US embassy cable - 05ASUNCION1090

UNCLAS SECTION 01 OF 02 ASUNCION 001090 
 
SIPDIS 
 
STATE FOR WHA/BSC AND EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR LYANG 
NSC FOR SUE CRONIN 
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, PHUM, PREL, KCRM, ETRD, PINR, PA 
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, AUGUST 21 
- AUGUST 27 
 
REF: ASUNCION 1053 
 
1. Summary 
 -- Ambassador Reaffirms Commitment to Strengthen US 
- GOP Relations 
 -- Negotiating for Oviedo Release 
 -- Cespedes is New Minister of Justice and Labor 
 -- Visit Sparks New Interest in EXIM Financing 
 
 
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Ambassador Reaffirms Commitment to Strengthen US - GOP 
Relations 
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2. (U) On August 24, Ambassador Keane used a 30 minute 
live-radio interview to discuss the broad US - GOP agenda. 
The Ambassador discussed issues such as job creation, 
strengthening municipal finance, and citizenship 
participation initiatives spearheaded by USAID.  He also 
talked about current health assistance programs funded by 
USAID and DOD.  The Ambassador clarified the bilateral 
trade and free trade agreement agendas and emphasized the 
potential of trade to lift people out of poverty. 
 
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Negotiating for Oviedo Release 
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3. (U) It has been reported recently that the National 
Union of Ethical Citizens Party (UNACE), headed by jailed 
coup plotter Lino Oviedo, and the Colorado Party (ANR) are 
planning to begin negotiations about the possibilities of 
Oviedo's release.  UNACE seeks the release of Oviedo in 
exchange for UNACE support of the ruling Colorado Party for 
the creation of a Constituent Assembly to allow the ruling 
president to run for reelection -- a key Colorado 
objective.  Senator Martin Chiola, deputy leader of the 
Senate Colorado Party bloc, confirmed earlier this week 
that his bloc is going to meet with UNACE.  President 
Duarte Frutos, however, said the ANR would not make any 
concessions to members of UNACE to free Oviedo.  Supreme 
Court Justice Nunez also reminded speculators that the 
courts are independent and would not follow any political 
deal to question a just conviction.  (NOTE: UNACE's 
unexpected change of position to vote for Ruben Candia 
Amarilla, the President's candidate for attorney general to 
replace Oscar Latorre, fueled speculation of some deal in 
the works.)   (reftel) 
 
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Cespedes is New Minister of Justice and Labor 
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4. (U) On August 26, Derlis Cespedes, 35 years old and a 
former Economic Crimes Attorney, was sworn in as the new 
Minister of Justice and Labor.  Cespedes replaces Ruben 
Candia Amarilla, who last week became the Attorney 
General.  (Comment: Cespedes is highly regarded by the 
Embassy and has worked well with the Embassy in the past, 
specifically in drafting the money laundering legislation, 
which is now before the Senate. End Comment.) (reftel) 
 
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Visit Sparks New Interest in EXIM Financing 
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5. (U) On August 22, Paul Tumminia, Director for Latin 
America of the Export-Import Bank visited Asuncion.  During 
his visit, Tumminia hosted a working breakfast for 
approximately fifty (50) Paraguayan businesspeople at which 
he explained the products and services offered by EXIM.  He 
also met with a group of local bankers, officials from the 
Ministry of Industry and Commerce (MIC) and the President 
of DINAC, Paraguay's civil aviation authority, where they 
discussed possible EXIM financing alternatives for a 
pending $20-$30 million USD upgrade of Asuncion's Silvio 
Petirossi International Airport.  Tumminia also had 
individual meetings regarding some concrete projects 
involving river transportation and a water pipeline that if 
completed, could result in up to $20 million USD in US 
exports. 
KEANE