US embassy cable - 03GUATEMALA2014

C O N F I D E N T I A L SECTION 01 OF 05 GUATEMALA 002014 
 
SIPDIS 
 
SENSITIVE 
 
USDOL FOR ILAB:ROBERT WHOLEY 
USTR FOR VIONDETTE LOPEZ/BUD CLATANOFF 
 
E.O. 12958: DECL: 08/06/2013 
TAGS: PREL, PGOV, ETRD, SNAR, ELAB, CASC, GT 
SUBJECT: CODEL BALLENGER VISIT ADVANCES U.S. INTERESTS 
 
REF: GUATEMALA 1908 
 
Classified By: PolOff Erik Hall.  Reason 1.5 (b). 
 
1.  (SBU) Summary:  A U.S. Congressional delegation led by 
Rep. Cass Ballenger, and including U.S. Representatives Kevin 
Brady, Jerry Weller, and Marsha Blackburn, visited Guatemala 
August 4-6.  The CoDel conveyed to the GOG, civil society, 
the private sector and the press USG concern over recent 
election-related violence, our interest in assuring free and 
fair elections in Guatemala, Congressional support for a 
CAFTA agreement including strong labor rights and IPR 
protections and the need for continued GOG progress in 
combating drug trafficking.  The CoDel visit demonstrated 
strong U.S. Congressional interest in Guatemalan democracy at 
this crucial juncture, and advanced our other highest 
priority goals in Guatemala.  End Summary. 
 
Background 
---------- 
2.  (U) Congressman Cass Ballenger, Chairman of the Western 
Hemisphere Sub-Committee of the House International Relations 
Committee, headed a Congressional delegation that visited 
Guatemala August 4-6.  The CoDel included U. S. 
Representatives Kevin Brady, Jerry Weller and Marsha 
Blackburn, as well as Mrs. Donna Ballenger, HIRC staffers 
Caleb McCarry, Jessica Lewis and Ted Brennan, State 
Department H officer James Hagen, and military escort Maj. 
William McCollough.  The CoDel met with the Country Team and 
Embassy Homeland Security Working Group, with Acting 
President Francisco Reyes Lopez and selected ministers, with 
Foreign Minister Edgar Gutierrez and the GOG's 
Inter-Institutional Counter-Narcotics Cooperation Group, with 
representatives of the Guatemalan Congress, employer groups, 
civil society representatives and human rights NGOs.  Press 
coverage of the visit was positive and straightforward. 
 
Meeting the GOG:  Narcotics, CAFTA, Elections 
--------------------------------------------- 
 
3.  (C) The CoDel met with GOG officials at a reception 
hosted by the Ambassador on August 4, and again on August 5 
at a lunch hosted by Acting President Francisco Reyes Lopez. 
The Vice President was accompanied by key members of the 
Economic Cabinet.  They met with Foreign Minister Gutierrez 
and the Inter-Institutional Counter-Narcotics Cooperation 
Group on August 5, and attended a dinner hosted by the 
Guatemalan Congress in honor of the delegation that evening. 
In each event, CoDel members raised concerns over recent 
pre-electoral violence (RefTel), the need for an honest 
election process in the run-up to Presidential elections on 
November 9, the unprecedented opportunities offered by a 
possible CAFTA agreement, the strong Congressional interest 
that labor and IPR protections be incorporated into such an 
agreement.  They also highlighted the importance of continued 
GOG cooperation in combating narco-trafficking. 
 
