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S E C R E T PANAMA 000324 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
E.O. 12958: DNG: CO 04/25/2033 
TAGS: PGOV PREL PM
SUBJECT: PANAMA POST: THE PANAMA WATCHERS' SPECIAL EDITION, 
9TH EDITION, VOLUME II 
 
Classified By: POLCOUNS Brian R. Naranjo.  Reasons:  1.4 (B), 
(C), and 
(D). 
 
------- 
Summary 
------- 
 
¶1.  (S/NF)  The April 18 to 25 visit by two seasoned USG 
Panama watchers provided a welcome opportunity to do a "deep 
dive" on Panama's domestic political scene.  Meeting with 
political leaders and advisors from across the political 
spectrum, these analysts not only had an opportunity to 
ascertain the veracity of the Panama Post's senior editor, 
but also to get some first hand experience with key movers 
and shakers on Panama's political scene.  In this edition, we 
recap these meetings as well as share additional political 
developments: 
 
-- Democratic Change President and presidential contender 
Ricardo Martinelli "plummeted in the polls," governing 
Revolutionary Democratic Party (PRD) presidential nomination 
candidate Balbina Herrera takes lead; 
-- Panamenista presidential nomination candidates Alberto 
Vallarino and Juan Carlos Varela are each fully confident of 
a primary victory -- somebody's wrong; 
-- PRD presidential nomination candidates Balbina Herrera and 
Juan Carlos Navarro relieved that PRD primary to be held 
August 17; 
-- Newly elected governing PRD National Executive Committee 
(CEN) Fifth Sub-Secretary Rod Diaz dishes on possible 
Torrijos political musings; 
-- Consensus is that National Assembly President Pedro Miguel 
Gonzalez (PMG), still wanted on a federal indictment for the 
1992 murder of a U.S. serviceman, will not run for 
re-election; 
-- PRD Women's leader nervous about Herrera; and 
-- PRD National Assembly Deputy explains how he is financing 
his campaign. 
 
End summary. 
 
--------------------------------------------- -- 
New Poll: Herrera Takes Lead, Martinelli Trails 
--------------------------------------------- -- 
 
¶2.  (C) CD President and presidential candidate Ricardo 
Martinelli "plummeted in the polls," falling by six points, 
Martinelli political advisor Jimmy Papadimitriu told POLCOUNS 
on April 17.  Gleeful on April 17 at the polling results to 
be published, the normally laconic PRD National Assembly 
Deputy and close Herrera confidant Hector Aleman said, "It's 
Balbina's time.  She's the leader for this moment in history. 
 People are looking for a leader who can bring opportunity to 
those who have not benefited socially or economically from 
Panama's growth to date." 
 
¶3.  (U)  Sure enough, published partially on April 21 in 
Panama City broadsheet daily La Prensa, Dichter and Neira's 
poll showed PRD presidential nomination candidate Balbina 
Herrera jumping by 3.5 percent to 25.1 percent in April from 
21.6 percent in February.  Over the same two month period, 
Martinelli fell 4.8 percent from 26.3 percent in February to 
20.3 percent in April.  PRD presidential nomination candidate 
Juan Carlos Navarro essentially remained static -- 13.3 
percent in February and 13.2 percent in April.  Both 
Panamenista presidential nomination candidates Alberto 
Vallarino and Juan Carlos Navarro hit 6.5 percent in April 
rising 0.7 percent and 1.3 percent respectably over their 
February poll numbers.  Moral Vanguard of the Nation (VMP) 
presidential candidate -- and former president -- Guillermo 
Endara tanked falling from 7.1 percent in February to 1.6 
percent in April.  Similarly, meager support for possible PRD 
presidential nomination candidate -- and former president -- 
Ernesto "El Toro" Perez Balladares evaporated as he slid from 
2.8 percent support in February to 0.0 percent in April. 
 
¶4. (C) "Not good news," Papadimitriu said of the poll on 
April 18, "but at least it makes Martinelli listen." 
Subsequently on April 19, Papadimitriu said that the 
Martinelli campaign would "go dark" for at least a week. 
"I'll pull together the surrogates to try to get them under 
control," Papadimitriu said after POLCOUNS asked about CD 
SecGen Ricardo Quijano's assertion to the press that 
Martinelli would not accept less than top billing in an 
opposition alliance.  "It's too early to be talking about 
that.  We need to show that we are different and new. 
Alliance talk and blather on radio and TV does not help." 
Martinelli announced to the press on April 21 that his formal 
campaign launch was set for May 10. 
 
