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C O N F I D E N T I A L PANAMA 001474 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 08/29/2016 
TAGS: PREL PGOV KCRM KJUS PM
SUBJECT: PANAMA POST:  EDITION X - "THE PEDRO MIGUEL 
GONZALEZ EDITION" 
 
REF: PANAMA 1430 (AND PREVIOUS) 
 
Classified By: Ambassador William A. Eaton.  Reasons: 
1.4 (b) and (d) 
 
------- 
Summary 
------- 
 
¶1.  (C)  This week's politics -- and in turn this week's 
edition of the Panama Post -- was dominated by the race to 
become the next President of the National Assembly and the 
prospects that Pedro Miguel Gonzalez (PMG), a fugitive from 
U.S. justice in connection with the 1992 murder of U.S. 
serviceman Zak Hernandez, would prevail.  The following are 
our PMG-related stories that were not reported elsewhere: 
 
-- former President Ernesto "El Toro" Perez Balladares 
reaches out to Panamenista Secretary General and National 
Assembly Deputy Francisco "Pancho" Aleman to propose a 
"governability pact" for the legislature; 
-- former President Mireya Moscoso's aide Eduardo Quiros 
dishes PMG-related dirt; 
-- Panama City Mayor Juan Carlos Navarro's emissary passes 
message that Navarro opposes PMG and remains friend of U.S. 
 
In other news, Ambassador hosted a lunch in honor of 
Democratic Change (CD) President and current opposition 
presidential front-runner Ricardo Martinelli: 
 
-- Moscoso believes former President Guillermo Endara and 
presidential aspirant Alberto Vallarino need to come to terms; 
-- Martinelli seeks to lead opposition in new direction; and 
-- Panamanian politics and the George Costanza effect. 
 
 
------------------------------------------ 
"Governability" Pact for National Assembly 
------------------------------------------ 
 
¶2. (C) Former President Ernesto "El Toro" Perez Balladares 
"reached out to me to see if I was interested in seeking to 
establish a governability pact for the National Assembly," 
Panamenista Secretary General and National Assembly Deputy 
Francisco "Pancho" Aleman told POLCOUNS on August 29.  "El 
Toro said he could deliver ten PRD deputies."  Aleman 
explained that he believed that El Toro reached out to him 
since both had reached a similar arrangement during the 
Moscoso Administration to form a majority in the National 
Assembly.  While non-commital, Aleman said that he told Perez 
Balladares that they should stay in touch as the race for 
National Assembly President continued to evolve.  "Our 
candidate for National Assembly President will be Wigberto 
Quintero," a Movement of Liberal Republic Nationalists 
(MOLIRENA) Deputy, according to Aleman.  "We will be looking 
for a rebellion in the PRD rank and file; they're not all 
happy with how the PRD bloc selected Pedro Miguel Gonzalez." 
Agreeing that First VP and FM Samuel Lewis' presidential 
aspirations were at stake in the outcome of the race for 
President of the National Assembly, Aleman also asserted that 
President Torrijos' position as PRD Secretary General was 
also hanging in the balance. 
 
¶3.  (C) Inquiring whether the U.S. suggested that Torrijos 
shuffle his cabinet to open political space to resolve his 
PMG problem, POLCOUNS assured Aleman that Torrijos flew solo 
on his decision to request the resignations of all of his 
ministers.  Aleman said that he had heard rumblings that 
Torrijos would name all of his new ministers, except for one 
that he would set aside for PMG.  Once elected National 
Assembly President, PMG would be offered the remaining 
ministerial portfolio thereby allowing PMG to win election 
but then be moved out of the way, Aleman explained.  POLCOUNS 
noted that PMG's legal problems would remain the same 
regardless of which high-level position he held. 
 
¶4.  (C) Comment:  Such a national governability pact is an 
extremely long shot that would require the PRD to break 
ranks, a possibility that is inconceivable for most PRD 
loyalists.  If true though, this development suggests that 
the PRD's internal troubles are more profound and the 
willingness of important PRD leaders to maneuver for 
political advantage is greater than previously believed. 
Important PRD players -- for example, Torrijos, Lewis, 
Minister of Housing Balbina Herrera, current Assembly 
President Elias Castillo, Perez Balladares, Panama City Mayor 
Juan Carlos Navarro, Assembly Deputy Hector Aleman and 
Assembly Majority Leader Leandro Avila -- are all on the move 
and angling for advantage.  If the race for President of the 
National Assembly plays out in a bloody fashion, then 
Torrijos' claim to lead the PRD will be in question. 
 
