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Cablegate: Xxxxxxxxxxxx Concerned About Regional Politics

VZCZCXYZ0000
OO RUEHWEB

DE RUEHAC #0661/01 2661837
ZNY SSSSS ZZH
O 221837Z SEP 08
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7270
INFO RUCNMER/MERCOSUR COLLECTIVE PRIORITY
RUEHBO/AMEMBASSY BOGOTA PRIORITY 0630
RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 3204
RUEHCV/AMEMBASSY CARACAS PRIORITY 0380
RUEHLP/AMEMBASSY LA PAZ SEP 3883
RUEHUB/USINT HAVANA PRIORITY 0174
RHEHNCS/NSC WASHDC PRIORITY
RHMFISS/HQ USSOUTHCOM MIAMI FL PRIORITY
RHMFISS/USSOCOM MACDILL AFB FL PRIORITY

S E C R E T ASUNCION 000661

NOFORN
SIPDIS

WHA/FO CMCMULLEN, WHA/BSC MDRUCKER, BFRIEDMAN, MDASCHBACH

E.O. 12958: DECL: 3.3 (X1,X6)
TAGS: PGOV SNAR MARR ECON PREL MASS PA BL
SUBJECT: XXXXXXXXXXXX CONCERNED ABOUT REGIONAL POLITICS

Classified By: DCM Michael J. Fitzpatrick; reasons 1.4 (a),(b), (c) and
(d).

1. (S/NF) SUMMARY: XXXXXXXXXXXX sought an
unofficial meeting with Emboffs September 13 to discuss the
Bolivian crisis and regional spillover. XXXXXXXXXXXX said Venezuela
has a presence in virtually all of Bolivia's military bases,
and that Venezuela's center of operations is in San Andita.
The Venezuelans enter Bolivia via Chimore using a PDVSA plane
which has a special compartment to carry cash and arms to
Bolivia. XXXXXXXXXXXX said Bolivian Minister of the Presidency de la
Quintana manages the Venezuelan (and other) money flowing
into Bolivia. XXXXXXXXXXXX told the DCM that both Venezuelans and
Cubans are engaged in underground operations to organize
marches and foment social unrest and planned to blame such
unrest on the political opposition. He provided some
background on the Bolivian armed forces' annoyance with
Chavez' interference in Bolivia's internal affairs, and
described the Bolivian military's drug eradication efforts as
a farse. The Bolivian defense attach said La Paz instructed
its ambassador to Paraguay to tell Ambassador Ayalde, during
her September 12 courtesy call on him, that U.S. Ambassador
Goldberg was the problem, not the United States.

2. (S/NF) SUMMARY CONTINUED: Shifting his focus to Paraguay,
XXXXXXXXXXXX said a PDVSA plane arrived Asuncion's First Brigade Air
Base August 14 and departed August 16, and told the DCM about
a clandestine meeting between Presidents Chavez, Morales and
Lugo late on August 15 following Lugo's inauguration. XXXXXXXXXXXX
predicted that Lugo would follow the Chavez line, although he
declined to state why and admitted that it was early to make
such a prediction. XXXXXXXXXXXX said the United States has so far
failed to impact Morales with its policies, and that it
should come down hard on counternarcotics and bulk up USAID's
presence in Bolivia. XXXXXXXXXXXX appeared to be a thoughtful
and credible interlocutor, although he hails from Santa Cruz
and probably has some regional biases. END SUMMARY.

