US embassy cable - 05ASUNCION1312

C O N F I D E N T I A L SECTION 01 OF 07 ASUNCION 001312 
 
SIPDIS 
 
FBI FOR DIRECTOR MUELLER 
 
E.O. 12958: DECL: 10/18/2015 
TAGS: PREL, PGOV, PTER, SNAR, KCRM, PA 
SUBJECT: FBI DIRECTOR MUELLER'S VISIT TO PARAGUAY: 
SCENESETTER 
 
Classified By: PolOff Mark A. Stamilio, reasons 1.4(b) and (d). 
 
1. (SBU) Director Mueller, Embassy Asuncion warmly welcomes 
your visit as an opportunity to promote U.S. law enforcement 
interests and security cooperation with Paraguay.  You come 
at a sensitive time, following a recent SECDEF visit that 
generated considerable press and political activity calling 
into question important, security-related aspects of our 
relationship with Paraguay.  False allegations of plans to 
build a U.S. military base in Paraguay and immunities for 
U.S. military personnel who participate in joint exercises 
here were the main focus, but the planned opening of a LEGAT 
office in Asuncion also drew considerable attention.  Press 
interest in your visit likely will be high.  What follows is 
an overview of the current situation in Paraguay, 
highlighting key issues, and suggested topics and talking 
points for your scheduled meetings and press event. 
 
2. (SBU) Note: Although there is no LEGAT office in Asuncion 
at present, a resident FBI representative has been assigned 
to another office in the Embassy here since May 2005.  End 
Note. 
 
------------------------ 
Your Program in Asuncion 
------------------------ 
 
3. (SBU) We look forward to your visit.  The evening of your 
arrival, you will receive a country team and 
counter-terrorism briefing.  The following day, you will meet 
separately with Vice President Luis Castiglioni (who will be 
Acting President during your visit), former Attorney General 
and new National Security Advisor Oscar Latorre, Supreme 
Court President Antonio Fretes, Interior Minister Rogelio 
Benitez, and Paraguayan National Police (PNP) Director 
General Fidel Isasa.  Press availability is scheduled 
immediately following your meeting with Castiglioni. 
Following your meeting with Isasa, you are scheduled to 
present a certificate of appreciation to Police Commissioner 
Carlos Altemburger, Chief of the PNP's Counter-Terrorism Unit 
(SEPRINTE), followed by a photo opportunity with senior 
members of SEPRINTE. 
 
4. (SBU) FBI Deputy Director Pistole met with Castiglioni 
during his visit to Washington in May/June.  Castiglioni has 
proven to be an ally on matters of security.  Your meetings 
with him and other Paraguayan officials afford the 
opportunity to strengthen existing rapport, and to discuss 
ways to advance U.S. law enforcement interests and further 
enhance bilateral security cooperation. 
 
--------------------------------------------- ------------- 
The Political Scene: President Duarte's Efforts Under Fire 
--------------------------------------------- ------------- 
 
5. (C) Your visit comes two years into the Duarte presidency. 
 In that time, Duarte turned a massive fiscal deficit into a 
large surplus, began a bold structural economic reform 
program, revived the economy, and fought corruption.  In 
recent months, however, political support for Duarte has 
sagged due to perceptions that his government has not taken 
adequate measures to create jobs, tackle corruption, and meet 
public security concerns.  As part of a pact to gain control 
of the Congress with the support of dissident Congressmen 
from opposition parties, Duarte's party, the Colorados, 
supported the election of a member of the socialist "Country 
in Solidarity" Party, Senator Carlos Filizzola, to be 
President of the Congress.  Those opposed to this tenuous 
pact are bitter about having lost control of the Congress in 
the June elections and threaten to undermine the Colorados, 
legislative agenda.  Filizzola is often at odds with U.S. 
policy.  He opposes U.S. military exercises in Paraguay and 
has called actions in Afghanistan and Iraq "genocide."  While 
as President of the Congress he will likely moderate his 
views, his ascendancy is troubling for the U.S. agenda. 
 
