US embassy cable - 05BUENOSAIRES264

C O N F I D E N T I A L SECTION 01 OF 04 BUENOS AIRES 000264 
 
SIPDIS 
 
WHA FOR A/S ROGER NORIEGA, PDAS DERHAM, WHA/BSC 
NSC FOR TOM SHANNON 
USCINCSO FOR POLAD 
 
E.O. 12958: DECL: 02/04/2015 
TAGS: PGOV, PREL, AR, CHAVEZ, MEETINGS WITH AMBASSADOR 
SUBJECT: AMBASSADOR'S MEETING WITH MINISTER OF THE 
PRESIDENCY ALBERTO FERNANDEZ 
 
REF: BUENOS AIRES 00138 
 
Classified By: Ambassador Lino Gutierrez for reasons 1.4 (b) and (d) 
 
1.  (C) Summary:  Minister of the Presidency Fernandez told 
me that the GoA valued its good relationship with the U.S. 
and was grateful for the support of President Bush. 
Fernandez pledged that the GoA would cooperate with the U.S. 
to make the Summit of the Americas a success.  He stressed 
that the GoA had tried to distance itself from Chavez and his 
anti-U.S. statements, and that Kirchner had told Chavez that 
the U.S. had been helpful to Argentina.  That said, the GoA 
believes governments should not isolate Chavez.  I laid out 
our concerns about Chavez and urged the GoA to rein him in. 
We also discussed Article 98, terrorism legislation, investor 
issues, the debt, ICSID claims, and internal politics.  End 
Summary. 
 
2.  (U) Prior to my departing post for Washington, I had 
lunch one-on-one with Minister of the Presidency Alberto 
Fernandez.  Fernandez looked tired, but seemed resigned to 
the pressures and demands of working for President Nestor 
Kirchner. 
 
Chavez 
------ 
 
3.  (SBU) Fernandez repeated what the Foreign Ministry had 
told us about the Chavez visit: the Argentines were 
uncomfortable with his anti-U.S. rhetoric, had asked him to 
refrain from criticizing the U.S. (he had not complied), and 
had significantly reduced Kirchner,s participation in the 
visit, which included a meeting and a lunch attended by 20 
people.  The Casa Rosada had purposely released a photograph 
of Kirchner looking at his watch while Chavez looked on. 
This was meant as a message to the world that the GOA is not 
comfortable with Chavez. 
 
4.  (C)  That said, the GoA believes (as Kirchner told Codel 
Dodd reftel) that Chavez should not be isolated.  The Chavez 
one sees in public is totally different than the private 
Chavez, who is more reasonable and less bombastic.  It is 
better to bring Chavez into the tent than to isolate him, 
Fernandez averred.  Fernandez said he was convinced that, 
with the referendum behind him, Chavez now feels more secure 
and sees less of a need to overstep his bounds. 
 
5.  (C) I replied that the United States was extremely 
concerned about Chavez,s actions.  It is evident that Chavez 
had turned his anti-U.S. rhetoric up a notch.  (Fernandez 
agreed.)  But what concerned us even more was the measures 
Chavez had taken against the Opposition.  Fernandez asked 
which measures gave us the most concern.  I cited three 
examples: the media law, prosecution of NGO,s, and the 
packing of the Supreme Court by 20 additional justices. 
Fernandez winced at the last one, suggesting that he was not 
aware of it.  I added that President Kirchner had played a 
moderating role with Chavez in the past.  I noted that 
Kirchner had met with the Venezuelan Opposition a number of 
times, even when Lula had refused to do so.  I hoped that 
President Kirchner would continue to work on behalf of 
Venezuelan democracy. 
 
6.  (C) Fernandez understood our position.  He assured me 
that Kirchner would continue to urge Chavez not to criticize 
us and not to cross the line with the Opposition.  That said, 
Argentina still believes that it is better to engage Chavez 
than to isolate him.  Fernandez revealed that during 
Kirchner,s lunch with Chavez, the Argentine president made 
it very clear that Argentina was grateful for the support it 
had received from the United States in the IMF.  I asked what 
Chavez had said.  He only listened, but said nothing, said 
Fernandez. 
 
