US embassy cable - 05ASUNCION557

C O N F I D E N T I A L SECTION 01 OF 02 ASUNCION 000557 
 
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: DECL: 04/22/2015 
TAGS: PGOV, PREL, PINR, SNAR, PA 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, APRIL 16-22 
 
REF: A. ASUNCION 00514 
 
     B. ASUNCION 00512 
     C. ASUNCION 00458 
 
Classified By: PolOff Mark Stamilio, reasons 1.4(b) and (d). 
 
1. (U) Summary 
-------------- 
-- Health Minister still in good graces with NDF 
-- NDF's failure to attend Pope's funeral a "miscalculation" 
-- Former Colombian President opens mouth, inserts foot 
-- Brazilians shoot down plane that transited Paraguay 
-- Chamber of Deputies President backs away from pro-Oviedo 
remarks 
-- National Police Chief resigns 
-- Counterfeit USD bills raise concerns 
 
Health Minister still in good graces with NDF 
--------------------------------------------- 
2. (U) After last week's exchange of barbs between VP 
Castiglioni and Health Minister Velazquez over a possible 
inquiry into the latter's administration of public funds and 
projects as the former Mayor of Fernando de la Mora (ref B), 
President Duarte publicly expressed his continued confidence 
in Velazquez.  Duarte took advantage of an unrelated media 
event in Central Department to praise Velazquez for his 
judicious use of public resources as Health Minister, and the 
savings that resulted.  (Note: Velazquez is one of several 
Colorados vying to become President of the Colorado party in 
upcoming internal elections.  He is also the head of a 
committee exploring the possibility of a Constitutional 
reform that would permit the President of the country to run 
for re-election.  End Note.) 
 
NDF's failure to attend Pope's funeral a "miscalculation" 
--------------------------------------------- ------------ 
3. (C) On 4/19, Aristides da Rosa Cano, leader of the 
Colorado bench in the Chamber of Deputies, told PolCouns that 
President Duarte's decision not to attend the funeral of Pope 
John Paul II was a "significant political miscalculation." 
Da Rosa indicated that Duarte was surprised by the strong 
criticism he received for his apparently personal decision 
not to attend the funeral.  Da Rosa commented that front-page 
photos of three U.S. Presidents and Secretary Rice kneeling 
in front of the Pope at his viewing reinforced just how 
significant a mistake it was, and increased public resentment 
over Duarte's decision. 
 
4. (C) Comment and Bio Note: Da Rosa is a novice politician, 
but a long-time confidant of the President.  They were 
colleagues at Ultima Hora newspaper.  Da Rosa worked as 
Duarte's Chief of Staff when Duarte was Minister of 
Education.  He accompanied Duarte to the White House in 2003. 
 Paraguay is a predominantly Catholic country.  Duarte was 
born into a Catholic family, but married a Mennonite. 
According to da Rosa, Duarte was not baptized in the 
Mennonite Church but considers himself more Mennonite than 
Catholic.  Duarte's religious preference has been an issue of 
political commentary throughout his presidency.  His decision 
not to attend the Pope's funeral merely stirred up further 
discussion of the matter.  On 4/20, the GOP announced that 
Duarte will lead a Paraguayan delegation traveling to the 
Vatican for Pope Benedict XVI's 4/25 inauguration Mass.  End 
Comment and Bio Note. 
 
Former Colombian President opens mouth, inserts foot 
--------------------------------------------- ------- 
5. (U) On 4/18, President Duarte and Paraguay's electoral 
commission (Tribunal Superior de Justicia Electoral, or TSJE) 
hosted the 11th Conference on the Quito Protocol, which deals 
with electoral issues.  Former Colombian President Andres 
Pastrana was the keynote speaker, and delivered an address on 
transparency and freedom of information.  During the address, 
he strayed into criticism of presidential re-elections and 
the use of electronic voting machines.  His commentary on 
presidential re-elections was presumably directed at 
incumbent Colombian President Alvaro Uribe, who is seeking 
re-election.  However, as noted in paragraph 2, above, Duarte 
is also interested in pursuing re-election.  Additionally, 
Paraguay is particularly proud of its record in using 
electronic voting machines in national elections, and might 
propose an initiative on the matter for the upcoming 
Ministerial Conference of the Community of Democracies (ref 
A).  Duarte met with Pastrana for 20 minutes prior to the 
event, but abruptly walked out of the conference just prior 
to Pastrana's address, perhaps having learned in advance what 
Pastrana was planning to say.  Members of the TSJE 
characterized Pastrana's remarks as "an unexpected 
digression." 
 
Brazilians shoot down plane that transited Paraguay 
--------------------------------------------- ------ 
6. (U) According to press reports, on 4/17 Brazilian 
authorities conducting a counter-drug operation shot down a 
twin-engine Piper Aztec as the pilot attempted to take off 
and escape after refueling in Brazilian territory.  The pilot 
was killed and the co-pilot wounded.  The men were Brazilian 
nationals, and reportedly had prior convictions for 
trafficking-related offenses.  The authorities estimate that 
they were transporting 500 kg of marijuana and 30 kg of 
cocaine, which they dropped from the plane over Uruguayan 
territory.  The authorities recovered over 100 kg of the 
marijuana, which they believe to be of Paraguayan origin. 
Flight records show that the plane flew through Paraguay and 
Colombia. 
 
Chamber of Deputies President backs away from pro-Oviedo 
remarks 
--------------------------------------------- ----------------- 
7. (SBU) Oscar Salomon of the Colorado party, President of 
the Chamber of Deputies, recently drew attention with remarks 
during a radio interview agreeing that Lino Oviedo, the 
jailed coup-plotter who leads the UNACE party, was the victim 
of "political persecution" and deserved a new trial.  In a 
conversation with PolOff, Salomon backed away from the 
remarks, claiming that he only observed that many considered 
the court that convicted Oviedo politically biased.  He 
denied having used the term "persecution" to describe 
Oviedo's situation, blaming a journalist for putting words in 
his mouth.  Other Embassy contacts have said that Salomon's 
remarks were a calculated appeal for UNACE votes in a 
possible re-election campaign (the Chamber will elect new 
leadership the last week of June), though Salomon said 
privately that he is not interested in seeking re-election 
and is looking forward to being a simple deputy for the 
coming year. 
 
National Police Chief resigns 
----------------------------- 
8. (U) On 4/21, Carlos Zelaya resigned as Chief of the 
National Police after only six months in the job.  Fidel 
Isasa Palacios will replace him as the fourth officer to lead 
the force since President Duarte took office in 2003. 
Analysis of the implications of this development and 
biographical information on Isasa will follow septel. 
 
Counterfeit USD bills raise concerns 
------------------------------------ 
9. (U) Concerns about counterfeit bills that first appeared 
in Peru and Bolivia spread to Paraguay this week.  The local 
press began reporting on fears that the same bills could 
appear here, leading to a front-page headline on 4/21.  Based 
on a request from Post's Regional Security Officer, the U.S. 
Secret Service provided a document explaining how to detect 
 
SIPDIS 
the false bills.  By Wednesday, 4/20, many banks, including 
ABN-AMRO, which handles Post's accounts and accommodation 
exchange, informally decided not to accept any bills with the 
letters CB, CD, or AB before the serial number.  Post 
provided the Secret Service document to the Central Bank and 
asked that it be widely disseminated.  Secret Service last 
provided training in Paraguay in July 2004.  If the financial 
system's reticence to accept entire series of U.S. currency 
continues, new Secret Service training, as was done in Peru 
and Bolivia, may be necessary to calm the waters. 
KEANE