US embassy cable - 04GUATEMALA1259

C O N F I D E N T I A L SECTION 01 OF 02 GUATEMALA 001259 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN 
 
E.O. 12958: DECL: 05/15/2014 
TAGS: PGOV, PHUM, MOPS, GT 
SUBJECT: PEREZ MOLINA LEAVES GOVERNMENT FOR CONGRESS 
 
REF: GUATEMALA 1241 
 
Classified By: Acting PolCouns Erik Hall, for reason 1.5 (b&d). 
 
1.  (C)  Summary:  On May 17, after meeting with President 
Berger, GOG Security and Defense Commissioner Otto Perez 
Molina announced his resignation from the Executive branch, 
the Patriot Party's (PP) exit from the GANA coalition, and 
his return to Congress to lead the PP in opposition.  Perez 
Molina claimed to have quit on principle, to protest the GANA 
alliance with the FRG (plus the Unionista Party and some 
independents) in the naming of the Congressional Permanent 
Commission (see reftel).  The press hailed Perez Molina's 
exit and criticized what they characterized as Berger's 
blunder.  By all accounts, the UNE and PAN say the 
Governability Pact is now officially over; the GANA expects 
to pick up six Congressional converts after losing the PP's 
eight.  GANA leaders insist no deal was made with the FRG for 
its support, which may continue through passage of the 
pending fiscal reforms.  It is unclear how Perez Molina's 
exit will affect the on-going military reduction.  Perez 
Molina had been the foremost advocate within the government 
of accompanying military reduction with modernization.  End 
Summary. 
 
Perez Molina's Move 
------------------- 
 
2.  (U) When announcing his decision, Perez Molina told the 
press that he resigned in protest over GANA collaboration 
with the FRG, and would now return to Congress to lead the 
Patriots in "constructive opposition."  He predicted that 
other parties would reject any future overtures from the GANA 
as a result, and that the GANA's "only option would be to 
continue (in alliance) with the FRG."  Perez Molina said, 
that in his meeting with Berger that immediately preceded his 
announcement, he had expressed concern to Berger that 
authorities were proceeding against two past Defense 
Ministers and their chiefs of finance for allegations of 
massive corruption, but not (Rios Montt's son) Enrique Rios 
Sosa, implying the existence of a corrupt political deal 
between Rios Montt and Berger.  Perez Molina also told the 
press that Berger had told him that as the FRG had not asked 
for anything in exchange for its support on the matter of the 
Permanent Commission, he believed the collaboration was 
limited to this single vote.  Later, he blamed GANA 
Congressional leader Ricardo Saravia and Presidential Chief 
of Staff Eduardo Gonzalez for continually excluding the PP 
from GANA decision-making. 
 
Presidential Reaction 
--------------------- 
 
3.  (U) President Berger reacted to Perez Molina's 
announcement by saying "we were not sure whether it was 
better to have them (the PP) as allies or opposition, as we 
were never sure of PP votes."  He commented that "the 
(Governability) Pact with the PAN and UNE was weak and never 
worked."  Berger said the agreement with the FRG was not 
conditional, and no different from what he would seek from 
any other party.  Berger said the GANA would negotiate vote 
by vote to pass pending legislation, including the fiscal 
reform package.  Eduardo Gonzalez publicly cited the PP's 
early insistence on forming its own separate Congressional 
bench distinct from that of the GANA, its opposition to 
CICIACS, its position on electoral reforms, and the Permanent 
Commission issue as evidence that the PP did not share the 
GANA's goals.  Asked about the political cost to the GANA of 
working with the FRG, Gonzalez said that "the divided 
Congress was the decision of Guatemalans.  This requires that 
all political groups in Congress be taken into account, 
including the FRG.  We must pursue, even with them, what is 
beneficial for Guatemala." 
 
