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C O N F I D E N T I A L PANAMA 001801 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 11/19/2017 
TAGS: PREL PGOV PM
SUBJECT: PANAMA POST:  EDITION XI 
 
REF: PANAM 1474 (AND PREVIOUS) 
 
Classified By: POLCOUNS Brian R. Naranjo.  Reasons:  1.4 
(b) and (d). 
 
------- 
Summary 
------- 
 
¶1.  (C) Back from an extended hiatus, the Panama Post now 
brings you its Thanksgiving edition.  Increasingly, the 
Panama Post is the hearing these days from all quarters that, 
despite her protests to the contrary, current Minister of 
Housing Balbina Herrera will be the governing Democratic 
Revolutionary Party (PRD) candidate for president.  Herrera 
continues to maintain that she wishes to run for Mayor of 
Panama, not President of the Republic.  Meanwhile, in the 
opposition, newly re-minted Panamenista member Alberto 
Vallarino is working behind the scenes with his party's and 
the opposition's elites to form a coalition to support his 
presidential candidacy.  Enthusiasm for a prospective 
Vallarino run is tempered though.  Finally, there is 
unhappiness inside the PRD's junior governing coalition 
partner, the Popular Party.  For this edition, the Panama 
Post brings you four stories: 
 
-- Three-way race for President -- Balbina Herrera, Ricardo 
Martinelli, and Alberto Vallarino -- coming, Samuel "Don 
Sammy" Lewis Galindo asserts; 
-- Elite opposition coalition for Alberto Vallarino begins to 
form; 
-- Will the Christian Democrats re-emerge on Panama's 
political scene and does it matter?; and 
-- Ambassador's anti-corruption applauded remarks, but 
"business is business." 
 
End summary. 
 
---------- ---------------------------- 
Don Sammy: Three-Way Race for President 
---------- ---------------------------- 
 
¶2.  (C)  "I foresee a three-way race for President of the 
Republic:  (current Minister of Housing) Balbina Hererra (for 
the governing Democratic Revolutionary Party (PRD)), 
(supermarket magnate) Ricardo Martinelli (for Democratic 
Change (CD)), and (son-in-law and businessman) Alberto 
Vallarino (for the Panamenista party and its eventual 
coalition partners)," Panamanian behind-the-scenes power 
broker Samuel "Don Sammy" Lewis Galindo told POLCOUNS on 
November 19.  Dismissive of his nephew First VP and FM Samuel 
Lewis Navarro's presidential prospects, Don Sammy said, "The 
way my nephew and President Torrijos handled Pedro Miguel 
Gonzalez's election as President of the National Assembly was 
a clumsy stupidity (torpeza).  They failed to see it coming, 
did nothing to stop it, and now have lost the (U.S.-Panama) 
Trade Promotion Agreement (TPA)."  Regarding his son-in-law, 
Don Sammy said, "It's hard to tell how much Alberto wants to 
be president.  He needs to get to work, yet he has headed off 
to Spain this week when he should be working hard here.  I 
think he wants to be president, but he is going about it like 
a corporate CEO, not by working the grassroots."  Believing 
that the PRD would be shifting leftward, Don Sammy said, 
"Watch out for Balbina.  She's going to try to run a populist 
campaign and will try to turn the clock back on Torrijos' 
achievements."  "The 'tendency (tendencia) faction' is 
stronger than Torrijos' camp, and Torrijos can no longer 
bridge the gap between (Ernesto) 'El Toro' (Perez Balladares) 
and Balbina (Herrera) of the tendencia and the modernizers 
that he brought into the fold."  While conceding that Herrera 
was a "sphinx" of whose views little is know, Don Sammy 
asserted, "She's hard-core tendencia and will be bad for 
Panama." 
 
¶3.  (C) Comment:  Politically, Don Sammy is a true survivor 
and, like a cat of nine lives, always lands on his feet.  An 
extraordinarily successful businessman, this oligarch is well 
positioned through family and business ties to come out on 
top regardless of who becomes Panama's next president.  While 
he sees his nephew First VP and FM Samuel Lewis' prospects 
waning, he sees his son-in-law Alberto Vallarino's star 
rising.  Convinced that Herrera would take Panama in the 
wrong direction, Don Sammy finds himself in the uncomfortable 
position of wondering whether his son-in-law really has the 
fire in the belly to run for president, something that is in 
the forefront of many opposition leaders' minds. 
 