--------------------------------------------- - 
Reforming the Economy, But Growth Insufficient 
--------------------------------------------- - 
 
6. (U) Paraguay's formal economy relies on agriculture.  It 
features bloated but weak state institutions and the heavy 
involvement of state-owned enterprises.  There is 
considerable activity involving the trading of imported 
legitimate goods, as well as contraband and counterfeit 
products, most of which are destined for Brazil or Argentina. 
 The Duarte government took office in 2003 on the heels of 
Paraguay's worst recession in years promising to attack 
widespread corruption and reform the economy.  Duarte named a 
non-partisan, technocratic economic cabinet and has supported 
their efforts.  On a macro-economic level, Paraguay's 
performance has been strong: economic growth reached 2.6 and 
4.0 percent in 2003 and 2004, respectively, and inflation was 
brought down to near 3 percent in 2004.  However, whereas the 
government succeeded early on in getting some significant 
economic reform laws through Congress, progress over the last 
year has been slow.  For Paraguay to escape from the poverty 
affecting roughly half of its population, the country needs 
to increase productivity by attracting capital and raising 
annual growth rates closer to 5 or 6 percent.  Success will 
require the government to stay the course on macro-economic 
stability and undertake deeper structural reforms. 
 
------------------------------------- 
Paraguay's Public Security Challenges 
------------------------------------- 
7. (U) Members of the Free Fatherland Party (PPL), a far-left 
political movement based in the countryside, kidnapped and 
subsequently murdered the daughter of a former president, 
Cecilia Cubas, whose body was discovered in February. 
Evidence ties the PPL to the Revolutionary Armed Forces of 
Colombia (FARC).  A culture of distrust allowing for little 
inter-institutional cooperation hampers the ability of 
Paraguay's law enforcement community to tackle rising 
concerns about public security; Paraguay's National Police 
are widely disparaged by the general population as 
incompetent and corrupt.  Last November, given the lack of 
confidence in the police, the President called the military 
out of the barracks to assist with law enforcement efforts. 
Its profile on the street has diminished in recent months as 
focus on the Cecilia Cubas kidnapping recedes from the public 
eye.  The Cecilia Cubas murder and clear evidence of FARC 
involvement shocked Paraguay's leaders and population. 
Increased cooperation with Colombia and the U.S. and 
realization of the need for better intelligence and other 
security measures were one result. 
 
8. (SBU) Note: The Paraguayan Attorney General's Office 
recently requested FBI assistance in isolating the voices of 
suspected Colombian and Brazilian nationals on an audio-video 
recording of a PPL kidnapping rehearsal exercise.  LEGAT 
Buenos Aires forwarded the recording to the FBI crime lab. 
Several months ago, SEPRINTE asked the FBI representative 
assigned to Embassy Asuncion to send to the FBI crime lab 
remnants of several charred address books seized in a raid 
pursuant to the Cubas investigation.  FBI analysis of both 
evidentiary requests is pending.  End Note. 
 
----------------------------------------- 
International Crime and Counter-Terrorism 
----------------------------------------- 
 
9. (U) The Tri-Border Area (TBA), the region of Paraguay that 
meets Brazil and Argentina, near the city of Ciudad del Este, 
is a primary USG concern. The area is notorious for drug and 
other smuggling, including trafficking in persons, 
intellectual piracy, document forgery, counterfeit cigarette 
manufacturing, and loose border controls, especially at the 
Friendship Bridge connecting Paraguay with Brazil. 
 
10. (U) Paraguay cooperates closely with us in addressing all 
the problems of greatest U.S. concern, including terrorist 
fund raising by Hezbollah.  Paraguay took the lead in 
establishing a four-nation coordination group known as the "3 
plus 1" (Argentina, Brazil, Paraguay, and the U.S.).  Also, 
despite the lack of specific anti-terrorist statutes, 
Paraguay has actively prosecuted known terrorist fund-raisers 
on tax evasion charges.  FARC involvement with the Cubas 
kidnapping and links to the local violent leftist PPL have 
heightened Paraguayan concerns about terrorism.  President 
Duarte noted the threats from international crime, including 
terrorist fund raising, in his July State of the Nation 
address. 
 
