Cablegate: Martinelli: Presidentialism or Populism?

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S E C R E T PANAMA 000701

NOFORN
SIPDIS

E.O. 12958: DECL: 09/01/2029
TAGS: PGOV PREL PINR PM
SUBJECT: MARTINELLI: PRESIDENTIALISM OR POPULISM?

REF: A. A. PANAMA 657
B. B. PANAMA 639
C. C. PANAMA 692

Classified By: Ambassador Barbara J. Stephenson for reasons 1.4 (b) and
(d)

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Summary
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1. (S//NF) President Ricardo Martinelli has begun his five
year term by energetically taking on a number of vested
interests, from powerful local businessmen perceived to be
abusing state concessions, to major international businesses
(ref A), civil society leaders, and officials of the former
governing Revolutionary Democratic Party (PRD). To do so, he
has exercised the wide powers available to him as president,
in addition to influencing other state institutions such as
the Supreme Court, the National Assembly, the Attorney
General's office, and the press. Martinelli's power over
these nominally independent institutions is based on the
preponderant power the Presidency has in the Panamanian
political system, his expansive view of his authority, and
his powerful personality. While many of Martinelli's moves
have been met with widespread public support, this extreme
concentration of power in the hands of one man, together with
Martinelli's attempt to push the Embassy into illegal
activities (ref B) and reports of his intimidation of
judicial authorities (ref C), are cause for concern over the
stability of Panama's democratic institutions in the medium
term. End Summary.

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Firmness, Not Finesse
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2. (C//NF) In his inauguration day address on July 1,
Martinelli made plain what his governing style would be; his
promise to govern "with firmness, but not finesse" (con
firmeza pero sin fineza) indicated that he would govern with
a strong hand, but without "excessive" concern for
"legalisms." Almost immediately after assuming power,
Martinelli personally led a group of ministers and police to
seize a controversial land-fill from businessman Jean Figali.
Figali was a perfect foil, having long been pilloried in the
press for violating zoning laws, benefiting excessively from
government concessions, and using political connections to
circumvent regulations. Martinelli then began a campaign
against other businessmen, companies and international
investors who had benefited from government concessions of
land and installations, ostensibly demanding that they pay a
higher tax rate, and accusing them of using government
connections to get sweetheart deals. Among his targets have
been major U.S. investors AES and MIT (ref A).

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Widely Popular
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3. (C//NF) Martinelli is still in his honeymoon period.
Despite the concern expressed by some international
investors, Martinelli's moves have been met with public
support, currently at 72% (not as high as Martin Torrijos'
80% approval rating at this point in his presidency, but
still very high). The press has also served more as a
cheerleader than as a watchdog. Fernando Berguido, Executive
Director of the paper of record La Prensa, told the
Ambassador August 25 that he thought Martinelli was finally
standing up to the vested interests. Asked what steps the
Embassy might take with new "democracy and governance"
funding to strengthen the independence of the judiciary,
Berguido, also head of Transparency International Panama,
suggested only that the Ambassador appeal to Martinelli
personally to keep honest justices and not appoint corrupt
ones. Berguido also acknowledged that Martinelli had
personally leaked documents to him that the paper had used to
run an expose on corruption by Ernesto Perez Balladares,
former president of Panama and currently campaigning to
reclaim the leadership of the Revolutionary Democratic Party
(PRD).

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National Assembly - Don't Look at Us!
-------------------------------------

4. (C//NF) During a series of lunches with National
Assembly Deputies from Martinelli's Democratic Change Party
(CD) and the allied Panamenista Party, several leading
deputies expressed their support for Martinelli, but also
highlighted the constitutional weakness of the Legislative
Branch compared with the Executive. Panamenista Deputy and
Party Vice President Alcibiades Vasquez told the DCM August
27 that the National Assembly was not an independent
institution, citing its lack of a stand alone budget, and the
Executive's control over discretionary funding. Deputies need
to carry out social programs in their districts. Several
deputies expressed anger over the disrespectful way Minister
of Government and Justice Jose Raul Mulino had behaved in
presenting a bill to be rubber-stamped. Mulino berated a
Panamenista Deputy and demanded that the Assembly pass the
law immediately without debate. Panamenista Deputy Jose
Blandon told emboffs that members of the government did not
know how the Assembly worked, and thus made unreasonable
demands on the pro-government block.

5. (C//NF) National Assembly President Jose Luis (Popi)
Varela told the emboffs that Martinelli had ordered him to
appoint Rafael Barcenas to the Panama Canal Administration
Board, a designation that belonged to the National Assembly.
Varela protested and argued that the President would have
three seats to appoint in January. According to Varela,
Martinelli said, "No, no, I have decided, and it has to be
Barcenas. Maybe I will name your candidate with one of my
nominations." Varela noted that after the Assembly voted as
instructed, Barcenas publicly thanked the President, and not
the Assembly or Varela, for appointing him. Deputies from
every party have told us that actions such as this were a
humiliation for the Assembly, and left it "naked" to public
scorn.

6. (C//NF) CD Whip, Jose Munoz told emboffs that Martinelli
himself was incorruptible, but that it was possible his
ministers could be corrupted. He expressed his belief that in
such a case, Martinelli would immediately fire the official.
Munoz and fellow CD deputies fully supported the government's
agenda. They argued that the heavy pressure on the large
corporations was an attempt to correct the entire culture of
evasion in Panama, by convincing average Panamanians that
they were not the only ones who would have to pay taxes or
obey the rules. They all noted, however, that the Assembly is
too weak to oppose Martinelli. Munoz indicated he did not
like the names circulating for Supreme Court nominees, but
noted there was nothing he could do to stop them. The
deputies were very supportive of efforts to prosecute corrupt
members of the former PRD government, but Munoz noted that it
would be very dangerous to Panamanian democracy for
Martinelli to find himself without a strong opposition.

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Comment: No Controls On Power
-----------------------------

7. (S//NF) Panama clearly has a very Presidentialist
government. The National Assembly has no independent budget,
no power to initiate budget bills, and no ability to modify
executive branch budget proposals. The Deputies are viewed as
service providers by their constituents, and rely on the
executive for funds. The Supreme Court and the A/G's office
also depend on the Executive for their budgets, and pay a
price for alienating a powerful president. Ultimately, the
president names Supreme Court magistrates, giving him the
ability to put his close allies into those jobs. But
Martinelli's power at this time goes beyond even this wide
constitutional mandate. Martinelli seems to be in permanent
campaign mode, constantly opening new fronts of battle in a
popular campaign against interests that are widely seen as
having benefited from special treatment by the government for
years. Martinelli's strong personality, his lack of
commitment to "rule of law," the hyper-powerful presidency,
and the high approval ratings may well end up combining to
erode Panama's democratic institutions.

8. (S//NF) Given the strategic importance of the
Panama-U.S. relationship, Post believes it is necessary to
avoid an over-identification with Martinelli and make clear
our support for Panama's democratic institutions as a whole.
Without weakening our cooperation with the GOP on our common
agenda, the Embassy is also making a point of meeting with
opposition political figures, supporting calls for
strengthening judicial independence, and highlighting our
work with civil society groups. Our message to our local
contacts will be that the USG supports the strengthening of
Panama's democratic institutions, to ensure its ability to
become a first world country, which is the consensus
development goal for Panama.
STEPHENSON

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