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Cablegate: Mexico: Calderon Meets Pri Resistance On

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225181
2009-09-15 13:21:00
09MEXICO2701
Embassy Mexico
CONFIDENTIAL

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C O N F I D E N T I A L SECTION 01 OF 03 MEXICO 002701

SIPDIS

NSC FOR SENIOR DIRECTOR RESTREPO; DEPARTMENT FOR WHA DAS
JACOBSON, MEX DIRECTOR LEE AND INR HOHMAN.

E.O. 12958: DECL: 09/08/2019
TAGS: ECIN ECON EINT EPET MX PGOV PINR PREL
SUBJECT: MEXICO: CALDERON MEETS PRI RESISTANCE ON
CONTROVERSIAL CABINET CHANGES

REF: A. MEXICO CITY 2636
B. MEXICO CITY 2556
C. MEXICO CITY 2675.

MEXICO 00002701 001.2 OF 003


Classified By: Political Minister Counselor Gustavo Delgado.
Reason: 1.4 (b),(d).

1. (c) Summary: Following up his bold state of the Union
message ref A), President Calderon announced several expected
Cabinet changes, eliminated a number of government
secretariats, and recommended a series of economic measures
that presaged an imminent tough battle on the budget
(septel). While much of this appears to have been discussed
at some level with the opposition, the politically
strengthened Institutional Revolutionary Party (PRI) has come
out strongly against a two-percent anti-poverty tax and
joined a choir of objections against an unexpected nominee to
replace the attorney general. This cable provides some
political context on the naming and confirmation process and
initial bio information on the nominees for attorney general,
the director of the state oil holding company PEMEX and
Minister of Agriculture. Additional detailed information on
the three nominees is provided in septels. End Summary.


Controversial Nominee for Attorney General
--------------------------------------------

2. (c) In a long-anticipated change, Calderon replaced
Eduardo Medina Mora in the key attorney general post, naming
Arturo Chavez Chavez, a dark horse on the list of names that
had been floated in political circles for some time (ref a).
While Chavez has the prosecutorial experience -- he served as
Chihuahua's Attorney General from 1996-1998, and the PAN
credentials -- he was a loyal deputy of Government Minister
Carlos Abascal during the Fox years, his choice was totally
unexpected and politically inexplicable. Chavez has strong
detractors within the Mexican human rights community because
of his perceived failings in dealing with the murder of a
large number of women in Ciudad Juarez, at a time when he was
ratcheting up the fight against drug cartels. The killings
gained international attention and leading human rights
organizations at home and abroad charged Chavez with failing
to energetically pursue the cases and even claimed that he
had covered up evidence. Our sources in the EU office in
Mexico echoed charges of insensitivity, noting that Chavez
had scant communication with the human rights community when
the Fox administration pushed through a national human rights
strategy. On the other hand PAN insiders have characterized
him as extremely loyal, noting his prosecutorial success
against the cartels in the difficult environment of Chihuahua
and his reputation as a "decent" and "loyal" technocrat.

3. (c) While Calderon may have floated Chavez Chavez's name
with the opposition, it is unlikely the President received
any significant promise of support. The press criticized the
appointment, human rights groups raised an immediate
objection, and a variety of political figures and
commentators, even well-known supporters of the government,
voiced objections. Political insiders told us that the PRI
reportedly rejected Calderon's two top picks (the
frontrunners were Jose Francisco Blake Mora, Secretary of
Government for Baja California State, and Juan Miguel
Alcantara, Medina Mora's deputy) and were offended by the
brusque way in which they were consulted. Two theories for
why Chavez had made the cut circulated in PAN circles: one
was that Calderon, upset with the PRI's rejection of his
initial choices, had decided to push a loyal and experienced
PAN foot soldier. Gaining more traction with each passing day
are reports that Calderon might have put Chavez forward as a
challenge to the PRI. If the opposition blocks Chavez in the
Senate, Calderon would withdraw his name and resubmit Blake
or Alcantara. Proponents of this version argue that the PRI
would be hard-pressed to block a second nominee for such an
important post. Until the issue is decided, Alcantara will
serve as acting Attorney General.

MEXICO 00002701 002.2 OF 003


Changed Power Equation in the Senate
------------------------------------

4. (c) Whatever the back story, Chavez will likely face a
tough battle for confirmation in the Senate. While the PAN's
plurality in the Senate is unaffected by the Congressional
elections in July, the shift in the power balance resulting
from the PRI's unexpected sweep and ascendancy in the Chamber
of Deputies, alters the political terrain in the upper house
as well. PRI strong man Manlio Fabio Beltrones will be the
key player in the Senate and will likely use his increased
room for maneuver to take advantage of Chavez' weak political
support in the key back room negotiations that will determine
when or if the nominee gets on the Senate calendar. As of
yet,there is no indication of when the confirmation
proceedings might happen or if Chavez has the votes he will
need to get the simple majority support he needs. PRI and PRD
representatives have already stated publicly that they will
not give Chavez a "blank check." While there is no time limit
for Senate confirmation, PRD Senator Torres noted that the
process was not open ended and that it would be difficult for
the opposition to block the appointment of such a key member
of the security cabinet. PRI Party leader Beatriz Paredes
told the Ambassador that unless something scandalous is
uncovered in the hearings, Chavez would be badgered and
bloodied, but eventually approved.