11. (C) Despite preoccupation with close-to-home terrorism 
issues including kidnappings, local violent radicals, the 
FARC, and fund raising for Hezbollah, Paraguay is reluctant 
to take a lead in the war on terrorism beyond its borders. 
This is due to pressure from Brazil as well as domestic 
concerns that an aggressive anti-terrorism policy (e.g., vis 
a vis the Middle East) will draw terrorist reprisals.  In 
addition, memories of abuses under the Stroessner 
dictatorship remain a factor.  Last year, President Duarte 
received Chairman of the Joint Chiefs of Staff General Myers, 
but then made a public show of announcing that Paraguay would 
not send a contingent to Iraq despite surprisingly having 
offered to do so when he met with President Bush a year 
earlier.  Given recent false allegations that the U.S. wants 
to establish a military base in Paraguay to combat terrorism 
in the TBA, we recommend tailoring public remarks about 
Paraguay's role in the global war on terrorism in a way that 
will not lend fuel to these false claims.  Fresh claims of 
abuses under the 35-year dictatorship of Alfredo Stroessner 
also make counter-terrorism legislation and action sensitive 
topics. 
 
12. (SBU) Paraguay is a significant transit point for the 
transportation of cocaine and other narcotics by air from 
Colombia to Brazil.  Much of the northwestern part of the 
country is uninhabited, and the GOP has difficulties in 
enforcing the law due to geography and the political power 
some drug traffickers wield.  Paraguay's national 
anti-narcotics secretariat (SENAD) coordinates GOP 
interdiction efforts, with significant assistance from the 
DEA.  In November 2004, Paraguay, Brazil and the DEA 
collaborated in a joint operation that produced the seizure 
of 260 kilograms of cocaine and the arrest of Brazilian drug 
kingpin Ivan Carlos Mendes Mesquita, wanted in the U.S. on 
drug trafficking charges involving Colombia's FARC 
guerrillas.  Paraguay extradited Mendes Mesquita to the U.S. 
on June 27, a dramatic and unprecedented step.  Clear 
congratulations are appropriate.  Post considers this case 
emblematic of the success we achieved by working with the 
SENAD as an autonomous unit.  Paraguay has no radar and some 
interlocutors may request U.S. assistance in this area.  We 
are looking into this possibility in the context of JIATF's 
operation "Southern Light," but Paraguay has many other tasks 
more important than obtaining radar, and we are supporting 
phased improvements in enforcement and prosecution. 
 
-------------------------- 
U.S. Interests in Paraguay 
-------------------------- 
 
13. (SBU) U.S. interests in Paraguay are focused on 
strengthening democratic institutions, promoting sound 
economic policies and good governance, disrupting criminal 
organizations, and combating terrorist financing.  Post 
maintains bilateral assistance programs dealing with 
combating narcotics trafficking, money laundering, 
intellectual property violations, and trafficking in persons. 
 The U.S. has assisted the Paraguayan Government in 
developing draft money-laundering and counter-terror 
legislation.  In the wake of the Cubas kidnapping, Vice 
President Castiglioni traveled to the U.S. for meetings with 
Vice President Cheney, FBI Deputy Director Pistole, and other 
key officials to discuss a comprehensive approach to 
Paraguay's security challenges, including a high-level 
seminar that the Center for Hemispheric Defense Studies 
(CHDS) conducted here in September.  USAID and the Peace 
Corps also have programs in the country.  Paraguay has been 
named a threshold country for Millennium Challenge Account 
funding, and recently presented an ambitious USD 35 million 
proposal to the Millennium Challenge Corporation. 
 
------------------------------------------- 
Key Law Enforcement Agencies and Activities 
------------------------------------------- 
 
14. (SBU) The PNP's Counter-Terrorism Unit (SEPRINTE) is an 
effective ally in our efforts to counter terrorist activity 
and terrorism finance in the region.  As noted in paragraph 
9, above, Paraguay cooperates closely with us in addressing 
all the problems of greatest U.S. concern, including 
terrorist fund raising by Hezbollah.  We are also working 
closely with Paraguay's national anti-money laundering 
secretariat (SEPRELAD) to improve Paraguay's ability to 
 
SIPDIS 
investigate and prosecute money laundering and terrorism 
financing.  The establishment of a LEGAT office in Asuncion 
is a key aspect of our strategy for combating transnational 
financial crimes.  As noted in paragraph 11, above, with 
significant assistance from DEA, Paraguay's autonomous 
national anti-narcotics secretariat (SENAD) has achieved 
considerable success in combating illicit drug trafficking. 
Paraguay is also taking positive steps to investigate and 
prosecute trafficking in persons, intellectual piracy, 
document forgery, counterfeit cigarette manufacturing, and 
customs and immigration violations. 
 
