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

UNCLAS SECTION 01 OF 03 PANAMA 002191 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR WHA/CEN 
SOUTHCOM ALSO FOR POLAD 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PM LABOR HUMAN RIGHTSPOLMIL
SUBJECT: PANAMA PROPOSED MERGER OF AIR AND MARITIME 
SERVICES - INNOVATION OR A BAD MARRIAGE? 
 
SUMMARY 
-------- 
¶1.  (SBU)  An October 6 proposal by Panama's Minister of 
Government and Justice (MOGJ) Hector Aleman to combine 
Panama's National Maritime Service (SMN) and National Air 
Service (SAN) into a National Coast Guard (Guardacostas) as 
an efficiency and cost-saving measure drew criticism from 
former Panamanian President Guillermo Endara, who immediately 
labeled the plan unconstitutional.  In newspaper reports that 
showed the Government of Panama's (GOP) sensitivity to 
anti-remilitarization critics, Aleman seemed to argue that 
the proposed merger would help to prevent the SMN and SAN's 
evolution into strong military forces capable of threatening 
Panama's democracy.  The proposal partly is an attempt to 
reform the SMN and SAN which clearly suffer from 
underfunding, shoddy maintenance, and poor leadership but to 
succeed it will need much higher budget outlays.  Those look 
improbable.  End summary. 
 
Coastal Security 
---------------- 
¶2.  Danilo Toro, MOGJ Chief of Staff, told PolOff that Panama 
needs a combined SMN-SAN Coast Guard to provide coastal 
security and protect infrastructure.  Toro believes the 
proposed Guardacostas doesn't violate Panama's constitution 
and the National Assembly only needs to enact new 
legislation.  Funding probably will emerge as the main issue. 
 The new service will need improved equipment and maintenance 
procedures, and possibly new bases to provide better 
protection to the Panama Canal and leaky borders with Costa 
Rica and Colombia, Toro said.  Panama also wants to protect 
its Atlantic and Pacific coastlines that total over 1500 
miles in length and that are dotted by over 400 islands. 
 
Era of the bad feelings:1968-1989 
--------------------------------- 
¶3.  (SBU)  Since Operation Just Cause removed Panama's 
military dictatorship and restored democracy in December 
1989, many Panamanians fear the remilitarization of their 
country and some bristle at the presence of U.S. forces even 
during off-shore exercises such as PANAMAX.  In 1994, Panama 
amended its constitution (article 310) to prohibit the 
establishment of a permanent military.  The constitution 
permits legislation to organize necessary police services 
which led to the creation of the Panamanian Public Forces 
(PPF) all under civilian control.  (Comment: the current SMN 
director wears a white Rear Admiral's uniform, an irritant to 
many anti-military Panamanians.  End comment.)  The PPF 
includes the Panamanian National Police (PNP), SAN, and SMN 
under the authority of the MOGJ.  The Ministry of the 
Presidency supervises the fourth element of the PNP, the 
Institutional Protection Service (SPI), the Presidential 
bodyguard. 
 
Immediate Response 
------------------ 
¶4.  (SBU)  Shortly after Aleman's announcement about the 
proposed Coast Guard, former President Guillermo Endara and 
(separately) retired Noriega-era General Ruben Dario Paredes 
denounced the plan as unconstitutional.  Endara, Panama's 
president from 1989 to 1994, told newspaper reporters that 
the plan made him nervous.  Endara fears that concentrating 
power in a single organization could pose a threat to 
democracy.  Clear divisions between the PPF elements, 
established during his presidency, were designed to prevent a 
concentrating power.  Paredes labeled the proposed Coast 
Guard a violation of article 310 of the constitution and 
expressed fears that it would lead to an evolution of a 
"strong man" who could threaten Panama's democracy. 
(Comment: Paredes comments are somewhat ironical since he has 
first hand-knowledge of how "strong-men" emerge.  He won a 
power struggle to became chief of staff of Panama's Guardia 
Nacional after the death of Omar Torrijos in 1981, then 
forced Panama's President Royo to resign, but was eventually 
forced out of power by Noriega.  End comment.) 
 
 
Reorganization "a real possibility" 
----------------------------------- 
¶5.  (SBU)  In January 2005, the SMN was shaken by the death 
of a marine recruit and in August by the drowning of three 
marines during a mock assault on an island in the Panama 
Canal.  Amid calls for his resignation, SMN director Rear 
Admiral Ricardo Traad drew heavy criticism for the deaths and 
for his frequent travel and comfortable lifestyle.   Toro 
spoke openly and confidently about the reorganization during 
his discussion with PolOff, adding that a final decision 
rests with President Martin Torrijos, Aleman, and the 
National Assembly.  Toro emphasized that the initial 
reorganization plan had been developed in June before the 
PANAMAX drownings, it was not a reaction to the tragedy as 
many newspaper accounts claimed.  He also said Panama cannot 
afford to continue wasting its money by funding the SMN and 
SAN as inefficient separate entities which always compete for 
scarce resources.  Toro did not discuss how joining the two 
services would save money.  Toro also emphasized the proposal 
does not represent a change in Panama's relationship with the 
United States or the Department of Defense. 
 
