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C O N F I D E N T I A L PANAMA 001484 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 09/05/2017 
TAGS: PREL PGOV KCRM KJUS PM
SUBJECT: PANAM POST:  EDITION XII 
 
 
Classified By: POLCOUNS Brian R. Naranjo.  Reasons:  1.4 (b) 
and (d) 
 
------- 
Summary 
------- 
 
¶1.  (C) The election and aftermath of Pedro Miguel Gonzalez 
-- wanted in the U.S. in connection with the 1992 murder of a 
U.S. serviceman -- dominated political discussions in Panama 
this week.  Nonetheless, the Panama Post's editor nonetheless 
found the time for a sit-down with presidential aspirant 
Alberto Vallarino. 
 
-- PRD Majority Leader says PMG affair was the result of a 
"total rebellion" by governing Revolutionary Democratic Party 
(PRD) National Assembly deputies; and 
-- Newly re-enlisted as a Panamanista, Alberto Vallarino 
waits in the wings of the presidential race. 
 
This week's edition of the Panama Post is coming to you early 
as your editor will be departing on leave.  Until your 
editor's return at the end of September, the Panama Post will 
be on hiatus. 
 
-------------------- -------------------------------------- 
PRD Majority Leader: PMG Affair Result of "Total Rebellion" 
-------------------- -------------------------------------- 
 
¶2.  (C)  "The election last Saturday of Pedro Miguel was not 
a nationalist act, but rather was an act of total rebellion. 
Unfortunately, given his problems with the U.S., it had to be 
Pedro Miguel who was elected. We rebeled not against the 
U.S., but rather against Martin Torrijos," governing 
Revolutionary Democratic Party (PRD) Majority Leader Deputy 
Leandro Avila told the Panama Post on September 5.  (Note: 
PMG is under U.S. indictment in connection with the 1992 
murder of U.S. serviceman Zak Hernandez.)  Avila then 
recounted the following series of events: 
 
Saturday, September 1: 
---------------------- 
 
-- 7:00 a.m.:  Summoned to the President's residence, PMG and 
PRD Deputy Hector Aleman met with President Torrijos.  This 
meeting was brief as it quickly devolved into a blame game. 
Aleman later told Avila that Torrijos blamed PMG for "trying 
to destroy the PRD" and putting the prospects for a PRD 
victory in 2009 at risk.  Allegedly, PMG blamed Torrijos for 
betraying him by telling PMG to go and secure the votes for 
his candidacy only to abandon PMG later in the face of 
pressure regarding PMG's legal problems in the U.S. 
 
-- 8:00 a.m.:  First VP and FM Samuel Lewis and 2nd VP and 
Minister of the President Ruben Arosemena met with PMG at the 
National Assembly.  Allegedly, PMG frantically paced the room 
and even yelled at Lewis.  Nonetheless, Lewis and Arosemena 
secured PMG's promise "to renounce at the end of his speech." 
 
-- 11:00 a.m.-3:00 p.m.:  (Note:  PMG was elected in a 
landslide securing the votes of all PRD deputies present 
(including Avila's), was sworn in, and delivered a polemical 
speech peppered with anti-American rhetoric.  Torrijos 
followed PMG's address with a "state of Panama" speech that 
was overshadowed by PMG's remarks.) 
 
-- 3:00 p.m.:  During a lunch in honor of PMG at Panama's 
Marriott Hotel, Minister of Housing Balbina Herrera, incensed 
that PMG had not stepped down as promised, got into a heated 
discussion that eroded into a yelling match.  PRD Deputy Juan 
Hernandez reportedly confronted Herrera, and the argument 
nearly came to blows. 
 
Sunday, September 2: 
-------------------- 
 
-- Morning: Allegedly, Torrijos personally phoned about 25 
PRD deputies to tell them that PMG had not honored his pledge 
to step down during his acceptance speech.  Torrijos invited 
these deputies to the Presidential palace on September 4 
after the invited VIP guests (including former President 
Carter and Senator Byrd) had departed Panama following the 
commemoration of the thirieth anniversary of the signing of 
the Panama Canal Treaties and the initiation of the Panama 
Canal expansion project. 
 
Tuesday, September 4: 
--------------------- 
 
-- 7:00 a.m.: PRD deputies stood up Torrijos' breakfast 
invitation, passing word back to Palace staffers, "Sorry, but 
National Assembly President Pedro Miguel Gonzalez has called 
a meeting to discuss committee assignments."  Torrijos 
attempted to recover by hosting a lunch in lieu of the 
breakfast, but, as PMG's meeting endured until 3:00 p.m., 
lunch too was cancelled. 
 
-- 5:00 p.m.:  Torrijos summoned all PRD deputies to the Casa 
Amarilla (Yellow House, a conference center on the 
presidential compound), telling them that he would first meet 
with PMG in his office after which both would join the 
assembled deputies at the Casa Amarilla. 
 
-- 6:00 p.m.: PRD Deputies began arriving at the Casa Amarilla 
 
-- 8:00 p.m.: Torrijos appeared at the Casa Amarilla and 
announced that PMG never showed up.  PRD Deputy Yassir 
Purcait, his campaign manager, never showed either. 
 
