US embassy cable - 05ASUNCION883

UNCLAS ASUNCION 000883 
 
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, EFIN, AFIN 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, JULY 2-8 
 
REF: A. ASUNCION 226 
     B. ASUNCION 813 
 
1.(U) Summary 
-------------- 
-- President Duarte Encounters a Polarized Congress 
-- TIP Suspect Extradited from Spain 
-- Ministry of Finance to Combat Corruption 
 
President Duarte Encounters a Polarized Congress 
--------------------------------------------- --- 
2. During the first official session under new Senate 
leadership (ref B), President Duarte delivered the State of 
the Nation Address to Congress on July 1, emphasizing his 
administration's achievements and assessing what still needs 
to be done. The President pledged to continue his battle 
against crime, specifically noting his commitment to fight 
terrorist financing. (Comment: It is rare for the President 
to officially acknowledge that financing of terrorism occurs 
in Paraguay. End Comment.) President Duarte's speech also 
called on the US Government to open its markets to Paraguayan 
meat products.  (Comment: Emboffs have advised the GOP in the 
past that the only barrier to importing beef is compliance 
with US sanitary regulations, pointing to Uruguay as proof. 
Emboffs will stress that point in upcoming meetings with 
administration officials. End Comment.) The opposition to the 
new leadership in Congress, consisting of the Authentic 
Radical Liberal Party (PLRA), the Beloved Fatherland Party 
(PPQ), and the National Union of Ethical Citizens (UNACE) 
party, refrained from attending the July 1 session. The 
opposition leaders accused President Duarte of interfering in 
legislative matters to promote the election of new Senate 
President, Carlos Filizzola, of the socialist Country in 
Solidarity Party (PPS), adding that they did not want to hear 
his "hypocritical" speech. 
 
3. The opposition bloc also confirmed their decision not to 
head any of the committees during the 2005-2006 legislative 
period. Senators from ruling Colorado Party (ANR) will head 
10 of the 14 Senate committees and four dissident opposition 
Senators, who have formed a pact with the ruling Colorado 
Party, will head the remaining committees. Of the four 
principal committees, ANR will preside over three: Finance 
and Budget, Legislation and Coding, and Foreign Relations. 
The National Encounter Party (PEN) will head the 
Constitutional Affairs Committee. (Comment: The opposition is 
bitter about being outmaneuvered by the Colorados for control 
of the Congress and threatens to undermine the Colorados' 
legislative agenda. End comment.) 
 
TIP Suspect Extradited from Spain 
--------------------------------- 
4.  (U) The Director of the Ministry of Women, Graciela 
Zelayla, informed post that Ms. Carolina Maidana Duarte was 
extradited from Spain into GOP custody on July 1 for her 
involvement in the trafficking of Lurde Resquin to Spain. In 
December 2004, Ms. Maidana,s brother, Raul Antonio Maidana 
Duarte, and Mario Ramon Gonzalez Caceres, were convicted for 
their involvement in the trafficking of this same women. 
(Note: Post has learned that this conviction was overturned 
on appeal in April 2005 by a vote of 2-1 on the grounds that 
the defendants should be tried in Spain where the trafficked 
woman suffered the ultimate effects of the crime.  The 
decision to overturn the conviction by the Appellate Court 
will come up for review by the Supreme Court,s Penal Court. 
Post intends to raise this case with the Supreme Court. End 
Note.) 
 
Ministry of Finance to Combat Corruption 
---------------------------------------- 
5.  (U) On June 23, Finance Minister Bergen approved creation 
of an internal investigation unit to combat corruption in all 
agencies of the Ministry of Finance. The unit compliments 
other entities created in the National Anti-drug Secretariat 
(SENAD), Customs, and the Ministry of Industry and Commerce 
to investigate predicate offenses contributing to money 
laundering and terrorist financing. 
KEANE