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C O N F I D E N T I A L PANAMA 000034 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 01/08/2017 
TAGS: PGOV PREL PM
SUBJECT: PANAMA POST:  2ND EDITION, VOLUME II 
 
REF: PANAMA 18 
 
Classified By: POLCOUNS Brian R. Naranjo.  Reasons:  1.4 (b) and (d). 
 
------- 
Summary 
------- 
 
¶1.  (C) In this addition of the Panama Post, our headlines 
are: 
 
-- Alberto Vallarino, declaring "Enough already!" launches 
campaign for Panamenista Party nomination; 
-- Cambio Democratic presidential candidate Ricardo 
Martinelli celebrates the Feast of the Epiphany with four 
rallies; 
-- Panama City Mayor and PRD presidential candidate Juan 
Carlos Navarro:  "I want Vallarino to win;" 
-- Former President Ernesto "El Toro" Perez Balladares 
launches his mayoral candidate, Noel Riande; 
-- Martinelli responds to whisper campaign; and 
-- Former President Guillermo Endara to formalize 
presidential candidacy. 
 
--------------------------------------------- ---------------- 
"Enough already!" -- Vallarino Launches Presidential Campaign 
--------------------------------------------- ---------------- 
 
¶2. (SBU) Launching his presidential run to chants of "Enough 
already! (Basta ya!)" on January 7, Alberto Vallarino 
squarely portrayed himself as the answer to President Martin 
Torrijos' "unfulfilled promises" and "inability to make 
decisions."  Presenting himself as a successful and 
accomplished administrator, this former banker declared, "The 
tie has been taken off and the decision has been made.  I am 
a candidate for the Presidency of the Republic.  We will 
return (to office)."  The top issues addressed included: 
public transportation, healthcare, law and order, employment, 
and standard of living.  He had specifics focused at winning 
the support of specific voting blocs.  For Panama's 
indigenous peoples, he promised to establish a Ministry of 
Indigenous Affairs.  For Panama's "burdened professional 
class," Vallarino promised to alleviate the burden of the 
CAIR (a kind of alternate minimum tax) by raising the 
exemption to USD 1,000.  Refraining from taking swipes at 
other Panamenista "pre-candidates," Vallarino instead slammed 
Torrijos as:  somebody who could not or would not decide; 
somebody more interested in advertising campaigns "to boost 
his ego;" and somebody who does not fulfill promises, 
including to reduce poverty, ensure "zero corruption," create 
jobs.  To each challenge, Vallarino asserted that he would 
"decide" and "act." 
 
¶3. (C) "Alberto wrote the speech himself," Panamenista Party 
Secretary General Francisco "Pancho" Aleman told POLCOUNS on 
January 9.  "He was not happy with the drafts that Jose 
Manuel Teran and (Patriotic Union (UP) VP) Jose Raul Mulino 
prepared for him."  While acknowledging that it ran too long 
at forty-five minutes, Aleman underscored, "These were his 
words."  Aleman also explained the Panamenista theology 
behind Vallarino's repetition of the line "We will return! 
(Volveremos!)" while holding up his fingers to form the 
letter "v."  During the 1951 coup d'etat against him, party 
founder Arnulfo Arias was photographed flashing the same "v" 
symbol as the military dragged him out of the presidency. 
"'V' does not stand for victory (victoria), but rather 'We 
will return! (Volveremos!),'" Aleman explained.  In this way, 
Vallarino was striving to tie himself to the very early roots 
of the Panamenista party and to Arias himself.  During his 
last conversation with POLCOUNS, Vallarino went to great 
lengths to explain his close relationship to Arias, 
underscoring several times that he "grew up just down the 
street from Arias" and was "practically a family member." 
(Note:  Vallarino considers Arias to be his uncle.  Arias' 
first wife was Vallarino's mother's first cousin.)  Aleman 
also shared that to date, Vallarino had been self-financing 
his campaign; "He will hold his first fund raiser in the 
coming days though."  Vallarino was very cautious about 
accepting money from others, Aleman asserted, but in the end 
could always trust his own money.  Soon Vallarino, in a test 
of strength with Panamenista President and declared candidate 
for the Panamenista presidential nomination Juan Carlos 
Varela, would embark on an effort to sign up 25,000 new party 
members.  Acknowledging that there was some tension among 
campaign advisors, Aleman said that, though they would 
achieve it, this goal had been established by Jose Manuel 
Teran.  "What does Teran know about politics though?  That 
doctor is not a politician.  He overstepped his 
organizational responsibilities by setting that goal." 
 