4.  (C) Senior GOG officials used the inter-ministerial 
counter-narcotics meeting to underscore GOG efforts to meet 
each of nine counter-narcotics problem areas identified by 
the USG.  After the GOG presentation, CoDel members 
acknowledged GOG efforts, but urged continued commitment to 
combat narco-trafficking, and noted the issue would come up 
in the context of Congressional debate on CAFTA.  Rep. 
Blackburn pressed for a firm GOG commitment and additional 
GOG resources to continue the fight.  Attorney General Carlos 
de Leon cited resources already committed by all 
participating institutions to address the problem areas, and 
said the creation of the inter-ministerial group also 
embodied the GOG's commitment.  Vice Minister of Foreign 
Affairs Gabriel Aguilera said the GOG is firmly committed to 
address each problem area completely, and emphasized that the 
inter-institutional working group has been formally 
constituted into a permanent body.  Rep. Brady also said that 
counter-narcotics cooperation will factor strongly in the 
CAFTA debate expected in the U.S. Congress and asked whether 
the Guatemalan Congress was funding the resource requests of 
the institutions present.  Minister of Government Reyes 
Calderon said his ministry's money-laundering unit had 
received an 18% budget increase from Congress over the past 
year.  Supreme Court Justice Napoleon Rojas said no US 
extraditions were pending (Comment:  Not quite right; the 
Ambassador corrected.  End Comment.), and that the court has 
auctioned seized assets and used the profits to create two 
new courts dedicated to trying cases involving organized 
crime. 
 
5.  (C) In a separate meeting with Foreign Minister Gutierrez 
(Defense Minister Moran was also present, but did not speak), 
Rep. Ballenger said his comment in October, 2002 to the 
effect that Guatemala should not be certified as cooperating 
fully in the counter-narcotics fight was not meant to offend, 
but to encourage stronger efforts in this mutual endeavor. 
He noted positive actions taken since de-certification by the 
GOG.  Gutierrez described those efforts, including progress 
in meeting the USG's 9 benchmarks, but said he was still "not 
fully satisfied" with the results.  "We are determined to do 
more," he said, "and have formed the inter-institutional 
counter-narcotics working group to continue improve 
cooperation."  In response to a question from Rep. Ballenger, 
he also described GOG negotiations with Belize and the 
current status of border talks.  While not resolved, he said, 
incidents in the adjacency zone have declined and the OAS has 
opened an office in the zone as a means to build mutual trust 
between the two nations.  Rep. Weller expressed hope that a 
fair and balanced CAFTA will be achieved, which incorporates 
the labor and IPR protections of the US-Chile FTA. 
 
6.  (C) Rep. Brady described Congressional debate over CAFTA 
and the importance of the labor issue in the U.S.  Gutierrez 
responded that a CAFTA is not limited to commercial relations 
but also expresses shared values and is a means to modernize 
Guatemala's business sector, which has profited from 
protectionism and lax enforcement of labor laws in the past. 
The GOG is pursuing an "aggressive" policy on CAFTA labor and 
commercial offers, and has been criticized by some other 
governments in the region for doing so.  The current 
government has achieved major labor law reforms and major 
(more than 50%) increases to the minimum wage, and President 
Portillo is asking the ILO to evaluate Guatemalan labor law. 
Weak enforcement is unfortunately a result of weak state 
structures.  Greater fiscal and social reforms are needed to 
form the basis for a CAFTA and a later FTA with the EU.  In 
response to a question about the status of Article 98 
discussions, the Foreign Minister said the GOG was studying 
the USG proposal, but could not take a position on an 
agreement when it has not yet ratified the Treaty of Rome. 
(Comment: This was bad news.  The Ambassador raised this with 
Guatemalan Ambassador to the U.S. Antonio Arenales on August 
5, telling him that Gutierrez needed to hear from him how 
important an issue this is to the USG and asking him to speak 
with the Foreign Minister; he said he would.  The Ambassador 
told Gutierrez on August 6 in a TelCon that his reply to the 
CoDel was like a bucket of cold water to our hopes of getting 
an Article 98 agreement soon and that it did not make sense, 
inasmuch as our proposed text does not even refer to the ICC 
or Rome Treaty.  Gutierrez replied that he may have listened 
too much to his legal advisors and said he would reconsider. 
The Ambassador suggested he seek Arenales' views as to the 
importance of this issue in Washington; Gutierrez pledged to 
consult with Arenales on both legalities and political 
importance.  End Comment.) 
 