3. (S/NF) Embassy Asuncion officers met with XXXXXXXXXXXX
, at
his request Saturday September 13 to discuss the Bolivia
crisis and regional spillover. XXXXXXXXXXXX (strictly protect)
originally requested a meeting with Embassy DATT and
Ambassador, who XXXXXXXXXXXX knew had previously served in
Bolivia. Instead, DCM and Pol/Econ Chief joined the XXXXXXXXXXXX for
a late September 13 meeting. XXXXXXXXXXXX, who spent XXXXXXXXXXXX
at Fort Benning (and was named XXXXXXXXXXXX), and
whose XXXXXXXXXXXX and several siblings reside in the United
States, painted himself as an institutionalist worried about
recent events in Bolivia and the region. XXXXXXXXXXXX said he
worries Bolivia is adopting economic systems that ""haven't
worked anywhere,"" and that Bolivians' freedoms are being
undermined. He admires the United States, and said he felt
that someone should share information with us, as Bolivian
military officials have little ability to speak freely to
U.S. Embassy officials in La Paz. XXXXXXXXXXXX, who is first
in his class, is likely to be promoted to XXXXXXXXXXXX soon, but
believes he will be given an unimportant onward assignment
back in La Paz.

-------------------------------
VENEZUELAN PRESENCE IN BOLIVIA
-------------------------------

4. (S/NF) XXXXXXXXXXXX said Venezuela has a presence in
virtually all of Bolivia's military bases, and that
Venezuela's center of operations is at the Escuela del los
Condores (Special Forces School) in San Andita. San Andita,
he said, served as the base for the August terrorist attack
against a public radio in Yacuiba, for which a Bolivian first
lieutenant was implicated and put in prison. (NOTE:
XXXXXXXXXXXX said the officer had a carnet to work in the
presidential palace and was formally assigned to La Paz. END
NOTE). The XXXXXXXXXXXX said Venezuela was training Bolivian
civilians as paramilitaries-- providing them with training on
political organization doctrine and weapons/military tactics.
He also noted a strong Venezuelan presence in the
MAS-controlled Yapacani, where a Chavez confidant (an
ex-minister or vice minister) directs Venezuelan operations
and training. He reported that 43-48 Venezuelan military
officers are based in Riberalta purporting to serve as
military engineers. In the Beni, he said 18-25 Venezuelan
military officers claim to be working to prevent flooding;
approximately 80 Cubans are working in the same area. He
said Venezuela continues to provide training for Morales'
presidential guard regimen, and that exchanges are ongoing.
XXXXXXXXXXXX said and that around 200 Bolivian civilians have
departed San Andita for Caracas this year (most from the
Altiplano, Achchachi, El Alto and Oruro); while some visited
Venezuela for 45 days, at least one group stayed in Venezuela
for three months.

5. (S/NF) According to XXXXXXXXXXXX the Venezuelans enter
Bolivia via Chimore using a PDVSA plane which has a special
compartment to carry cash (dollars) and arms to Bolivia.
XXXXXXXXXXXX said Chavez publicly bought Bolivian cooperatives
with branches in Chimore and La Paz to change the dollars
into bolivianos. (NOTE: He thought the cooperatives operate
under the names Prodem, Finsa, or Banco del Sol. END NOTE).
The money, he said, is dispersed to lower level military
commanders for ""projects,"" but continues to flow after the
projects are completed. He estimated that USD 500,000-600,000
flows weekly into the Chapare from Venezuela, with each
military unit commander receiving between USD 10,000-50,000 a
month, depending on rank and level of command. XXXXXXXXXXXX
lamented that the military officers are pressured to join the
scheme, and that the cash payments are undermining the
Bolivian military as an institution. He also commented that
international financier George Soros (Amcit) is funding
activities in Bolivia.

6. (S/NF) XXXXXXXXXXXX said Bolivian Minister of the
Presidency Juan Ramon de la Quintana manages the Venezuelan
and other illicit money flowing into Bolivia. He said
Bolivian customs recently stopped several containers being
transported via land through Bolivia to Brazil containing
over USD 1.5 million in Chinese contraband. XXXXXXXXXXXX said
Quintana personally ordered Bolivian customs to release the
trucks. He also alleged that as minister of the presidency
and president of Bolivia's state television station, Quintana
manages several high-end contracts for purchases of goods,
which he uses to generate off-the-books revenues by
purchasing items for 3-4 times their value. XXXXXXXXXXXX also
reported that Venezuela's ambassador to Bolivia and
Venezuela's military attach frequently travel back and forth
between Bolivia and Venezuela.

