US embassy cable - 05ASUNCION148

UNCLAS SECTION 01 OF 02 ASUNCION 000148 
 
SIPDIS 
 
STATE FOR WHA/BSC AND EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR SCRONIN AND LYANG 
NSC FOR KIM BREIER 
TREASURY FOR OSIA MAUREEN WAFER 
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR 
COMMERCE FOR ITA SARAH COOK 
SOUTHCOM FOR POLAD DAN JOHNSON 
 
E.O. 12958: N/A 
TAGS: PGOV, PREL, ECON, PINR, SNAR, PA 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, JANUARY 
22-28 
 
 
1. (U) SUMMARY: 
---------------- 
-- Political Angel to Cubas Kidnapping Arrests 
-- Resignation Drama at Immigration 
-- Taiwan Seeking to Further Trade and Business Ties 
-- Court Rules in Favor of Continuing Extradition of Drug 
Trafficker 
 
----------------------------------------- 
Political Angel to Cubas Kidnapping Arrests 
----------------------------------------- 
 
2.  On January 25, Attorney General, Oscar Latorre announced 
mounting evidence, including phone call logs, that links 
members of the leftist Free Fatherland Party (PPL) to the 
kidnapping of Cecilia Cubas, the daughter of former President 
Raul Cubas.  Police officials arrested eight individuals, 
with alleged links to PPL, in the central departments of San 
Pedro and Caaguazu; four have since been released and a 
warrant is pending for the arrest of two other PPL suspects. 
The leader of PPL, Juan Arrom, however, denied to local press 
its involvement in the kidnapping of Cubas and stated the GOP 
is politically persecuting the Party.  He added that those 
arrested were expelled from the Party in October 2004. One of 
the suspects, Osmar Martinez, turned himself in after calling 
on human rights groups to guarantee his safety, according to 
press, stating that he feared he would suffer mistreatment by 
GOP officials. (More on case to follow septel). 
 
--------------------------------- 
Resignation Drama in Immigration 
--------------------------------- 
 
3.  Carlos Liseras, Director General of Immigration, resigned 
on January 25 citing policy differences and personality 
clashes with Minister of Interior, Nelson Mora. He was 
reinstated on January 27 after President Duarte asked him to 
stay in the position to help fight corruption.  Liseras 
claimed in local press that he suffered mounting pressure and 
threats to protect Colorado Party members suspected of fraud, 
such as a regional Colorado Party Leader, Luis Alberto Ayala, 
who is currently detained for fraud and falsifying documents. 
 The Director presented Ayala's case to local prosecutors for 
investigation.  Liseras has served as Director since July 
2004.  On January 27, CONOFF spoke to the Secretary of 
Immigration who claimed that Liseras might return to his 
duties suggesting the resignation may have been a ploy to 
gain public support from the President.  However, his 
resignation and comments to the press could have a long- term 
effect on his working relationship with Minister Mora. 
 
--------------------------------------------- --- 
Taiwan Seeking to Expand Trade and Business Ties 
--------------------------------------------- --- 
 
4.  During his visit to Taiwan this week, Paraguayan 
Vice-President Luis Castiglioni met with President Chen 
Shui-bian, who hopes to bolster trade with Paraguay and sign 
a free trade agreement (FTA) by year's end.  President 
Shui-bian stated to Taiwanese press, his offers to travel to 
Asuncion to sign the FTA with President Duarte. Paraguay 
maintains close trade relations with Taiwan, despite Mercosur 
pressure to trade with the People's Republic of China (PRC). 
In recent weeks, GOP officials have stated they are willing 
to consider the PRC as a trade partner of Mercosur, but will 
not modify their current diplomatic relations with Taiwan in 
the process. 
 
5.  On a related note, Senate President Miguel Carrizosa 
announced to local press from Taipei, where he is 
accompanying the VP and leading a delegation of congressmen, 
that Taiwanese Agro-businesses have expressed interest in 
investing up to USD 50 million in soy and corn processing 
plants in Paraguay.  Currently, Paraguay exports a majority 
of its soy product for processing. 
 
--------------------------------------------- --------------- 
Court Rules in Favor of Continuing Extradition of Drug 
Trafficker 
--------------------------------------------- --------------- 
 
6.  On January 21, a Judge in the Court of First Instance 
ruled against Ivan Mendes-Mesquita's request to throw out the 
request for his extradition to the U.S. for trial.  Mesquita 
has ten days to appeal the decision.  (Background: In 
November 2004, cooperation between Brazil and Paraguay 
produced the arrest of Mesquita, a major narcotics trafficker 
from the Beira Mar trafficking organization, and the seizure 
of 262 kilograms of cocaine.  The U.S. seeks his extradition 
on drug trafficking charges.) 
KEANE