ALEJANDRO TOLEDO BIOGRAPHY: POLITICAL ASSETS AND

S E C R E T SECTION 01 OF 03 LIMA 002475

SIPDIS

DEPARTMENT FOR INR/B

E.O. 12958: DECL: 4/24/05
TAGS: PINR PGOV PREL PGOV PREL PGOV PREL PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF
SUBJECT: ALEJANDRO TOLEDO BIOGRAPHY: POLITICAL ASSETS AND
LIABILITIES

REFS: (A) LIMA 1638


1. (U) CLASSIFIED BY AMBASSADOR JOHN HAMILTON, REASONS 1.5
B AND D.


2. (S) SUMMARY: PRESIDENTIAL ASPIRANT ALEJANDRO TOLEDO'S
CHARISMA, ABILITY TO APPEAL TO VARIOUS AUDIENCES, INCLUDING
PERU'S INDIGENOUS AND POOREST COMMUNITIES, AND POSITIVE
HUMAN RIGHTS AND ECONOMIC MESSAGE HAVE HELPED TO CATAPULT
HIM INTO A RUN-OFF ELECTION WITH PRESIDENT FUJIMORI. HIS
NEGATIVES INCLUDE A HOT TEMPER, A TENDENCY TOWARD LECTURING,
SOME DOUBTS ABOUT HIS ECONOMIC CREDENTIALS, AND A REPUTATION
FOR HAVING BEEN A PHILANDERER AND OCCASIONALLY HEAVY
DRINKER. WHILE TOLEDO WON FAVOR WITH MIDDLE CLASS STUDENTS
FOR DONNING A RED HEAD BAND AND LEADING 50,000 PROTESTORS TO
THE PRESIDENTIAL PALACE AFTER THE POLLS CLOSED APRIL 9, PRO-
FUJIMORI SUPPORTERS HAVE ALREADY BRANDED HIM A RABBLE ROUSER
FOR THE SAME REASON. PERU 2000 OFFICIALS HAVE ALSO TRIED TO
LINK TOLEDO TO THE HIGHLY CONTROVERSIAL EX-PRESIDENT ALAN
GARCIA, AND TV TALK SHOWS REVISITED ALLEGATIONS THAT HE
REFUSED TO RECOGNIZE PATERNITY AND PROVIDE SUPPORT TO AN
ILLEGITIMATE DAUGHTER. OTHER PRO-GOVERNMENT PRESS REPORTED
HE AND HIS WIFE WERE DIVORCED AND HAVE NOT REMARRIED.
DOMESTIC VIOLENCE AND DRUG USE ARE AMONG OTHER, UNCONFIRMED
RUMORS THAT COULD SURFACE BETWEEN NOW AND THE NEXT ROUND.
END SUMMARY

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DARLING OF THE INTERNATIONAL PRESS
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3. (SBU) TOLEDO'S EARLY YEARS READ LIKE (AND HE PORTRAYS
THEM AS) A HOLLYWOOD SCRIPT. (NO LESS THAN 10 U.S. DAILIES
AND 2 INTERNATIONAL WEEKLIES INCLUDED HIS RAGS-TO-RICHES
STORY IN THEIR COVERAGE OF PERU'S ELECTIONS.) BORN MARCH
28, 1946, TO PARENTS OF 16 CHILDREN (SEVEN OF WHOM DIED
PREMATURELY) IN THE SMALL HIGHLAND HAMLET OF CABANA (ANCASH
DEPARTMENT),HE GREW UP IN THE SEAPORT TOWN OF CHIMBOTE. BY
AGE EIGHT, HE WAS WORKING PART TIME AS A SHOESHINE BOY TO
SUPPLEMENT THE FAMILY'S INCOME. IN SECONDARY SCHOOL, HE WON
RECOGNITION FOR HIS WRITING SKILLS AND SOON AFTER LANDED A
JOB WORKING FOR A LOCAL PAPER. IN HIS LAST YEAR OF HIGH
SCHOOL (1962-63),HE WON (WITH THE HELP OF U.S. PEACE CORPS
VOLUNTEER JOEL MEISNER) A ONE-YEAR ROTARY SCHOLARSHIP TO SAN
FRANCISCO UNIVERSITY TO STUDY ECONOMICS.