7. (S/NF) XXXXXXXXXXXX told the DCM that both Venezuelans and
Cubans are engaged in underground operations to organize
marches and foment social unrest (possibly including deaths)
in order to blame such unrest on the political opposition.
He speculated that the Venezuelans and Cubans might engage in
tactics such as kidnappings and terrorist acts (possibly
including against American citizens) in order to set up the
victims as ""spies."" He cited a terrorist act to blow up a
gas duct to Brazil as an example of such an activity.

----------------------------
BOLIVIAN MILITARY REACTION
----------------------------

8. (S/NF) XXXXXXXXXXXX also provided some background on the
Bolivian armed forces' annoyance with Chavez' interference in
Bolivia's internal affairs. He said Bolivian Armed Forces
Commander Trigo went to President Morales and told him the
military was unhappy and demanded that he respond to Chavez'
actions and statements. Trigo reportedly told Morales that
his troops insisted on a public statement, and that if Trigo
didn't issue one, someone else would. Trigo, along with the
other armed forces commanders, offered their resignations to
Morales. Morales refused their resignations and approved
issuance of their statement on September 12, but criticized
Trigo for not being able to control his own people.
XXXXXXXXXXXX believed Morales will change all of Bolivia's
service commanders by December, and said Morales realizes
that doing so now would only add to the appearance of a
crisis. He said General Arambulo or General Ramiro de la
Fuente (Quintana ally) are leading candidates for Army
commander. He also noted that the military is increasingly
worried about its role in the conflict, and that if orders
are given to shoot, will want them in writing.

----------------
DRUG CONNECTIONS
----------------

9. (S/NF) XXXXXXXXXXXX asserted the Bolivian military's drug
eradication efforts are a farse. He said the units go out
and move around so it looks like they are eradicating, but
that they distort eradication numbers. XXXXXXXXXXXX felt sure
that Bolivian drug money is going to the FARC, which he said
is active in the Chapare. He said they had confirmed that
Colombians are working in the Chapare with Venezuelans and
campesinos to train them for social protests, and that they
knew the Colombians were not official. He also believed
Chavez is involved in the Bolivian drug trade.

------------------
PERSONA NON GRATA
------------------

10. (S/NF) XXXXXXXXXXXX said he read La Paz's
instructions to its ambassador in Paraguay, Marco Antonio
Vidaurre Noriega, which Vidaurre was to deliver to Ambassador
Ayalde during her September 12 courtesy call on him. The
instructions, according to XXXXXXXXXXXX, said U.S. Ambassador
Goldberg was the problem, not the United States. (NOTE:
Ambassador Vidaurre did not strictly comply with his
instructions in him meeting with the Ambassador, but
downplayed the escalation of conflict between the U.S. and
Bolivia and blamed the press for exaggerating it. END NOTE).
XXXXXXXXXXXX discounted the instructions, however, saying
that President Morales doesn't dislike only Ambassador
Goldberg, but President Bush and all Republicans in general,
and believes that Barack Obama is a better option for Bolivia
as he is not likely to be as hard line. He said Morales'
prohibition on U.S.-Bolivian mil-to-mil contact further
demonstrate that Morales does not actually believe that
Ambassador Goldberg is the problem. He said Goldberg's
insistence that Bolivia meet its international obligations
was an obstacle for Morales, and that narcos and others want
to operate freely in Bolivia. He explained that despite the
lack of any history of U.S. repression of Bolivians,
campesinos applaud their leaders for standing up to the
United States as they believe they have been subject to U.S.
neoliberal demands and associate the United States with
robbing Bolivia's natural resources.

