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C O N F I D E N T I A L PANAMA 001430 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 08/24/2017 
TAGS: PREL PGOV ECON ELAB PM
SUBJECT: PANAMA POST:  EDITION IX 
 
REF: PANAMA 1346 (AND PREVIOUS) 
 
Classified By: Ambassador William A. Eaton.  Reasons:  1.4 (b) and (d). 
 
------- 
Summary 
------- 
 
¶1.  (C)  For the ninth edition of the Panama Post, our top 
stories are: 
 
-- Ernesto "El Toro" Perez Balladares will run for president, 
wants to face Vallarino; 
-- Jose Manuel Teran:  opposition needs to rally around 
Vallarino; 
-- Juan Carlos Varela and his campaign team lunch with 
Ambassador; 
-- Democratic Change (CD) party to surpass Patriotic Union 
(UP) to be Panama's second largest opposition party?; 
-- radical construction union SUNTRACS seeks confrontation; 
and 
-- Panama prepares accommodations for Noriega 
 
--------------------------------------------- --------- 
El Toro to Run for President Regardless of PRD Primary 
--------------------------------------------- --------- 
 
¶2.  (U) Regardless of what happens in the governing 
Democratic Revolutionary Party (PRD) primaries, former 
President Ernest "El Toro" Perez Balladares told assembled 
mass media leaders at the City Club on August 22, that he 
would run for president again.  Furthermore, El Toro said he 
wanted to run against Alberto Vallarino, who recently joined 
the Panamenista Party.  "I'd like to run against Alberto 
because he is a capable man, and it would give the public a 
chance to choose between a proven person (Perez Balladares) 
and a successful businessman."  Summarizing his views of the 
rest of field in the race for president, "El Toro" said:  (1) 
former President and President of the Moral Vanguard of the 
Nation (VMP) party Guillermo Endara would withdraw; (2) 
Democratic Change (CD) President Ricardo Martinelli "had 
bought himself a party and now wants to buy the presidency;" 
and (3) "I don't care which of the cousins (First VP and FM 
Samuel Lewis or Panama City Mayor Juan Carlos Navarro) I 
face" in the PRD primaries.  The following day, Minister of 
Housing Balbina Herrera underscored that she would continue 
her campaign to be elected president of the PRD. 
 
¶3.  (C) Comment:  After a flurry of activity a few months ago 
launching his campaign to be the next President of the PRD, 
the Panama Post has not really heard much from El Toro until 
now.  Joining the lunch-o-mania (the purposefully visible 
meal encounters by political notables) that has gripped 
Panama City over the past couple of weeks, Perez Balladares 
decided to inject some vigor into his political profile by 
hosting a gab-fab at the City Club for media leaders, not PRD 
faithful or leaders.  His prospects for reeling in the PRD 
Presidency have evaporated since Minister of Housing Balbina 
Herrera was penciled in for that job.  By announcing that 
regardless of the results of the PRD primaries that he will 
run independent of the PRD, El Toro has for the first time 
publicly stated a willingness to break with the PRD to 
advance his efforts to return to the Presidential Palace. 
Up-and-coming PRD stars who met with Ambassador on August 23 
indicated that they were not all surprised that El Toro was 
prepared to break with the PRD, and none of the five 
mid-level PRD officials thought El Toro would have much of a 
chance at success.  Many Panamanians will wonder if a leopard 
-- especially a PRD leopard and particularly especially this 
PRD leopard -- can convincingly change its spots. 
 
-------------------------------------------- 
Teran:  Vallarino is the Opposition's Answer 
-------------------------------------------- 
 
