 
 
 
REF: A. PANAMA 1047 
     ¶B. PANAMA 1963 
 
 
Classified By: Charge Christopher J. McMullen for reasons 1.4 (b) & (d) 
 
 
SUMMARY: ELECTORAL DEFEAT = REFORM DEMANDS 
------------------------------------------ 

¶1.  (C) Up-and-coming Arnulfista Party (PA) leaders will not 
wait for Party President Mireya Moscoso to complete her term 
in January 2006 before trying to rebuild the party, ideally 
minus her.  After the PA's meager third-place finish (16.4% 
of popular vote) in Panama's May 2004 presidential election 
and woeful showing of only 16 of 78 legislative seats, 
Moscoso opponents are calling for her head.  She probably 
will not survive the party's January 2005 national 
convention.  Numerous corruption scandals during Mireya 
Moscoso's 1999-2004 presidency violated the letter and spirit 
of her campaign promises to clean up Panamanian politics, and 
led the Party's coalition to disastrous defeat at the polls. 
Meanwhile, Moscoso's iron-fisted control of the party bred 
many enemies.  Among the Young Turks, Juan Carlos Varela has 
been her most vocal opponent.  Brothers Francisco and Marco 
Ameglio are also pushing for reform.  Legislator Jose Isabel 
Blandon and PA Secretary General Carlos Raul Piad have 
approached the situation more delicately, but also with an 
eye toward reform.  The reformers, who claim to have broad 
support within the party, call for making PA bodies and 
procedures more democratic and transparent by removing Mireya 
Moscoso as PA President and renaming the PA as "Partido 
Panamenista."  They differ on which measure to prioritize and 
how to time reforms.  Embassy expects major changes in PA 
leadership and structure at its January 16, 2005 convention. 
END SUMMARY. 
 
 
PUSHING AND ACCELERATING REFORM 
------------------------------- 

¶2.  (C) Second-term legislator Jose Isabel Blandon Figueroa 
claims credit for including a constitutional clause last July 
requiring Panama's political parties to have "democratic 
structures" in the reform package now before the Legislative 
Assembly, but he is not pushing hard for Moscoso's ouster. 
Blandon wants the Arnulfista Party to hold mandatory 
primaries for all elected positions and internal elections 
for party leadership positions.  Blandon privately told POL 
specialist in August that he believes PA Board elections 
should come sometime after PA bylaws are reformed during the 
January 2005 national convention.  Blandon told EmbOffs at a 
September lunch with other Arnulfista legislators that 
Moscoso would step down from her PA Board position prior to 
January 2006 only if asked by the PA national convention 
delegates.  On this issue, Blandon appears to be leaving his 
options open. 
 
 
¶3.  (C) Businessman Juan Carlos Varela's lobbying efforts at 
all levels of the party hierarchy make him the most vocal 
advocate for removing the current PA Board of Directors 
(including Moscoso) well before January 2006.  In fact, the 
Varelas' faction wants Moscoso out by January 2005.  Varela 
has proposed that reforms to PA bylaws be implemented as 
early as November 28.  He recently confided to POL Counselor 
that "big changes would happen soon."  On 10/20, La Prensa 
reported that Legislator Jose Luis Varela (Juan Carlos' 
brother) claimed that 70% of Arnulfista convention delegates 
were prepared to accept the resignation of the entire PA 
Board on November 28.  On 10/26, Marco Ameglio presented to 
PA Secretary General Carlos Raul Piad a petition signed by 
380 of 598 convention delegates (64%, much more than the 
legal minimum of 30% established in the Electoral Code) to 
hold the PA national convention on November 28 instead of 
January 16.  Ameglio brothers Marco and Francisco (both 
ex-legislators) share the Varelas' desire to remove top party 
leadership quickly, but the two camps' allegiance to one 
another may well end there.  (COMMENT: The Ameglios presented 
their petition with Jose Luis Varela, among others; however, 
given Marco's well-known desire to run for President, he is 
likely to lunge hard into the resulting power vacuum, ready 
to fight the Varelas for the 2009 presidential nomination if 
Moscoso resigns.  END COMMENT.) 
 
 
COMMENT: WHAT'S IN A NAME? 
-------------------------- 

¶4.  (C) Changing the name of the Arnulfista Party would allow 
several well-known outcasts to rejoin the party leadership as 
well as rejuvenate the PA's group identity.  Between 1999 and 
2004, the PA expelled several strong leaders, including 
ex-President Guillermo Endara, Juan Carlos Varela, and 
Ex-Minister of Agriculture Alejandro Posse.  PA bylaws bar 
someone who has been expelled from the party from returning. 
A new party with a new Board of Directors could welcome all 
comers and perhaps build momentum based on mutually shared 
opposition to the Torrijos administration.  And PA members 
have not forgotten that former President Endara (1989-94) won 
almost twice as many votes as Moscoso's candidate (Jose 
Miguel Aleman) in the May 2 election, votes that PA leaders 
want back.  Moscoso opponents, including the Ameglios and the 
Varelas, believe that a name that evokes a shared mission or 
ideology rather than Moscoso's deceased husband Arnulfo Arias 
would reinforce their rejection of Moscoso's decision to 
follow in the thrice-deposed president's footsteps as a 
traditional "caudillo" in the personalist politician mold. 
Instead, they seek to make the party a model for democratic 
practices (though critics also see a good dose of 
personalismo in the ostensible goals of the would-be 
reformers.) 
 
 
COMMENT: SOON, BUT NOT JUST YET 
------------------------------- 

¶5.  (C) Juan Carlos Varela told POL Counselor that he and the 
Ameglios are using the November 2004 convention proposal as a 
ploy to avoid any possibility that Moscoso may postpone the 
January 16, 2005 convention.  Stepping into the trap, Mireya 
Moscoso explained in a 10/21 radio interview that, "the Board 
of Directors of the Arnulfista Party would have to approve 
any proposal to hold the party's extraordinary convention 
before the scheduled date of January 16, 2005.  No such 
proposal has been presented."  The Varela/Ameglio faction's 
proposal has upped the stakes.  After nearly resigning from 
the PA Board in May 2004, Moscoso has dug in her heels at the 
helm of the party.  When asked about the movement to unseat 
her and reform the PA as recently as September, she told a 
confidant, "This is my party and I rule it!"  To Juan Carlos 
Varela, Moscoso shouted over the phone, "If you want a war, 
then I'll give you a war."  Moscoso still has plenty of 
influential allies within the party who are willing to back 
her right to stay in charge until January 2006 (including 
Blandon when it suits him).  Her opponents currently claim 
60-70% support.  While we expect that mounting pressure 
within the PA will eventually persuade Moscoso to relinquish 
control of the party, we suspect that she will try to play 
one faction against the other in order to maintain a modicum 
of influence in the party leadership. 
 
 
MCMULLEN