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Viewing cable 06PANAMA190, PANAMA: INCREASING URGENCY ON CANAL REFERENDUM

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Reference ID Created Released Classification Origin
06PANAMA190 2006-02-01 21:51 2011-05-29 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Panama
VZCZCXYZ0017
RR RUEHWEB

DE RUEHZP #0190/01 0322151
ZNR UUUUU ZZH (CCY ADX89D0ED MSI2855 640A)
R 012151Z FEB 06 ZDS
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC 7280
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHBO/AMEMBASSY BOGOTA 2148
RUEHCV/AMEMBASSY CARACAS 0927
RUEHQT/AMEMBASSY QUITO 0810
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/JOINT STAFF WASHINGTON DC
RUEKJCS/OSD WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL//J5/J2/POLAD//
UNCLAS PANAMA 000190 
 
SIPDIS 
 
C O R R E C T E D COPY TO ADD SIPDIS CAPTION 
 
SENSITIVE 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN, AND INL 
SOUTHCOM FOR POLAD 
 
E.O. 12958:N/A 
TAGS: PGOV PREL PINR SNAR PM
SUBJECT: PANAMA:  INCREASING URGENCY ON CANAL REFERENDUM 
 
 
SUMMARY 
------- 
1. (U) A flurry of recent detailed discussions at the Panama 
Canal Authority (ACP) to discuss the proposed Canal 
expansion suggest that the GOP is speeding up its internal 
technical process, in order to hold a constitutionally 
mandated referendum in 2006.  Amid the hubbub at ACP 
headquarters, one thing that has not gone unnoticed is ACP 
board member and Minister of the Economy and Finance 
Ricaurte Vasquez's alleged lobbying to be named to direct 
the multi-billion-dollar project.  Canal Administrator 
Alberto Aleman January 30 held a special briefing on Canal 
expansion planning for the Ambassador and Emboffs. (To be 
reported septel.)  Whatever the truth of Vazquez's 
machinations, Aleman informed Emboffs that he himself would 
oversee the project.  End Summary. 
 
2.  (SBU) Emboff met privately with Panama Canal Authority 
(ACP) board member Eduardo Quiros on January 13, an active 
politician who served as Minister of Public Works under the 
Moscoso Administration.  Quiros commented that the ACP board 
is meeting more often lately to move on with the Canal 
expansion project, but confided that there may be an 
additional motive for the rush than the project itself. 
Quiros shared with Emboff that there is a strong rumor 
within ACP board members that Minister of Economy and 
Finance and (by default) President of the ACP Board Ricaurte 
Vasquez "plans to present the board with a proposal to 
appoint him Project Manager (with total autonomy) for the 
Canal expansion project."  (Note:  This appointment would 
allow Vasquez, a former Canal Deputy Administrator until 
President Torrijos appointed him a Cabinet member, to return 
to the Canal without the need to report to his former boss, 
re-appointed Administrator Alberto Aleman. End note.) 
 
3.  (SBU) On January 3, President Torrijos showed up 
unexpectedly at an ACP board meeting.  Board members later 
found out that board President (and Minister) Vasquez had 
phoned President Torrijos during a break and invited him 
over without informing the other board members.  Torrijos's 
presence was reportedly awkward, as the board is not used to 
discussing issues in his presence and because Torrijos 
himself was not prepared to address Canal issues.  Board 
members speculated that Vasquez might have invited Torrijos 
to impress him with his work as ACP President and/or to make 
the board believe that Torrijos fully supports him. 
According to Quiros, President Torrijos listened to the 
overall discussion for about an hour and at the end only 
said that he would accept whatever the board decides on the 
expansion project, but that he would also consult with the 
country's political forces and the civil society.  Then he 
left the meeting. 
 
The Power Behind 
---------------- 
4. (SBU) Quiros claimed that board member (and MFA Senior 
Advisor and PRD member) Adolfo Ahumada would support 
Vasquez' candidacy to run the Canal project if it is ever 
submitted before the board.  Quiros told Emboff that Ahumada 
is more influential in this government than people think, 
"an old-line PRDer who is quiet but smart.  Foreign Minister 
Samuel Lewis relies on him heavily and so does Minister 
Vasquez as neither one of them is a traditional politician 
nor a lawyer," Quiros added.  Rumors have it that Ahumada 
was behind Supreme Court Justice Graciela Dixon's candidacy 
last October to become Chief Justice.  Ahumada was 
successful in his campaign as Dixon was sworn in as Chief 
Justice on January 3, 2006, both Ahumada and Dixon are old 
lefties. 
 
5. (SBU)  In a recent La Prensa daily interview Ahumada 
spoke about Panama's need to have close ties "with 
everybody" and is known for drafting speeches for Foreign 
Ministry authorities calling for relationships with 
different world blocks.  Quiros claimed that Ahumada is 
currently pushing the Canal board to travel to China in 2006 
to attend the International Advisory Board meeting. 
Allegedly, the trip to China has been pending for two years 
now.  Board members believe that a trip to China this year 
is not recommended to avoid any misinterpretation. 
GOP trust with Canal monies 
--------------------------- 
6.  (SBU) In January 2006 through a special legislative 
decree the GOP passed a law establishing a trust with US$50 
million per year coming from Canal profits to be used for 
social projects throughout the country.  Smartly, Minister 
Vasquez did not transfer the monies at the end of the year 
as usual, but waited until the trust bill was signed in 
January 2006 to transfer the first US$50 million.  Board 
members interpreted this action as an intelligent move from 
Minister Vasquez to favor himself before President Torrijos. 
 
COMMENT 
------- 
7.  (U) GOP contacts continue to express their wish that the 
mandated Canal referendum is held sometime mid-2006.  It is 
no secret that the GOP considers the Canal expansion as the 
panacea of their administration.  More than once, members of 
the governing party have excitedly expressed their looking 
forward for the project, which would create plenty of job 
opportunities in the country, thus reducing Panama's 
unemployment rate.  (Local opinion polls identify 
unemployment as Panama's worst problem.)  The project would 
also give the PRD party and its potential candidates an 
ample boost in the 2009 national elections. 
 
Eaton #