U.S.-Argentine Relations 
------------------------ 
 
7.  (SBU) In Fernandez,s opinion, U.S.-Argentine relations 
are at a high point.  Fernandez repeated the point of 
Argentina,s appreciation for U.S. support during the 
Kirchner term.  I agreed that relations were good, but said 
there were a number of problems.  We certainly appreciate 
Argentina,s cooperation on counter-terrorism; its 
cooperation on regional issues like Bolivia and Haiti, and 
our dialogue on Venezuela; the generally fair treatment that 
U.S. investors receive.  I said that our countries are 
working together on a plethora of issues, many of which are 
not reported in the press.  As an example, I cited the recent 
DS training of 170 Argentine health and law enforcement 
officials on weapons of mass destruction.  It had gone 
extremely well, yet there seemed to be a reluctance on the 
part of some in publicizing our efforts. 
 
8.  (C) Fernandez seemed surprised by my assertion.  He said 
Argentines respected the American people and U.S. 
institutions, even if we disagreed on some foreign policy 
issues like Iraq.  He expressed no objection to publicizing 
our joint efforts, especially on such an important issue as 
weapons of mass destruction, and particularly after the 
recent nightclub fire in which almost 200 people had died. 
 
Summit of the Americas 
---------------------- 
 
9.  (SBU) This year will be an important one in our 
relations, I noted, culminating in the November Summit of the 
Americas in Mar del Plata.  We should work to eliminate or at 
a minimum substantially reduce bilateral problems.  Fernandez 
agreed.  He said the Summit would go well, and pledged his 
cooperation to ensure that our objectives were met. 
 
Article 98 
---------- 
 
10.  (C) One lingering irritant in our bilateral relations 
was the inability of the U.S. and Argentina to hold joint 
military exercises on Argentine soil, I observed.  One way to 
eliminate this problem was for Argentina and the U.S. to sign 
an Article 98 agreement.  I recounted how FM Bielsa had 
expressed optimism during his recent meeting with Secretary 
Powell that our countries could reach an agreement on this 
issue.  I said we respected Argentina,s decision to join and 
be an active participant in the International Criminal Court, 
but the ICC charter actually permitted countries to sign 
Article 98 agreements.  Fernandez had some familiarity with 
the issue, but clearly had not been directly involved in it. 
He said this would be a difficult issue for the GoA, but 
promised to get involved.  I said our lawyers had come a long 
way in finding language that would be acceptable to both 
sides; with some effort, we could find a solution. 
 
Terrorism Legislation, AMIA 
--------------------------- 
 
11.  (SBU) I urged the GoA to ratify two counter-terrorism 
conventions: the 1971 OAS Convention on the Suppression of 
Terrorism and the 1999 UN Convention on the Suppression of 
Terrorism Finance.  The Senate has ratified both conventions, 
but the Chamber of Deputies has not brought them to a vote. 
I added that the Chairman of the House Foreign Affairs 
Committee, Deputy Jorge Arguello, was working on this and 
other terrorism issues with the Embassy. 
 
12.  (SBU) Fernandez said he was aware of Arguello,s 
efforts, and agreed it was important that Argentina ratify 
the conventions.  He passed on that he had recently met with 
Jewish organizations on the next steps of the AMIA case.  The 
Jewish groups had urged the GoA to continue to pursue leads 
in the case until the perpetrators were charged; Fernandez 
pledged that the GoA would continue to do so.  Fernandez 
asked if the ratification of the two conventions would have 
an impact on GoA efforts on AMIA.  I said I did not think so, 
but that we would look into the matter. 
 
 
Investor Issues 
--------------- 
 
13.  (SBU) I thanked Fernandez for the GoA,s issuing a 
contract to Rolls Royce USA to repair the damaged Rolls Royce 
engines in the presidential jet, Tango One.  I briefed him on 
the Container Security Initiative and said we were close on 
signing a memorandum of understanding.  I also noted progress 
on the GoA purchase of three Northrop Grumman TPS 78 radar 
upgrades.  We also discussed Liberty Media/Hicks Muse,s 
difficulties with the Argentine agency COMFER in confirming 
their status as shareholders. 
 
