VZCZCXYZ0001
RR RUEHWEB

DE RUEHZP #0807/01 3022127
ZNR UUUUU ZZH
R 292127Z OCT 09
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC 0035
INFO RHEFDIA/DIA WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RUEAIIA/CIA WASHINGTON DC
RUEHBO/AMEMBASSY BOGOTA
RUEHGT/AMEMBASSY GUATEMALA
RUEHME/AMEMBASSY MEXICO 0011
RUEHMU/AMEMBASSY MANAGUA
RUEHSJ/AMEMBASSY SAN JOSE 0011
RUEHSN/AMEMBASSY SAN SALVADOR 0011
RUEHTG/AMEMBASSY TEGUCIGALPA 0011
RUEHZP/AMEMBASSY PANAMA
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS PANAMA 000807 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PM
SUBJECT: CONTROVERSY OVER NEW CONTROLLER GENERAL IN PANAMA 
 
Summary 
 
---------- 
 
¶1.      (SBU) The National Assembly has selected Gioconda Torres de 
Bianchini, a longtime associate of President Ricardo Martinelli in 
both his public and private incarnations, as Controller General of 
Panama, effective January 1, 2010. Despite de Bianchini's 
qualifications, her close ties to Martinelli may compromise the 
fight against corruption in the Panamanian government. Attendant 
press reaction has been very negative.  The loss of unqualified 
press support for the new administration could begin to erode 
Martinelli's 86 percent popularity ratings. End Summary. 
 
 
 
Nolo Contendre 
 
----------------- 
 
 
 
¶2.      (SBU) The Controller General, whose job is to provide 
oversight of executive branch spending, occupies a critical place 
in the government.  All government contracts must pass through the 
office, which is cabinet-level, regardless of the originating 
ministry.  This makes it a natural chokepoint for preventing 
corruption, or not.  De Bianchini began working with Martinelli in 
1994 when he was director of the Social Security Administration and 
she was the head of national audits there.   From 2000 to 2009, she 
was chief auditor at Ricamar, S.A., one of the companies in 
Martinelli's sprawling business empire.  De Bianchi served as 
treasurer of the Cambio Democratico (Democratic Change) party 
during Martinelli's successful presidential run this year. In 
addition to her extensive personal ties to Martinelli, the media 
reports that her daughter was also given one of Panama's lucrative 
diplomatic postings.  According to an Embassy contact, Martinelli 
told governing coalition deputies several months ago that de 
Bianchini was his choice, defending her credentials and stating 
"she keeps me honest."  She was the only candidate the coalition 
put forward, and cleanly beat the opposition Democratic 
Revolutionary Party (PRD) nominee 43 to 19.  The deputies chose 
Luis Icaza, a member of the coalition Panamenista party, as 
sub-controller. 
 
 
 
Consistent Criticism 
 
---------------------- 
 
 
 
¶3.      (SBU) De Bianchini submitted her bid for the controllership 
October 14, on the day of the deadline, allowing effectively no 
time for a public debate to emerge.  She was confirmed to the post 
on October 20.  La Prensa, the country's leading daily newspaper, 
ran a critical opinion piece on the front page, directly below the 
story of her bid submission. The article pointed out the hypocrisy 
of Martinelli's campaign promise to break the political traditions 
of nepotism and cronyism, and then choosing such a close 
collaborator to this important post.  "The capabilities of de 
Bianchini are unquestionable, but her independence generates 
important doubts.  Her appointment will condemn the country to five 
more years of the same actions so criticized by the President 
during his third presidential campaign." In response to the 
allegations of a conflict of interest, President Martinelli said 
that he trusts de Bianchini's work and honesty. 
 
 
 
¶4.      (SBU) La Prensa delivered another rebuke upon de 
Bianchini's confirmation by the National Assembly in an even more 
critical front page editorial.  Citing broken promises by 
Martinelli to change the culture of corruption in Panamanian 
politics and lambasting the assembly for "abject" conduct in its 
 
relations with the executive, the piece predicts that the same 
pattern will hold with the crucial upcoming nominations for the 
Supreme Court. 
 
 
 
Comment 
 
----------- 
 
 
 
¶5.      (SBU) Despite de Bianchini's excellent resume from private 
and public sector experience, the optic of a controller who is 
beholden to the president, rather than one who will independently 
examine the government's actions, does nothing to improve the poor 
performance and reputation of Panama's weak institutions. 
Observers told Emboffs they were shocked at how overtly Martinelli 
controlled the nomination, which they said belongs to the 
legislature, on whose behalf the controller's office provides 
oversight of the executive branch. The fact that La Prensa, which 
has been strongly supportive of the new government, has directly 
challenged Martinelli on this appointment may signal the end of the 
honeymoon with the media, which Martinelli's closest advisor 
(Minister of the Presidency Papadimitriou) on October 20 
characterized as unprecedented in Panama. The upcoming Supreme 
Court nominations will be an important indicator of both 
Martinelli's intentions, and the extent to which he has worn out 
his image of "change." 
 
 
 
 
 
 
 
 
 
This email is UNCLASSIFIED. 
STEPHENSON