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### Viewing cable 04PANAMA1224, PANAMA LEGISLATIVE UPDATE: NEW BALLGAME ON

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
04PANAMA1224 | 2004-05-17 20:49 | 2011-05-31 00:00 | CONFIDENTIAL//NOFORN | 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 001224

    SIPDIS

    SENSITIVE

    DEPT. FOR WHA/CEN/BRIGHAM

    E.O. 12958: DECL: 05/17/2014
    TAGS: PGOV PREL PINR PM POLITICS FOREIGN POLICY
    SUBJECT: PANAMA LEGISLATIVE UPDATE: NEW BALLGAME ON
    SEPTEMBER 1

    REF: PANAMA 1047

    Classified By: DCM Christopher J. McMullen for reasons 1.4 (b) & (d)

    SUMMARY: Expect little until September 1
    ----------------------------------------

    ¶1.  (SBU) Panamanians (current legislators included) are so
    focused on what will happen after September 1 that they
    appear to have forgotten entirely that the current Assembly
    session will continue until the end of May.  The Democratic
    Revolutionary Party (PRD), Panama's largest and best
    organized party, whose candidate Martin Torrijos won the
    presidency by a commanding margin, is poised to control
    Panama's 78-member unicameral legislature that will assume
    office on September 1.  PRD legislators won 41 seats,
    securing a massive advantage over the second-largest block,
    the Arnulfista Party's 17 legislators.  All seven legally
    recognized political parties won at least one seat and enough
    votes to survive as parties.  Alliances to defeat future PRD
    legislative initiatives would require opposition legislators
    to "convert" PRD renegades as well as join forces with each
    other, both unlikely events.  End Summary.

    Out-going legislators slump
    ---------------------------

    ¶2.  (C) Despite bickering over constitutional reform, Embassy
    expects little substantive progress in the legislative branch
    before the new Assembly gets to work on September 1.  The
    outgoing losers, who constitute a high proportion of the
    current Assembly, just don't have the political will to push
    things through.  Media reports highlight legislators' failure
    to attend sessions for the past several months.  Assembly
    President Jacobo Salas closed the Assembly weeks before
    Panama's May 2 elections to allow incumbents and staff, who
    had thrown their hats in the ring, to run their campaigns.
    Salas ordered extra hours in May and early June to make up
    for lost time, but the Assembly has not gathered a quorum (at
    least 50%) during several days that it was supposed to be in
    session.

    Winners and Losers
    ------------------

    ¶3.  (SBU) The clearest winner in the May 2 elections was the
    PRD, which increased its number of seats in the Assembly from
    34 to 41, and the Solidarity Party, whose share of the
    Assembly increased from 4 to 9.  Despite their alliance with
    the PRD, the Popular Party (PP) lost big, maintaining only
    one of its five current legislative seats (that of Second
    Vice President-elect Ruben Arosemena).  Analysts have
    suggested that the PRD-PP alliance accentuated the existing
    cleavage within the PP (formerly the staunchly anti-PRD
    Christian Democratic Party), which began during the Endara
    Administration (1989-94) with a dispute between Endara and
    his First Vice President Ricardo Arias Calderon.  Indeed,
    three incumbent PP legislators jumped ship to the Arnulfistas
    for their re-election bid and two won.  Though not as
    severely as in the presidential race, the Arnulfistas lost
    ground in the legislature, with their share of the Assembly
    falling from 19 to 17 legislators.  The Arnulfistas owe
    several "wins" to incumbents who defected from other parties
    like Juan Carlos Varela (PP), Enrique Garrido (PP), Carlos
    Afu (PRD), and Sergio Galvez (Democratic Change Party).

    ¶4. (SBU)  The most likely composition of the Legislative
    Assembly that will begin work on September 1 (subject to the
    resolution of formal challenges to results, which must be
    submitted by Friday May 13 at the latest) is:

     PARTY                                      # Legislators
     -----                                      -------------
     Democratic Revolutionary Party (PRD)            41
     Arnulfista Party (PA)                           17
     Solidarity Party (PS)                            9
     Natl. Liberal Republican Movement (MOLIRENA)     4
     National Liberal Party (PLN)                     3
     Democratic Change Party (CD)                     3
     Popular Party (PP)                               1

    Prospects before May 31
    -----------------------

    ¶5.  (C) Embassy is following two issues of interest to the
    USG in the current legislature.  First, the Ministry of
    Foreign Relations still has to present the Palermo Convention
    to the Assembly for ratification, to which there does not
    appear to be any strong opposition.  Second, the Legislative
    Assembly will need to consider an amendment to the organic
    law of the Interoceanic Regional Authority (ARI) to permit
    non-commercial organizations to purchase reverted land in
    installments.  Successful passage of such an amendment will
    determine whether Florida State University (FSU) can afford
    to keep its Panama campus and might close a long-standing
    dispute between ARI and FSU.