------------------- 
The Military's Role 
------------------- 
 
15. (U) The military's primary mission is to protect 
Paraguay's territorial integrity, defend the legitimate 
authorities in accordance with the Constitution, and 
cooperate in civil defense.  It does not have a lead role in 
counter-drug operations, but provides a specialized tactical 
unit to support SENAD.  The military's Special Forces unit is 
in the process of organizing a company-size counter-terrorism 
unit, and the Presidential Guard Unit has a specialized 
counter-terrorist platoon.  The Navy has a law enforcement 
mission on Paraguay's rivers.  The military is still seen as 
the first to be called whenever there is a "crisis," and many 
Paraguayans feel "safer" when the military is out on the 
streets with the police. 
 
16. (C) Recent press reports that Minister of Defense Roberto 
Gonzalez conveyed to members of Paraguay's Congress interest 
in adopting a shootdown policy appear to have been 
inaccurate.  Given Paraguay's lack of radar equipment, 
Paraguay does not have the capability to monitor air traffic, 
much less bring down planes involved in illicit activity 
traveling in Paraguayan air space.  The Ambassador flagged 
for the Defense and Foreign Ministers the legal and political 
ramifications of a decision to adopt a shootdown policy. 
They assured the Ambassador that the Government of Paraguay 
had no intentions of adopting such a policy. 
 
------------------------------------ 
Discussion Topics and Talking Points 
------------------------------------ 
 
17. (C) We expect that Vice President Castiglioni will 
explain the administration's vision and goals, which will 
largely focus on domestic concerns related to reforming 
Paraguay's culture of impunity and corruption because it 
relates directly to the nation's law enforcement and security 
challenges.  He will express the government's commitment to 
the struggles against terrorism and drug trafficking.  The 
Duarte administration believes that Paraguay's solid efforts 
in these fields warrant more international assistance, 
particularly from the U.S.  Castiglioni probably will note 
Paraguay's significant successes against drug traffickers and 
other transnational criminals, and may specifically request 
equipment such as radar and helicopters.  Castiglioni will 
welcome increased U.S. law enforcement and security 
cooperation, and may note that Paraguay is also receiving 
enhanced cooperation from Colombia.  Your meeting with 
Castiglioni would be a good opportunity to explore closer law 
enforcement and security ties. 
 
18. (SBU) A few topics you might discuss with Vice President 
Castiglioni are as follows: 
 
-- Congratulate Paraguay on its successes against drug 
traffickers, such as the FARC-connected Mendes Mesquita, who 
was recently extradited to the U.S. 
 
-- Welcome Paraguay's continuing solid support in the 
struggle against terrorism, particularly on prosecuting 
terrorist financiers, and close cooperation with U.S. 
authorities in this arena.  Note that passage of anti-money 
laundering legislation pending in the Paraguayan Congress 
will enhance the tools Paraguay has to fight this scourge. 
Also note that the establishment of a LEGAT office in 
Asuncion is a key aspect of our strategy for combating 
transnational financial crimes. 
 
-- Note the importance to the U.S. and Paraguay of our 
cooperation on other key law enforcement matters, and express 
appreciation that the Duarte administration has given such 
matters its full support despite domestic as well as foreign 
criticism in the region. 
 
-- (If asked:) Acknowledge that LEGAT Buenos Aires forwarded 
to the FBI crime lab the request from the Attorney General's 
Office for FBI assistance in isolating the voices of 
suspected Colombian and Brazilian nationals on an audio-video 
recording of a PPL kidnapping rehearsal exercise, and that 
the FBI representative assigned to Embassy Asuncion forwarded 
to the FBI crime lab remnants of several charred address 
books seized in a raid pursuant to the Cubas investigation. 
FBI analysis of both evidentiary requests is pending. 
 