SMN/SAN: no real threat to democracy. 
------------------------------------- 
¶6.  (SBU)  Neither the SMN or the SAN currently pose any 
threat to the GOP according to Embassy DOD officers.  Neither 
service has heavy weaponry, tanks, armored vehicles, attack 
helicopters or fighter aircraft to stage a coup.  Toro 
reminded PolOff that the PNP has over 15,000 members, much 
more than the SMN and SAN combined.  Currently three of the 
six SMN's lightly armed patrol boats are dry-docked due to 
corrosion problems. 
 
¶7.  (SBU)  The SMN has only 700 members, 150 of whom are 
marines, but leadership at all ranks is poor.  Public 
criticism of its professionalism is rampant.  The SAN's aging 
fleet of helicopters and transport aircraft, the majority of 
which are over twenty years old, suffer from poor 
maintenance, often the result of high turnover of experienced 
mechanics to better paying jobs. The 700 member SAN has four 
unarmed T-35 trainer aircraft and two propeller driven C-212 
transport aircraft.  The rotary squadron of 14 aircraft 
consists of mostly UH-1 helicopters only five of which are 
currently airworthy.  Four of the helicopters are being 
cannibalized for spare parts.  Following a maintenance 
assessment by the Missouri Army National Guard in September, 
the Embassy has advised its personnel not to fly on 
Panamanian helicopters due to safety concerns.  Any threat 
posed to the GOP by the SAN/SMN could be answered by the over 
15,000 members of the PNP but that organization is also in 
the process of reorganization. 
 
 
The Canal is always the key 
--------------------------- 
¶8.  (SBU)  Maritime security and protecting the Canal and its 
associated ports is crucial to Panama's economy, Toro 
emphasized.  Much of Panama's infrastructure such as its 
Atlantic-to-Pacific railway and communications systems are 
located on or near the Canal.  In an incident two weeks ago 
that rendered most of Panama's phone and computer systems 
inoperable, vandals cut a fiber optic cable in the Atlantic 
port city of Colon possibly believing it was copper wire that 
could quickly be sold for cash.  Toro feels this incident 
underscores the need for better protection of the country's 
infrastructure.  (Comment: an act of vandalism, such as the 
cutting of a phone cable is a problem for the police to 
prevent, not maritime forces.) 
 
A well-thought out plan? 
------------------------ 
¶9.  (SBU)  When PolOff asked Toro what Panama needs to effect 
this proposed merger, he quickly provided a checklist agenda. 
 Toro's checklist, although not detailed, provides a good 
overview of some of the problems with the current force 
structure.  Toro stated the plan must begin with the 
development of new doctrine focused on coastal defense, not 
just defending the Canal.  Next, the new Coast Guard would 
need additional naval bases and airports to base its 
operations.  Toro cited the need to increase resources for 
proper maintenance of ships and aircraft.  The final part of 
the plan is to increase training for all PPF members in the 
new service. 
 
Comment: Time for a fresh start? 
-------------------------------- 
¶10.  (SBU) The idea of creating a coast guard, possibly 
modeled along the lines of the U.S. Coast Guard (USCG), is 
innovative and shows both the GOP and MOGJ are willing to try 
new ideas to solve systemic problems in the SAN and SMN.  In 
some ways, starting a new organization might be easier than 
trying to repair the existing structure of the SMN and SAN. 
It also avoids potential disagreements about which service 
should receive new equipment at the expense of the other. 
Since the USCG is nominally a law enforcement agency under 
DHS, Panama's use of this model could address some of the 
existing public fears of remilitarization. 
Spend Money to Save Money? 
-------------------------- 
¶11.  (SBU)  The missing pieces in the plan are resources and 
training.  Simply merging the two poorly- equipped forces is 
not a solution.  Purchasing new helicopters and ships will be 
expensive and also pointless without proper maintenance. 
Though part of the justification for the reorganization is to 
reduce spending, the GOP will need to spend a considerable 
amount of money to ensure their plan succeeds.  The issue of 
training and professionalism in the PPF also needs to be 
addressed. 
 
Opportunity for the U.S.? 
------------------------- 
¶12.  (SBU)  The drowning of three marines conducting what 
should be a basic military maneuver for them points to 
serious training deficiencies.  Panama faces a real challenge 
in creating a new organization from two troubled units and 
will look to the U.S. for guidance, training, and resources 
if it attempts to move forward with this major change.  The 
plan also presents the U.S. with an opportunity to assist in 
the creation of an organization that will better serve U.S. 
interests in a region frequently called "America's third 
border."  Aleman and Toro have said Panama cannot afford to 
continue operating both the SAN and SMN.  How Panama plans to 
fund a Coast Guard that will need new bases, equipment, and 
maintenance facilities is the critical issue. 
 
 
EATON