Viewing cable 04PANAMA540

04PANAMA5402004-03-04 19:40:00 2011-08-30 01:44:00 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 000540 
E.O. 12958: DECL: 03/04/2014 
REF: A. 03 PANAMA 0798 
     ¶B. 03 PANAMA 2451 
     ¶C. 03 PANAMA 3294 
     ¶D. PANAMA 0440 
     ¶E. 03 PANAMA 2442 
     ¶F. PANAMA 0145 

¶1.  (C) Roberto Eisenmann, Jr., founder of Panama's 
anti-dictatorship daily newspaper La Prensa, since 1990 
turned political maverick and op-ed gadfly, recently shared 
with POL Counselor some caustic commentary on what he called 
the "outrageous" attitude of Panama's political class and its 
corrupt behavior.  Eisenmann said his "hopes" for Democratic 
Revolutionary Party (PRD) presidential front-runner Martin 
Torrijos began to fade when Torrijos was slow to disengage 
himself from first cousin Hugo Torrijos.  Hugo is Martin's 
major, if not chief financial backer and recently dismissed 
campaign manager, implicated several times for financial 
abuse of public office, though never formally charged.  Given 
Torrijos' spotty resume and his apparent reliance on shady 
finances, Eisenmann views an increasingly likely Martin 
Torrijos presidency as "on the job training and then hope for 
the best."  On former President Endara's candidacy, Eisenmann 
said he faces a "very uphill battle," adding that Endara has 
"no new ideas" and lacks money and a national organization. 
Although occasionally critical of U.S. politics in Panama and 
the wider region, Eisenmann is nonetheless an analyst with 
insight and a person of integrity whose views carry weight, 
even among those Panamanians who view him as arrogant and 
elitist.  End Summary. 
Two Biggest Parties "Equally Corrupt" 

¶2.  (C) As a journalist, Roberto Eisenmann has focused 
squarely on corruption -- during military rule and after -- 
and he finds Panama's political elite sadly lacking.  He is 
anything but sanguine about democratic Panama, since 
Operation Just Cause ended Panama's 21-year military 
dictatorship in December 1989.  Panama could be a first-world 
country, he says, if it had decent government for just ten 
years.  Following the ouster of Manuel Noriega, he recalled 
that Panamanians with strong political convictions wanted a 
bipartisan system with two strong parties (Arnulfistas and 
PRD), but the two parties now "are equally corrupt."  "The 
attitude of the political class is outrageous," Eisenmann 
said. "They don't seem to give a damn."  Panama must clean 
house or risk the emergence of a Panamanian Hugo Chavez. 
Endara As Anti-System Candidate 

¶3.  (C) Eisenmann is grateful for former President Guillermo 
Endara's presidential candidacy in Panama's May 2 election, 
"or else we would have some crazy populist running," he 
added.  Endara is an establishment figure running for 
president in a slot that otherwise might have been filled by 
a genuine anti-system candidate, such as fired social 
security fund administrator Juan Jovane.  What Hugo Chavez 
proved in Venezuela -- that "anyone" can run for president -- 
may become true in Panama, Eisenmann said.  (See Reftel E.) 
At least in the May 2 election, no candidate poses any threat 
to the democratic process.  Eisenmann said that Endara faces 
a "very uphill battle," and lacks a national organization, 
money, as well as new ideas. 
Friends Get the Cash Box 

¶4.  (C) Eisenmann had few kind words for out-going President 
Mireya Moscoso.  Referring to his one-year stint as advisor 
to President Moscoso, Eisenmann recalled telling her "I have 
friends too but I don't give them the cash box."  Eisenmann 
added that Moscoso hates former President Endara "with a 
passion" because she sees him as a Arnulfista party 
Historical Dislike of PRD 

¶5.  (C) Eisenmann acknowledged his dislike of the PRD for 
historical reasons (an allusion to his personal clashes with 
PRD military strongmen Omar Torrijos and Manuel Noriega), but 
said he tries to be objective.  He views an increasingly 
likely Martin Torrijos presidency as "on the job training and 
then hope for the best."  (Note: Martin Torrijos has held two 
jobs in his life that we know of.  He managed a McDonald's 
fast food franchise in Chicago in the late 1980s.  During 
1994-1998 he was Vice Minister of Government and Justice 
under President Ernesto Perez Balladares.  Given this limited 
experience, many other observers also worry about Torrijos' 
lack of depth on issues.  End Note.) 
Alarm Bells 

¶6.  (C) Eisenmann praised Torrijos for his ability to gain 
control of the PRD, for isolating the old guard, and winning 
a democratic intra-party primary vote.  But he sounded alarm 
bells about Hugo Torrijos, Martin's "money man," who served 
as his campaign manager (until Martin recently asked him to 
step down) and likely will play a prominent role in a PRD 
presidency, and who recently was implicated in a scandal 
concerning his stewardship of Ports Engineering Construction 
Corporation (PECC -- See Ref C).  In November 2003 
Comptroller Alvin Weeden apparently called Torrijos to warn 
him to remove his cousin from the campaign on the day before 
accusations against Hugo Torrijos (and former president Perez 
Balladares) became public in the PECC scandal.  Even after 
removing Hugo a month later, Martin insisted it had nothing 
to do with PECC, adding that he was sure that Hugo was 
innocent of any wrongdoing.  (Note: Eisenmann thought the 
surprising thing about the PECC scandal was that Perez 
Balladares reportedly got such a small part of the action -- 
only 7.5%.  "I bet he was pissed off when he found out the 
Torrijos boys were getting more than him," he said.  End 
"This Hugo Thing" 

