US embassy cable - 04GUATEMALA223

C O N F I D E N T I A L SECTION 01 OF 03 GUATEMALA 000223 
 
SIPDIS 
 
DEPARTMENT FOR WHA A/S NORIEGA 
 
E.O. 12958: DECL: 01/27/2014 
TAGS: PREL, OVIP, PGOV, SNAR, EAID, ETRD, PHUM, MASS, KTIA, GT 
SUBJECT: SCENE SETTER FOR THE FEBRUARY 3-5 VISIT TO 
GUATEMALA OF WHA A/S ROGER NORIEGA 
 
Classified By: PolCouns David E. Lindwall, reason 1.5 (b) and (d). 
 
Summary: 
--------- 
1. (C) Your visit to Guatemala comes as President Berger and 
his team are anxious to demonstrate publicly that bilateral 
relations have improved and that we have a shared agenda on 
trade and investment, fighting domestic corruption and 
transnational crime, and the 1996 Peace Accords.  As he did 
with Governor Bush and with private sector unhappiness over 
CAFTA deal growing, Berger will seek your help for "an 
adjustment;" he also wants a big assist in investigating and 
prosecuting corrupt officials of the Portillo government. 
Other request include increased assistance in the war on 
drugs, protection for Guatemalan immigrants in the US, 
financial assistance for a major reduction of the military 
and getting off the FATF list of non-cooperating countries. 
We would like you to raise  CICIACS, the labor GSP petition, 
TIP and Article 98.  End summary. 
 
Off to a strong start 
--------------------- 
2. (C) In his first days in office, Berger secured a 
governability pact with two reform-minded parties in 
Congress, ensuring a pro-government majority in the fractious 
legislature for now.  He named a capable and experienced team 
of ministers and advisers who have increased public 
confidence that his government will deliver job creation and 
improved public security.  The governability pact gave 
effective control of Congress to the center-left UNE party, 
requiring Berger to negotiate on important legislation; 
implications there are still unclear. 
 
3. (C) Despite finding their ministries with few resources 
and having little formal transition, Berger's team has begun 
to implement his agenda.  Berger has toured areas of the city 
with serious crime problems, and has launched joint 
military/police patrols in areas dominated by gangs. 
Minister of Education Acena is defusing a threatened 
nation-wide teachers strike.  The Ministry of Economy is 
engaged on CAFTA (a problem area -- see para. 5 below).  The 
government will soon launch a campaign targeted at 
eliminating malnutrition in the areas affected by famine. 
 
4. (C) Berger has drawn public attention to the improvement 
in the US-Guatemala relationship.  He is an admirer of the 
ARENA governments in El Salvador, and is convinced that 
progress and development in El Salvador have been driven to a 
large extent by the policy of successive ARENA governments to 
ally themselves closely with the U.S.  Foreign Minister Briz 
invited the Ambassador over to the Ministry only days after 
taking office and called in the press corps to make the point 
that the Berger government values its relationship with us. 
Briz told the Ambassador that the GOG wants to give the Peace 
Corps the Orden del Quetzal (Guatemala's highest recognition) 
in March, in glaring contrast to Portillo's bestowing the 
medal on the Cuban medical brigade.  President Berger invited 
the Ambassador and DCM for a private breakfast at the Palace 
on January 29.  Berger's ministers are by and large long-time 
contacts of the Embassy, and have reaffirmed the priority 
they attach to maintaining close ties with us in their new 
positions. 
 
CAFTA 
----- 
5. (C) Berger is a true believer in free trade and is a 
strong supporter of CAFTA, not only as a mechanism to 
increase trade and investment, but as a symbol of a new and 
much broader relationship between our two countries.  But 
with Guatemala's private sector increasingly upset over the 
outcome for Guatemala and convinced that the Portillo 
government negotiated CAFTA in bad faith, making some 
concessions intentionally for the purpose of punishing the 
economic sectors that financed Berger's election campaign, he 
is concerned that this issue is becoming politically 
unmanageable.  USTR made some "adjustments" this week to 
accommodate these concerns and gave Guatemala treatment more 
similar to that given the other countries. However, the 
Portillo government's concession on beer was not addressed 
and remains a particular concern to Berger as the owners of 
Guatemala's newest brewery were his largest campaign 
contributors.  Berger will tell you, as he did the Ambassador 
on January 29,  that he will "continue fighting" for beer. 
We and USTR have countered Berger's concerns by noting that 
Guatemala's negotiators worked hard and achieved an outcome 
that, on balance, is very similar to what others achieved 
(Note: See Guatemala 207 for a more detailed analysis of the 
Berger government's views on reopening CAFTA, and our 
response. end note). 
Corruption investigation 
------------------------ 
6. (C) There is growing press attention to major corruption 
cases involving senior officials of the Portillo government, 
and Berger will ask you for USG support to investigate and 
prosecute former officials.  He recently asked us to cancel 
the visas of a number of former officials (including 
President Portillo); we told him that all visa revocations 
have to follow due process and that we may have a law 
enforcement interest in not/not revoking visas at this point. 
 Neither should we close that door, however.  Other Berger 
officials have asked us about pending investigations in the 
US against Portillo-era officials, and it is clear that 
Berger intends to pursue some legal action against the most 
egregious cases of corruption under the previous government. 
The past few days have seen a feeding frenzy in the press as 
reports of investigations of former GOG officials by US 
authorities have made the news.  We have made it clear that 
we can not comment on ongoing judicial investigations in the 
United States.  At the January 29 meeting, Berger welcomed 
the offer to receive a briefing on the status of the 
investigation from U.S. law enforcement officials. 
 