19. (SBU) Castiglioni hopes that you will speak with the 
press during your visit, and suggested that you do so upon 
exiting your meeting with him.  He indicated that he would 
not accompany you to the podium.  Press interest will likely 
be high.  Paraguayan journalists are generally friendly 
people.  We suggest that you lead off with a short statement 
about the purpose of your visit and your impressions after 
meeting with the Vice President, drawing from the points 
below, which we have prepared as a press release: 
 
-- The purpose of this visit is to meet key government 
leaders involved in law enforcement.  The FBI Director will 
also meet with Supreme Court President Fretes, the Minister 
of the Interior, and others. 
 
-- In June 2005, Vice President Castiglioni was in Washington 
and met with FBI Deputy Director John Pistole. 
 
-- Among the items discussed was the establishment of a Legal 
Attach office at the U.S. Embassy in Asuncion, envisioned to 
open in 2007.  The Legal Attach is a representative from the 
Federal Bureau of Investigation (FBI), and part of the U.S. 
Department of Justice headed by Attorney General Alberto 
Gonzales. 
 
-- Asuncion will be the eighth capital city in Latin America 
to receive the services of a Legal Attach office.  Full 
service Legal Attach offices now exist at the U.S. Embassies 
in Brasilia, Buenos Aires, Santiago, Caracas, Bogota, Panama 
City, and Mexico City.  Around the world, the FBI now 
maintains fully operational Legal Attach offices in 53 
overseas locations, and is planning to set up 13 more over 
the next two years, including one in San Salvador. 
 
-- The Legal Attach office in Asuncion will conduct 
traditional law enforcement liaison and provide training 
activities for appropriate law enforcement personnel in 
Paraguay.  It will provide diplomatic representation and a 
bridge of communication between U.S. and Paraguayan law 
enforcement authorities, including access to information 
databases and other resources maintained in the United States 
and elsewhere. 
 
-- The FBI Director's visit to Asuncion is part of a regional 
visit to five Latin American cities.  Director Mueller will 
arrive in Asuncion following meetings in Brasilia. 
 
(If asked:) 
 
FBI Involvement in Paraguay 
 
-- Q: When will the FBI office open here, and how many agents 
will staff it? 
 
-- A: The current plan is to open the office sometime in 
2007, and to staff it with two FBI agents. 
 
-- Q: Vice President Castiglioni has said the main purpose of 
the FBI office here will be to provide training to Paraguayan 
law enforcement personnel.  What specific types of training 
and services will the FBI office in Asuncion offer?  Will the 
FBI office do things other than arrange for training? 
 
-- A: Training the FBI provides to local and international 
law enforcement partners is designed to develop a 
professional cadre of leaders through the FBI's National 
Academy and similar programs, with the objective of building 
expertise, specialized skills, and a high degree of ethical 
values in law enforcement.  In addition to training, the 
Legal Attach office will provide traditional law enforcement 
liaison between U.S. and Paraguayan law enforcement 
authorities, including access to information databases and 
other resources maintained in the United States and elsewhere. 
 
-- Q: Does the FBI plan to conduct law enforcement operations 
in Ciudad del Este?  Will the FBI investigate crimes in all 
parts of the country? 
 
-- A: The Legal Attach office is intended to provide 
diplomatic representation and a bridge of communication 
between U.S. and Paraguayan officials.  This is not our 
jurisdiction, and we will not conduct independent law 
enforcement investigations or operations here.  Anything the 
FBI does here will be pursuant to operations conducted by 
Paraguayan authorities, since they have lawful jurisdiction 
in this sovereign nation. 
 
International Crime and Counter-Terrorism 
 
-- As clearly outlined in the U.S. Report on Global 
Terrorism, we believe the activities in the Tri-Border Area 
are basically fundraising and financing, not operational in 
nature. 
 
-- We rely on the authorities in the countries involved to 
provide the legal structure to allow the investigation, 
arrest, and prosecution of persons involved in such 
activities. 
 