4. (SBU) WORKING DURING HIS FIRST YEAR OF UNIVERSITY
STUDIES AS A PART-TIME GAS STATION ATTENDANT, HE PLAYED HIS
WAY ONTO THE UNIVERSITY'S SOCCER TEAM AND WON A SCHOLARSHIP.
HE GRADUATED IN 1970 WITH A BA IN ECONOMICS AND BUSINESS
ADMINISTRATION AND THEN STUDIED AT STANFORD, WHERE HE
COMPLETED MASTERS DEGREES IN HUMAN RESOURCES (1971) AND
ECONOMICS (1972) AND MARRIED FELLOW STANFORD STUDENT ELIANE
KARP, A BELGIAN BORN AMCIT, IN 1972. STARTING IN 1973, HE
WORKED ON A PHD IN HUMAN RESOURCES AND COMPLETED HIS
COURSEWORK AND EXAMS IN 1976. (NOTE: TOLEDO RECEIVED
RESEARCH GRANTS FROM USAID AND THE FORD FOUNDATION DURING
1973-76. WE HAVE NO RECORDS ON HOW HE FINANCED HIS STUDIES
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AT STANFORD BETWEEN 1971-1972. TOLEDO DID NOT COMPLETE HIS
PHD IN ECONOMICS OF HUMAN RESOURCES UNTIL 1992.)


5. (SBU) BETWEEN 1976 AND 1991, HE WAS A LIMA-BASED
CONSULTANT TO THE UN, WORLD BANK, IBD, AND WORKED FOR THE
ILO IN GENEVA AND THE OECD IN PARIS. TOLEDO THEN TAUGHT AS
A PERMANENT PROFESSOR AT THE GRADUATE SCHOOL OF BUSINESS
ADMINISTRATION (ESAN) IN LIMA FROM 1991-1994. DURING THIS
SAME PERIOD HE WAS A VISITING SCHOLAR AT HARVARD. (NOTE:
TOLEDO DID A STUDY ON MACRO ECONOMIC ISSUES IN 1988 FOR
USAID; HE ALSO CONSULTED FOR USAID WHILE AT HARVARD.)


6. (SBU) TOLEDO CLAIMS THAT, AFTER FINISHING HIS PHD
COURSEWORK IN 1976 (AND IN BETWEEN CONSULTING JOBS),HE
ADVISED SEVERAL (UNSPECIFIED) LATIN AMERICAN COUNTRIES. HIS
CV SAYS BETWEEN 1983-1991 HE "PROVIDED PERIODICAL TECHNICAL
AND INDEPENDENT ADVICE TO PERU'S PRESIDENTS BELAUNDE,
GARCIA, AND FUJIMORI," ON EXTERNAL DEBT, STRUCTURAL REFORMS,
AND ECONOMIC GROWTH STRATEGIES. (NOTE: FUJIMORI DENIED THAT
TOLEDO HAD ANY ASSOCIATION WITH HIS GOVERNMENT.) HE ALSO
WORKED AS THE DIRECTOR GENERAL AND VICE MINISTER OF
ECONOMICS AND LABOR STUDIES AND THE MINISTRY OF LABOR (1981-
1983).

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ACTION INR-00

INFO LOG-00 NP-00 ACQ-00 CIAE-00 SMEC-00 INL-01 DODE-00
DOEE-00 DOTE-00 WHA-00 DS-00 EB-00 EUR-01 FAAE-00
FBIE-00 VC-01 TEDE-00 LAB-01 VCE-00 AC-01 NRRC-00
NSAE-00 PM-00 ACE-00 SSO-00 SNIS-00 NISC-00 PMB-00
DSCC-00 DRL-02 G-00 NFAT-00 SAS-00 /007W
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FM AMEMBASSY LIMA
TO SECSTATE WASHDC IMMEDIATE 4093
INFO AMEMBASSY BOGOTA
AMEMBASSY CARACAS
AMEMBASSY BRASILIA
AMEMBASSY QUITO
AMEMBASSY SANTIAGO
AMEMBASSY BUENOS AIRES
AMEMBASSY LA PAZ
AMEMBASSY MOSCOW
USCINCSO MIAMI FL