¶4. (C) Comment:  Vallarino's claim to have drawn 15,000 
supporters to his campaign launch were wildly exaggerated. 
POLCOUNS, present at the rally, estimated the crowd size at 
7,500 to 8,000, an estimate shared by Panamenista leaders and 
some journalists on scene.  Aleman conceded as much by 
stating that they would have achieved the 15,000 mark if the 
event had been held back for another hour pending the arrival 
of the final buses, "but the ad copy had already been 
delivered to the newspapers."  Nonetheless, Vallarino 
succeeded in drawing a significant crowd to a well crafted 
political rally.  True to his reputation, Vallarino mixed 
little with the "washed" special invitees on the mammoth 
fifteen foot high seventy-five foot wide stage and not at all 
with the "unwashed" masses in the dusty field.  Indeed, 
Vallarino ascended to a five foot high podium in the center 
of the stage.  Soaring some twenty feet above the crowd, many 
could not identify him until well into his speech.  Press 
risers and cut-away risers caught the made-for-TV images of 
Vallarino delivering his speech against a bill board-sized 
backdrop of the party's red, yellow, and black colors and a 
fifteen by twelve foot profile image of Vallarino's face. 
Vallarino lost the attention of most in the crowd, who had 
waited up to two hours in the blazing sun, after about twenty 
minutes into his address.  Vallarino demonstrated his ability 
to organize a large event and his willingness to expend 
considerable resources on his campaign.  Now it remains to be 
seen if he will be able to carry this effort forward to pull 
his poll numbers out of the doldrums to first challenge Juan 
Carlos Varela, who has a commanding lead among Panamenista 
leaders for the party's presidential nomination. 
 
------------------------------- 
Three Kings Day with Martinelli 
------------------------------- 
 
¶5. (SBU) Democratic Change (CD)  President and presidential 
candidate Ricardo Martinelli careened through four rallies on 
January 7 across Panama City in Chilibre, Los Andes, San 
Miguelito and Tocumen giving away USD 140,000 in 
gifts/prizes.  POLCOUNS caught up with Martinelli in San 
Miguelito, his third stop, where Martinelli waded into the 
jammed gymnasium of the Instituto Rubiano to raffle of 
washing machines, refrigerators, and ovens as well as give 
away dozens of bicycles, electric fans, mattresses, irons, 
blenders and other household goods.  The scene was repeated 
later in the afternoon in a Tocumen baseball field where 
Martinelli gave away twenty-nine inch televisions and -- the 
ultimate prize -- a car.  Martinelli did not deliver any long 
addresses, but did launch pointed barbs at Torrijos and the 
governing Revolutionary Democratic Party (PRD). 
 
¶6. (C) While Panama City broad sheet daily "La Estrella" 
estimated that Martinelli drew 50,000 people to his four 
events, Martinelli's full-page add on January 8 claimed only 
30,000 and POLCOUNS estimated a total of 20,000, a number 
Martinelli's campaign advisor thought was reasonable. 
Campaign advisor Jimmy Papademetriu told to POLCOUNS that he 
believed that he had "averted a disaster" by re-packaging the 
day's events as a Feast of the Epiphany (Three Kings Day) 
event.  Papademetriu explained that CD National Assembly 
Deputy Jose Munoz had sold Martinelli on the concept of a 
large event to compete directly with Vallarino's campaign 
launch.  "Vallarino is at four percent in the polls. 
Martinelli is at forty percent in the polls," Papademetriu 
said.  "Why would we want to get into a who's-crowd-is-bigger 
measuring contest?"  Munoz though had portrayed the event as 
essential to winning over continued support to attract new 
political leaders to the CD.  Martinelli confided that he 
believed that three PRD deputies would join the CD in the 
coming months.  Papademetriu dismissed such logic as 
convenient for Munoz to ensure Martinelli was on hand for 
Munoz's re-election effort.  "For USD 140,000, I could have 
done four events over the course of a month without competing 
with Vallarino," Papademetriu said.  "Ricardo said it's his 
money though and there's plenty more available." 
 
