US embassy cable - 04GUATEMALA2146

C O N F I D E N T I A L SECTION 01 OF 02 GUATEMALA 002146 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN AND DRL/IL 
 
E.O. 12958: DECL: 08/23/2014 
TAGS: PGOV, PHUM, EFIN, EAID, MASS, SNAR, PREF, ASEC, GT 
SUBJECT: GUATEMALAN CONGRESS APPROVES PAYMENTS TO EX-PACS 
 
REF: GUATEMALA 1555 
 
1.  (U) Summary:  Guatemala's Congress has approved payments 
to ex-members of the civil self-defense patrols (PAC) that 
served as adjuncts to the Guatemalan Army from 1981 to 1996. 
The Congress agreed to pay the equivalent of about 665 
dollars in three payments to each ex-PAC between now and the 
end of 2006. The total bill could be anywhere from $100 
million to $830 million, depending upon the numbers found 
eligible for payment, and on the exact number of ex-PACs who 
already received the initial payment last year.  The fate of 
this measure remains unclear, with the possibility of a 
presidential veto and/or lawsuits challenging its 
constitutionality.  End summary. 
 
2.  (U) Under former president Portillo, the GOG in 2003 
began compensating former members of the paramilitary PACs 
for their service during Guatemala's 1960-96 armed conflict. 
Portillo's electoral year sop to the ex-PACs was politically 
motivated, and all the major presidential candidates voiced 
support for the initiative.  Human rights groups, however, 
challenged the Portillo initiative in court, and on June 21 
the Constitutional Court ruled the ex-PAC payments 
unconstitutional because they lacked congressional approval. 
 
3.  (U) Congressional action was spurred by threats from the 
ex-PACs to shut down the capital through blockades of 
highways, the international airport, and important government 
offices.  Beginning with the seizure of an oil refinery in 
the Peten in 1997, the ex-PACs have successfully used such 
pressure tactics to obtain movement on this issue, with the 
most recent action being a partial blockade on government 
offices on August 11 while Congress was debating the bill. 
On August 19, Congress approved a modified version of the 
bill, with 119 votes in favor, fourteen more than the 
required two-thirds majority. 
 
4.  (U) Eligibility criteria for the ex-PAC payments have not 
yet been set.  Reliable estimates of the funds needed to pay 
the ex-PACs range from 900 million to 2.4 billion quetzales. 
The potential pool of payees ranges up to 500,000, or even 
higher, since the PAC numbers reached a peak of 1.3 million 
in 1984.  (Many of the ex-PACs received an initial payment 
during the Portillo Administration, but payments were 
decentralized, thus making an accurate accounting difficult.) 
 Critics of the payment schedule who argued for an extension 
of payment period have warned that tax increases will be 
needed to fund this initiative.  For her part, Finance 
Minister Bonilla reported to the press and confirmed to 
EconCouns that the 2004 budget only provides 300 million 
quetzales for the payments.  Any amount above that would have 
to be specifically authorized by the Congress. 
 
5.  (SBU) One Guatemalan newspaper has reported a rumor that 
the U.S. Embassy wants to see a presidential veto of this 
measure because the U.S. believes that the payment is not 
called for in the peace accords, or, alternatively, is 
concerned about a resurgence of the PAC as an organized 
group.  Should this rumor gain any support, the ex-PACs may 
possibly target the Embassy for protests. 
 
6.  (C) Ricardo Saravia, the Congressional leader of the GANA 
governing party coalition, told the Ambassador August 20 that 
he considered the August 19 passage of legislation 
authorizing compensation to ex-PACs to be a defeat for the 
Berger Administration.  The bill was way too expensive, 
Saravia said.  It would break the budget and undermine the 
recently-announced Social and Economic Reactivation Plan. 
Saravia said that GANA had started with a plan that would 
have an annual price tag of 300 million quetzales for each of 
three years and had negotiated up to something over 400 
million quetzales.  Saravia estimated that the plan that 
passed would have an annual cost of Q1,200 million, once all 
possible recipients were taken into account.  He viewed the 
vote as a demonstration by the opposition that they had the 
muscle to do what they wanted when they pooled their votes 
together.  Saravia thought that the bill could be overturned 
on one of several procedural grounds.  He also opined that 
President Berger would have to veto the bill if it couldn't 
be overturned for procedural defects. 
 
7.  (SBU) Comment:  Although it is unseemly for Congress to 
be seen as caving in to heavy-handed ex-PAC pressure tactics, 
most Guatemalans believe the ex-PACs deserve some 
compensation for service which was involuntary for the 
majority of these veterans.  However, the financial burden is 
one that the GOG can ill afford at this time, and the 
Congress shirked its responsibility of determining a revenue 
source for the expenditure.  If President Berger does not 
veto the bill, we expect human rights groups will challenge 
the constitutionality of the payments. 
 
HAMILTON