14.  (SBU) Fernandez said progress had been made in disputes 
with foreign companies, but the utility companies, and 
particularly the French-owned Aguas Argentinas, were still a 
problem.  During Kirchner,s trip to France, Fernandez said 
that President Chirac had made it clear that the GoF would 
not fall on its sword over the issue, saying that it was not 
an issue between the two governments.  Fernandez said that 
Kirchner had sought help from Spanish PM Zapatero in dealing 
with Spanish-owned companies.  Zapatero understands our point 
of view but was not as categorical as Chirac. 
 
Debt 
---- 
 
15.  (SBU) Fernandez was optimistic that Argentina would 
secure a high participation rate for its debt offer.  He 
related that during the road show Argentine officials had 
ascertained that many foreign creditors were really 
Argentines with assets abroad.  These Argentines had 
presumably moved their money abroad in order to avoid paying 
taxes.  Therefore, Fernandez continued, these Argentine 
creditors are unlikely to call attention to themselves or 
their assets.  Thus, they are more likely to accept the GoA 
offer than to sue the GoA and expose themselves to the 
Argentine equivalent of the IRS. 
 
ICSID Claims 
------------ 
 
16.  (SBU) Fernandez said it was not realistic to expect that 
Argentina would pay for any ICSID claims that they would lose 
before the World Bank mechanism.  It simply could not afford 
it.  Moreover, to pay companies for losses during the 
Argentine economic crisis would put companies in a more 
privileged status than ordinary Argentines, who had to 
swallow them with no relief.  The only way companies could 
hope to obtain anything from the GoA was to negotiate.  I 
explained to Fernandez that once U.S. companies opted for 
ICSID arbitration, by law we did not provide normal advocacy. 
 That said, some U.S. companies were willing to negotiate, 
and one company, AES, had recently come to an agreement with 
the GoA but often they had trouble identifying an 
interlocutor on the GoA side.  Fernandez reiterated that the 
GoA was always willing to negotiate. 
 
Energy 
------ 
 
17.  (SBU) Fernandez was optimistic that the GoA would get 
through the coming winter without an energy crisis.  We have 
secured additional electricity from Brazil and fuel oil from 
Venezuela, so we should be all right, he claimed.  The GoA 
was seeking to lower gas consumption in the country. 
(COMMENT: Last winter the GoA was fortunate that it was one 
of the mildest winters in memory.  If this winter is more 
typical, the GoA may face some problems.) 
 
Internal Politics 
----------------- 
 
18.  Fernandez described former President Eduardo Duhalde as 
a political animal.  Duhalde had recently paid a call on 
Fernandez, ostensibly to talk about Lula, Chavez and 
Mercosur, but he spent the bulk of the meeting talking about 
an internal election in the remote village of La Matanza. 
Fernandez opined that by offering to hold a plebiscite, 
Buenos Aires Mayor Anibal Ibarra had gained the upper hand in 
his battle to remain mayor following the criticism of his 
administration after the Cromagnon nightclub fire.  (COMMENT: 
 There may be a bit of wishful thinking on Fernandez, part, 
since he is known to be dating Ibarra,s sister, Congress 
Deputy Vilma Ibarra.  END COMMENT)  On the other hand, Buenos 
Aires province governor Felipe Sola was a long way from 
winning his battle with Duhalde on the budget.  The crafty 
Duhalde still controlled the Buenos Aires legislature. 
 
Comment 
------- 
 
19.  (C) Fernandez is a useful interlocutor for this Embassy, 
and will be helpful in the months to come as we prepare for 
the Summit.  Formerly described as a center-Right politician, 
he has hitched his wagon to Kirchner and provides a dose of 
Buenos Aires realpolitik to the igloo that has become the 
Casa Rosada after the arrival of Kirchner and his penguins. 
End Comment. 
GUTIERREZ