    ¶6.  (C) PRD sources have told EmbOffs that they are seeking
    Arnulfista collaboration to reform the Social Security Fund
    (CSS) before September 1, a highly unlikely scenario.  Though
    the Torrijos team says their plan would allow both sides to
    save face while resolving a critical national problem, the
    Arnulfistas don't appear to have the backing (or desire) to
    take the drastic steps it would require.  The CSS cannot
    continue to operate with its massive cash flow hemorrhages,
    which are eating into its reserves at an alarming rate.
    Indeed, only a consensus solution from all political corners
    has even a remote chance to be successful; however, President
    Moscoso already apparently told Martin Torrijos that her
    administration, "just can't do it right now."

    What to look for after September 1
    ----------------------------------

    ¶7.  (C) When the new PRD-dominated Legislative Assembly goes
    to work on September 1, 2004, it will probably begin in
    lock-step with the initiatives that President-elect Martin
    Torrijos' launches from the executive branch.  On the other
    hand, the Assembly's committees may well be places where
    tensions flare between the PRD "old guard" and new PRD blood
    like first-time San Miguelito Legislator-Elect "Mickey"
    Aleman (a liquor company executive in his early 30s whose
    uncle is Arnulfista Legislator Francisco "Pancho" Aleman).
    Intra-PRD competition for the Assembly presidency that the
    media has publicized pits youth (Rogelio Paredes from the
    working class district of Arraijan just across the Panama
    Canal) against experience (Elias Castillo, a longtime public
    office-holder who won re-election to his legislative seat
    representing middle to upper class San Francisco and Paitilla
    suburbs).  Hector Aleman, Martin Torrijos' "campaign
    coordinator," is another seasoned political veteran
    re-elected to the Legislative Assembly who will probably be
    recognized for his service to the PRD and could be a
    contender for Assembly president.

    ¶8.  (SBU) Parties other than the PRD will have their hands
    full trying to forge alliances inside the Assembly and out.
    The Arnulfistas have already announced sweeping reforms of
    their Board of Directors and changes to the party bylaws that
    would make primaries mandatory.  Guillermo Endara has heeded
    the Solidarity Party's call to join and strengthen the sudden
    beneficiary of a massive electoral subsidy US$3.7M, which he
    hopes will present constructive opposition to the PRD.  The
    two heirs of Panama's "liberal" tradition, the National
    Liberal Republican Movement (MOLIRENA) Party and the National
    Liberal Party (PLN), have announced that they are discussing
    a merger.  The PLN barely survived the May 2 elections,
    capturing only 1.5% of the presidential vote and 5.23% of the
    legislative vote nationwide.  A PLN/MOLIRENA merger, would
    create a 7-legislator block to reckon with inside the
    assembly and allow those previously expelled from MOLIRENA to
    return to the flock.  (NOTE: The term "liberal" in this case
    corresponds to the historical Conservative / Liberal
    dichotomy in Colombian politics.  End Note.)

    COMMENT: Old faces
    ------------------

    ¶9.  (C) Several candidates' clear ethical and/or legal
    peccadilloes evidently did not trouble the voters who
    re-elected them.  Analysis reveals that 32 of 59 (54%) of
    incumbent legislators won re-election.  Of the 27 who didn't
    make it, 14 are Arnulfistas, 9 are PRDistas, and one each
    were members of the four smaller parties.  A May 11 La Prensa
    report cites former Supreme Court Justice Edgardo Molina
    Mola's understandable disdain for the re-election of two
    controversial politicians -- Sergio Galvez and Carlos Afu.
    Arnulfista behemoth Galvez, who abandoned CD almost
    immediately after it helped him win his seat in 1999, freely
    admits that he never attends legislative sessions.  He also
    continues to deny widespread charges that he sells contraband
    rice by using his legislative immunity.  Former PRD turned
    Arnulfista Afu became (in)famous by waving $6,000 cash in the
    air on national TV that he said he received as a bribe from
    promoters of the controversial CEMIS project.

    ¶10.  (C) The PRD was not without their winners of
    questionable repute, led by Pedro Miguel Gonzalez, wanted by
    U.S. authorities for his role in the 1992 murder of U.S. Army
    Sergeant Zak Hernandez.  Pedro Miguel's re-election campaign
    was rife with irregularities, including allegations of
    rampant vote-buying and the alleged participation of
    relatives of Erasmo Pinilla, one of Panama's three Electoral
    Magistrates, in his campaign.  The Electoral Tribunal (ET)
    aggressively pursued rumors of irregularities in that
    electoral circuit, pre-emptively removing several apparently
    biased officials after the Arnulfista party lodged a formal
    complaint.  Arnulfista Jose "Pepe" Gomez, who lost to
    Gonzalez by a very narrow margin, has not lodged a formal
    complaint with the ET.

    ¶11.  (C) An angel compared with Gonzalez is Elias Ariel
    Castillo, a PRD legislator who won re-election and seeks to
    become Assembly President.  Castillo served 17 months hard
    time while being investigated for embezzling approximately
    US$1 million of government funds to fund 1989 political
    campaigns for Manuel Noriega supporters when he was municipal
    treasurer of Panama City.  He was never convicted of any
    crime because the judge dismissed charges against him based
    on investigators' failure to follow established procedures.

    WATT

`