The GANA's Side 
--------------- 
 
4.  (C) GANA Congressional chief Ricardo Saravia told PolOff 
on May 17 that Molina's exit had been long coming, and the 
GANA's cooperation with the FRG is just a convenient excuse. 
He accused Perez Molina of personal political motives for the 
PP's uncooperative behavior in Congress (over the electoral 
reforms and CICIACS, which Saravia said he is now convinced 
Guatemala desperately needs) and his seeding of confidants 
throughout the Executive branch.  Note:  Perez Molina 
reportedly freed these individuals of any obligation to step 
down and Berger said he had no intention of "using the 
machete to lop off heads."  End Note. 
 
5.  (C) With the Governability Pact now definitively over, 
Saravia said the GANA (with 39 deputies, after the departure 
of the PP's 8) expects to accept 6 converts from the 
independent deputies, and will work with the FRG (31 
deputies) and Unionistas (7),  to achieve the simple majority 
needed to pass high-priority pending fiscal reforms during 
the recess (by July 30).  Saravia is the leader of Berger 
loyalists who left the PAN with Berger during the election 
campaign, to form the GANA.  This group, referred to as the 
M-17, is not formally incorporated as a party, and includes 
28 Congress members.  He claimed that the loyalty of the 
remaining two political parties (the Reform Movement, with 4 
deputies; and the National Solidarity Party, with seven) was 
assured.  Note:  Press reports raised doubts about this 
claim, saying PSN leaders also expressed concern on May 17 
about GANA collaboration with the FRG.  On May 18, PSN 
leaders continued to publicly express concern about GANA-FRG 
cooperation.  End Note. 
 
6.  (C) According to Saravia, the GANA's collaboration with 
the FRG is solely focused on the fiscal reforms.  He claimed 
there is no deal with the FRG involving prosecutions of 
Portillo government officials.  Saravia said he was forced to 
approach the FRG when it became clear that President of 
Congress Morales would not agree to GANA's preferred 
composition of the Permanent Commission (critical to control 
over the Congress during the recess).  Morales had also 
indicated that the fiscal reforms would be sent to many 
different commissions, a recipe, in Saravia's view, for 
endless delay.  In contrast, the May 15 
GANA-FRG-Unionista-independent vote gave the GANA majority 
control over the Permanent Commission, and the fiscal reforms 
will be considered by the Finance Commission only. 
 
A View from the Opposition 
-------------------------- 
 
7.  (C) Former UNE Vice Presidential candidate Fernando 
Andrade echoed the editorial line of the major papers to 
EconCouns on May 18.  According to Andrade, the Eduardo 
Gonzalez - Perez Molina rivalry came to a head, provoked by 
the obsession with cobbling together votes for the fiscal 
pact.  He blamed Berger for failing to control both these 
egos within the government.  A better leader would have the 
vision, experience, and maturity to keep the PP inside Gana 
through the military restructuring and find some way to avoid 
the embrace of the FRG.  Instead, the GANA set up Otto Perez 
to seize the high ground before they got what they needed on 
military restructuring and the basic direction of government. 
 According to Andrade, Perez retains the support of the 
ex-PACs and is the person the military high command trusts to 
get modernization in return for down-sizing; he will be big 
trouble for GANA down the road. 
 
Comment 
------- 
 
8.  (C) Perez Molina's presidential aspirations are widely 
recognized and an eventual break with the GANA was considered 
inevitable.  The GANA's collaboration with the FRG offered 
Perez Molina an opportunity to claim the moral high ground 
(and gain the support of a fiercely partisan print media). 
By Saravia's account, the GANA believes the price they are 
paying for this collaboration is justified by the near-term 
goal of passing fiscal reforms.  That price could continue to 
mount, however.  Opposition leaders and opinion-makers 
continue to portray the move as a political blunder and blame 
Berger and Gonzalez. 
 
9.  (C) It is unclear how the exit of Perez Molina and the 
Patriot Party will affect ongoing military reductions and 
other issues of USG interest, including CICIACS.  Some 
members of the military saw Perez Molina as the GOG guarantor 
of modernization in exchange for reductions, and may require 
reassurance that the promise will be kept. 
HAMILTON