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### Viewing cable 05PANAMA234, PANAMANIANS PONDER BOLIVARIAN CIRCLES AND

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05PANAMA234 | 2005-02-01 22:29 | 2011-05-31 00:00 | CONFIDENTIAL | Embassy Panama

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    C O N F I D E N T I A L SECTION 01 OF 03 PANAMA 000234

    SIPDIS

    DEPARTMENT FOR WHA/CEN/PIERCE
    SOUTHCOM ALSO FOR POLAD
    VANCOUVER FOR CG ARREAGA

    E.O. 12958: DECL: 11/24/2014
    TAGS: PREL PGOV SNAR MARR PINS ENRG EPET PM VZ POL CHIEF
    SUBJECT: PANAMANIANS PONDER BOLIVARIAN CIRCLES AND
    VENEZUELAN INFLUENCE IN DOMESTIC AFFAIRS

    REF: A. 04 PANAMA 2452
         ¶B. 04 PANAMA 2937
         ¶C. 04 PANAMA 2661
         ¶D. 04 PANAMA 2176

    Classified By: Ambassador Linda E. Watt for reasons 1.4 (b) and (d).

    SUMMARY
    -------

    ¶1.  (C) Despite recent press reports and speculation about
    Venezuelan-inspired Bolivarian Circles in Panama, threatening
    language from Venezuelan president Chavez that Venezuelan
    "terrorists" are using Panama as a base, and Panama-Venezuela
    discussions about oil and other commercial links (to be
    reported Septel), ordinary Panamanians do not believe
    Chavez's mischief-making could imperil Panama's domestic
    stability.  While popular consensus derides his Bolivarian
    Circles as toothless, high GOP officials are less sanguine.
    Minister of the Presidency Ubaldino Real recently shared his
    fears with the Ambassador that the GOP's upcoming reform
    proposals (especially on social security or CSS) and
    long-standing public discontent with social and economic
    inequality, poverty, stagnant living standards, and
    underemployment could provide tinder for extremist groups to
    exploit.  Embassy believes that Chavez has little support in
    Panama, but a prolonged crisis (such as violent protests over
    social security reform) could provide the Bolivarian Circles
    (in alliance with small but well-trained Panamanian leftist
    groups) with an opening to cause problems for the Torrijos
    government.  End Summary.

    Bolivarian Circles in Panama
    ---------------------------

    ¶2.  (C) A December 13, 2004 article in La Prensa, the largest
    circulation Panamanian daily, posited the presence of up to
    10 apparently subversive Bolivarian Circles in Panama, with
    nominal allegiance to and apparently linked financially with
    Hugo Chavez's "Bolivarian Revolution." (See Reftel)  (Note:
    Venezuelan defense attach Javier Gamboa, who departed Panama
    about five months ago, reportedly bragged about being a
    proponent of the Circles.  According to unconfirmed reports,
    the Circles began in Panama several years ago.)  The La
    Prensa article identified former El Siglo newspaper co-owner
    Angel Padilla Beliz and Panamanian lawyer Fernan Casis as
    Circle leaders but gave no hint about the extent of the
    group's membership or influence.

    Potential Trouble?
    ------------------

    ¶3.  (C) Most Panamanian government (GOP) officials and
    ordinary Panamanian citizens discount the ability of the
    Bolivarian Circles to influence domestic politics and widely
    deride Venezuelan president Hugo Chavez as a "loco" and a
    "payaso" (clown), but top policy makers are not as sure.  On
    Jan. 18, Minister of the Presidency Ubaldino Real told
    Ambassador Watt that the GOP is worried about Chavez's
    potential to stir up trouble, especially when the GOP unveils
    its social security reform proposals (expected before the end
    of March).  Real underscored that the Torrijos
    Administration's economic and social policies are designed to
    support democracy and stability by fighting the poverty and
    hopelessness that are now facts of life for 40% of the
    Panamanian population.  Nonetheless, Real and his colleagues
    are acutely aware that underlying popular discontent over
    economic inequality could make fertile ground for Panamanian
    leftist groups seeking to stir up trouble.  (Note: DAO Panama
    will report GOP views regarding Bolivarian Circles and
    Venezuelan influence in Panama via Septel.  The uprising in
    Bocas del Toro in October 2004 is an example of local unrest
    that the Circles could exploit.  See Reftel C.  End Note.)

    Lawmakers Downplay Bolivarian Potential
    ---------------------------------------

    ¶4.  (C) Several prominent Panamanian legislators rejected any
    notion that Bolivarian Circles could cause harm in Panama.
    One legislator noted that the Circles are small, ineffectual,
    lack cohesion, and have no popular support.  Another
    legislator agreed that Panamanian union leaders may be
    receiving Venezuelan money, but argued that did not matter
    much because those union leaders would oppose the Social
    Security reforms regardless of any encouragement from
    Venezuela.