-----------------------------------
VENEZUELAN ACTIVITIES IN PARAGUAY
-----------------------------------

11. (S/NF) Shifting his focus to Paraguay, XXXXXXXXXXXX said a
PDVSA plane (Falcon aircraft) arrived Asuncion's First
Brigade Air Base August 14, the day before Lugo's
inauguration, and departed August 16 (with no checks or
inspections), and told the DCM about a clandestine August 15
meeting between Presidents Chavez, Morales and Lugo. (XXXXXXXXXXXX
accompanied President Morales to the meeting
but waited outside). The three presidents traveled in and
out of three different locations (using back exits and
changing cars) before arriving at the Venezuelan ambassador's
residence. Once there, they met for 2 hours and then moved
to the Hotel Excelsior, where Chavez and Morales met for four
more hours (until 2 a.m.); Lugo departed the hotel earlier,
around 12:30 a.m.

12. (S/NF) XXXXXXXXXXXX predicted that Lugo would follow the
Chavez line, although he declined to state why and admitted
that it was early to make such a prediction. He said Lugo
had promised to get Chavez into Mercosur (NOTE: Paraguay's
congress will decide that issue) and worried about increasing
contact between Lugo and the leftist social movement Tekojoja
(part of Lugo's political alliance) and Bolivian social
movements. He said Tekojoja and the P-MAS are clearly
Chavez' contacts in Paraguay, and that a new radical group
called Nanduti (the Guarani word for spider web) has been
receiving funding and meeting at the Bolivian embassy in
Asuncion. He said Tekojoja claims to ""represent Lugo"" and
that September 11 Tekojoja representatives flew to Bolivia
via a private plane to work with social groups there. He
also said Lugo has traveled to Bolivia three times in past
months -- once before the April 20 election and twice after.
On the first occasion, when Lugo traveled with then-President
Duarte, Chavez made clear that he had picked Lugo over
Duarte, which created an evident strain between Duarte and
his successor.

-----------------------------
ADVICE FOR THE UNITED STATES
-----------------------------

13. (S/NF) XXXXXXXXXXXX said the United States has so far
failed to impact Morales by throwing out Bolivia's ambassador
to the United States (this meeting occurred days before the
USG decertified Bolivia). He asserted that cutting off
ATPDEA assistance would have no impact, as Chavez promised to
compensate Morales for the loss of U.S. assistance. He
pointedly asked us ""what it will take for the United States
to respond?"" XXXXXXXXXXXX said the Bolivian military wanted to
""make"" Morales and the opposition talk to each other, but
that they needed international support. However, he was
pessimistic about the ability of the OAS (which he said was
biased), European Union, United States, Mercosur, or the
Catholic Church to play that role. XXXXXXXXXXXX said that even
if both sides enter into a dialogue, the strife will continue.

15. (S/NF) XXXXXXXXXXXX said the United States should
come down hard on counternarcotics (or else Chavez and
narcotraffickers will flourish) and bulk up USAID's presence
in Bolivia. If we end our assistance, he said, the Bolivian
people will become so brainwashed that the country will have
no chance of recuperating in the next 20 years. He said we
should continue to work visibly where people want USAID to
work, and to focus on national leaders and
training/education. He encouraged the U.S. Embassy in La Paz
to look for opportunities for humanitarian assistance
projects that could be used to maintain ties with the
Bolivian military. He also said the Embassy should work with
student leaders, as well as some ""rational"" indigenous actors
such as Rufo Calle, Isaac Avalos and (the CA delegate who
fell and hurt his head). He warned that Ministers de la
Quintana, Rada and San Miguel are ""the most radical"" of
Morales' cabinet, and said he thinks things will get worse
for Bolivia, and possibly Paraguay as well.

--------
COMMENT
--------

16. (S/NF) XXXXXXXXXXXX appeared to be a thoughtful and
credible interlocutor, although he hails from XXXXXXXXXXXX and
probably has some regional biases. He also may be
exaggerating the Venzuelan angle in Bolivia in order to get
gain attention from the United States. On Paraguay, his
views of Lugo are pessimistic, although certainly not out of
line with concerns that some other opposition politicians
share about Lugo aligning himself with Chavez.

Please visit us at http://www.state.sgov.gov/p/wha/asuncion

AYALDE

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