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08PANAMA412008-01-14 20:43:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Panama

DE RUEHZP #0041/01 0142043
R 142043Z JAN 08
C O N F I D E N T I A L PANAMA 000041 
E.O. 12958: DECL: 01/14/2017 
Classified By: POLCOUNS Brian R. Naranjo.  Reasons:  1.4 (b) and (d). 
¶1. (C) "There will be many surprised political observers on 
Sunday," former President and candidate for the presidency of 
the governing Revolutionary Democratic Party (PRD) Ernesto 
"El Toro" Perez Balladares told POLCOUNS on January 13.  PRD 
members will go to the polls on January 20 to elect 4,200 
delegates to attend the party's national convention.  In 
turn, these delegates will elect PRD's National Executive 
Committee (CEN). Perez Balladares did not/not raise his 
permanent ineligibility for a U.S. visa for having 
trafficking in illegal aliens.  Perez Balladares said that 
the current field of prospective PRD presidential candidates 
was weak, anticipated that Alberto Vallarino would win the 
Panamenista nomination, and predicted that ultimately there 
would be a three-way race between the PRD's candidate, 
Democratic Change (CD) party president Ricardo Martinelli, 
and Vallarino.  Regarding bilateral relations, El Toro 
asserted that the U.S. should be concerned about the rising 
populist/leftist wing in the party and that he said that the 
"right wing of the PRD" that could serve as a counterbalance. 
 Perez Balladares said several times that he had not decided 
whether or not to run for president again, "I am taking this 
step by step.  There will time to decide whether to run 
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"In politics, there are no surprises, just surprised 
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¶2. (C) "I have done the necessary political work to advance 
my campaign to be president of the PRD," Perez Balladares 
stated.  "You watch.  In politics, there are no surprises, 
just surprised observers. There will be many surprised 
political observers on Sunday."  Though he would not venture 
any further information regarding his prediction, El Toro 
clearly believed that he would exceed expectations in the 
PRD's January 21 election for delegates.  Once the delegates 
are chosen, "I will focus on securing their support one by 
one.  I will switch from hunting with my shotgun to hunting 
with my rifle," Perez Balladares said, sitting in his den 
covered in trophies, including a whole stuffed lion, from his 
African safaris. 
¶3. (C) Perez Balladares said that the next three months, 
during which the PRD would select its internal leadership, 
would be critical not only for the future of the PRD, but 
also for Panama.  Currently, the PRD was a party without 
leadership; "(President) Martin (Torrijos) does not decide 
anything.  He does not act."  Furthermore, he added, "Our 
potential presidential candidates are not viable.  (Panama 
City Mayor) Juan Carlos (Navarro) is a liar and cannot be 
trusted; we know this in the party.  Juan Carlos cannot even 
pick up the garbage.  (Minister of Housing) Balbina (Herrera) 
has too radical and populist of a past; the elites will never 
accept her."  The former president said, "The U.S. should be 
concerned about the growing leftist, populist wing in the 
PRD.  The right wing, of which I am a part, could serve as a 
counterbalance to the Balbina, (National Assembly Deputy) 
Hector Aleman, and (National Assembly President) Pedro Miguel 
Gonzalez (PMG)."  Ultimately, PMG was a "flash in the pan," 
but there were others out there who would be more of a 
problem for the U.S., Perez Balladares asserted.  "You know, 
of course, that the Venezuelans are financing Balbina.  You 
have to know that."  (Note:  Post has no/no evidence that 
directly links Herrera to financing from Venezuela.) 
Views on Opposition 
¶4. (C) Ultimately, El Toro predicted, there would be a 
three-way race for president:  the PRD's candidate, Alberto 
Vallarino who would win the Panamenista primary, and Ricardo 
Martinelli.  "Vallarino will make a good candidate," El Toro 
said, "but he will not win if the opposition is divided."  If 
"my fellow ex-president  and friend (Guillermo) Endara" stays 
in and Martinelli runs "as we all expect," then the PRD would 
win in 2009.  El Toro described Panamenista President Juan 
Carlos Varela as "well-intentioned" but "not in the same 
league as real presidential candidates, the same goes for 
that boy, you know, the one from the milk family."  (Note: 
El Toro was referring to Panamenista presidential aspirant 
Marco Ameglio whose family owns the Bonlac milk and milk 
product company.) 
Panama Needs Man of Action 
¶5. (C) "There is a lot of work to be done in this country. 
We need somebody who will lead, push ahead projects, and get 
things done," Perez Balladares said.  Asking what has The 
Torrijos Administration had achieved, El Toro asserted that 
the Torrijos Administration had failed to "get the job done" 
in education, security, infrastructure, and health care  "We 
need to fight corruption too and strengthen the judiciary. 
If you do something that is corrupt, you should be arrested, 
tried, and, if convicted, serve time in prison."  The rank 
and file of the party had become increasingly disenchanted 
with Torrijos, felt ignored, and wished to be consulted more, 
Perez Balladares asserted.  "Panama needs a leader who is a 
man of action." 
Silent on Visa Ineligibility 
¶6.  (C) At no point in the conversation did Perez Balladares 
mention his permanent ineligibility for a U.S. visa on the 
grounds of his involvement in the trafficking of illegal 
¶7.  (C) El Toro was out to charm.  Though brash and brutal in 
his political assessment, he also sought to regale POLCOUNS 
with his safari stories.  He reviewed at length his four-day 
hunt to bag a male lion, for example.  Conversation began as 
the San Diego-Indiannapolis AFC division play-off was winding 
down, and the former president -- who cannot travel to the 
States to see his beloved Notre Dame Fightin' Irish play -- 
chatted eagerly about the NFL.  In the past, emissaries 
reaching out to Embassy on El Toro's behalf had indicated 
that El Toro would discuss politics only after resolving his 
visa situation, a non-start for post.  Continuing his charm 
offense, El Toro chanted the anti-corruption mantra, but, 
coming from one of Panama's most corrupt president's since 
the 1989 restoration of democracy, this message rings hollow. 
 While he is clearly not one to be afflicted with a lot of 
self-doubt, El Toro was clearly confident that he had solid 
reasons, mostly left unstated, to believe that he would 
exceed expectations on January 21.  His willingness to talk 
politics and not even raise his visa plight may indicate that 
El Toro is honestly interested in discrete contact with the 
Embassy.  This wily politician and master manipulator will 
need to be handled with extreme caution.  POLCOUNS advised 
Perez Balladares that any contact needed to be handled 
discretely, away from the unblinking lens of the media, and 
in confidence.  While post is not seeking any further 
contact, if such contact cannot be managed discretely, then 
contact with Perez Balladares should be dropped. 
¶8.  (C) This meeting was facilitated on Perez Balladares' 
behalf by Eduardo Morgan, Perez Balladares' former Ambassador 
to the U.S. and the founder of Panama's largest law firm. 
Morgan offered to introduce POLCOUNS to the former president 
after lunch at Morgan's beach house outside Panama City.  The 
meeting with Perez Balladares took place at his beach home, a 
short distance away from Morgan's beach house.  The only 
participants were:  Perez Balladares, his wife Dora Boyd de 
Perez Balladares, Morgan, POLCOUNS, and his wife.