7.  (C) Asked by Rep. Ballenger for his views on the violent 
FRG protests of July 24-25, Gutierrez responded that these 
events "are not easy to understand and are harder to 
explain."  The upcoming elections will be historic, he said, 
because this will be the first election where former 
guerrilla combatants will stand directly for election 
(referring to the URNG party, which has nominated Rodrigo 
Asturias (AKA Comandante Gaspar Ilom) for President, and 
which previously stood only in coalition with other parties). 
 It is also historic because never before in Guatemalan 
history has a second consecutive democratically-elected 
government passed power to a third.  President Portillo has 
made a firm commitment to a clean, credible election, but the 
pre-electoral campaign has become very controversial, causing 
great public confusion.  He has asked the OAS to monitor the 
use of state funds for electoral purposes.  "I personally 
reject the July 24-25 demonstrations, but also believe it is 
not helpful to exaggerate the facts.  For example, the word 
"rioters" was incorrectly used here.  What I saw was a 
well-organized and highly controlled movement.  It is vital 
for Guatemalans to keep a cool head."  The Ambassador 
responded that it is important to note that the demonstrators 
carried machetes, clubs and guns, and while they did not use 
them, they were acting in a way clearly intended to 
intimidate.  He urged all sides to work to improve the 
electoral climate. 
 
8.  (C) At a Congressional dinner on August 5, host Vice 
President of Congress Zury Rios toasted the CoDel and said a 
majority of the Guatemalan Congress fully supports the 
counter-narcotics fight and will continue to do so.  She also 
said Congress would support CAFTA approval.  In response, 
Rep. Ballenger toasted US-Guatemalan friendship and told 
representatives that "the eyes of the world will be on 
Guatemala" during this election year, and urged the GOG to 
conduct free and fair elections, free from violence and 
intimidation.  He pledged to return to Guatemala to observe 
the elections himself.  In private conversations with Rios, 
Rep. Ballenger and the Ambassador urged her and other FRG 
leaders present to prevent violence and intimidation of the 
sort witnessed on July 24-25. 
 
Civil Society 
------------- 
 
9.  (SBU) On August 4 the CoDel met with the Guatemalan 
Forum, a group formed in August 2002 to promote social 
dialogue.  The Forum comprises individuals drawn from a 
variety of civil society organizations, including human 
rights groups, indigenous organizations, academic 
institutions and think tanks, private sector groups and 
unions, and religious organizations.  Miguel Angel Barcacel, 
a director of a prominent socio-economic analysis think tank 
(ASIES), described for the Congressmen an atmosphere of 
repression and intimidation of rural voters by the ruling 
party, which erupted in violent riots on July 24-25 in the 
capital (one journalist died of a heart attack).  The Forum 
has since issued position papers on national issues including 
security, economic revitalization, rural development, justice 
and electoral reform.  The Forum recently joined with other 
civil society groups to form the "Civic Front" to address 
fraud in the upcoming elections.  He requested USG support 
for clean elections and international observation of the vote 
in November. 
 
10.  (SBU) Carmen Aida Ibarra Moran of the Myrna Mack 
Foundation, criticized the lack of access to education, 
employment and health care for Guatemala's poor, and the 
continued effective exercise of power by "clandestine forces" 
linked to the ruling FRG, the Army, and retired Army 
officers.  The threat from these forces, which have roots in 
all the political parties, represents an even greater threat 
to Guatemala's democracy that Rios Montt's candidacy per se. 
Human rights activist Mario Polanco warned that electoral 
fraud will occur well before voting day, and cited the July 
24-25 riots as a direct consequence of the FRG's alleged 
re-activation of the network of civil self-defense patrols 
created by Rios Montt during the civil conflict.  Of 
particular concern is the security of journalists in this 
context.  On the brighter side, Federico Licht of the 
Guatemalan Jewish Community cited a rebirth of civil society 
groups willing to defend democratic freedoms, including the 
Guatemalan Forum.  Rep. Ballenger commented that in the 
elections in El Salvador immediately after the peace accords 
were signed, 85% of voters turned out on election day despite 
numerous death threats.  He encouraged civil society to 
educate voters about the secrecy of each vote and said he 
would be among those observing the vote in November. 
 
