US embassy cable - 05PANAMA350

UNCLAS SECTION 01 OF 03 PANAMA 000350 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR WHA/CEN 
SOUTHCOM ALSO FOR POLAD 
VANCOUVER FOR CG ARREAGA 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, PM, POLITICS & FOREIGN POLICY 
SUBJECT: PANAMA: SHOWDOWN AT THE ARNULFISTA CONVENTION 
LEAVES MOSCOSO ON TOP 
 
 
SUMMARY 
------- 
1. (SBU) Defying expectations, former president Mireya 
Moscoso retained her position as Arnulfista Party (PA) 
president at a January 16 closed-door convention, co-opting 
one of her main antagonists, Marco Ameglio, while defeating 
the other key challenger, liquor magnate Juan Carlos Varela. 
Now renamed Partido Panamenista, the PA  convention was to 
decide leadership issues in the wake of its crushing May 2004 
electoral loss of executive and legislative power to the 
Democratic Revolutionary Party (PRD) of President Martin 
Torrijos.  Through an adroit if unlikely alliance with 
erstwhile opponent Marco Ameglio (now vice president), 
Moscoso survived with her powers temporarily intact, pledging 
to step down in April (though many observers remain skeptical 
that she will surrender complete control).  Varela, who was 
widely expected to dominate the convention in alliance with 
Ameglio and to oust Moscoso, was left out in the cold after a 
series of costly blunders.  The convention's unexpected 
outcome signifies a tactical power shift within the party, as 
Varela's chance for a 2009 presidential candidacy seems all 
but lost, while those of former presidential candidate Jose 
Miguel Aleman and Moscoso-confidant and former Foreign 
Minister Harmodio Arias got a boost.  Whether Moscoso 
actually gives up control of the party, however, is the key 
factor in the near term and could determine how the party 
adjusts to the ruling PRD's current dominance of the 
political scene.  End Summary. 
 
Frustrated Payback 
------------------ 
2. (SBU) Prior to the January 16 convention both Marco 
Ameglio and Juan Carlos Varela had severely criticized Mireya 
Moscoso for her leadership of the PA up to and including the 
2004 Presidential election and had campaigned vocally for her 
resignation.  PA candidate Jose Miguel Aleman polled a dismal 
16% of the popular vote on May 2, 2004 and lost the election 
by more than 31 percentage points, finishing third in a race 
of four candidates.  Many Arnulfistas attributed the debacle 
to Moscoso's unpopularity and meddling in the campaign.  Many 
Panamanians inside and outside the PA believed that stripping 
Moscoso of her prominent party position would be an 
appropriate outcome. 
 
Unlikely Alliances 
------------------ 
3. (SBU) But it was not to be.  Moscoso was able to back her 
way out of trouble on January 16 by negotiating a deal with 
Marco Ameglio after Juan Carlos Varela committed a series of 
errors that doomed his faction to defeat.  At a January 24 
meeting with POL Counselor, 2009 Arnulfista presidential 
hopeful Harmodio Arias said that Moscoso had offered first to 
ally herself with Varela, especially as Ameglio, who had 
shown disloyalty to the party in the past, is not a "true" 
Arnulfista.  Arias added that Varela, by rejecting 
opportunities to negotiate a political deal with Moscoso, had 
ignored the rule of "Politics 101," which is negotiate, 
negotiate, and negotiate.  In the end, Varela refused to 
negotiate.  Ameglio, on the other hand, according to former 
Public Works Minister Eduardo Quiros, started negotiating 
with Moscoso "as soon as he stepped inside the room" at the 
convention.  For his part, Varela later claimed, in a 
conversation with POL Counselor, that his support would have 
evaporated if he had struck any deals with Moscoso. 
 
JC'S "Three Strikes" 
-------------------- 
4. (SBU) According to both Arias and Quiros, Varela committed 
three fatal errors that created confusion among his 
supporters and alienated potentially sympathetic delegates. 
(Note: Varela himself was not a delegate and was barred from 
the convention floor.  At the outset of the convention, the 
party was split into four groups under Moscoso, Varela, 
Ameglio, and a group of undecideds expected to vote with 
whomever they thought would win.  Quiros, Jose Miguel Aleman, 
and Carlos Raul Piad, who did not want Moscoso to be forced 
out, served as mediators between the groups.)  Varela's first 
proposal (on internal party bylaws, board elections, and 
holding mandatory primaries) would have been a initial test 
of his voting strength but, due to a technicality, never made 
it to the convention floor.  The convention committee 
rejected the proposal because it lacked the necessary 
supporting signatures.  Arias said that this oversight was 
committed by Varela's assistant, who forgot to attach the 
signature page to the proposal when she handed it in. 
 