¶7. (C) "In the general elections, there will be four 
candidates:  the PRD candidate, the Panamenista candidate who 
will probably be Varela, Endara, and me," Martinelli told 
Ambassador on January 9 over lunch at the Cafe Bulvar, the 
traditional haunt on Panama City's main thoroughfare for 
journalists, politicians, and other hangers-on.  "I am not 
worried about a race in which there are three opposition 
candidates, because in the end the most anti-PRD candidate 
will win:  me."  Martinelli said that this next campaign 
would be expensive and would get very bloody. 
 
¶8. (C) Comment:  Papademetriu noted that the Three Kings 
Day's events had allowed him to test out Martinelli's 
campaign machinery to see where they needed better equipment 
(e.g., sound systems), who the good event organizers were, 
and other organizational needs.  For his part, Martinelli 
continues to be his typical confident self, assuring 
Ambassador, "I will win this race, and the U.S. will have a 
strong friend in me, stronger than any previous Panamanian 
president."  Fearful of losing the limited number of CD 
deputies he has -- most of whom jumped ship from other 
parties -- Martinelli is easily swayed by their pleas for 
help and to spend (his) money.  Noting that Martinelli, in a 
recent poll, drew thirteen percent of PRD members' support, 
Papademietriu urged Martinelli not to attack the PRD party, 
but rather Torrijos the person.  Assisted by El Salvadoran 
ARENA election professionals, Papademetriu is striving to 
assert more control over Martinelli's campaign activities, 
message management, and general discipline.  Dealing with the 
headstrong Martinelli, Papademetriu will have his work cut 
out for him. 
 
--------------------------------------------- -------------- 
Navarro:  "I want Vallarino to win the Panamenista primary" 
--------------------------------------------- -------------- 
 
¶9.  (C) "I want Vallarino to win the Panamenista primary," 
Panama City Mayor -- and PRD presidential candidate -- Juan 
Carlos Navarro told Ambassador on January 12.  "He would 
split the anti-PRD vote with Martinelli, and make it easier 
for me to win by allowing me to pick up independents on top 
of the PRD vote."  Contrary to polling that post has seen, 
Navarro asserted that Vallarino was handily defeating Varela 
and would prevail. 
 
¶10. (C) Comment:  Navarro was his usually brash and confident 
self at lunch.  He tipped the press off to ensure a publicity 
bounce in the wake of former President Ernesto "El Toro" 
Perez Balladares' announcement of Noel Riande's candidacy to 
run for Panama City Mayor.  At this meeting though, Navarro 
seemed less confident than previously that Minister of 
Housing Balbina Herrera would not challenge him for the PRD's 
presidential nomination; his assertions that he did not have 
"Balbina problem" were simply less convincing.  Nonetheless, 
Navarro exuded enough confidence to look down the road to the 
general elections.  He firmly believes that, if he can get to 
the general elections, that he will face a hopelessly divided 
opposition over which he can prevail. 
 
--------------------------------------- 
"El Toro" Lanches His Mayoral Candidate 
--------------------------------------- 
 
¶11. (SBU) In a bizarre announcement, former President Ernesto 
"El Toro" Perez Balladares announced January 9 that he would 
support Noel Riande as the PRD candidate to be Mayor of 
Panama City.  Having teased the media that he had an 
"important" announcement to make that day, El Toro proceeded 
to dominate the scene intended to launch Riande.  "The 
problems of the city demand a mayor who is available 
twenty-four hours a day.  Instead of riding around on horses, 
the mayor (Juan Carlos Navarro) should be riding around on 
garbage trucks," Perez Balladares proclaimed.  Riande, the 
former head of the PRD's businessman's front, was left on the 
sidelines of his own campaign announcement. 
 