¶3.  (C) Addressing the PRD bloc on the evening of September 
4, Torrjios admitted that he had made many mistakes, 
including not taking the calls of PRD deputies and generally 
ignoring them, Avila said.  Torrijos swore that he had not 
received any pressure from the USG regarding PMG's candidacy. 
 He promised more funds for the PRD deputies' districts and 
admitted that the people were demanding social action that 
the deputies had been unable to provide.  According to Avila, 
several PRD deputies told Torrijos that only Torrijos could 
convince PMG to step down; "You are friends with Pedro 
Miguel, not us." 
 
¶4.  (C)  Avila asserted to the Panama Post that Torrijos' 
September 4 mea culpa speech might have turned the tide for 
the President.  "Easily 35 deputies are willing to push for 
PMG to go," Avila said.  "But Pedro Miguel needs to renounce 
since he was legally elected. Unless he steps down, nothing 
will happen."  Avila asserted that Torrijos "sloppy 
management and political style" directly caused the PMG 
affair.  "Pedro Miguel asked Torrijos if he could be the one, 
and Torrijos told him, 'Yes, go ahead and get the votes,'" 
Avila explained.  Yet when PMG was able to secure the votes, 
something Torrijos thought would never happen, Avila said 
that Torrijos could not "turn things around."  As for whether 
PMG would step down, Avila said he did not believe PMG would 
step down soon, "if at all.  PMG is crazier than ever, but he 
is a believer.  He will have to be convinced for reasons 
other than money to step down." 
 
¶5.  (C) Comment:  Avila's recounting of these four days of 
the PMG affair tracks well with reports that the Panama Post 
has picked up elsewhere.  The PMG affair has revealed 
fissures and divisions with the PRD ranks that are deeper and 
more complex than most political observers would have 
imagined before September 1.  The PRD though remains a 
disciplined party; indeed PRD deputies delivered a landslide 
victory (50 yes - 25 no - 2 absences) for PMG, a candidate, 
if Avila is to be believed, that they  did not want.  There 
are few winners in this affair, except perhaps for former 
President Ernesto "El Toro" Perez Balladares who might gain 
political force in relative terms as Torrijos and others have 
been weakened by this debacle.  Ultimately, if it is 
resolved, the PMG affair will be resolved in a typically PRD 
fashion.  Stay tuned. 
 
------------------------------ 
Vallarino Waiting in the Wings 
------------------------------ 
 
¶6. (C) "I am prepared to enter the presidential race if I can 
contribute to fostering opposition unity," presidential 
aspirant Alberto Vallarino told POLCOUNSQSeptember 4. 
Careful to state that he was not a candidate, Vallarino 
nonethless acknowledged that he was in constant contact with 
fellow Panamenista Party leaders and other opposition 
leaders.  Vallarino professed to be on excellent terms with 
former President Mireya Moscoso, current Panamenista Party 
President Juan Carlos Varela (who was Vallarino's campaign 
manager in 2004), and former party president Marco Ameglio as 
well as the Moral Vanguard of the Nation (VMP) Party 
President and former President Guillermo Endara and Patriotic 
Union (UP) Party President Guillermo "Billy" Ford.  "You need 
to be rich or get the nomination of a rich party to 
successfully run for president," explained Vallarino, a 
multimillionaire banker and investor.  Seen in the light of 
who had the economic wherewithal to make a presidential run, 
Vallarino acknowledged that three serious candidates would 
be:  Cambio Democratico's Ricardo Martinelli, whoever the PRD 
runs, and himself.  "Endara -- a nice and honest man -- will 
never succeed; he has no money and he would be a return to 
the past."  Were he to throw his hat into the ring, Vallarino 
said that he would position himself as a "new alternative" to 
the old politics.  "I have never been in government, but I 
have been extremely successful in business.  I will appeal to 
the young who aspire for an optimistic future."  Asked why he 
rejoined the Panamenista Party, Vallarino said that he had 
always been a Panamenista; "I grew up around Arnulfo Arias. 
Being Panamenista in my family is nearly a matter of 
genetics."  As an aside, Vallarino noted that he had been 
offered the presidency of the UP, but "I wouldn't work well 
in a small party." 
 
¶7. (C) Comment: Vallarino caused quite a stir when he 
re-joined the Panamenista party in mid-August and increased 
speculation that he would throw his hat into the presidential 
race.  To date, however, Vallarino has been careful to manage 
his profile and to not appear to be a declared candidate. 
Understanding that Martinelli will definitely run for 
president, Vallarino is positioning himself to be the obvious 
unity candidate for the rest of the opposition.  Panamenista 
Party President Juan Carlos Varela's continuing feud with 
Moscoso leaves Varela vulnerable to Vallarino who would like 
to take from Varela the mantle of being the face of a 
"renewed" Panamenista party.  Vallarino, who has been under 
an ethical cloud in the wake of his windfall profits secured 
as the result of special tax breaks for the sale of Banistmo 
bank, will have to deal with Endara's "honest Abe" 
reputation.  Finally, he will need grapple with Martinelli's 
already well staked claim to be the new alternative to 
Panama's politics as usual.  Vallarino's deep pockets and 
deliberate and calculating manner though make him a candidate 
to watch. 
 
EATON