Election 2009: Panama's Opposition Candidate Heading for Victory Amid Looming Campaign Finance Scandal

Coalition Politics

With electoral campaigns drawing to a close, business tycoon Ricardo Martinelli is expected to score a historic victory in Panama’s general elections on 3 May. According to the last poll from Unimer, published on 23 April, the candidate of the Alliance for Change (AC) is leading the race with 50.2% of the intended vote, conformably ahead of Balbina Herrera, the ruling Democratic Revolutionary Party (PRD)'s candidate with 38.3%. With no chance of winning the contest, former president Guillermo Endara, running for the Moral Vanguard party (VMP), is trailing far behind, grabbing only 3% of the vote. An alternative poll by Ipsos suggests a similar picture, showing a 49% support for Martinelli, 16% more than Herrera (33%).

Although Martinelli has long been ahead in the polls, the foundations of this commanding lead were laid earlier this year when he successfully brought the Panameñista Party (PP) on board his AC electoral platform. Dropping his own electoral ambitions, PP leader Juan Carlos Varela became Martinelli’s running mate, thus considerably broadening the electoral base for the AC, which is also supported by the opposition Patriotic Union (UP) and the Nationalist Republican Liberal Movement (Morilena, see Panama: 2 February 2009: Opposition Parties Formalise Union Ahead of Panamanian Vote). The broadening of the alliance might also prove instrumental in obtaining a majority in the legislature, even though the PRD is set to remain the largest force in the unicameral Congress. According to the Unimer poll, 32.4% of the electorate would vote for the PRD in the legislative elections, while only 27.2% would support the candidates of Martinelli’s Democratic Change party (CD). The PP, formerly the second-strongest political force, is polling surprisingly weakly, with only 8.5% of intended votes.

Dubious Campaign Financing

Exacerbating the effects of coalition politics, Herrera’s campaign suffered another setback when the jailed Colombian financier David Murcia Guzmán claimed in March to have given some US$6 million in (illegal) donations to support Herrera’s campaign as well as that of Roberto Velásquez, the PRD candidate for Panama City, by far the most important local post up for grabs in the upcoming elections. Rejecting the allegations, Herrera has in turn accused Martinelli, a supermarket tycoon, of being linked to Guzmán. The immunity of all three incriminated candidates has been lifted, but a probe by electoral authorities into campaign accounts has so far found no evidence of illegal financing, allowing all candidates to continue to contest the elections. Investigations are ongoing, however, as definitive campaign finance reports are not due until 60 days after the elections.

Despite the scandal, Velásquez has been leading the race for the mayoralty of Panama City. The most recent polls by Ipsos have seen him ahead of his main rival Bosco Vallarino, albeit by a razor-thin 2% margin. Vallarino’s bid has been beset by legal problems of its own, when it emerged that he became a naturalised U.S. citizen during the 1980s. This makes him technically ineligible to contest the elections, but in a controversial judgment the Electoral Tribunal (TE), on 16 April, declared that it did not have the authority to disqualify his candidacy.

Outlook and Implications

Soaring crime rates fuelled by drug-trafficking, a surge in living costs, and rising uncertainty in the aftermath of the worldwide economic downturn have provided the structural conditions for a change in government. This situation has been skilfully exploited by Martinelli, casting himself successfully as an outsider to traditional party politics, while being able to draw at the same time on the electoral support of the PP. By contrast, internal divisions have marred Herrera’s campaign, compounding the effects of coalition politics and the scandal of alleged illegal campaign financing. The latest blow came when on 23 April PRD heavyweight Giselle de Calcagno threw her weight behind Martinelli’s presidential bid.