¶5. (C) Meanwhile, Navarro attempted to spin the results by 
asserting that he was running much closer to Herrera among 
PRD party members.  Separately, Navarro supporter National 
Assembly Deputy Miguel "Mickey" Aleman, who represents the 
voter rich municipality of San Miguelito just outside Panama 
City, told the Panama Post on April 18, "Our internal polls 
show that in San Miguelito across all parties Balbina is 
beating Navarro 3 to 1, but within the party Balbina leads 
Navarro by 2 to 1."  Navarro needed to bring those numbers 
down to even in San Miguelito if he was to be a viable 
candidate nationally against Herrera. 
 
¶6.  (C) Comment:  Perhaps most interestingly, the number of 
respondents who did not know or did not respond nearly 
doubled from 13.4 percent in February to 24.7 percent in 
April.  Many political observers had previously predicted 
that formal campaign launches would result in more undecided 
voters making their minds up and declaring support for 
individual candidates.  Instead, quite the opposite has 
happened:  not only have voters remained on the fence, but it 
appears that many have joined them.  Unhappy with the results 
of the poll, some political surrogates sought to impugn the 
poll by suggesting that Herrera had a business relationship 
with Dichter and Neira that skewed the results.  Don't 
believe the hype:  Dichter and Neira remains the most serious 
and independent pollster in Panama, and it is not suprising 
that Herrera, or any other serious politician, had a business 
relationship with this outfit.  Last February, when 
Martinelli still held a commanding lead, the rumor was flying 
around that since Martinelli used Dichter and Neira for 
consumer polls for his Super99 supermarket chain that 
Martinelli's lead was suspect.  Valiantly, Navarro strove to 
assert that his own private polls of PRD faithful showed him 
leading Herrera by a "short margin," as described by Navarro 
aide Ivan Gonzalez to our itinerant analysts on April 17. 
Repeated requests to see Navarro's internal polling have 
fallen on deaf ears.  " 
 
-------------- --------------------------------------- 
"I'm winning." "No, I'm winning"  Vallarino and Varela 
-------------- --------------------------------------- 
 
¶7. (C) Panamenista presidential nomination candidate Juan 
Carlos Varela's advisors Meliton Arrocha and his brother Jose 
Luis "Popi" Varela asserted on April 15 that Varela was 
handily leading in the Panamenista internal race.  Similarly, 
fellow Panamenista contender Alberto Vallarino asserted on 
April 17 that he was handily leading in this internal race. 
While Varela focused on trying to build the "framework" for 
an alliance by sitting down with Patriotic Union (UP)'s Billy 
Ford on April 15, Vallarino asserted that supporters of 
also-ran Panamenista presidential nomination candidate Marco 
Ameglio were migrating his way and that it would not be 
possible to form an alliance until after the July 6 
Panamenista primary. 
 
¶8. (C) Comment: Obviously, somebody is wrong.  The Panama 
Post simply does not know whether it is Varela or Vallarino. 
Neither seems to be conducting any serious internal party 
polling -- indeed both argue that it is impossible to poll 
Panamenistas accurately given their aversion to declaring to 
pollsters their party affiliation, an aversion allegedly 
ingrained by years of opposition to military dictatorship and 
the PRD.  Unfortunately, the Dichter and Neira sheds no light 
in its nationwide poll either.  The Panama Post will continue 
to try to unravel this mystery. 
 
------------ --------- 
PRD Primary: August 17 
------------ --------- 
 
¶9. (C) The PRD CEN had decided informally that its primary 
would be held on August 17, PRD CEN members Rod Diaz, Hector 
Aleman, and Elias Castillo all separately confirmed.  Navarro 
political advisor Ivan Gonzalez and Herrera political ally 
Hector Aleman separately expressed their relief that an 
August date had been chosen as neither wanted a long, 
expensive, and drawn-out internal campaign.  Rumors that the 
primary might be pushed off until October had caused 
significant anxiety in both camps. 
 