Strike Two 
---------- 
5. (SBU) Varela then decided to ask his supporters to abstain 
from voting on any other proposal.  That decision was 
wrongheaded, his critics agree, for two reasons.  First, it 
prevented them from speaking at all or giving voice to their 
frustrations and opinions.  It also backfired, reducing his 
support.  In Arias's version of events, Varela vacillated on 
whether his supporters should abstain or vote for other 
proposals.  As a result of that confusion and because Ameglio 
by then had made his pact with Moscoso, Varela's group was 
confused about how to vote.  The convention then took the 
small number of abstentions (74) as proof of Varela's 
weakness, compared with the combined Moscoso-Ameglio vote of 
256 (with 215 opposing).  In fact, the abstentions did not 
reflect Varela's real strength (about 230) going into the 
convention.  Meanwhile, many undecided delegates sided with 
Moscoso. 
 
Strike Three 
------------ 
6. (SBU) Finally, Moscoso sent a messenger to Varela's hotel 
asking him to come to the convention from which he was 
officially barred.  Rumor has it among party members that 
Moscoso offered to let Varela in through a back door to meet 
with her.  Varela, shy of being caught on camera sneaking in 
through a back door to meet Moscoso, wanted to enter through 
the front one.  The meeting never happened.  Strike three. 
 
The Panamenista Future: Juan Carlos Out, Jose Miguel In? 
--------------------------------------------- ----------- 
7. (SBU) Quiros said that many in the party were "shocked and 
disappointed" with Ameglio's ascendency, and blamed Varela 
for the outcome.  Quiros expects many in the party to 
campaign for other candidates to prevent Ameglio, now seen as 
an opportunist, from winning board elections in 2006.  Now 
widely perceived as a loser inside the party, Varela's 
prospects for a 2009 presidential run seem dead.  That 
unexpected turn of events gives new hope to Jose Miguel 
Aleman, the party's failed standard bearer in 2004, and 
possibly to the supremely confident Arias. 
 
8. (SBU) At a January 31 reception, Varela claimed he had 
never intended to team up with Moscoso.  On the contrary, his 
strength depended on distancing himself from Moscoso in favor 
of a "new" Arnulfista Party that would capture and hold the 
support of the younger generation, a group that was 
successfully courted by Torrijos, but one that did not have 
strong ties to any particular party. 
 
Moscoso: Leaving Through The Front Door 
--------------------------------------- 
9. (SBU) Moscoso's success was due to her shrewd management 
of her residual strength and her offer to step down as PA 
leader in April, when a new board will be elected, Arias and 
Quiros said.  As Arias stated: "she wanted to leave through 
the front door, not the back."  Given the PA's putative 
new-found aversion to back room politics, it was most likely 
a good way to maintain party unity.  In addition, Moscoso 
came to the convention well-prepared to garner wider support. 
 According to Quiros, she surprised the 500-plus delegates by 
delivering a non-scheduled speech at the opening of the 
convention.  In her speech, she put all the board positions 
at the party's disposition, allowed for secret voting on 
every decision, and appointed a representative of each wing 
to every commission. 
 
11. (SBU) The new Moscoso-Ameglio alliance gives Ameglio ten 
supporters on the new internal board of directors, and 
Moscoso only five (although some observers still believe that 
Moscoso might outmaneuver Ameglio).  Assuming that Moscoso 
resigns in April, Ameglio would take over as temporary 
president until early 2006 when the party holds new 
elections.  Ameglio, now Panamenista vice-president, told 
reporters that Moscoso deserves the respect of the party 
after the convention.  When POL Counselor asked what the 
alliance means for the party, Harmodio Arias said, "Nothing; 
it was a victory for her." 
 
Comment 
------- 
12.  (SBU) The Partido Panamenista's transition to a united, 
transparent and democratic post-Moscoso future is going to 
take longer than some pre-Convention optimists -- Varela 
among them -- thought.  Only 4% of Panamanians identified 
themselves as Arnulfistas (Panamenistas) in a recent Gallup 
poll.  That shows the party's public disarray but does not 
reflect the party's inherent or potential strength.  (The 
party has some strong young leaders who have been blocked out 
or manipulated by Moscoso, a "caudilla" in the tradition of 
her revered late husband and party founder, Arnulfo Arias.) 
The PA presidential candidate, Jose Miguel Aleman, polled 
only 16% of the vote in May 2004 but Arnulfistas also voted 
for Guillermo Endara, who got 31%.  The combined 
Aleman-Endara vote equaled the 47% of voters who gave the 
presidency to Martin Torrijos.  While it is too early to 
count the Arnulfistas out, it is also too early to predict 
whether the party will succeed in finding a way to repackage 
and modernize itself to become a relevant force for the 
future. 
WATT