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Cablegate: Benefit Package Defuses Talk of Police Strike, But

This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 LIMA 004163


E.O. 12958: DECL: 09/23/2015

REF: A. LIMA 3735
B. LIMA 3337

Classified By: Polcouns Alexander Margulies. Reason: 1.4(d).

1. (C) SUMMARY: President Alejandro Toledo, on 9/19,
defused growing talk of a nationwide police strike by
announcing a 284 million Soles (USD 86 million) package of
back-pay, salary increases, benefits and operational funding.
Police sources tell us that, while the immediate crisis has
passed, unrest continues in the ranks and additional
attention needs to be paid to police needs to ensure
stability and address the country's "security deficit."
Finance Minister Fernando Zavala has warned that other
agencies will have to tighten their belts over the coming
year as the GOP will raid their coffers to pay for the police
increases. END SUMMARY.

2. (U) Presidential political advisor Juan de la Puente
first raised concern over a possible strike by the National
Police (PNP) during an 8/31 meeting with Polcouns. Over the
following two weeks talk of a PNP nationwide work stoppage
increased, spurred by threats from representatives of
organizations of active-duty and retired officers' spouses
and warnings from the National Federation of NCOs,
Specialists and Civilian Employees of the PNP that it would
support a strike starting on 9/30. The opposition APRA party
added fuel to the fire when its Political Director (and
Congresswoman) Mercedes Cabanillas met with police family
members and expressed sympathy for their demands, although
party leader Alan Garcia quickly declared that APRA opposed a
police strike.

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3. (C) National Security Advisor Gen.(R) Luis Arias
Graziani, in a 9/14 conversation with Emboffs, acknowledged
widespread unrest in police ranks, which he said was being
exacerbated by extreme left-wing militants linked to one
Celso Pastrana. Pastrana is a former police sergeant who led
a three-day police strike in 1987, escaped from prison in
1992, obtained political asylum in Sweden, and returned to
Peru in 2004 after passing through Cuba and Venezuela (though
no/no direct link to either Fidel Castro or Hugo Chavez has
been uncovered to date). He is the founder/leader of the
Nationalist Patriotic Front, a group reportedly made up
chiefly of other veterans of the 1987 strike and their

4. (U) There is general agreement that PNP members have
legitimate grievances. According to the weekly "Caretas,"
the GOP owes police personnel over 100 million Soles in
unpaid vacation benefits (dating from as far back as 1998),
41 million Soles for TDY and moving expenses, and 207 million
Soles for uniforms. In addition, the Military-Police Pension
Fund is technically bankrupt due to massive embezzlement
during the Fujimori regime and 1.1 billion Soles in unpaid
GOP contributions. The take-home pay for an NCO is 690
Soles/month (USD 212).

5. (U) Prime Minister Pedro Pablo Kuczynski (PPK) postponed
a planned trip to Washington for a week to work up an
assistance package sufficient to head off the strike. This
package was announced by President Toledo on 9/19, following
the latter's return from the UNGA. It totals 284 million
Soles (104 million Soles in 2005 and 180 million in 2006),
which will include:

-- 37 million Soles in back-vacation pay;
-- a one-time 150 Soles bonus for each PNP member;
-- a 110 Soles (USD 34) monthly pay increase in 2006 (60
Soles/month in January, another 50 Soles/month starting in
July); and
-- 47 million Soles for operational expenses (gasoline, TDY
pay, lunch costs).

6. (U) Toledo's announcement effectively defused the threat
of an immediate strike. Oscar Pedraza, head of the National
Federation of NCOs, Specialists and Civilian Employees of the
PNP, issued a communique on 9/22, which characterized the
GOP's offer as inadequate, but nonetheless concluded that the
organization had decided to "suspend the police strike and
hope that the authorities honor their public commitment."

7. (C) NAS police contacts tell us that, while a PNP strike
has been averted for the moment, serious unrest continues in
the ranks. They point to dissatisfaction with the GOP's new
program to enhance citizen security, a central point in both
President Toledo's 7/28 State of the Nation speech (Ref B)
and Prime Minister Kuczynski's presentation to Congress (Ref
A). They explained that the rank-and-file are upset with
limits that new Police Commander Gen. Luis Montoya has placed
on police moonlighting after-hours, which significantly
supplements officer's meager salaries, and rent-a-cop
schemes, under which high-level officials pocket considerable
sums for providing off-duty police to private companies.

8. (C) Vice Minister of the Interior Jose Luis Avilez, in a
9/23 meeting with DCM, stated that the danger of a strike had
passed, and the GOP was now concentrating on finalizing and
implementing its citizen security initiative. MinInt
Intelligence Directorate (DIGIMIN) Chief Gen. Jorge Cardenas,
in a 9/23 meeting with Deputy Polcouns, said that he did not
see any possibility of a strike at this point. Active-duty
officers on the whole are pleased with the salary increase,
and most of the discontent has been coming from retired
officers, through their wives' organization, who are
concerned that their pensions will not increase in line with
salary raises. Cardenas did not/not agree that officers are
concerned that their outside employment will be done away
with; everyone recognizes that this is a necessary evil,
although there is agreement that it must be kept within
reasonable bounds so that officers do not arrive for their
shifts exhausted. Cardenas added that a lot of high-level
consultation has gone into improving the PNP's lot. He has
personally briefed Toledo and the PM and met with Finance
Ministry representatives to find new ways to loosen up more
money for the police. Cardenas believes that Toledo has
bought into the premise that new training academies should be
opened (mentioning Cajamarca and Huancavelica) to graduate
5000-6000 new officers annually so as to keep up with
attrition and address the country's "security deficit." He
concluded that the GOP also intends to address PNP social
welfare issues, such as health and housing.

9. (SBU) COMMENT: Improving citizen security is the GOP's
top domestic initiative for the remainder of Toledo's term.
Prime Minister Kuczynski and new Interior Minister Romulo
Pizarro have publicly laid their jobs on the line over this
issue, vowing to demonstrate improvement over the next few
months or accept the political responsibility for failure.
The GOP's stance left it open to the counter from PNP
proponents demanding back-pay, salary increases and other
benefits. The Government has managed to cobble together a
substantial package for the police, but, as Finance Minister
Zavala has noted, the result will be felt by other government
agencies, which will see their budgets cut to pay for the PNP
increases. There is now a growing focus on the Armed Forces,
whose defenders are already starting to ask when
servicemembers will receive similar treatment. END COMMENT.


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