US embassy cable - 05ASUNCION1190

C O N F I D E N T I A L SECTION 01 OF 02 ASUNCION 001190 
 
SIPDIS 
 
C O R R E C T E D   C O P Y 
(TO ADD REFERENCE B.  PLEASE NOTE THAT PAR 1 
WAS CORRECTED TO INCLUDE REF B) 
 
NSC FOR SUE CRONIN 
TREASURY FOR OTA 
JUSTICE FOR OPDAT 
SOUTHCOM FOR POLAD DAN JOHNSON 
 
E.O. 12958: DECL: 09/20/2015 
TAGS: PREL, MASS, PTER, ECON, CVIS, PINR, PA, JKJUS 
SUBJECT: PARAGUAYAN VP ON ATA TRAINING, CHDS WORKSHOP, 
MONEY LAUNDERING, ETC. 
 
REF: A.  ASUNCION 1177 
     B.  SECSTATE 165412 
 
Classified By: Ambassador John F. Keane for reasons 1.4 (b) and (d). 
 
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SUMMARY 
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1. (C) Begin summary:  Sept. 15 Ambassador informed VP 
Castiglioni of State ATA anti-kidnapping training at FBI 
academy for 24 Paraguayans Dec. 5-16 (ref B.)  They also 
discussed: CHDS security workshop; money laundering and penal 
procedure reform; and backsliding on airline price 
deregulation, travel agency fees, and visa flexibilization 
for AmCits.  VP was pleased with training offer following his 
June trip to Washington, anxious to take advantage of the 
CHDS strategic seminar, and committed to pushing ML law and 
addressing setbacks on aviation and tourism.  End Summary. 
 
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ATA Anti-kidnapping Training 
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2. (C) Sept. 15 Ambassador detailed anti-kidnapping training 
ATA would fund Dec. 5-16 (ref A) at FBI Academy for 24 police 
and prosecutors.  Noting that this initiative followed the 
tragic Cubas case, an expert assessment, and the VP,s visit 
to Washington, the Ambassador said it was a concrete example 
of bilateral cooperation in attacking the public,s top 
concern.  The VP was grateful and enthused, adding that he 
would publicize the offer widely and ensure full cooperation 
in selecting top candidates.  The Ambassador and VP agreed 
the Embassy would work with the Attorney General (AG), 
Minister of Interior, and Chief of Police to select 
candidates.  The Ambassador announced this initiative to the 
press following the meeting. 
 
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Former AG Latorre to Intel Post 
------------------------------- 
 
3. (C) VP confirmed that President Duarte would soon sign a 
decree naming former AG Oscar Latorre a Ministerial rank 
adviser on security issues.  This will give Latorre legal 
status to begin work while they prepare and pass a law 
establishing a new intelligence service.  VP said Latorre 
will continue out-patient treatment care (rumored to be for 
cancer) but that he is well enough to begin work as a 
Ministerial adviser.  Castiglioni said someone with a similar 
health problem had received treatment where Latorre sought 
help and recovered fully.  Latorre has been involved in 
preparations for the CHDS seminar and could remain a key 
figure if his health holds up. 
 
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Money Laundering (ML), Penal Code Reform 
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4. (C) Ambassador listed ongoing efforts to push ML law and 
sought continued support.  VP noted President had pushed for 
the law in recent summit with Congress and Supreme Court, 
that he and others had met with key Senators, and that he 
understood further meetings were scheduled.  The Ambassador 
agreed, noting that a 9/16 session between experts and key 
Senate committee chairs was important.  Supreme Court 
president Fretes might not be available, but the meeting was 
important nonetheless.  Castiglioni said Colorado Senator 
Bader Rachid was a clear problem on the law, although he said 
he didn,t know why (Note: Post concludes it is Rachid's 
connections to shady businesses, including in CDE). 
 
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Aviation Deregulation and Tourism 
--------------------------------- 
 
5. (C) Ambassador relayed reports that Aviation Director 
Bittar was holding up supposedly agreed on deregulation of 
airline operations and prices following the Open Skies 
agreement.  American Airlines rep had told DCM that Bittar 
had made "major mistakes" and was bowing to pressure from 
Brazilain carriers.  VP said he had heard the same and had 
WAS CORRECTED TO INCLUDE REF B). 
called Bittar in for a report.  GOP was committed to 
deregulation, he said.  Ambassador then asked about a tourism 
law that would legally establish commission levels airlines 
must pay to travel agents; American Airlines has threatened 
to leave the market if the law goes into effect.  Castiglioni 
was visibly uncomfortable, and argued that he agreed that the 
law was awful and had urged NDF to veto it.  There were 
counter pressures within his party, however, and he felt 
isolated on this.  He would, he said, raise it with NDF 
again.  Ambassador then asked about long-sought changes to 
visa processing for AmCits.  Catiglioni laughingly said he 
had been isolated on that issue as well.  His plan for a 
"tourist card" system paid for at the airport in Asuncion was 
ready, but a scheme was needed to replace revenues the MFA 
would lose.  He said this would be dealt with during upcoming 
budget discussions. 
 
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Comment: An Ally with His Hands Full 
------------------------------------ 
 
6. (C) VP Castiglioni is reflexively pro-U.S. and seeks to 
expand commercial and political ties with us, even at the 
expense of upsetting nationalists, populists, and Brazil. 
Reftel noted President,s impatience with VP,s forward 
stance on some issues, however, and Castigioni needs to pick 
his spots.  The CHDS workshop (septel) was a great success, 
but was very low key, at the request of the President and 
following the pubic uproar over the SecDef visit and military 
exercises.  We will continue to cooperate with the VP to 
advance major USG priorities and to strengthen those within 
the GOP friendly to the U.S., but must be wary of burning him 
with his party or even his President. 
KEANE