11.  (U) At a meeting on August 5 with human rights groups 
hosted by Frank LaRue, Director of the Center for Legal 
Action in Human Rights (CALDH), the delegation met with Fredy 
Peccerelli, Director of the Guatemalan Forensic Anthropology 
Foundation (FAFG); Iduvina Hernandez, Director of the 
Association for the Study and Promotion of Security in 
Democracy (SEDEM); and Nery Rodenas, Director of the 
Archbishop,s Office on Human Rights (ODHA).  The human 
rights leaders described a deteriorating security situation 
facing human rights workers, their initiative to create an 
international commission to investigate clandestine groups 
(CICIACS), and the increase in threats to the opposition from 
politically-motivated violence. 
 
12.  (U) Peccerelli spoke about his work exhuming clandestine 
cemeteries dating from the internal conflict, many of which 
were attributed to the counterinsurgency campaigns of the 
Rios Montt government in 1981-1982.  Peccerelli recounted 
numerous death threats he and members of his staff have 
received, and described the GOG's protective efforts as weak. 
 Hernandez and Rodenas alleged that the bulk of these threats 
are posed by "clandestine groups" linked to state structures 
through networks of retired military officers now involved in 
organized criminal activity.  They expressed hope that the 
CICIACS would help identify and prosecute these networks and 
their members and requested USG financial and political 
support.  The Ambassador responded that the USG has strongly 
supported the proposal politically, and is in the process of 
identifying financial support.  More support will be needed 
from other donors, he said.  LaRue showed the delegation 
several video clips from the riots of July 24-25, which he 
characterized as a blatant effort by the ruling Guatemalan 
Republican Front (FRG) to intimidate voters and the courts. 
Congressman Ballenger responded that the "world will be 
watching" the elections in November.  Representative Brady 
said the Congress continues to make support for human rights 
in Guatemala a high priority. 
 
CAFTA, Labor and IPR 
-------------------- 
 
13.  (SBU) At a lunch on August 4 with Marcio Cuevas, Vice 
President of the main private sector group (CACIF) and 
President of the Non-Traditional Export Association 
(AGEXPRONT); Peter Lamport, former Guatemalan Ambassador to 
the U.S. and business leader; William Stixrud, a 
representative of the coffee exporters; and Mario Montano, 
ex-President of CACIF; CoDel members emphasized the 
opportunity presented by a potential CAFTA agreement. 
Congressional debate over CAFTA will be affected by the 
unemployment situation in the U.S. when the agreement is 
submitted to Congress, probably in March or April of 2004, 
Representative Ballenger said.  There is great concern over 
labor conditions in Central America, he said, and urged 
business leaders to provide Congress evidence of adequate 
labor protections in law and effective enforcement of those 
laws.  Rep. Brady emphasized that the vote on CAFTA in the 
U.S. Congress will be a close one, and may be determined by a 
small group of currently undecided Congress members concerned 
about labor rights protections in the region.  The U.S.-Chile 
FTA is a good model for CAFTA labor provisions, but U.S. 
labor groups are skeptical about labor conditions in Central 
America.  He encouraged business leaders to provide 
information about how Guatemalan worker rights are better 
protected today, citing Abraham Lincoln's dictum that 
"examples are not just the best form of persuasion, but 
rather the only form of persuasion."  In addition, he said, 
the USG hopes CAFTA will help to integrate the region and 
build productive capacity.  Representative Weller noted that 
2004 is an election year in the U.S., and suggested that the 
later CAFTA is presented to Congress, the more difficult it 
will be to pass.  He emphasized the importance of labor law 
enforcement, while also raising the importance to many U.S. 
Congressional members that IPR protections are fully 
respected.  Rep. Blackburn expressed concern about IPR 
protections and agriculture provisions of a CAFTA. 
 
