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C O N F I D E N T I A L PANAMA 000525

SIPDIS

SIPDIS

DEPARTMENT FOR WHA/CEN
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 01/06/2016
TAGS: PGOV PREL PINR PM
SUBJECT: PANAMA: INTERNAL RULING-PARTY DYNAMICS AS JOSTLING
FOR 2009 ELECTIONS BEGINS -- PART II: THE UNWANTED ONE

REF: PANAMA 0502

Classified By: AMBASSADOR WILLIAM EATON FOR REASONS 1.4 (B) AND (D).

¶1.  (U) "The Unwanted One" is Part II in a three-part series
on Democratic Revolutionary Party inner dynamics.  Part I
(reftel): The Front Runners.  Part III (septel): The Veeps.

SUMMARY
-------
¶2.  (C) Ernesto Perez Balladares (PB) is widely seen as
angling for another shot at Panama's presidency, which
President Martin Torrijos is eager to prevent.  To that end,
Torrijos allegedly has asked 2009 presidential hopeful Juan
Carlos Navarro to oppose PB, which he has done with gusto.
Possibly Panama's most competent modern president
(1994-1999), PB brought Panama into the WTO and privatized
the country's creaking energy and telecommunications sectors.
 PB also has a long list of negatives that decrease his
attractiveness to voters and to the Democratic Revolutionary
Party (PRD).  Although a dark horse at the moment, the wily,
determined, and wealthy PB cannot be counted out.  End
Summary.

PRD President -- Ticket to Success?
-----------------------------------
¶3.  (SBU) Publicly campaigning for the past six months to
become PRD president in the party's 2007 internal elections,
former president Perez Balladares (57) has been holding
political meetings in the countryside and allegedly will
begin an aggressive media campaign in 2006 targeted to young
PRD voters.  Though the PRD presidency is largely ceremonial,
observers assume that PB is eager to use his campaign for the
job as a straw poll of his popularity within the party; and
after being elected to it, ceremonial or not, it is widely
assumed that he would use it as a springboard to gain the
party's 2009 nomination for president.  (Note: Real power
within the PRD resides in the posts of secretary general and
deputy secretary general, whose current incumbents are
President Torrijos and Housing Minister Balbina Herrera,
respectively.  The current PRD president is political
non-entity Hugo Giraud.  End Note.)

What Is "Torrijismo"?
---------------------
¶4.  (SBU) PB is widely disliked and distrusted within the PRD
(and nationally) but some PRDistas, especially disappointed
job seekers and others, disgruntled with Torrijos and his
"technocratic" (read: non-PRD) governing style, could end up
supporting him, especially if Torrijos neglects the party
grassroots.  Part of PB's strategy is to dent Torrijos's
reputation within the party by questioning his assumed mantle
of political heir to his father, former dictator Omar
Torrijos, who founded the PRD in 1979.  Torrijos's emerging
anti-PB strategy is to paint PB as an unpleasant, vaguely
sinister has-been.

Stalking Horses
---------------
¶5.  (SBU) Both Torrijos and PB are using stand-ins to damage
each other's standing.  Recently, PB's former labor minister,
Mitchell Doens, has been issuing sentimental calls for a
political rescue of "Torrijismo" -- the populist policies of
Martin's dictator dad -- and to shun Martin Torrijos's PRD.
On the other hand, Panama City Mayor Juan Carlos Navarro has
been attacking PB.  Widely seen as PB's stalking horse, Doens
is pushing for a return to the pro-labor, populist Torrijos
policies of the 1970s (which also emphasized
nationalist/anti-U.S. propaganda, repression, and human
rights abuses), in which military strongman Omar Torrijos
posed as benevolent champion of the poor and downtrodden and
as the enemy of the aloof, selfish, rich "rabiblanco" elite
and "U.S. imperialism."  (Comment: In fact, corruption,
income disparity, and national indebtedness all greatly
increased under Torrijos.  Not least, Torrijos gave Panama
Manuel Noriega, who headed the military's feared intelligence
branch, and whom Torrijos used to call "my gangster."  End
Comment.)

Doens Leads the Charge
----------------------
¶6.  (SBU) In a recent op-ed piece, Doens called for the PRD
to distance itself from the GOP and from Martin Torrijos, who
he accused of running a "personalist" administration,
ignoring the party's base, and leading it to certain
electoral ruin in 2009.  Doens claimed that Torrijos was
making far too many concessions to the PRD's worst "enemies,"
who include the U.S. government.

Green Light For A Fracas
------------------------
¶7.  (SBU) PB's negatives -- and his pugnaciousness -- are
never far from the surface.  During the week of March 13 PB
engaged in an escalating public media altercation with Panama
City Mayor Juan Carlos Navarro, who told the Ambassador March
16 that Torrijos had given him the "green light" to take on
PB and to oppose him for the PRD presidency.  PB had taken
umbrage at Navarro's comment on television that privatizing
the state-owned electricity company had been an expensive
mistake.  PB shot back at what he called Navarro's "infantile
demagoguery," called him a "coward," and reminded him of a
fawning letter he once had sent to Manuel Noriega.  Navarro
fired back immediately, denouncing PB's "egoism,"
"uncontrollable arrogance," "excessive fortune," and "his
barely controlled and unhealthy obsession" with seeking
another term as president of Panama.  Navarro followed that
with a scathing op-ed piece in El Panama America backing
Torrijos and calling PB a "vulgar," "irresponsible," and
"hypersensitive" man of the past, and reminding his readers
that the USG had revoked PB's visa, to the continuing "shame"
of all Panamanians.

Comment
-------
¶8.  (C) Aside from his overbearing personality, which earned
him the nickname El Toro ("the bull"), PB has three main
negatives: He privatized the energy and telecommunications
sectors but left them with weak regulatory oversight.  The
result has been substantial rate increases and mediocre
service, for which he is routinely blamed.  Second, he held
the nation hostage, in effect, for most of 1998 as he pursued
a referendum to permit him to run for a second consecutive
term.  He lost that vote by a crushing two-to-one margin, a
fact that PRD kingmakers will likely not forget.  Lastly PB's
U.S. visa was revoked in 2001 due to alien smuggling charges.
 He is unlikely to earn the PRD's berth in 2009.  But no one
should forget that Martin Torrijos himself was in the
political wilderness until PB plucked him from obscurity
following his referendum defeat to be the PRD's presidential
candidate in 1999.

EATON