VZCZCXYZ0000
RR RUEHWEB

DE RUEHZP #0242/01 0792029
ZNY CCCCC ZZH
R 202029Z MAR 09
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC 3184
INFO RUEHBO/AMEMBASSY BOGOTA 2785
RUEHSJ/AMEMBASSY SAN JOSE 2001
RHMFISS/DEPT OF JUSTICE WASHINGTON DC
RHMFISS/COMDT COGARD WASHINGTON DC
RUEABND/DEA WASHDC
RHMFISS/DIRJIATF SOUTH
RHMFISS/CDR USSOUTHCOM MIAMI FL
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/JOINT STAFF WASHINGTON DC
RHEHAAA/NSC WASHDC
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L PANAMA 000242 
 
SIPDIS 
 
E.O. 12958: DECL: 03/20/2019 
TAGS: PGOV PREL SNAR PM
SUBJECT: PANAMA: MURCIA ACCUSATIONS UNLEASH POLITICAL 
FIRESTORM 
 
Classified By: Ambassador Barbara J. Stephenson for reasons 1.4 (b) and 
 (d) 
 
------- 
Summary 
------- 
 
¶1.  (C)  The Panamanian Electoral Tribunal (TE) suspended the 
legal immunity of the leading presidential candidates Ricardo 
Martinelli and Balbina Herrera March 19, in addition to the 
front-running candidate for Mayor of Panama City, Roberto 
"Bobby" Velasquez and Martinelli's attorney, Alma Cortez. The 
Attorney General, Ana Matilde Gomez, has requested the move 
so that her office could investigate accusation of corruption 
lodged against the candidates as a result of claims by 
accused swindler and money launderer, David Murcia Guzman , 
that he gave $3 million dollars to the campaigns of Velasquez 
and Herrera, both candidates for the ruling Revolutionary 
Democratic Party (PRD). Herrera has responded by accusing 
Martinelli's super market chain of being a "narco-candidate" 
because his super market chain allegedly provided services to 
Murcia's company, DMG. The action is unprecedented, and has 
plunged the upcoming May 3 election into unchartered waters. 
All three candidates can continue to campaign, but they must 
submit to questions from investigating prosecutors. The 
elections themselves are apparently not in jeopardy, though 
it remains to be seen if Herrera or her Vice Presidential 
running mate Juan Carlos Navarro might resign their 
candidacies. Either outcome would risk splitting the PRD. 
Conspiracy theories are multiplying, including those blaming 
the USG for the PRD's problems. The scandal is also affecting 
the government, which has now been forced to admit that 
agents of the Institutional Protection Service (SPI - 
equivalent of the Secret Service) protected Murcia while he 
was in Panama. One or even two ministers could eventually be 
forced to resign as a result. Given the explosive nature of 
the scandal, and the need to find scapegoats, Post is keeping 
a distance from both campaigns, so as not to provide the 
opportunity to tie the USG to events that may end up 
reshaping the electoral landscape and leave some political 
groups severely affected, and very angry. End Summary. 
 
--------------- 
Immunity Lifted 
--------------- 
 
¶2.  (C)  The Panamanian Electoral Tribunal lifted the legal 
immunity of the two leading presidential candidates March 19, 
at the request of Attorney General Ana Matilde Gomez. Gomez 
is now free to investigate whether leading presidential 
candidates Ricardo Martinelli (Democratic Change - CD) and 
Balbina Herrera (PRD), together with leading candidate for 
Mayor of Panama City Roberto "Bobby" Velasquez and 
Martinelli's lawyer Alma Cortez (who had been a candidate for 
National Assembly Deputy and so had immunity) had any 
criminal dealings with David Guzman Murcia. Murcia is in 
prison in Colombia charged with running a Ponzi scheme and 
investigated for money laundering, and now under indictment 
in the U.S. for money laundering associated with drug 
trafficking. In separate interviews on March 10 with the two 
leading Panamanian dailies, La Estrella and La Prensa, Murcia 
claimed that he had given $3 million to the campaign of 
Velasquez, and through him, to Herrera. At first Velasquez 
denied even knowing Murcia, but has since admitted several 
elements of Murcia's story, including meeting Murcia in his 
hotel room and discussing how to contribute money to a 
political campaign, though he denies taking any money, and 
other elements have been confirmed by agents of the SPI who 
were moonlighting as bodyguards for Murcia. The story has 
filled the newspapers for the last week, as details of 
Murcia's accusations have been confirmed bit by bit. 
 
----------------- 
The Investigation 
----------------- 
 
¶3.  (C)  Eduardo Camacho of the Panamenista party filed a 
formal request with the A/G's office to investigate Velasquez 
and Herrera based on Murcia's accusations. Herrera then filed 
a request that the A/G's office investigate Martinelli, 
 
claiming that stores within his Super 99 chain was a "service 
provider",  along with 134 other companies, to Murcia's 
company DMG. Herrera's accusation is that if DMG dealt with 
them in cash, then the companies (especially Super 99) should 
have suspected money laundering. Since filing the complaint, 
Herrera has taken to calling Martinelli a "narco-candidate." 
 