¶4.  (C) "Vallarino is the one who can unite the opposition 
and defeat the PRD," Panamenista leader and former Ministry 
of Health in the Mireya Moscoso Administration Jose Manuel 
Teran told POLCOUNS on August 23.  "Vallarino's re-joining 
the Panamenista Party greatly clarified the opposition 
scenario."  Acknowledging a deepening struggle within the 
Panamenista Party, Teran, who was clearly fronting for 
Vallarino, said that the Panamenistas needed to find a way to 
talk some sense into party president Juan Carlos Varela. 
"Varela's presidential campaign will go nowhere.  He cannot 
continue to fight La Dona (Mireya Moscoso), and his campaign 
team is too young and inexperienced.  Many fear Varela simply 
wants to accept the slot of vice presidential running mate to 
Martinelli."  Teran explained that Vallarino campaign would 
collapse Endara's attempt to return to the presidency. 
"Endara doesn't have enough members to legally establish a 
party.  The Vanguard is vulnerable to legal challenges." 
Also, "Without the Panamenistas, Endara cannot succeed."  The 
Patriotic Union (UP) and the Movement of Liberal Republican 
Nationals (MOLIRENA) would join the Panamenistas in broad 
opposition coalition against the PRD.  As for Martinelli, 
Teran held out hope that Martinelli would support a broad 
opposition coalition once it became evident that he could not 
win but that he might deny the opposition a victory.  Teran 
asserted that Moscoso had done a wonderful job of renewing 
her political power and clout and said Moscoso was behind 
Vallarino's ascendance. 
 
¶5.  (C)  Comment:  Alberto Vallarino's re-joining the 
Panamenista Party has had a broad ripple effect across the 
opposition.  As of yet, however, it is unclear what the end 
result of that impact will be.  Likely to jump into the 
presidential race, Vallarino's political movements and action 
bear close watching.  A significant subplot to this drama 
will be the machinations and maneuvering of former President 
Moscoso who has been aggressively courting rank and file 
Panamenistas (most recently joining the lunch-o-mania fervor 
by hosting an August 22 lunch) and continues to pressure 
Varela. 
 
---------------------------------- 
Varela:  Lunch with the Ambassador 
---------------------------------- 
 
¶6.  (C)  While Moscoso was dining across town with various 
and sundry Panamenista deputies and mid-level luminaries, 
Panamenista President Juan Carlos Varela had lunch on August 
22 with Ambassador.  Varela sought to portray himself as an 
agent of change who had renewed the Panamenista Party and 
would seek to renew Panama.  Presenting himself as "young, 
fresh, and new," Varela was dismissive of old timers such as 
Endara, Vallarino and former First VP and UP President-elect 
Guillermo "Billy" Ford.  Varela was accompanied by two young 
Panamenistas who would play key roles on his campaign, 
Meliton Arrocha and Carlos Duboy. 
 
¶7.  (C)  Comment:  Varela continues to struggle for political 
relevance, not only on Panama's national political scene but 
increasingly within his own party.  He stubbornly will not 
reconcile with Panamenista grande dame Moscoso, not just out 
of a sense of personal pride, but also a sense of political 
necessity.  In trying to advance his message of renewal, 
Moscoso is a useful foil for Varela enabling him to cast 
himself in contrast to the corruption and mismanagement that 
plagued her administration.  The Panama Post is skeptical 
about Varela's ability to sustain a viable run for the 
presidency when confronted with the tough realities of 
Panama's power politics, of which Moscoso is a master, and as 
heavy hitters such as Vallarino start warming up their 
engines.  Even in the best of times and without relentless 
pressure from Moscoso, Varela would face an uphill battle in 
demonstrating that, as the head and product of Panama's 
largest opposition party, which has deep roots in Panama's 
history, that he truly offers something "young, fresh, and 
new." 
 
--------------------------------------------- -- 
Democratic Change Seeks to Pass Patriotic Union 
--------------------------------------------- -- 
 
¶8.  (C) "Democratic Change (CD) will surpass Patriotic Union 
(UP) to be Panama's second largest opposition party," CD Vice 
President Roberto Henriquez told POLCOUNS on August 22.  The 
Electoral Tribunal (TE) would release the July party 
membership figures that would showed that the CD had grown to 
about 90,000 members, Henriquez explained.  "Since the 
beginning of August, we have signed up 10,000 more members 
and I think we'll have over 125,000 members by the end of the 
year."  Currently, UP is estimated to have 125,000 members. 
More importantly though, Henriquez explained, CD is moving 
ahead with structural and organizational work.  "We'll have 
candidates for every race across the country from councilman 
to president.  We have already established organizations in 
half of the country's precincts (corregimientos) and soon 
will be established in every precinct." 
 
¶9.  (C) On August 22, Panamenista luminary Jose Manuel Teran 
showed POLCOUNS a bootleg of the TE's membership figures that 
indeed showed CD gaining about 7,000 members to reach about 
92,000 members.  UP lost about 2,000 members in July.  VMP 
and the Panamenista Party also recorded losses. 
Interestingly, MOLIRENA, which has been under a death watch 
for months, actually gained some 5,000 members.  "MOLIRENA 
always appeals to the intellectuals," Teran claimed, "and 
should not be discounted entirely as a political force," 
though admittedly its leadership was lost at sea. 
 