------------------- 
Moscoso Aide Dishes 
------------------- 
 
¶5.  (C) The Panama Post sat down with former President Mireya 
Moscoso's closest aide and former Minister of Public Works, 
Eduardo Quiros.  The following are some of the morsels that 
Quiros shared with the Panama Post: 
 
-- Pedro Miguel Gonzalez (PMG) Serving as President Martin 
Torrijos' Intermediary in Land Deal:  "Martin is buying land 
in Pedro Miguel's district in Santa Fe, Veraguas, and Pedro 
Miguel is his 'realtor' in the area," Quiros asserted. 
Apparently, well-known traditional Panamanian musician Sammy 
Sandoval was interested in buying a small island in Veraguas 
and was making significant progress with the owner in closing 
the deal.  That was until Sandoval got a call from the owner 
who stated that he had been visited by "a deputy" who offered 
a "bit more" than Sandoval, so the island's owner was going 
to sell to the new offerer.  Allegedly, Sandoval said that 
the new purchaser was none other than Torrijos and that the 
deputy in question was PMG. 
 
-- PMG Promising Panamenista National Assembly Deputies 
Access to Funds, If Elected:  Inquiring with Panamenista 
deputies as to why they were not making more political hay 
out of PMG's candidacy to be the next President of the 
National Assembly, Quiros said that he learned that PMG was 
offering Panamenista deputies who stayed quiet access to the 
chamber's USD 38 million/year allotment.  As these 
Panamenistas' votes were irrelevant to the ultimate election 
of the National Assembly President (the governing 
Revolutionary Democratic Party (PRD) holds 45 of the 
chamber's 75 seats), Quiros explained that the deputies would 
just as soon take the funds that they would need for 
reelection. 
 
¶6.  (C) Comment.  Who knows if it is true that PMG is acting 
as Torrijos' "realtor" in Veraguas; while believable, the 
Panama Post has no independent confirmation.  Knowing that 
Torrijos and PMG have long-standing, close personal ties, it 
is indeed possible that the two are cooperating in this 
fashion.  As for rumors that PMG is handing out IOUs backed 
by the Assembly's annual allotment, these rumors also are 
believable but not confirmable.  If PMG ends up facing only 
token opposition rejection, then one does not need to reach 
far to surmise that muted opposition came with a high price. 
 
--------------------------------------------- -------------- 
Navarro Sends Message That He is Still a Friend of the U.S. 
--------------------------------------------- -------------- 
 
¶7. (C) "The mayor wants the Embassy to know that he is still 
a friend of the United States and opposes the election of 
Pedro Miguel Gonzalez for President of the National 
Assembly," Panama City Mayor Juan Carlos Navarro's aide Ivan 
Gonzalez told POLCOUNS on August 29.  Noting that the Panama 
City Council had unanimously adopted a resolution supporting 
PMG's candidacy to head the legislature, Gonzalez -- no 
relation to PMG -- pointed out that this resolution was put 
forward by PMG's cousin and that Navarro had refused to sign 
it.  "The PRD is making a big mistake in giving Pedro Miguel 
this leadership position.  The mayor remains a strong 
proponent of the Trade Promotion Agreement a fears that this 
development will jeopardize it," Gonzalez added. 
 
¶8. (C)  Comment:  Navarro smelled a political opportunity to 
outflank his cousin, First VP and FM Samuel Lewis, by laying 
claim to the "most pro-U.S. PRD politician" title.  Indeed 
Navarro's emissary went to great lengths to stress that 
Navarro wanted the Ambassador to receive this message before 
the PRD's National Assembly bloc dubbed PMG its nominee to be 
President of the National Assembly.  The Panama Post also 
notes, however, that Navarro has made no public statements 
regarding his opposition to PMG or his desire to remain a 
 
close friend of the U.S.  He did, however, attend the PRD 
bloc's meeting at which PMG was elected by 41 yes votes, zero 
no votes, one abstention, and three absences. 
 
--------------------------------------------- ------- 
Moscoso:  Endara and Vallarino Need to Come to Terms 
--------------------------------------------- ------- 
 
¶9. (C) Moscoso was "convinced that the PRD will win again in 
2009 if former President and President of the Moral Vanguard 
of the Nation (VMP) Guillermo Endara and former presidential 
candidate and recently re-enlisted Panamenista member Alberto 
Vallarino did not come to terms and agree not to oppose one 
another, Moscoso aide Eduardo Quiros told the Panama Post on 
August 28.  "Because he is in a better position in the polls, 
Endara is in a better position to lay claim to being the 
opposition's presidential candidate, but Vallarino's ego will 
not let him be Endara's vice presidential running mate," 
Quiros explained.  On the other hand, however, when Endara 
found out that Vallarino would be the keynote speaker at 
Moscoso's graveside event to commemorate the death of her 
husband and Panamenista Party founder Arnulfo Arias, Endara 
felt sufficiently threatened to demand to speak as well. 
Quiros said that Moscoso believed that the opposition should 
persuade Endara's wife -- Ana Mae Diaz de Endara -- to 
convince Endara to be Vallarino's running mate.  (Rather like 
Cher or Madonna, Endara's wife is simply known as Ana Mae, a 
nod to her diva-esque reputation.)  In turn, Moscoso believed 
that the Panamenistas would then finance her campaign for 
mayor of Panama City, "what she really wants." 
 