¶12. (C) Comment:  Riande stands nearly no chance of winning. 
One political wag described him as "wealthy and politically 
clueless, the ideal toy for El Toro."  Navarro for his part 
downplayed the attacks on him reminding the press that he was 
running for president, not mayor.  In his January 11 lunch 
with Ambassador  (see para 9), he bravely said that he would 
turn the corner on the "garbage crisis" that has plagued his 
administration.  He even went so far as to say that he would 
get a bounce out of the "garbage crisis" since he would 
demonstrate he was a good manager.  These latest antics by El 
Toro demonstrate that he can still cause waves. 
 
--------------------------------------- 
Martinelli Responds to Whisper Campaign 
--------------------------------------- 
 
¶13.  (U) "Success is shared with all," proclaimed full-page 
ads taken out by the Super99 supermarket chain in all Panama 
City's major newspapers on January 10.  The adds prominently 
featured Super99 owner -- and presidential candidate -- 
Ricardo Martinelli surrounded by his employees distributing 
end-of-year bonuses and awards (including major appliances). 
According to the add, "more than USD 747,525 in bonuses 
(were) distributed" in December along with food baskets, 
major electric appliances, mattresses, bicycles, and 
scholarships.  One out of every three chain employees as at 
least one child who receives a scholarship from the company, 
the ad stated. 
 
¶14.  (C) Martinelli explained to Ambassador on January 11 
that this ad was intended to respond to the PRD's whisper 
campaign that asserted that Martinelli was a bad employer. 
Campaign advisor Papademetriu January 7 asserted to POLCOUNS 
that "former military intelligence officers closely 
associated with the PRD" were actively pushing negative 
whisper campaigns against Martinelli, including campaigns 
that asserted that Martinelli did not pay his bills, that 
supermarket chain owner was responsible for the rising cost 
of living, and that Martinelli was crazy and on medication. 
Of these whisper campaigns, CD VP Roberto Henriquez explained 
to POLCOUNS on January 12 that Martinelli and his team were 
most concerned about the "bad employer" gossip, hence the ad 
campaign.  "We will continue to fight these kinds of negative 
campaigns with our good story," Henriquez said.  As for the 
assertion that Martinelli was responsible for the rising cost 
of living, Henriquez explained that the CD did not believe 
that message was hurting Martinelli.  "People see prices 
going up all around them -- gas, electricity, rent, cars, and 
food -- and they know that Super99 is not responsible for all 
of it.  Super99 is still one of the more competitive food 
stores and it only accounts for two percent of retail sales 
nationwide." 
 
¶15.  (C) Comment:  Martinelli's team sees gossip control as a 
top priority.  Having sustained a commanding lead in the 
polls, Martinelli and his CD advisors are keenly aware that 
they present a big target.  Whether Papademtriu's assertions 
that former "G-2 types" are actively manipulating the public, 
the fact remains that these rumors are careening around town 
and have gained a currency. 
 
----------------------------- 
Endara to Formalize Candidacy 
----------------------------- 
 
¶16. (C) Moral Vanguard of the Nation (VMP) party president 
Guillermo Endara would be elected in VMP's party primary on 
January 13, VMP leader Menalco Solis told POLCOUNS on January 
¶11.  (Note:  Former President Endara faces no opposition in 
this primary in the party that he established for himself.) 
Solis said that Endara would launch his presidential campaign 
in an event on January 21.  While exceedingly enthusiastic 
and optimistic, Solis acknowledged that VMP has no money, 
only has a presence essentially in Colon and Panama City, 
cannot do any polling and has no access to polling data, and 
has no outside domestic or international political advisors. 
Musing about the speech that he would have to give on January 
21, Solis said that he would answer the question of "why 
Endara for president?" by underscoring his "sterling honesty" 
and "everything that flows from that."  Telling POLCOUNS to 
mark down this date, Solis said, "I predict that (Alberto) 
Vallarino will step down when he realizes that he is likely 
to finish in third place or worse in the general elections. 
He is too proud to be an also-ran." 
 
¶17. (C) Comment:  If one were to bet on a long-shot horse to 
win Panama's presidential race, Endara would be the horse on 
which to bet.  While he cannot be considered a frontrunner by 
any stretch of the imagination, seasoned political watchers 
in Panama are all too aware of how well Endara did in 1999 
garnering twelve percent of the vote or about 500,000 votes. 
To be considered a serious candidate, however, future events 
and developments would need to break his way to clear a path 
forward. 
EATON