S E C R E T SECTION 02 OF 03 LIMA 002475

SIPDIS

DEPARTMENT FOR INR/B

E.O. 12958: DECL: 4/24/05
TAGS: PINR PGOV PREL PGOV PREL PGOV PREL PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF
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SUBJECT: ALEJANDRO TOLEDO BIOGRAPHY: POLITICAL ASSETS AND
LIABILITIES


7. (C) TOLEDO RAN FOR PRESIDENT IN 1995, COMING OUT OF
NOWHERE TO PEAK AT 15 PERCENT BEFORE FADING TO THREE PERCENT
(AFTER BEING ACCUSED OF TIES TO THE CLAE PYRAMID SCHEME --
SEE BELOW) AND A FOURTH-PLACE FINISH. HIS CAMPAIGN CENTERED
ON JOB CREATION AND INSTITUTIONALIZING PERU'S PRIVATIZATION
PROGRAM. ACCORDING TO EMBASSY FILES, TOLEDO MAINTAINED
CLOSE CONTACTS TO THE FUJIMORI GOVERNMENT AFTER THE ELECTION
AND WAS MANEUVERING TO LAND A HIGH-PROFILE MINISTRY OF TRADE
OR FINANCE JOB THAT ULTIMATELY NEVER MATERIALIZED. HE
RETURNED TO HIS JOB AT ESAN AND BECAME DIRECTOR OF THE
RESEARCH AND INTERNATIONAL DEVELOPMENT DEPARTMENT IN 1998.
A RELIABLE AND REGULAR EMBASSY CONTACT, HE VOICED HIS
INTENTION TO RUN FOR PRESIDENT IN 2000 TO THE DCM IN
NOVEMBER 1996.

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BLACK MARK I: THE CLAE SCANDAL
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8. (SBU) TOLEDO'S REPUTATION IN THE 1995 ELECTIONS SUFFERED
FROM ALLEGATIONS OF TIES TO THE 1993 COLLAPSE OF A MULTI-
MILLION DOLLAR PYRAMID SCHEME (CALLED CLAE -- THE LATIN
AMERICAN CENTER OF BUSINESS ADVICE) IN WHICH THOUSANDS OF
PERUVIANS LOST THEIR SAVINGS AND SEVERAL PEOPLE WERE
CONVICTED OF FRAUD. TOLEDO'S DIRECT INVOLVEMENT WAS NEVER
ESTABLISHED, BUT HE HAD WELL KNOWN PERSONAL (AND ALLEGED
PROFESSIONAL) TIES TO CLAE'S OWNERS, CARLOS MANRIQUE AND HIS
WIFE VIOLETA MORI, BOTH OF WHOM ARE IN JAIL AND HAVE
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SUBSEQUENTLY STATED THAT TOLEDO HAD WORKED FOR CLAE (A
CHARGE HE DENIES). TOLEDO HAS BEEN ACCUSED OF HELPING HIS
BROTHER WITHDRAW MONEY BEFORE CLAE'S COLLAPSE. THE CLAE
STORY RESURFACED IN MARCH 2000 AS TOLEDO'S POLL NUMBERS
GREW. PRO-GOVERNMENT DAILY EXPRESO AND YELLOW PRESS PAPERS
PRINTED PICTURES OF TOLEDO AND MANRIQUE IN BOSTON. TOLEDO
ADMITTED THAT HE AND MANRIQUE HAD BEEN PERSONAL FRIENDS BUT
DENIED ANY BUSINESS ASSOCIATION. THE CLAE STORY RE-
CIRCULATED DOUBTS ABOUT TOLEDO, BUT NOTHING NEW TURNED UP.