-- We are pleased by Paraguay's active cooperation in the 
fight against terrorism.  It has taken important steps to 
counter this grave problem and was instrumental in helping 
strengthen regional cooperation with the U.S. (through the "3 
plus 1" mechanism). 
 
Q: What proof do you have that Paraguay funds terrorists? 
 
-- We never said that "Paraguay" funds terrorists, but rather 
that individuals in Paraguay (specifically in the Tri-Border 
Area) fund organizations engaged in terrorist activities. 
 
-- Illicit activity, particularly along the tri-border, 
fosters corruption, discourages investment, inhibits economic 
development, and creates a milieu favorable to money 
launderers and terrorist financiers. 
 
-- President Duarte mentioned the threat from terrorist 
financing in his annual message to Congress. 
 
-- In recent years, Paraguay has convicted individuals for 
tax evasion who have also been implicated in laundering money 
for terrorist groups. 
 
-- It is vital that Paraguay continue to prosecute and 
convict those implicated in illicit activity, including money 
laundering and terrorist financing. 
 
Counter-Drug Efforts 
 
-- Paraguay is making an important effort against drug 
trafficking, despite limited resources.  We applaud historic 
achievements, including the arrest and extradition of Mendes 
Mesquita, who had ties to the FARC. 
 
-- We are confident there will be continued good performance 
in this area, which will benefit the Paraguayan people as 
well as the region at large. 
 
Q: What types of assistance will the U.S. provide Paraguay to 
meet its security challenges?  Can you give us radar and 
helicopters? 
 
-- In 2004, the U.S. provided Paraguay with USD 1 million in 
funds to assist Paraguay in combating narcotics trafficking, 
money laundering, trafficking in persons, and intellectual 
property rights piracy. 
 
-- Those funds support training for judges, prosecutors, and 
police, purchase of equipment, and conduct of operations. 
 
-- Since 1987, the U.S. has donated over USD 5.8 million to 
assist Paraguay's law enforcement efforts. 
 
FARC Ties 
 
-- Evidence of FARC ties to the Cubas kidnapping is very 
disturbing.  The FARC has demonstrated its readiness to 
commit any number of atrocities, including kidnappings and 
other forms of terrorism, to advance its objectives. 
 
-- The U.S. recognizes Paraguay's commitment to address this 
problem. 
 
Rumors of a U.S. Military Base 
 
-- Reports of U.S. intentions to base U.S. troops in Paraguay 
are not true. 
 
-- The truth is that small numbers of U.S. personnel, in 
groups of generally 10-20 persons, will train with their 
Paraguayan military colleagues during periods of two to six 
weeks and then return to the U.S.  No U.S. soldiers will be 
deployed in Paraguay for extended periods of time. 
 
20. (SBU) Topics you might discuss with Latorre, Fretes, 
Benitez, and Isasa: 
 
-- Recent successes against drug traffickers, and Mendes 
Mesquita extradition. 
 
-- Continuing solid support in struggle against terrorism and 
close cooperation on prosecuting terrorist financiers. 
 
-- Importance of passing anti-money laundering legislation to 
enhance Paraguay's ability to fight this scourge. 
 
-- (With Isasa:) Note importance of alliance with SEPRINTE in 
struggle against terrorism and terrorism finance. 
 
-- Importance to the U.S. and Paraguay of cooperation on 
other key law enforcement matters, and appreciation that the 
Duarte administration has given such matters its full support 
despite domestic as well as foreign criticism in the region. 
 
-- (With Latorre:) Ask what he sees as his primary role in 
his new job as National Security Advisor, and what his top 
priorities are. 
 
-- (With others:) Ask what they see as Paraguay's top law 
enforcement priorities. 
 
-- (If asked:) Acknowledge that LEGAT Buenos Aires forwarded 
request for FBI assistance in isolating suspected Colombian 
and Brazilian voices on PPL kidnapping rehearsal video, and 
that Embassy Asuncion forwarded to the FBI crime lab remnants 
of several charred address books seized in a raid pursuant to 
the Cubas investigation.  FBI analysis of both evidentiary 
requests is pending. 
KEANE