¶10. (C) "I do not want to be her campaign manager," Aleman 
told the Panama Post on April 17.  Herrera though needed to 
set up a real campaign organization and build some structure 
around here, Aleman said.  (Note:  Later the same day, 
Herrera announced that Hugo Torrijos, President Torrijos' 
uncle, would be her campaign manager.)  Noting that Torrijos 
had "thin skin, like a baby," Aleman acknowledged that one of 
the toughest things for Herrera would be campaigning on the 
basis of continuity with the PRD's and Torrijos 
Administration's initiatives while also differentiating 
Herrera from Torrijos.  "We'll try to celebrate the good 
things while explaining what can be done better and how.  We 
learned a lot from the 1999 campaign that Torrijos lost in 
large part due to El Toro's own inability to suffer 
criticism," Aleman asserted.  "Balbina will position herself 
like Omar Torrijos:  'Neither of the left, nor of the right.'" 
 
¶11.  (C) As for Navarro, Gonzalez said on April 17 that the 
mayor was conducting daily focus groups in an effort to fine 
tune his message.  Also, Gonzalez said that Navarro had not 
heard the response from First Lady Vivian Fernandez de 
Torrijos regarding Navarro's offer of the vice presidential 
slot to her.  Desiring Torrijos to show support for Navarro, 
Gonzalez said, "Torrijos should do what (former President 
Mireya) Moscoso did the other day (declaring her support for 
Vallarino).  He should openly and publicly support Navarro." 
 
¶12. (C) Disenchantment with Navarro's tactics also begun to 
grow, PRD CEN Fifth Sub-Secretary Rodrigo "Rod" Diaz.  "He's 
running a very dirty campaign."  Navarro's team got caught 
supporting a bogus anti-Balbina blog aimed at reminding 
voters of her radical past and ties to former dictator Manuel 
Noriega.  Also, PRD local leaders who signed resolutions 
supporting Navarro months ago were displeased at the mayor's 
publication of these statements now to indicate broad support 
for him as Herrera was not an option at the time the 
statements were prepared.  Finally, Navarro was believed to 
have leaked the story that his cousin, 1st VP and FM Samuel 
Lewis, had met with notorious drug trafficker Urrego to 
discuss purchasing an island owned by Urrego in an effort to 
keep Lewis from seeking the PRD nomination.  Additionally, 
Navarro was widely believed to have leaked the story of 
then-PRD SecGen Martin Torrijos' contract with the government 
of the Dominican Republic.  Allegedly Navarro sourced the 
Urrego story to Torrijos' camp followers and the DR story to 
Lewis loyalists. 
 
¶13. (C) Comment:  Navarro's efforts to suffocate Herrera's 
campaign in the crib have failed.  Herrera -- despite only 
minimal media exposure and advertising, no campaign 
structure, and limited financial resources -- easily outpaces 
Navarro in the polls.  Navarro's throw-everything-at-her 
strategy may come at a high cost as negative reaction to his 
tactics grows within the PRD ranks.  A tenacious and 
combative politician, Navarro is unlikely to throw the towel 
in any time soon.  As for Herrera, she can not rest on her 
laurels, but must put in place the machinery to sustain her 
lead and build upon it.  She faces an uphill battle 
convincing professionals and elites to place their trust in 
her or at least to not actively oppose her.  Appointment of 
Hugo Torrijos, whose name persistently crops up in public and 
in private in connection with shady deals and corrupt 
activities, is not a good sign of the kinds of people that 
Herrera may wish to empower.  Though he wrongly predicted on 
April 16 that Herrera would name Mitchell Doens her campaign 
advisor, PRD CEN Fifth Sub-Secretary Rodrigo "Rod" Diaz may 
be correct that alleged corrupt "deal facilitator" and close 
Torrijos confidant Pille Gonzalez would serve as Herrera's 
"enforcer" on her campaign. 
 
----------------------- 
PRD CEN Newcomer Dishes 
----------------------- 
 
¶14. (C) Possibly presaging a growing bandwagon effect, newly 
elected PRD CEN Fifth Sub-Secretary Rodrigo "Rod" Diaz 
asserted  on April 16 that increasingly PRD leaders, 
including himself, were supporting Herrera's presidential 
run.  Diaz asserted that Torrijos sought to maintain the 
"third candidate option" (most likely Lewis) to maintain 
leverage over Herrera and Navarro in an effort to keep the 
PRD internal campaign civil.  He also suggested that Torrijos 
could "disqualify" Navarro by simply stepping aside for a 
brief period giving Lewis presidential powers temporarily. 
Under Panama's constitution, Diaz explained, Navarro, a 
"first order relative" (a first cousin) of Lewis, would be 
prohibited from seeking election for ten years.  Finally, 
Diaz asserted that Torrijos was prepared to act "decisively" 
to quell any Navarro-Herrera bickering that got out of hand. 
 