¶7.  (C) "I had hopes for Torrijos but this Hugo thing set me 
back," Eisenmann said.  Hugo Torrijos was ports director 
under PRD President Ernesto Perez Balladares, "and left 
rich," Eisenmann noted.  "A lot of money is made in Panama's 
Asian consulates," he quickly added, the Philippines in 
particular.  (Note: Also Vietnam.  Overall, commercial 
authentications make Tokyo Panama's most lucrative far 
eastern consulate.  End note.)  Augusto "Onassis" Garcia 
(advisor and close associate of President Moscoso) and Hugo 
"understand each other," Eisenmann continued.  Onassis Garcia 
controls Panama's Asian consulates, he explained, (as Hugo 
Torrijos controlled them under Perez Balladares, when he was 
ports director, and before that under Manuel Noriega, as 
Finance Ministry shipping and consular services director). 
When Onassis Garcia's nephew, Juan Carlos Escalona (now 
Panama's ambassador and consul general in Manila), got there 
in 2000, Eisenmann continued, "Hugo Torrijos told him, 'It 
will take you 18 months to set up your own system.  Why not 
use the one that I have and give me a cut?'"  Eisenmann 
quipped, "These are the guys who are in government, because 
it's good business for them." 
Background: Seamen's Visas a Lucrative Trade 

¶8.  (C) The licensing of merchant seamen to work on 
Panama-flagged vessels in East Asian capitals, Manila in 
particular, is a lucrative business for corrupt Panamanian 
officials (see Ref A and B), as is ship registration. 
Seamen, in their thousands, reportedly must pay an inflated 
"fee" of several hundred dollars, which officials pocket, for 
an identity cards whose nominal price starts at $115.  Also, 
to obtain their health clearances, the seamen reportedly must 
use only specific Manila clinics which, it is assumed, pay 
kickbacks to the officials.  (Comment: Embassy Panama has put 
the issue of seamen's visas and vessel registration at the 
top of our maritime security agenda.  While we have made 
major progress in virtually every other area of that agenda, 
the issue of seamen's visas and vessel registration remains 
elusive because of corruption in Panama's consulates and its 
Maritime Authority (AMP).  We hope to engage the next 
government which takes office on September 1, 2004, stressing 
that corruption involving seamen's visas and the registration 
of vessels under Panama's flag poses a direct threat to U.S. 
-- and Panamanian -- security interests.  End comment.) 
Ties of "Blood, Marriage, and Adultery" 

¶9.  (C) Interlocking relationships of blood and marriage (and 
adultery, as the wags have it) among Panama's elite go beyond 
mere nepotism, making official corruption difficult to root 
out.  For instance, Amb. Juan Carlos Escalona's brother, 
Arnulfo Escalona, is currently Minister of Government and 
Justice.  Both are nephews of Onassis Garcia (Moscoso's close 
advisor) but Arnulfo is also widely rumored to be President 
Moscoso's paramour.  Garcia's daughters, Bertilda and Rita, 
are Administrator of the Panamanian Maritime Authority (AMP) 
and Panama's Consul General in New York, respectively. 
Bertilda, Rita, and Juan Carlos thus control three of four 
AMP offices with authority to register ships and issue 
seafarer IDs (the fourth is London).  This particular group 
has long been known as the "Chitre Mafia," after the 
Panamanian town they hail from (Ref D). 

¶10.  (C) Eisenmann may be an inveterate contrarian in his 
views, but his disdain for the traditional parties 
(particularly the PRD and Arnulfistas) is a sentiment 
increasingly shared by Panamanians who are unhappy with the 
corruption, clientelism, and cronyism within the political 
class.  Likewise, much of the popular support for ousted 
Social Security Chief Jovane, as well as the popularity of 
Solidaridad candidate Endara, reflects an underlying populism 
in Panama that could create conditions for the emergence of a 
charismatic demagogue, similar to the Chavez phenomenon in 
Venezuela.  Many observers believe that Panama's May 2, 2004 
election is key to restoring the credibility of the 
traditional political parties.  (See Reftel F.)  If Torrijos 
wins the election, as current trends suggest, Eisenmann and 
other top opinion shapers will be watching closely to see 
whether Torrijos lives up to his pledge to be "the Tony Blair 
of Panama."  As Torrijos's First Vice Presidential Candidate 
Samuel Lewis Navarro has said about corruption in Panama, 
"Change starts at the top."  His first test will be the 
appointment of government officials who can break the corrupt 
traditions that were described by Eisenmann.