14.  (SBU) Cuevas said that successfully achieving a CAFTA 
agreement is CACIF's highest priority, to encourage greater 
foreign investment and joint ventures in Guatemala.  He 
expressed "total agreement" that the Labor Ministry's 
inspectorate will require support to better enforce existing 
labor laws.  He also expressed concern over the $15 million 
maximum sanction for labor rights violations under the 
US-Singapore agreement.  Lamport said that beyond its effect 
on trade, a CAFTA will help strengthen Guatemalan democracy 
by strengthening the rule of law.  Guatemalans view a CAFTA 
as a tool to help maintain the competitiveness of exports 
from the region, and as a way to counter-balance potential 
dominance by Mexican firms.  He claimed Guatemalan labor law 
to be "more than adequate," and cited voluntary industry 
efforts to improve working conditions out of a recognition 
that Guatemala cannot compete successfully "based on cheap 
labor alone."  Unionization, however, is not the best way to 
benefit workers, he argued, citing the closure of the 
Phillips Van Heusen factory after a collective bargaining 
agreement was achieved in the mid-1990s.  Lamport also cited 
the newly-created Civic Front as evidence of a mature, 
non-violent reaction by civil society to the inscription of 
Efrain Rios Montt as a candidate for the Presidency.  In 
response to the Ambassador's query of what the Front will do, 
Lamport said the Front will begin observing election fraud or 
abuse of public resources now, and would encourage voters not 
to be discouraged by FRG intimidation tactics. 
 
Press Gets Message 
------------------ 
 
15.  (U) The visit received extensive coverage by local 
media.  On August 5, Rep. Ballenger was interviewed by 
journalist Carlisle Johnson on his English-language morning 
show and asked about the delegation's views on CAFTA, the 
fight against drugs and upcoming general elections in 
Guatemala.  Later the same day, following a lunch meeting 
with Vice President Reyes Lopez, Rep. Ballenger was 
interviewed by major newspapers, news radio and TV regarding 
efforts made by the Government of Guatemala to combat 
narcotics trafficking.  Finally, later that day, the media 
attended a press conference immediately following a meeting 
with human rights groups where reporters inquired about the 
CoDel's views on the violent demonstrations that took place 
in Guatemala City on July 24 and 25.  In total, press items 
appeared in four daily newspapers, on two TV news reports, 
and three radio stations. 
 
16.  (U) Leading daily "Prensa Libre" ran a headline on 
August 6 that said "US warning:  If there's fraud, no CAFTA; 
eyes of the world will be on the elections, signal U.S. 
Congress members."  While predictably the press tried to draw 
Rep. Ballenger out on the possible effect of a Rios Montt win 
on CAFTA, Rep. Ballenger's response was that if Rios Montt 
wins in a free and fair election, he doubted that it would 
affect the vote on CAFTA.  Reps. Ballenger and Brady strongly 
emphasized the need for continued progress on 
counter-narcotics cooperation, saying Congress will give that 
issue significant consideration when debating a CAFTA 
agreement.  On narcotics certification, Rep. Ballenger told 
the press that encouraging progress has been made, and noted 
that it is President Bush's decision whether we certify or 
not. 
 
Comment 
------- 
 
16.  (C) This was a timely, extremely useful visit and we are 
grateful for the CoDel's interest and support.  The CoDel 
visit was well received by all sectors here, including the 
press, and supported USG interests and Embassy efforts on a 
range of issues.  For its part, the GOG rolled out the red 
carpet, with the VP hosting a lunch and Congressional Vice 
President Zury Rios hosting a gala dinner with all but the 
GANA Congress members present (they were invited but 
declined).  Guatemalans who had contact with the CoDel went 
away convinced of U.S. Congressional interest in Guatemalan 
democracy at this critical juncture:  in the wake of 
pre-electoral violence and in the context of the 
unprecedented opportunity offered by CAFTA negotiations.  At 
a reception hosted by the Ambassador for a broad 
cross-section of Guatemalan civil society, government members 
and opposition figures, Rep. Ballenger made a strong 
statement about the need for clean, peaceful elections, the 
importance of CAFTA to the region, and the need to address 
labor rights issues. 
 
17.  (U) This cable was not cleared by CoDel members prior to 
their departure. 
HAMILTON