--------------------------------------------- -------- 
Pro-Alberto Vallarino Coalition Forming in Opposition 
--------------------------------------------- -------- 
 
¶4.  (C) "A substantial coalition supporting prospective 
candidate Alberto Vallarino is forming,"  Panamenista Party 
Secretary General Francisco "Pancho" Aleman told POLCOUNS on 
November 15.  Former President Mireya "Moscoso, (Patriotic 
Union (UP) VP) Jose Raul Mulino, and myself are all working 
hard for Vallarino."  "You watch," Pancho Aleman said, "We'll 
use the inter-party primary to knock out (former President 
and President of the Moral Vanguard of the Nation (VMP) Party 
President Guillermo) Endara out and to force Martinelli to 
come to terms with us."  Pancho Aleman asserted that 
Panamenista Party President and presidential aspirant Juan 
Carlos Varela, with whom Aleman is on the outs, was 
"increasingly out of touch with political reality" and "no 
longer controls the party."  Varela "was in for a surprise" 
when the Panamenista Directorate to meet on December 1 to set 
the party's internal election calendar, Pancho Aleman 
asserted, believing Varela's weakness would be demonstrated. 
In an otherwise unremarkable lunch conversation with 
Ambassador, newly re-minted Panamenista Party member and 
presidential aspirant Alberto Vallarino asserted, "I want the 
Panamenistas to hold their internal primaries in early May. 
That'll give us enough time for an inter-party primary and 
then to organize the campaign against the PRD."  Meanwhile, 
Varela met November 20 with the party's leadership to 
tentatively plan on a primary for August 31, something that 
will have to be approved by the National Directorate of the 
Panamenista Party on December 1. 
 
¶5.  (C) The Latin American Institute for Advanced Studies 
(ILDEA) hosted former Mayor of Santiago, Chile Jaime Ravinet 
to discuss his experience in Chile's Concertacion, an 
alliance of Christian and Social Democratic parties.  While 
long-shot Panamenista presidential aspirant Marco Ameglio 
attended, noticeably absent were Varela and any of his 
closest supporters.  Former President Mireya Moscoso's 
acolytes were out in force as were close allies of Vallarino 
and Patriotic Union (UP) party VP Jose Raul Mulino who indeed 
served as the opposition's commentator on the dais sharing 
his reflections on Ravinet's remarks.  On the margins of this 
event, Pancho Aleman asserted, "Juan Carlos (Varela) no 
longer controls the Panamenista rank and file.  They're all 
moving towards Alberto."  Separately, former Minister of 
Health and Vallarino ally Jose Manuel Teran, Pancho Aleman, 
and Panamenista activist and former FM Jose Miguel Aleman 
confirmed for POLCOUNS that the ILDEA event had been 
orchestrated by Vallarino as a show of force aimed at 
influencing the elites of the Panamenista Party and the wider 
opposition. 
 
¶6.  (C) "We have to get Endara to step down," Jose Miguel 
Aleman told POLCOUNS subsequently on November 19.  "He's too 
old and weak.  Perhaps we can buy him off by offering his 
wife (Anna Mae) the nomination to be our candidate for Mayor 
of Panama City." 
 
¶7.  (C) Comment:  Key opposition forces are coalescing around 
Vallarino, but there is a lack of enthusiasm as support for 
Vallarino appears to be primarily limited to the elite movers 
and shakers within the Panamenista Party and its prospective 
coalition partners, particularly UP or at least the portion 
of UP led by Mulino.  Moscoso stated outright to Ambassador 
on October 29 that she supported Vallarino, but also voiced 
concerns about his commitment to the race.  Don Sammy stated 
on November 19 that he believed that Moscoso's support for 
Vallarino was a matter of political convenience rather than 
based upon any true heartfelt support for Vallarino. 
Questions regarding how solidly Vallarino is committed to 
running, assertions that Vallarino seeks a "coronation," and 
the widespread belief that he does not wish to sully his 
hands mixing it up with masses all feed a lack of enthusiasm 
for Vallarino.  To date, to the best of the Panama Post's 
knowledge, Vallarino has reserved his political activities to 
boardroom maneuverings and has stayed off the campaign trail. 
 Vallarino's strategy at this point appears to be to seek 
legitimacy through both a Panamenista Party primary and an 
inter-party primary while at the same time working behind the 
scenes to force competitors, like Endara, out of the race. 
Teran and Pancho Aleman even go so far as to assert that, 
presented with a strong enough pro-Vallarino front, 
Martinelli, who categorically refuses to participate in an 
inter-party primary, might be forced seek terms with 
Vallarino and pull out of the race.  In some sense, 
Vallarino's strategy is rather like a hostile corporate 
take-over:  buy up as many shares as you can, co-opt other 
major shareholders, take control of the share-holders 
convention, install new corporate management, and then 
dominate opposition market competitors (i.e., Martinelli) to 
reach a modus vivendi. 
 