Immigration 
----------- 
7. (C) During the campaign, Berger met with Guatemalan 
immigrants to the US, recognizing the growing importance of 
their remittances to family members in Guatemala (which, at 
close to $2 billion in 2003, exceeded foreign currency 
earnings from coffee, sugar, and tourism combined).  Berger 
and Foreign Minister Briz have told us that migrant issues 
will be high on their agenda, and have asked us informally if 
the US would consider extending TPS benefits to Guatemalan 
migrants.  Assistant Secretary of State for Consular Affairs 
Maura Harty, during a January 21 visit to Guatemala, told 
senior MFA officials that President Bush's initiative on 
immigration is designed to address the concerns the Berger 
government is interested in, and urged the GOG to follow that 
process carefully.  The Ambassador reinforced that point and 
further noted to Berger on January 29 that Guatemala is 
increasingly taking advantage of the H2-B program, and said 
the Berger government can take credit for the consolidation 
of this program in coming years. 
 
Counter-narcotics cooperation 
----------------------------- 
8. (C) President Berger is also determined to crack down on 
drug trafficking through Guatemala, and cocaine seizures 
during his first two weeks in office have already topped 
1,200 kilos.  Berger is looking for additional resources to 
dedicate to the war on drugs, and would like to see our 
financial assistance increase.  He told the Ambassador on 
January 29 that the poor state of maintenance of Guatemala's 
air force assets makes it difficult for the GOG to provide 
support at the level it would like to counter-narcotics 
operations.  We have told him that the seizure in 2003 of $22 
million in cash demonstrates the potential for Guatemala to 
use seized assets to fund GOG efforts in the war on drugs, 
and encouraged him to seek an agreement with the Supreme 
Court on how to use those funds (Note: The Constitution 
assigns all seized assets to be administered by the Supreme 
Court.  We have long encouraged the GOG to negotiate an MOU 
with the judiciary which would allow for the sharing of those 
assets -- currently not being used -- with the narcotics 
police and other GOG agencies active in the war on drugs. End 
note). 
 
Reducing the military 
--------------------- 
9. (C) The spiraling military budget during the Portillo 
administration convinced Berger to reduce the armed forces. 
He told the Ambassador on January 29 that he commissioned the 
new Minister of Defense to devise a plan to reduce the 
military, and sent the first draft back asking the Minister 
to cut deeper.  Berger would like to cut 16,000 officers and 
troops, and estimates that severance benefits alone will cost 
roughly $200 million.  He would like to finance it with 
foreign aid, and hopes to enlist Nobel laureate Rigoberta 
Menchu to pass the hat among traditional donors.  He asked 
for our help.  The Ambassador told Berger that, irrespective 
of our support for military reform, the donor community would 
not easily be persuaded to finance job layoffs, and urged 
Berger to explore ways to finance the reform by selling 
valuable property currently owned by the military.  On 
military assistance more broadly, the Ambassador noted that 
current congressional prohibitions could only be overcome by 
profound reforms in the military and a serious and public 
accounting for past human rights violations. 
 
Berger is open to our agenda 
---------------------------- 
10. (C) Berger will welcome engaging in a dialogue with you 
on our priorities in the bilateral agenda.  He has asked the 
Foreign Ministry to review the status of our discussions on 
an Article 98 Agreement, and appears poised to expedite a 
negotiation.  The Foreign Ministry is also preparing draft 
legislation to renew authority for Mayan Jaguar 
counter-narcotics exercises, and is preparing a presentation 
for an upcoming GSP review.  Berger is also anxious to resume 
meetings of the bilateral working groups on counter-narcotics 
cooperation, trafficking in persons and labor rights, and the 
Foreign Ministry intends to convoke all three groups during 
February. 
 
11. (C) Berger strongly supports the creation of CICIACS, 
though that ball is now in the hands of Congress and the 
Constitutional Court.  We expect him to use his considerable 
political capital to positively influence debate in Congress, 
but his influence with the high court is limited.  The 
Constitutional Court magistrates have not tipped their hands 
on how they might rule on CICIACS' constitutionality.  This 
initiative is unprecedented in form and scope, and -- while 
expensive -- could save us significantly greater expenditures 
five to ten years down the road.  This is definitely an area 
where we can already see around the corner. 
 
Comment 
------- 
12. (C) Berger will use your visit to gauge how important 
these issues are to us, and to see if there are any 
additional resources we can bring to bear to advance our 
common agenda.  Your restating the priority we attach to 
concluding an Article 98 Agreement, passing a law extending 
Mayan Jaguar, increasing cooperation against drugs and 
illegal alien smuggling, tightening GOG actions against 
trafficking in persons, improving respect for labor rights 
and signing CAFTA will not be lost on Berger or his team.  We 
look forward to your visit and believe it will significantly 
advance USG interests with the new government. 
HAMILTON