¶10.  (C) Comment: Panamanian politicians and observers love 
to engage in the membership statistics parlor game measuring 
and comparing the relative strengths of the different 
parties.  Seen in that light, the CD should gain more 
credibility as a political party whereas today its seen as 
the expensive adornment of a wealthy supermarket magnet, 
Ricardo Martinelli.  Martinelli has previously told the 
Panama Post that he was investing serious money in building a 
nationwide, precinct-by-precinct machine.  If he is able to 
actually establish such a machine, Martinelli will then 
earned significant political street cred. 
 
---------------------------- 
SUNTRACS Seeks Confrontation 
---------------------------- 
 
¶11. (SBU) The shooting deaths of two construction union 
workers in separate incidents within a 48-hour period 
heightened tensions between the GOP and the radical union 
SUNTRACS.  On August 14, SUNTRACS members confronted workers 
from rival construction union, SITICOOP, outside the Chilibre 
office of Brazilian contractor Odebrecht, which is 
constructing a highway extension between Panama City and 
Colon.  Odebrecht's private security guards allegedly opened 
fire on SUNTRACS workers, wounding two and killing one.  On 
August 16, a Panamanian National Police (PNP) officer 
allegedly killed a SUNTRACS member with a shotgun blast to 
the head during a confrontation at a job site in the Pearl 
Islands, a small archipelago in the Gulf of Panama.  These 
incidents prompted a series of protests on August 16 by 
hundreds of SUNTRACS workers and their sympathizers, 
culminating with a street march to the Presidential Palace. 
Despite fears of further violence, the march ended without 
incident. 
 
¶12.  (SBU) Comment:  Our construction industry contacts have 
alleged in recent months that SUNTRACS has displayed an 
increasingly aggressive posture at job sites around the 
country and in its street protests.  The GOP has thus far 
sought to avoid head-on clashes, prompting some in the 
industry to complain that SUNTRACS has cowed law enforcement 
authorities into giving them wide berth to intimidate 
developers and the public.  Suspicions about that SUNTRACS 
enjoys financial and organizational support from Venezuela 
and that their real interest is in fostering a climate of 
crisis during the run-up to Panama's 2009 elections.  Last 
week's killings could foreshadow further violence and 
certainly heighten tensions between SUNTRACS and other unions 
and the GOP. 
 
------------------------------------ 
Noriega  Supporters and GOP Prepare 
------------------------------------ 
 
¶13.  (SBU) Panama's chattering class was a twitter this week 
gabbing about the work being done on former dictator Manuel 
Antonio Noriega's former residence in Panama City.  News 
outlets reported on the new paint being slapped on his 
formerly posh residence and speculation was rampant as to who 
was underwriting these efforts.  Separately, Minister of 
Government and Justice announced August 22 that Noriega would 
be taken to the El Renacer ("the rebirth") Penitentiary 
Center were he to be returned to Panama following completion 
of his sentence in the U.S. on September 9.  On August 22, 
Vice Minister of Finance Orcila Vega de Constable underscored 
that any work on Noriega's residence had to be authorized by 
her ministry and, stated that once repaired, the residence 
would be auctioned.  Meanwhile, Noriega's residence will need 
much more than a dusting and touch-up paint job.  The 
residence, and other properties, have essentially been 
abandoned for seventeen years and require extensive work. 
 
¶14.  (C) A subdued, low level of nervousness that Noriega 
might actually be returned to Panama is helping the media 
sell papers and fill air time.  There were echoes of this 
nervousness in the halls of the MFA too.  DCM and POLCOUNS 
were called in to see MFA Senior Advisor Adolfo Ahumada on 
August 21 for meeting that turned out to be essentially a 
hand holding exercise to hear out Ahumada's inquiries as to 
whether Noriega's legal challenges to his extradition might 
prevail.  DCM and POLCOUNS underscored that it remained the 
policy of the U.S. to extradite Noriega to France and that 
the USG and GOP would need to wait to see how the judge would 
rule on Noriega's prisoner of war challenge to his 
extradition.  Ahumada noted that President Torrijos would 
hold a senior level meeting on August 22 to discuss the 
Noriega situation. 
EATON