    Security Officials Downplay Venezuelan Influence
    --------------------------------------------- ---

    ¶5.  (C) Recent speculation has focused on the possibility
    that Venezuela is gaining influence among the growing number
    of Panamanian Public Force (PPF) officers being trained in
    Venezuela.  Embassy discussions with recently returned
    Panamanian National Police (PNP) officers suggest that
    exposure to Venezuela has not necessarily increased their
    regard for Chavez.  Even their Venezuelan instructors
    reportedly badmouthed Chavez in front of Panamanian police
    officers.  One such officer recently told PolOff that a
    Venezuelan colonel had called Chavez's Bolivarian Circles
    "una locura" (insanity).  (Comment: While dozens of PPF
    officers have been trained in Venezuela over recent years,
    among them eight PNP commissioners or sub-commissioners, the
    U.S. and other Latin American countries have historically
    exercised greater influence within Panama's security forces.
    End Comment.)

    Panama Views Venezuela in Economic Terms
    ----------------------------------------

    ¶6.  (C) Panama and Venezuela have developed a number of new
    economic links during the past six months but Panamanian MFA
    officials reject the idea that those largely commercial links
    could give Venezuela leverage over Panama.  Instead, they
    portray Venezuela as an "unreliable" partner.  (Note: The
    incoming Torrijos GOP was not overly concerned when Venezuela
    recalled its ambassador following outgoing-President
    Moscoso's August 2004 pardon of four anti-Cuban prisoners,
    including one, Luis Posada Carriles, who is wanted in
    Venezuela for a 1973 attack on a Venezuelan airliner.  See
    Reftel D.  End note.)  Since that time, the GOP has joined
    the former Group of Three (Venezuela, Colombia and Mexico,)
    now G-4, a regional economic and diplomatic bloc.  Panama's
    decision to join the G-4 reflects a broader strategy to forge
    stronger economic and commercial ties in the region.  (See
    Reftels A and B.)

    Oil Pipeline or Pipe Dream?
    ------------------------

    ¶7.  (C) Panama and Venezuela are exploring the possibility of
    sending Venezuelan crude oil through an existing
    trans-Isthmus pipeline across Panama to the Pacific for Asian
    (mostly Chinese) customers.  (Note: Chavez claims that his
    purpose in pursuing the project is to diversify his customer
    base away from the United States.  The economic feasibility
    of the project seems less certain, but we leave it to Embassy
    Caracas to make that judgment.  End note.)  While it may be
    true, as some have suggested, that the oil pipeline idea is
    just a smoke screen to mask Chavez's "true" intention of
    using the Bolivarian Circles to destabilize Panama,
    Panamanian security officials view the diplomatic discussions
    as purely commercial, involving no potential Venezuelan
    threat to national security.

    ¶8.  Panama's MFA Foreign Relations Advisor Nils Castro
    believes Venezuela has limited value as a trading partner.
    Castro recently told ECON Counselor that Venezuela's sole
    value to Panama is its petroleum, as Venezuelan investment in
    Panama is relatively small.  That attitude has been reflected
    in recent Panamanian apathy toward Chavez's tiff with
    Colombia.

    Comment
    -------

    ¶9.  (C) Many Panamanians believe that the Torrijos government
    is Panama's last hope for a viable democracy.  Average
    Panamanians view their country as small and weak and its
    political elite as venal and indifferent to the country's
    problems.  The Bolivarian Circle's propaganda could
    capitalize on that underlying malaise.

    ¶10.  (C) Bolivarian circles conceivably could gain momentum
    and political influence in the event of a prolonged, general
    crisis in Panama.  They are currently too inconsequential and
    lack the numbers to initiate such a breakdown.  More
    immediately, the GOP is concerned that Venezuelan money might
    fund well-trained Panamanian leftist groups to organize
    violent street demonstrations when CSS reforms are announced
    (probably in the next month or so).  And Chavez may well hope
    to bring Panama into his "orbit."  While Panama is trying to
    forge closer commercial ties with Venezuela and other
    countries in the region, GOP officials discount any long-term
    convergence of Panamanian and Venezuelan political, economic
    or ideological interests, aside from the economic benefits
    that the GOP might be able to extract from capital-intensive
    GOV energy investments, if they should come about.  Indeed,
    Chavez's main leverage in Panama is the financial power which
    petroleum puts in his hands.  (Note: We recently received
    unconfirmed reports that Chavez has offered Panama
    concessionary prices on oil in return for Panama's support
    for Cuba on United Nations votes.  End Note.)

    ¶11.  (C) Chavez is well acquainted with Panama, having spent
    18 months here following his release from prison after his
    failed 1992 coup, but his influence in Panama is practically
    nil.  Panamanians widely deride him as a lunatic for his
    improbable proposals and claims, for instance, his 2004
    suggestion that he would dispatch Venezuelan MIGs to defend
    the Panama Canal against terrorists.  More recently he has
    made veiled threats to Panama, claiming that hundreds of
    Venezuelan "terrorists" (including several of his former
    political opponents) are using Panama as a base.  He implied
    that the U.S. doctrine of preemptive war (such as in Iraq)
    may also give him the right to launch anti-Chavista attacks
    against opponents in Panama or elsewhere.

    ¶12.  (SBU) Embassy Panama defers to the perspective of
    Embassy Caracas on Venezuelan aims in Panama, on oil and
    other commercial links, or on the mischief-making potential
    of Bolivarian Circles.

    WATT

`