¶15. (C) "I'll be focusing on the PRD's youth activities," 
Diaz said.  Panama City Councilman Carlos Perez-Herrera would 
be the PRD Youth Secretary.  "We're going to facilitate a 
comprehensive youth outreach effort to develop platform 
issues for the eventual presidential candidate."  Also, Diaz 
said he would be launching a "Vision of Omar" effort to 
inculcate PRD youth in the ideology of the party's founder. 
(Note:  Diaz did not clarify how this effort would address 
the Noriega period, other than to say that it was an 
"aberration.")  As part of this effort, Diaz said he 
purchased the entire 18,000 photo collection of pictures 
taken by a Mexican photographer of Omar Torrijos.  "We'll use 
these photos to try to re-introduce and explain the legacy of 
Omar and what he means for PRD Youth." 
 
¶16. (C) Finally, Diaz asserted that Torrijos would eventually 
back Herrera, but not before ensuring that there would be 
"continuity in the cabinet" to ensure that programs and 
initiatives initiated by Torrijos would continue to be 
carried out.  For example, Diaz said that the USG should 
expect to see names like Alejandro "Andy" Ferrer, who 
recently resigned as Minister of Commerce and Industry, 
return to an Herrera cabinet.  Reviewing a list of names 
Herrera has floated as cabinet prospects, Diaz dismissed them 
all. 
 
¶17. (C)  Comment:  Diaz, a close ally of Torrijos and Lewis, 
is clearly moving to back Herrera.  While the ideas and ploys 
offered by Diaz strike the Panama Post as fanciful, they may 
shed some light on Torrijos' Walter Mitty-esque daydreaming. 
An indecisive leader who prefers to ponder and allow 
political developments to evolve in his direction, it is 
difficult to see Torrijos trying to force a third candidate 
(indeed, the prospect has little credibility on the street) 
or to be able to enforce a "continuity in the cabinet" pact 
with Herrera.  Herrera grows stronger by the day while 
Torrijos enters the doldrums of his lame duck period. 
 
-------------------------------- 
PMG Will Not Run for Re-election 
-------------------------------- 
 
¶18. (C) The consensus view of the Panama Post's interlocutors 
over the past week to ten days was that National Assembly 
President -- and U.S. fugitive under indictment in connection 
with the 1992 murder of a U.S. serviceman -- Pedro Miguel 
Gonzalez (PMG) would not/not run for re-election as the 
legislature's president.  Separately, three PRD CEN members 
-- Diaz, Aleman, and National Assembly Deputy (and PMG's 
predecessor) Elias Castillo -- all confirmed that CEN 
members, including PMG, discussed PMG's re-election and 
concurred that PMG should not/not run again.  Panamenista 
National Assembly Deputy Francisco "Pancho" Aleman, 
Vallarino's campaign manager, stated that he believed that 
PMG would not run again, but rather would focus on his 
re-election for his National Assembly seat.  Vallarino was 
dismissive of the whole matter commenting that he "did not 
care" if the U.S.-Panama Trade Promotion Agreement (TPA) 
moved forward. "It's not good for Panama, so who cares if 
Pedro Miguel runs or does not run for re-election," Vallarino 
said.  Varel-istas, Arrocha and "Popi" Varela said they 
believed PMG would stay away from re-election, and Navarro's 
aide Gonzalez said he believed PMG would not run. 
Additionally Castillo told POLOFF that he would run for Mayor 
of Panama in part to keep PMG out of that race. 
 
¶19. (C) Comment:  The Panama Post is heartened by the news 
that PMG is not going to run for re-election, but we are not 
prepared to place bets that PMG will not once again run for 
and win the legislatures presidency.  We will continue to 
monitor. 
 
