US embassy cable - 05ASUNCION90

UNCLAS SECTION 01 OF 02 ASUNCION 000090 
 
SIPDIS 
 
STATE WHA/BSC 
STATE PASS TO USAID LAC/AA 
NSC FOR MIKE DEMPSEY 
SOUTHCOM FOR POLAD DAN JOHNSON 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, PTER, SNAR, EFIN, ETRD, PA 
SUBJECT: PARAGUAY: CODEL DISCUSSES TERRORIST FINANCING, 
NARCOTICS, CORRUPTION, REFORM AND TRADE WITH  SENATORS AND 
PRESIDENTIAL ADVISORS 
 
REF: ASUNCION 77 
 
1.  Summary.  On 1/11 Senators Dodd, Chaffee, and Nelson 
toured Ciudad del Este (CDE) and visited the Itaipu 
Hydroelectric Dam.  On 1/12, they met with President Duarte 
(see reftel), Paraguayan Senators and Presidential Advisors. 
 In their meeting with Senators, CODEL Dodd registered its 
concern over terrorist financing; the Paraguayan Senators 
requested the U.S. provide it with radars to combat drug 
trafficking.  Sen. Dodd's comments to the press on this issue 
following the meeting drew wide coverage and some backlash 
from some commentators complaining about a lack of evidence. 
The CODEL's meeting with GOP advisors focused on reform and 
trade. End Summary. 
 
CODEL Visits CDE, Itaipu Dam 
---------------------------- 
 
2.  On 1/11, Sen. Dodd (D) of Connecticut, Sen. Chaffee (R) 
of Rhode Island, and Sen. Nelson (D) of Florida toured Ciudad 
del Este, visiting the Friendship Bridge connecting Paraguay 
with Brazil where they observed the massive movement of 
people and goods between the two countries and spoke to 
Customs and Immigration officials.  Paraguayan officials 
complained about the lack of resources at their disposal to 
tackle the problems they face and appealed for assistance; 
Dodd noted the possibility of better utilization of the 
resources they currently have.  Earlier in the day, the CODEL 
received a tour of the facilities at the Itaipu Hydroelectric 
Dam, noting its importance to Paraguay on a variety of levels 
both political and economic. 
 
Meeting with Paraguayan Senators on Terrorist Financing and 
Counter Narcotics 
--------------------------------------------- ------ 
 
3.  On 1/12, CODEL Dodd met with Paraguayan Senate leaders 
from a number of political parties.  Sen. Dodd stressed the 
importance the U.S. attaches to GOP efforts to counter money 
laundering, drug trafficking and terrorist financing.  He 
registered concern about terrorist financing, particularly in 
view of illicit activity the delegation observed in CDE. 
Sen. Bade Rachid of the Colorado Party complained that U.S. 
charges regarding this problem are on occasion too broad and 
unsupported.  He conveyed his hope that the visit by the U.S. 
Senators could produce something concrete, urging they find a 
way to provide Paraguay with four radars to monitor and 
combat the movement of narcotics flights over Paraguay.  He 
suggested these radars might be available among excess goods 
no longer used in the wake of U.S. base closures. 
 
Meeting with Presidential Advisors 
---------------------------------- 
 
4.  Before its departure on 1/12, CODEL Dodd met with a 
number of advisors from President Duarte's economic team, 
stressing U.S. support for efforts to combat corruption and 
implement economic reform.  Presidential Advisor Walde 
described the need for a transformation in the Paraguayan 
cultural mindset for its efforts to reform and combat 
corruption to become sustainable.  He appealed to the U.S. to 
open its markets to Paraguayan goods, in particular garments 
and organic sugar, flagging as significant and positive the 
economic impact this opportunity would avail Paraguay.  Walde 
also noted that the GOP plans to sign an Open Skies agreement 
as one part of a broad strategy to make Asuncion an air hub, 
promote new exports, and bring in tourists.  Minister of 
Trade and Commerce Ernst Bergen stressed the IPR fight. 
Minister of Finance (MOF) advisor Fernando Massi elaborated 
on reform achievements described by the President (reftel). 
MOF advisor Diego Abente noted the long-term GOP reform plan. 
 Sen. Dodd praised the reforms, urging the GOP to build 
public support as the process continues, since great ideas 
were bound to fail in a democracy if not sold to the people. 
 
Press Coverage 
-------------- 
 
5.  Sen. Dodd's comments to the press received wide coverage 
with most focusing on the concerns conveyed regarding the 
flow of funds to terrorist organizers.  Some commentators, 
including the Mayor of Ciudad del Este and a congresswoman 
from the region, complained about the lack of evidence the 
U.S. provides to support its claims regarding terrorist 
financing.  On a positive note, Senate President Carrizosa 
conveyed publicly that he shared some of U.S. concerns on 
this matter and flagged the need for Paraguay to step up its 
efforts to address the problem.  Charge answered some of the 
critics in a live radio interview 1/14, noting that U.S. 
concerns were not new, and are part of worldwide efforts 
against terrorist funding. 
 
6.  CODEL departed before having the opportunity to clear 
this cable. 
 
 
KEANE