----------------- 
Hurry Up and Wait 
----------------- 
 
¶4.  (C)  TE magistrate Gerardo Solis told POLFSN that he 
believed that it was too early in the process to lift the 
candidate's immunity, but that Gomez had insisted. He noted 
that Gomez's investigation would take a minimum of two years, 
and that the only way either candidate could be forced off 
the ballot would be for them to be "judged, convicted, and 
all appeals exhausted." He said there was absolutely no way 
that this could happen in the next two months. He said that 
if the PRD wants Herrera to bow out and leave Navarro as the 
candidate, Herrera would have to take the decision, as the 
PRD had no power to force her off the ticket. 
 
-------------------- 
Elections in Danger? 
-------------------- 
 
¶5.  (C)  Solis said that after hearing rumors "on the street" 
about postponing the elections he had looked up the law. He 
found that the May 3 election date is stipulated in the 
Electoral Code, not the Constitution. Therefore, in theory, 
the National Assembly could decide to change the law and 
postpone the date. He said he is not talking about this, in 
the hope that nobody notices. Solis closed by saying he did 
not like the strange things that were going on. 
 
---------------- 
Blame the Gringos 
---------------- 
 
¶6.  (C)  In her public comments Herrera has concentrated on 
denying any wrongdoing, while her campaign has questioned why 
the press was able to talk to Murcia, while Panamanian 
prosecutors were not. President Torrijo's private secretary 
Leonel Solis told POLFSN March 17 that members of Balbina's 
inner circle were claiming within the PRD that Colombian 
President Uribe and USG were responsible for the scandal. He 
said senior Herrera advisor and PRD heavyweight Mitchell 
Doens and Minister of Public Works Benjamin Colamarco had 
both come to him claiming that the scandal was part of a plot 
by Uribe and the USG to prevent Herrera winning the election. 
According to Solis, they claimed that Uribe had complained to 
the USG that he could not risk a third leftist leader on his 
borders, and as a result the USG had orchestrated the Murcia 
interview and accusations. Colamarco then claimed that the 
plot extended beyond Herrera to Velasquez because he was 
ahead in the polls, and made his accusations about the SPI to 
hurt Torrijos. He said the same story was being told by other 
members of the PRD's left-wing "Tendencia" faction, including 
Hector Aleman, Ramiro Vasquez Chambonett, and Pedro Miguel 
Gonzalez. Solis said he had discussed the claim with 
President Torrijos, who believes that the claim is aimed at 
preventing other groups in the PRD, especially those 
supporting VP nominee Navarro, from abandoning Herrera. 
 
------- 
Comment 
------- 
 
¶7.  (C)  This scandal is a huge black eye for Panama, and 
could do serious damage to its international reputation as a 
safe place to do business. And the worst is far from over. 
The most notable aspect of the scandal is how quickly 
Murcia's most outlandish claims are being proven true beyond 
a shadow of a doubt. So far Martinelli is not really hurt by 
this, as Herrera's claims against him are not well understood 
by the public, and perhaps not by her either. Murcia's claims 
against the PRD, on the other hand, are very easy for 
everyone to understand, and each day another smoking gun is 
found. That does not mean, however, that Martinelli may not 
 
find himself enmeshed in this scandal to a more serious 
degree in the future. 
 
¶8.  (C)  Which leads to the question, what is behind the TE's 
decision? Among the possible explanations, is that by having 
the A/G open an investigation, the two candidates actually 
move the story off the front pages, as everything becomes 
subject to investigation, and public comment is 
understandably unwise. That may give everyone an excuse to 
back away from the story, and restart the campaign. Herrera 
was running 15% behind Martinelli before the story broke, and 
desperately needs the story to disappear, while the wider the 
press investigation grows, the more likely something may be 
turned up on Martinelli. Murcia was clearly throwing a lot of 
money around before his arrest, and it would be surprising if 
none ended up in Martinelli's accounts. 
 
¶9.  (C)  Another possibility is that the PRD is looking for 
an excuse to take Herrera off the ticket, and allow Navarro 
to take over. That would allow a real restart to the 
floundering PRD campaign, and give a serious option to the 
many people who wish their was another option in this race. 
This is easier said than done, however, as this would imply 
turning control of the party over from Herrera's Tendencia 
group over to Navarro. Given the bad blood between them, this 
option is only a real possibility if the Herrera camp fears 
their is so much evidence of wrong-doing out there, that they 
need to make a deal to protect themselves from prosecution. 
Given the possibility that this scandal might seriously 
damage the Tendencia, Post will steer wide of the entire 
affair, so as not to be "associatable" with this affair in 
any way. 
STEPHENSON