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C O N F I D E N T I A L PANAMA 000550 
 
SIPDIS 
 
E.O. 12958: DECL: 07/07/2018 
TAGS: PGOV PREL KDEM PM
SUBJECT: PANAMA: VARELA WINS PANAMENISTA PRESIDENTIAL 
NOMINATION 
 
Classified By: POLCOUNS Brian R. Naranjo.  Reason:  1.4 (d) 
 
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Summary 
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¶1. (C) "I want to issue a call not only for party unity, but 
also for a coalition to win the elections in 2009," exclaimed 
Juan Carlos Varela late in the evening on July 6, in 
declaring victory in the Panamenista Party presidential 
primary.  On July 7, Alberto Vallarino, Varela's main 
opponent, acknowledged Varela's victory.  As of 3:00 pm, July 
6, with 66.3 percent of the vote in, 55.92 percent of voters 
had chosen Varela while 34.54 percent opted for Vallarino out 
of a total of 117,105 votes counted.  Varela's declaration of 
victory and Vallarino's concession were based, however, upon 
non-official results and amid criticism, particularly from 
Vallarino himself, aimed at the slow manner in which the 
party's National Electoral Committee (CNE) made primary 
results available to the public.  Indeed, the official 
results from the first of the party's 39 electoral circuits 
rolled in to the CNE only shortly after Vallarino conceded on 
July 7.  Bickering over the CNE's delay in releasing results 
may have marred an otherwise nearly flawless electoral 
process, but the result was never in doubt, including among 
Vallarino's supporters and campaign leaders:  Varela had won 
a commanding victory.  Now Varela must turn to uniting his 
party behind him and overcoming skepticism about his ability 
to unify the broader opposition.  End summary. 
 
--------------------------------------------- --------- 
Varela Declares Victory Despite Official Results Delay 
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¶2. (C) At about 11:30 pm on July 6 -- 7 1/2 hours after the 
polls had closed -- Varela took the stage at the convention 
center of the El Panama Hotel to claim victory.  During his 
speech, he did not acknowledge the growing controversy over 
the CNE's delay in making results available.  "There is only 
one result:  the party won.  Panama won.  Today we begin down 
a new road."  In his speech, Varela called for Panamenista 
Party and broader opposition unity to fulfill "five dreams:" 
the "elimination" of crime, the establishment "dignified" 
salaries, the improvement of public services, the creation of 
jobs, and the replacement of corrupt practices with "clean 
hands."  Noting that the first step for Varela would be 
consolidating the party behind him, Varela campaign advisor 
Meliton Arrocha said that how the Panamenista Party pulled 
together behind Varela would depend upon how Vallarino, 
Varela, and their respective camp followers acted.  Varela's 
brother and key campaign advisor Jose Luis "Popi" Varela told 
POLCOUNS that, with his strong finish behind him, Varela 
would "negotiate from a position of strength" with other 
opposition parties to form a coalition.  Popi Varela did not 
believe that alliances would be announced as quickly as some 
observers might think, speculating that an opposition 
coalition might not emerge until September, after the PRD 
primary. 
 
¶3. (C) Varela's victory speech came about one hour after 
Vallarino, for the second time in the evening, complained 
publicly about the CNE's failure to release official results. 
"It's unfortunate that official results are not available, 
because we all know that they (Panamenista Party President 
Varela's supporters) control the electoral committee," a 
bitter Vallarino declared at about 10:30 before retiring for 
the evening.  Earlier in the evening, Vallarino had implored 
the CNE to make the primary results more quickly, "for the 
good of the party and for the good of opposition unity." 
Privately, Vallarino complained to POLCOUNS that Varela's 
margin of victory was not as wide as then being portrayed. 
(Note:  At the time of POLCOUNS's conversation with 
Vallarino, Varela was leading Vallarino by over 24 points. 
End note)  "He's manipulating the release of results by 
starting with Pese (Varela's home town) to make it look like 
he has a tidal wave of support," Vallarino complained 
privately.  "For party unity and our democratic image, we 
need fast results."  Vallarino, however, stopped well short, 
in both his public and private comments, from calling into 
question the integrity of the process and privately 
acknowledged to POLCOUNS that he had been beaten.  Conceding 
defeat the following day, Vallarino also laid down markers 
for the Panamenista Party's role in the broader opposition. 
"I hope that the Panamenista candidate will lead the 
opposition to challenged (the governing Revolutionary 
Democratic Party) PRD in the upcoming general elections," 
Vallarino stated.  "Varela knows very well that the winner 
has a key role to play in building an opposition alliance. 
Varela should lead the opposition alliance.  We have the 
votes and the strength." 
 
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Comment 
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¶4. (C) Headstrong and overly confident before Sunday's poll, 
Vallarino took this defeat hard.  Vallarino campaign manager 
and Panamenista Party SecGen Francisco "Pancho" Aleman had 
previously predicted to POLCOUNS that Vallarino would defeat 
Varela by a 4 to 1 margin; obviously this loss fell well 
short of this bold claim. The CNE's difficulties in releasing 
results -- whether intentional or not -- furthermore left a 
bitter taste in Vallarino's mouth.  Aware shortly after the 
polls that he had lost the primary, Vallarino's protestations 
seemed to have more to do with a desire for respect for the 
process, a hope to be treated with decency, and a search for 
an exit with honor.  Varela's victory to a large extent will 
be interpreted as another example of Panamanian voter's 
desire for change and a new kind of politics.  Varela, who 
took the reins of the Panamenista Party two years ago, has 
fought a long battle to renew the party in the wake of the 
ethical cloud under which former President Mireya Moscoso, 
the last Panamenista President, left office in 2004. 
Striving to move the party to a more democratic, grassroots 
oriented organization -- these primaries were the 
Panamenistas' first primaries -- Varela earned his spurs as a 
reformer.  To unify the party, Varela will need to come to 
terms with party chieftains who have been suspicious of 
Varela's reform agenda, chief among which will be former 
President Moscoso with whom Varela is not on speaking terms. 
 
¶5. (C) Unable to comprehend how a Panamenista candidate could 
accept second billing on a unified opposition ticket, party 
chieftains will place significant pressure on Varela to steer 
well clear of accepting a VP slot on, for example, Democratic 
Change (CD) presidential candidate Ricardo Martinelli's 
ticket.  For his part, given the commanding size of his 
victory, Varela may reconsider whatever prior commitments he 
may have made to form an alliance with Martinelli.  In the 
meantime, groups with in Patriotic Union (UP) and the 
Movement of Liberal Republican Nationals (MOLIRENA) agitating 
for alliance with Martinelli will likely become more vocal. 
Strongly desiring to knock the PRD out of power -- and 
fearing the consequences for their political survival should 
the fail -- many in the opposition including UP's President 
Billy Ford and VP Jose Raul Mulino (previously a Vallarino 
supporter) and MOLIRENA's President Gonzalez-Ruiz have 
previously commented to POLCOUNS that they have serious 
doubts about Varela's suitability, gravitas, and maturity to 
unify the opposition, defeat the PRD, and serve as president. 
 Martinelli campaign advisor Jimmy Papadimitriu had 
previously commented that the ideal Panamenista outcome would 
be for Varela to win by a small margin so that Martinelli 
could more easily use the gravitational pull of his 
significant lead in the national polls to reel in Varela.  To 
nobody's surprise, Martinelli declared July 6 that he had no 
intention of accepting a VP slot on a Varela ticket. 
MESA