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ILLEGITIMATE CHILD, DIVORCE
--------------


9. (C) ON MARCH 28, LUCRECIA OROZCO ZAPATA APPEARED ON A
POPULAR DAYTIME TV TALK SHOW AND ALLEGED THAT TOLEDO HAD
FATHERED HER SIX-YEAR OLD DAUGHTER AND REFUSED TO RECOGNIZE
AND SUPPORT HER. THOUGH TOLEDO HAD WON TWO PATERNITY COURT
JUDGMENTS SEVERAL YEARS AGO, THE SHOW'S HOSTESS, LAURA
BOZZO, CLAIMED THE COURTS WERE CORRUPT AND HAD IGNORED A
POSITIVE BLOOD TYPE MATCH. BOZZO LED THE TV STUDIO AUDIENCE
IN CHANTS CALLING ON TOLEDO TO TAKE A DNA TEST FOR SEVERAL
DAYS THEREAFTER. TOLEDO REFUSED COMMENT ON THE CHARGES,
NOTED THE COURTS' PREVIOUS RULINGS, AND SAID HE HAD ONLY ONE
WIFE AND CHILD. OUR FILES CONTAIN NO MENTION OF OROZCO, BUT
EMBASSY SOURCES TELL US THAT TOLEDO DATED HER OPENLY IN THE
EARLY 1990S AFTER HE AND HIS WIFE SEPARATED SOMETIME IN

1988.


10. (SBU) IN THE LAST TWO WEEKS LEADING TO THIS YEAR'S
ELECTIONS, EXPRESSO BROKE A STORY THAT TOLEDO AND HIS WIFE
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HAD DIVORCED IN 1992, COMPLETE WITH A PHOTOCOPY OF THE
WASHINGTON, DC DIVORCE DECREE. EXPRESSO CLAIMED THAT TOLEDO
HAD COMMITTED PERJURY WHEN HE CLAIMED TO BE MARRIED IN AN
APPLICATION FOR OFFICIAL DOCUMENTS IN 1997. TOLEDO REFUSED
COMMENT ON WHETHER HE AND KARP HAD EVER DIVORCED OR
REMARRIED.

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OTHER DIRTY LAUNDRY
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11. (C) TOLEDO'S DOMESTIC PROBLEMS WERE WIDELY KNOWN WITHIN
THE MISSION COMMUNITY BECAUSE BOTH HE AND HIS WIFE HAD TIES
TO USAID. ELIANE KARP WORKED FOR USAID LIMA FROM 1985-87
AND HAD A REPUTATION FOR BEING BRILLIANT BUT UNRELIABLE AND
DIFFICULT TO WORK WITH. SHE SPOKE FLUENT QUECHUA AND WAS
ACTIVE IN LIMA'S SMALL JEWISH COMMUNITY. MISSION STAFF
RECALL HER HAVING MARITAL DIFFICULTIES. THERE WERE ALSO
STORIES THAT SHE WAS A VICTIM OF SPOUSAL ABUSE. USAID
DECIDED NOT TO RENEW HER CONTRACT IN 1987 (MAINLY BECAUSE
HER WORK ATTENDANCE BECAME TOO UNPREDICTABLE AS HER MARRIAGE
CAME UNDER GROWING STRESS) AND IN JANUARY 1988 SHE SEPARATED
FROM TOLEDO AND FOUND EMPLOYMENT IN THE WORLD BANK IN
WASHINGTON. EVENTUALLY SHE MOVED TO ISRAEL UNTIL SHE AND

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ACTION INR-00

INFO LOG-00 NP-00 ACQ-00 CIAE-00 SMEC-00 INL-01 DODE-00
DOEE-00 DOTE-00 WHA-00 DS-00 EB-00 EUR-01 FAAE-00
FBIE-00 VC-01 TEDE-00 LAB-01 VCE-00 AC-01 NRRC-00
NSAE-00 PM-00 ACE-00 SSO-00 SNIS-00 NISC-00 PMB-00
DSCC-00 DRL-02 G-00 NFAT-00 SAS-00 /007W
-------------- 4F97BD 251231Z /38
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FM AMEMBASSY LIMA
TO SECSTATE WASHDC IMMEDIATE 4094
INFO AMEMBASSY BOGOTA
AMEMBASSY CARACAS
AMEMBASSY BRASILIA
AMEMBASSY QUITO
AMEMBASSY SANTIAGO
AMEMBASSY BUENOS AIRES
AMEMBASSY LA PAZ
AMEMBASSY MOSCOW
USCINCSO MIAMI FL