New PEMEX Director a Sign of Changes to Come?
---------------------------------------------

5. (c) Calderon tapped Juan Suarez Coppel to be PEMEX's new
chief executive, replacing Jesus Reyes-Heroles. Suarez has
been roundly criticized for his missteps during an earlier
tenure as head of PEMEX's finances, with some critics
accusing him of having left the company in disarray. More
recently, he has come under the gun for similar mismanagement
of a private investment fund. Although a member of the PRI
like the outgoing Director, Suarez does not have the same
ties to the conservative and nationalistic wing of the PRI,
which some interpret as boding well for reform and a future
opening of the energy sector. Like Secretary of Energy
(SENER) Kessel, Suarez has a background in economics, as well
as a Master's degree from the University of Chicago. The
relationship between SENER and PEMEX could also improve due
to this change in leadership, given the fact that Secretary
Kessel and Reyes-Heroles disliked each other personally and
did not see eye to eye on the reform agenda. Suarez is
reportedly a long-standing business opponent of Mexican
billionaire and oligarch Carlos Slim, owner of the telecoms
monopolies Telmex and Telcel. Suarez does not need Senate
confirmation, but must be approved by the Council of
Administration, a cabinet-level body comprised of the
Secretary of Energy, Secretaries of the Economic-Related
Ministries, the Secretary of Social Development, and
representatives of the energy sector and the PEMEX union.

Back to the Future at Agriculture
---------------------------------

6. (c) Calderon named Franciso Javier Mayorga to replace
Agriculture Secretary Alberto Cardenas. During his tenure,
Cardenas had come under much criticism from small farmers and
was reportedly unpopular with his own staff (ref c).
Mayorga, a former Agricultural Secretary from 2005-2006 under
President Fox, is a welcome change. He is a strong supporter
of NAFTA, has broad experience in the field apart from his
former Ministry position, and previously worked well with the
Embassy. (See ref b for a more detailed description of
Mayorga's priorities.)


Streamlining Government?
------------------------

7. (c) In a bid to respond to charges, particularly from the

MEXICO 00002701 003.2 OF 003


PRI, that his administration has bloated the government
bureaucracy, President Calderon also proposed dissolving
three existing government Secretariats: Agrarian Reform,
Tourism, and Public Function (tasked with "reinventing
government"). Calderon has announced he will transfer the
Tourism Secretariat to the Secretariat of Economy, the
Secretariat of Agrarian Reform to the Secretariat of Social
Development, and will replace the Secretariat of Internal
Affairs with a Federal Comptrollers' Office, directly under
the supervision of the Office of the Presidency. By
eliminating these Secretariats and taking further austerity
measures Calderon hopes to cut approximately USD 13.9 billion
in expenditures (septel on details and analysis). Calderon
intends to put these savings towards housing projects, food
assistance, public health care, and day care centers for
impoverished Mexicans. Members of the opposition have voiced
skepticism, calling into question the projected savings and
warning of objections by rural sectors to the proposed shift
of the Agrarian Reform program.

More Changes to Come...
-----------------------

8. (c) Calderon is likely not finished with making changes to
his cabinet. His Secretary of the Economy,Ruiz Mateos, has
come in for much criticism by the business sector, but has
survived up to now because of his close personal friendship
with President Calderon. At the very least, Calderon will,
by the end of the year, need to identify replacements for the
President of the Bank of Mexico and two Supreme Court judges,
all of whose terms end in the coming months. In each
instance, he will need Senate approval for his nominations.
Separately, the President of the National Human Rights
Commission's (CNDH) term ends in October. The Senate's Human
Rights Commission will present a list of three candidates for
the Senate to consider. Pundits have long speculated Calderon
could look to tap Finance Minister Carstens to take over as
the Bank of Mexico President. In the end Calderon will need
to negotiate these important appointments with an opposition
sure to have competing priorities.

Comment
-------

9. (c) Calderon's cabinet changes and proposed cuts in the
government bureaucracy have scored mixed reviews both within
political circles and the general public. His new
Agricultural Minister enters the job with valuable experience
and benefits from his predecessor's relative unpopularity.
The new PEMEX director will have to overcome charges of past
financial mismanagement if he is to realize potential hopes
that he could help bridge PRI and PAN differences in tackling
Mexico's energy challenges. Calderon's nominee for Attorney
General will have an even tougher time gaining the consensus
support common for a high level Presidential appointment; he
faces a bruising confirmation battle if he even makes it onto
the Senate calendar. Chavez finds himself politically
isolated and fending off sharp criticism of his human rights
record. Political negotiations between the ruling party and
an emboldened opposition will ultimately determine how the
nominees fare and what they will be able to accomplish if or
when they assume their duties.
Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /

PASCUAL

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