¶10.  (C) Comment:  Moscoso is widely believed to be presently 
backing Vallarino to be the opposition (aside from Martinelli 
and his CD party) candidate for president, so it should come 
as no surprise that she would like to see Endara become 
Vallarino's vice presidential running mate.  Why though would 
Endara, who has already topped the ticket and who leads 
Vallarino in the polls, take second billing?  Quiros does, 
however, provide a plausible reason for Endara and Vallarino 
sharing the podium at the Arnulfo Arias commemoration, if 
indeed Moscoso is trying to facilitate a coming to terms 
between the two presidential aspirants. 
 
------------------------- 
Martinelli Comes to Lunch 
------------------------- 
 
¶11. (C) "If we don't find an alternative to Panama's 
traditional politics that successfully addresses Panama's 
challenges, then in five to ten years Panama will face a 
social explosion," Democratic Change (CD) President and 
presidential candidate Ricardo Martinelli told the Ambassador 
on August 28.  Accompanied by his closest advisors -- CD VP 
Roberto Henriquez, Economic Advisor (and AMCIT) Frank de 
Lima, and campaign manager Ricardo Quijano -- Martinelli 
forcefully asserted that he was the viable alternative to 
avert such a social explosion by fighting corruption, 
creating jobs, and improving the lives of average 
Panamanians.  "We are going to reach out to average 
Panamanians to advance our cause by giving them hope," 
Martinelli said.  Regarding the proposed inter-party primary, 
Martinelli said that he would not participate, even if those 
Panamanians who were not members of opposition parties could 
participate.  (Note:  Panamanian law permits only those 
citizens who are members of an opposition party to 
participate in an interparty primary.)  Quijano explained 
that an interparty primary would give a distinct advantage to 
the Panamenista Party, the largest opposition party, that 
would be out of proportion for the support for its 
candidates.  Also, Quijano said Panamanians who were not even 
motivated to enlist with a party were unlikely to go to the 
polls.  Martinelli said that he did not think that Panama's 
opposition politicians were mature enough to accept the 
results and then fall in behind the interparty primary's 
winner, "Instead, the winner would be left to try to 
consolidate the opposition fractured by disgruntled losers. 
It would be better to build political alliances that 
strengthen the opposition candidate, not participate in an 
electoral process that would weaken the opposition," 
Martinelli claimed.  Leaving the door open to forming 
alliance's on the CD's terms, Martinelli said that the focus 
right now was on strengthening CD's structure and 
organization.  Henriquez added that the CD would soon surpass 
Patriotic Union (UP) in terms of membership and that the CD 
would have a nationwide, precinct-by-precinct organization 
established. 
 
¶12. (C)  Comment:  Martinelli remains supremely confident at 
his prospects, and there is no doubt that he will run for 
president in 2009.  He is not, however, a shoo-in for to lead 
the opposition or to defeat the PRD.  Martinelli himself 
acknowledged that the elections are still many months away, 
and there is still much that can happen. 
 
--------------------------------------------- ----- 
Panamanian Politics and the George Costanza Method 
--------------------------------------------- ----- 
 
¶13.  (C) "The worst political analysts and the last people 
from whom anybody should take political advice in Panama are 
the upper and middle class.  They don't know what's really 
going on," Democratic Change (CD) Vice President Roberto 
Henriquez asserted during Martinelli's August 28 lunch with 
Ambassador.  "You should listen to them and do the exact 
opposite if you want to succeed in Panamanian politics." 
Asked by DCM who of the four CD pols present was a member of 
the super elite Panama City social club "Club Union," all 
four -- Martinelli, Henriquez, Frank de Lima and Ricardo 
Quijano -- admitted to belonging to this bastion of Panama's 
upper class. 
 
¶14.  (C)  Comment:  Essentially, Henriquez was proposing an 
approach reminiscent of the strategy by George Costanza, the 
hapless Seinfeld character who was constantly falling into 
misfortune, who turned around his fortunes by doing the exact 
opposite of what his instincts normally told him to do. It 
remains to be seen, however, if adherence to such a George 
Costanza effect would pay off or if Martinelli and his CD 
elites have any true insight into Panama's "popular" sectors. 
 
EATON