S E C R E T SECTION 03 OF 03 LIMA 002475

SIPDIS

DEPARTMENT FOR INR/B

E.O. 12958: DECL: 4/24/05
TAGS: PINR PGOV PREL PGOV PREL PGOV PREL PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF
SECRET

PAGE 02 LIMA 02475 03 OF 03 251229Z
SUBJECT: ALEJANDRO TOLEDO BIOGRAPHY: POLITICAL ASSETS AND
LIABILITIES

TOLEDO RECONCILED IN LATE 1996.


12. (C) SINCE THEN KARP HAS WORKED AS A MANAGER IN AN
AGRICULTURE BANK. THOUGH CREDITED WITH HELPING TOLEDO'S
CAMPAIGN BY USING HER KNOWLEDGE OF PERU AND FLUENT QUECHUA
TO APPEAL TO VOTERS, SHE HAS COME UNDER ATTACK FROM THE
YELLOW PRESS AND OTHERS FOR HER LIBERAL VIEWS AND STATUS AS
A FOREIGNER. SOURCES CLOSE TO TOLEDO CONFIRM THAT KARP
URGED HER HUSBAND TO DON A HEADBAND AND LEAD PROTESTERS IN A
MARCH ON THE PRESIDENTIAL PALACE AFTER THE POLLS CLOSED
APRIL 9, A DECISION THAT MANY PERUVIAN OPINION MAKERS
FOUND QUESTIONABLE.

13. (S) A FUJIMORI POLLSTER AND OTHER PRO-GOVERNMENT
SOURCES HAVE CONVEYED TO CURRENT AND FORMER EMBOFFS THAT THE
GOP HAS EVIDENCE OF DRUG (INCLUDING COCAINE) USE BY TOLEDO;
JUST WHEN THE DRUG USE IS SUPPOSED TO HAVE OCCURRED IS
UNCLEAR. IT MAY HAVE BEEN DURING TOLEDO'S STUDENT DAYS AT
THE UNIVERSITY OF SAN FRANCISCO AND STANFORD 25-30 YEARS
AGO. THUS FAR, THERE IS NOTHING TO SUGGEST HE CONTINUED,
BUT THIS ISSUE COULD PROVE EXPLOSIVE IN THE LEAD UP TO THE
SECOND ROUND.

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COMMENT
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14. (S) THE FUJIMORI CAMP SEEMS INTENT ON MAKING CHARACTER A
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CENTRAL ISSUE IN THE SECOND ROUND (I.E., CONTINUE WITH SMEAR
TACTICS),AS EVERYONE FROM VICE PRESIDENTIAL CANDIDATE
TUDELA ON DOWN HAS FOUND REASONS NOT TO SUPPORT HUMAN RIGHTS
OMBUDSMAN JORGE SANTISTEVAN'S PROPOSAL FOR AN ELECTORAL CODE
OF CONDUCT AND ETHICS TRIBUNAL. FUJIMORI'S SUPPORTERS HAVE
ALREADY PORTRAYED TOLEDO AS A RABBLE ROUSING DEMAGOGUE CUT
IN THE MOLD OF ALAN GARCIA. WE EXPECT PRO-GOVERNMENT
JOURNALISTS TO EGG TOLEDO TO ISSUE AN ON-THE-RECORD DENIAL
OF DRUG USE AND DOMESTIC VIOLENCE, FOLLOWED BY LEAKING OF
WHATEVER EVIDENCE THE GOVERNMENT HAS. FOR HIS PART, TOLEDO
IS LIKELY TO REFUSE ANY COMMENT ON THE ALLEGATIONS. WE
SHOULD ALSO REFUSE COMMENT.

HAMILTON

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