------------------------------------------ 
New Christian Democratic Party on Horizon? 
------------------------------------------ 
 
¶8.  (C) "I am leading a faction within the Popular Party that 
is seeking to reconnect with our Christian Democratic roots," 
former Ambassador to Washington and Popular Party activities 
Eduardo Vallarino told POLCOUNS on November 19.  "It is going 
to be difficult to pull the entire party out of the 
gravitational pull of the PRD, but perhaps the true Christian 
democrats would break away."  Vallarino asserted that nobody 
had ever been able to explain how the Christian democrats 
could form a coalition with the PRD social democrats: 
"Ideologically and intellectually, the PRD is rooted in 
materialism, dialectics, and Marxian socialism -- they're a 
key part of the Socialist International for heaven's sake -- 
and lacks the moral and ethical traditions of the social 
Christians."  Vallarino said that fights over the Torrijos 
Administration's handling of Pedro Miguel Gonzalez's election 
as President of the National Assembly, underestimating badly 
the impact that the election of this U.S. fugitive wanted in 
connection with the 1992 murder of a U.S. serviceman would 
have on efforts to ratify the TPA, and unwillingness to take 
on Venezuelan President Chavez's increasingly undemocratic 
behavior had strained relations within the Popular Party 
between those who seek continued accommodation with the PRD 
and those who wish to return to their Christian Democratic 
roots. 
 
¶9.  (C) Comment:  The Popular Party essentially condemned 
itself to politically irrelevancy when it became the PRD's 
junior coalition party for the 2004 elections.  If Christian 
Democrats were to split from the Popular Party, Torrijos 
would likely be subjected to a brief flurry of negative 
stories regarding his inability to hold together his 
coalition.  The longer term impact though would be minimal: 
Panama would have two more boutique parties, one the remains 
of the Popular Party hopelessly trapped orbiting around the 
PRD and the other the Christian Democrats freed of the PRD's 
gravitational pull but doomed to wander the outer space of 
Panamanian politics. 
 
------------- --------------------------------------------- - 
¶E. Vallarino: Applauds Corruption Remarks, Does Biz with Uba 
------------- --------------------------------------------- - 
 
¶10. (C) "Even though they were technically an interference in 
internal Panamanian affairs, Ambassador Eaton's recent 
remarks condemning continued corruption and weakness in our 
judiciary deserve to be applauded; I liked them,"  Eduardo 
Vallarino told POLCOUNS on November 19.  Vallarino, echoing 
the Ambassador's recent speech to the Chamber of Commerce, 
noted that Panama had to "protect its trademark and image." 
"We need to ensure an efficient judicial system that deals 
with disputes fairly and that is not subject to 
manipulation."  At the conclusion of lunch however, after 
taking a call from former Minister of the Presidency Ubaldino 
"Uba" Real, Vallarino explained, "I'm doing a series of power 
generation projects, about a dozen.  Uba and I and our 
'phantom partner' (read:  President Martin Torrijos) are 
involved in one deal in Veraguas state.  It's kinda wierd to 
be doing business with the PRD, but business is business." 
 
¶11.  (C) Comment:  While it is heartening to see that the 
Ambassador's anti-corruption message and calls to strengthen 
the judiciary are resonating positively even with the 
"sovereigntist" crowd that sees such remarks as interference, 
it is disheartening to hear the same supporters speak so 
blithely about business deals in which a partner, namely the 
sitting head of state and government, has to be referred to 
as a "phantom partner."  While Vallarino noted that he 
believed that no serious in-roads against corruption would be 
made until Panamanians got serious about the problem 
themselves, Vallarino's own "business is business" remarks 
underscored the difficulties in forging such an essential 
anti-corruption political basis in Panama. 
 
ARREAGA