US embassy cable - 05PANAMA629

C O N F I D E N T I A L SECTION 01 OF 02 PANAMA 000629 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR WHA/CEN 
SOUTHCOM ALSO FOR POLAD 
VANCOUVER FOR CG ARREAGA 
 
E.O. 12958: DECL: 03/17/2015 
TAGS: PGOV, PREL, PHUM, PM, POL CHIEF 
SUBJECT: PANAMANIAN SUPREME COURT FRACAS BLURS GOVERNMENT 
FOCUS ON SOCIAL SECURITY REFORM 
 
 
Classified By: Ambassador Linda E. Watt for reasons 1.4 (B) & (D). 
 
1.  (C) A public row pitting one Supreme Court Justice 
against three others has incited vehement public demands for 
the dismissal of all nine justices.  On March 10 the 
Panamanian government (GOP) institutionalized those demands 
by forming a State Justice Commission (SJC) comprising state 
officials and the National Bar Association president, with a 
mandate requiring it to devise by early September a 
structural solution to the Court "crisis."  Panamanians 
rightly view the Court as ineffectual, highly politicized, 
and corrupt.  Although the GOP could have seized this 
opportunity to do some long-overdue house cleaning at the 
Court -- a key to fulfilling its anti-corruption pledges -- 
it evidently fears spending political capital and distracting 
its focus from its burgeoning, contentious domestic 
legislative agenda.  That agenda includes first of all reform 
of Panama's Social Security system (CSS), which the GOP plans 
to announce in coming weeks, as well as a planned referendum, 
possibly early in 2006, to decide not-yet-announced plans to 
widen the Panama Canal.  The GOP is loath to endanger either 
priority, which explains its reluctance at this moment to 
take on the Court.  End Summary. 
 
2.  (C) Unseemly public mudslinging among four Supreme Court 
justices (three against one) in early March has provoked a 
groundswell of popular demands for the dismissal of all nine 
Justices.  On March 2, Justices Hoyos, Salas, and Spadafora 
publicly accused Justice Arjona of endangering the separation 
of powers and the independence of the judicial branch of 
government by engaging in "illegal" administrative practices. 
 Arjona shot back on March 3, charging the three with freeing 
suspects in narcotrafficking and murder cases, impeding 
access to public information, and countenancing international 
arms trafficking.  As charges and counter-charges jostled for 
space on the front pages of Panama's dailies, Attorney 
General Ana Gomez in a March 4 letter asked National Assembly 
President Jerry Wilson to invite Arjona to testify. 
 
3.  (C) Observers who thought AG Gomez's letter reflected a 
concerted GOP strategy to eliminate Hoyos, Salas, and 
Spadafora soon were proved wrong as media, NGOs, and 
Panamanians from all walks of life vented their fury on the 
Court's alleged incompetence and corruption.  Amid strident 
calls for the entire Court to resign, President Torrijos on 
March 10 agreed to appoint Gomez and Wilson to a State 
Justice Commission (SJC) that would include Chief Justice 
Troyano, Ombudsman Tejada, and National Bar Association 
President Carlos Vasquez.  The SJC is charged with finding a 
solution to the Court crisis within 180 days, that is by 
early September 2005. 
 
4.  (C) (Comment: By forming the commission, Torrijos in 
effect has decided to procrastinate.  He has also given the 
impression, which may not turn out to be true, that he will 
give civil society a veto over his policy on the Court, when 
it is eventually formulated.  The Assembly has the 
constitutional power to impeach Justices, who serve 10-year 
terms, but never successfully has exercised that power. 
Salas and Spadafora are Moscoso nominees.  Hoyos is a Perez 
Balladares nominee whose term ends in December 2005.  Arjona, 
a Moscoso nominee who has proved to be an independent-minded 
political maverick, has been a long-time Embassy confidant. 
He has accused the other justices of accepting payoffs from 
criminals and estimates that he has cast the lone dissent in 
perhaps 50 Supreme Court votes where the majority showed "no 
concern" for the evidence or the seriousness of the cases. 
End comment.) 
 
Where's the Beef? 
----------------- 
5.  (C) In a March 4 meeting with POL Counselor, Justice 
Arjona claimed that the charges against him were frivolous 
and based on personal vendettas stemming from the persistence 
of his lone, dissenting votes on many Court decisions.  The 
other justices barely tolerate him, Arjona said.  In a effort 
to force him off the Court, Arjona recounted, former Supreme 
Court President Pereira Burgos confiscated his Court-paid car 
in Spring 2004, then stopped paying his staff.  In 
desperation, Arjona turned to then-Minister of Economy and 
Finance Norberto Delgado, who proposed paying Arjona's staff 
from the Attorney General's office.  That is the purported 
basis, Arjona explained, for the charges against him of 
administrative impropriety and undermining the separation of 
powers.  Among Embassy contacts, none believe that the 
accusations against Arjona are anything but political payback. 
 
6.  (C) Arjona's charges against Hoyos, Salas, and Spadafora 
are much more serious and substantive.  Specifically, Arjona 
has questioned their April 2004 decision to free Lorena Henao 
Montoya (sister of notorious drug trafficker Arcangel Henao 
Montoya), who was subsequently arrested by Colombian 
authorities.  Also, Arjona is blaming the three for impeding 
an investigation into the use of millions of dollars of 
Taiwan-donated funds in the Fundacion Mar del Sur, paid to 
First Lady Ruby Moscoso, former President Moscoso's sister. 
In addition, Arjona faults the three justices for freeing 
suspected Israeli arms trafficker Shimon Yelinek in the 
Otterloo case in March 2004,l presumably for payoffs. 
 
Comment 
------- 
7.  (C) The sudden and unexpected upsurge of popular 
sentiment against Panama's Supreme Court presented the 
Torrijos administration with an opportunity to grasp a 
politically acceptable solution to its perceived corruption 
and incompetence.  Since winning office in May 2004, Torrijos 
and his cabinet have agonized over the best way to reform the 
Court in a way that would respect the constitution and be 
seen as politically neutral while forcing some of the more 
egregious Justices from the bench.  Faced with the imminent 
unfolding of one of its principal domestic priorities -- a 
campaign to reform social security (CSS) is already underway, 
while the details of the reforms and possibly violent street 
demonstration are expected soon -- the GOP has refused to 
allow itself to become distracted by lesser priorities, such 
as the Court. 
 
WATT