---------------------------------------- 
PRD Women's Leader Nervous About Herrera 
---------------------------------------- 
 
¶20. (C) PRD member and the head of the inter-party Forum of 
Women in Political Parties Irasema de Ahumada expressed her 
"deep concern" to the Panama Post about what was going on in 
the PRD and "what could happen in Panama."  "I don't like 
either one of our current candidates (Herrera or Navarro). 
They are both the same type of politician:  they talk a lot, 
make a lot of promises, but have no substance," she 
explained.  "I support Navarro because he is my boss and I 
would be fired if I didn't, but at least I know that he is 
not getting money from Chavez. What is going to happen if 
Balbina wins?"  De Ahumada asserted that it was "widely known 
at all levels in the party" that candidates who support 
Herrera would receive money that originated with pro-Chavez 
Panamanian Ambassador to Venezuela Ballesteros and that was 
channeled through Hector Aleman.  "Please pass on to the 
Ambassador that many PRD members are concerned," De Ahumada 
said.  She added that most party members were not leftist or 
anti-American. 
 
¶21. (C) Turning to "consular commissions," De Ahumada stated 
that now that former Minister of the Presidency Ubaldino Real 
had left government, Rod Diaz was responsible for divvying up 
the "consular commissions" that Panamanian Consul Generals 
sent back to Panama City.  (Note:  Under Panamanian law and 
regulation, Consul Generals are entitled to ten percent of 
the consular fees collected by their missions.  There is a 
long tradition by Panamanian Presidents of requesting a cut 
of this entitlement in exchange for having been named to 
these lucrative positions.)  Allegedly, Diaz writes checks 
for PRD campaigns off an account at Banvivienda that is part 
of the Grupo Mundial conglomerate of which Diaz is CEO. 
 
¶22. (C) De Ahumada asserted that the Cuban Embassy was 
playing a key role in facilitating communication between 
members of the PRD's left-wing "Tendency (Tendencia)" 
faction, who were not on speaking terms, and the Venezuelan 
government for financial support.  De Ahumada referred to 
this policy as "triangulation."  Allegedly, the Cubans were 
capitalizing on their long-standing ties with various 
"Tendency" PRD members.  De Ahumada added that she had run 
into a Cuban Embassy officer at the grocery story.  She 
stated that this Cuban official, believing De Ahumada to be 
an Herrera supporter, said, "We have to support the (female) 
comrade because she is the one who can break the ties to the 
oligarchy. 
 
¶23. (C) Comment:  Rumors of Venezuelan money making its way 
into Herrera's pockets have been rampant in recent weeks in 
Panama City.  As of yet, the Panama Post has no confirmable 
reports.  The most common rumor has been that Herrera ally 
Hector Aleman enters into oil deals with Venezuelan 
counterparts and then re-directs a portion of the profits to 
Herrera.  The new twist in the rumor is that the Panamanian 
Ambassador in Caracas, a known Chavez sympathizer, is 
channeling Venezuelan money to Herrera.  Despite the absence 
of proof, Panama's chattering class and elite are convinced 
that a Venezuela-Herrera tie is a financial reality.  For his 
party, Hector Aleman asserted he was not receiving or passing 
Venezuelan money, asking rhetorically, "They think I'm more 
leftist than Chavez.  How am I supposed to fight this rumor? 
Balbina doesn't need Chavez's money; she's already leading 
the polls."  The Panama Post will continue to monitor this 
issue. 
 
--------------------------------------------- -------- 
Financing one PRD National Assembly Deputy's Campaign 
--------------------------------------------- -------- 
 
¶24.  (C) "I should be spending around USD 80,000 between now 
and August to win for re-election in the PRD primary," PRD 
National Assembly Deputy Miguel "Mickey" Aleman told the 
Panama Post's correspondent on April 18.  PRD CEN Member "Rod 
Diaz gave me USD 10,000 already and promised me USD 20-30,000 
more.  My uncle is giving me another USD 20,000 and bought me 
a sound van."  Through the Social Investment Fund (FIS), a 
pool of money controlled by the Ministry of the Presidency, 
"Torrijos is giving me around USD 5,000 in T-shirts and 
caps."  Asked was it not illegal to redirect FIS monies for 
partisan political purposes, Aleman said, "The bill will show 
that they were for 'sports uniforms.' Don't think that I am 
the only one getting this kind of help.  Many others are too." 
EATON