PAN IN THE PROCESS OF OVERCOMING INTERNAL RIVALRY

C O N F I D E N T I A L SECTION 01 OF 03 GUATEMALA 000128

SIPDIS

DEPT FOR WHA/CEN

E.O. 12958: DECL: 01/14/2013
TAGS: PGOV PINR SNAR GT
SUBJECT: PAN IN THE PROCESS OF OVERCOMING INTERNAL RIVALRY

REF: A. 02 GUATEMALA 2891


B. 02 GUATEMALA 2977

C. 02 GUATEMALA 3158

Classified By: Political Officer Erik Hall for reason 1.5 (d)


1. (C) Summary: The National Advancement Party's two rival
leaders, presidential candidate Oscar Berger and party
Secretary General Leonel Lopez Rodas, announced their accord

SIPDIS
to work together in support of Berger's presidential
candidacy. In a symbolic media event on January 13,
bulldozers demolished a cement block wall between PAN
headquarters and the adjacent Berger campaign office. The
deal worked out between the two men consolidates the support
of Lopez loyalists for Berger's presidential candidacy in
exchange for Berger's support for other candidacies backed by
Lopez. While details about the deal are partial, they
apparently include an even split of Congressional
candidacies, consensual decision-making in the PAN's
executive committee, and future consideration of an accord on
the vice presidency and mayoralty of the capital. Key
private sector backers of Berger are happy with the accord,
and some hope Berger will now reach outside the PAN in
selecting his running-mate. By assuring party unity for the
moment, the agreement between the two men boosts Berger's
presidential prospects. End Summary.

Background
--------------


2. (SBU) The PAN's November primary generated significant
animosity between the two leaders of the Party -- Oscar
Berger and Leonel Lopez (see RefTels -- and neither side
sought a rapprochement with the other in the early days after
the election. Despite Berger's overwhelming primary victory,
Lopez Rodas continued to exercise significant control over
the party organization through his influence with its local
affiliates and his majority in the party's Executive
Committee. Several of Berger's financial backers echoed the
views of a Prensa Libre editorial calling on Berger to broker
peace with Lopez in order to preserve party unity. They
argued that Berger's unwillingness to make concessions to
Lopez threatened to split the party, making a loss in the
national elections more likely.

The Deal: Lopez Rodas' Version
--------------


3. (C) Leonel Lopez Rodas told us on January 12 that he and
Oscar Berger had reached a firm agreement on the following:

-- They will name an equal number of congressional
candidates on the national list with Berger getting even
numbers and Lopez getting odd numbers. The same applies to
the list for congressmen representing Guatemala City.

-- Mauricio Urruela (a Lopez supporter) is the candidate for
mayor of Guatemala City (for now). He will receive the full
support of the party. In early April, the PAN will conduct a
poll, and if it looks as if Urruela will not win, he will be
replaced by Berger's candidate, Eduardo Castillo.

-- Lopez Rodas is the favorite to become the Vice
Presidential candidate. However, if by April it looks as if
the PAN needs to bring in someone from outside to boost their
chances, then Lopez and Berger will make a decision on who to
ultimately fill this slot.

-- Lopez considers Berger's campaign manager, banker Eduardo
Gonzalez, to be the main barrier to effective communication
and collaboration between his camp and Berger's. Lopez
believes Gonzalez has been the strongest advocate of not
making concessions to Lopez that could later undermine
Berger's ability to carry out his own plan of government if
elected.

The Deal: View from Berger Supporters
--------------


4. (C) The Berger-Lopez Rodas agreement is viewed somewhat
differently by Berger supporters. Carlos Arias, CACIF's
Labor Commission chief and purportedly a political strategist
for Berger's major sponsors, gave PolOff a different account
of the Berger-Lopez Rodas deal in a discussion on January 10.
The sponsors, which Arias refers to as the "organized
private sector" (SPO),is comprised of the Gutierrez-Bosch
clan and others, including Peter Lamport, who acts as the
group's international affairs person. Cement king Enrique
Novella was part of the team before he died in a plane crash
in El Salvador late in 2002. According to Arias:

-- The SPO is happy that Berger has accommodated Lopez
Rodas. The deal includes an even split of Congressional
candidates and consensual decision-making in the PAN
executive committee (Lopez Rodas had a one-vote margin of
control there, but has agreed that Berger will be added to
the group).
-- The Vice Presidency is not part of the bargain. That
issue will be revisited in March or April. Arias implied
that there was an agreement that the Vice Presidential
candidate should come from outside the PAN (ruling out Lopez
Rodas). Ideally, it would be someone who could first unify
the small third parties and bring leftist votes to Berger.
Arias said his personal preference would be Alvaro Colom.
There have also been talks with Mayan organizations about
Rigoberto Queme, the indigenous Mayor of Quetzaltenango.
(Comment: Queme has registered a party to give him an option
to run for president. End Comment.)

-- Arias said that the PAN's candidate for Mayor of
Guatemala City was also not part of the Lopez Rodas-Berger
deal. He noted that Prensa Libre had a story saying Berger
had selected Mauricio Urruela as his preferred candidate.
Arias called Urruela "a thief" from a good family who is
hated by the SPO. He called the press article a trial
balloon.

-- Asked what role Eduardo Gonzalez would have in a
potential Berger administration, Arias said Gonzalez would
run it from within. He credited Gonzalez with engineering
Berger's primary victory.

-- The SPO invested heavily in the PAN primaries, and also
contracted a U.S. political consultant and Felipe Noguera, an
Argentine based in Miami for technical assistance. For now,
they have retained only Noguera's services.

-- SPO members recognize that to recoup power they must
focus on the 2003 election (supporting Berger) while also
looking beyond the presidency and cultivating Congressional
deputies in as many parties as possible. They are now
totally committed to legal, constitutional pursuit of lasting
influence in the GOG, "whatever their attitudes may have been
in the past."

-- The immediate task now is to finalize Berger's political
platform. In parallel, the SPO will also produce its own
proposals on a plan of government, including how to finance
it, and distribute it to all political parties.

-- With the new accommodation between Lopez Rodas and
Berger, the main losers, according to Arias, will be the
Unionist party. The Unionist split from the PAN was a
reaction by former president Arzu against Lopez Rodas. While
some Unionists will return to the PAN to support Berger
nevertheless, some Unionists closest to Arzu will not be
welcomed by Lopez Rodas.

-- According to Arias the SPO's "kings" of the private
sector have changed their thinking: first, by deciding to
work together for mutual rather than private interests, and
second, to accommodate to new rules of the game under
globalization by seeking influence by operating within the
democratic system. He believes it is in the interest of the
SPO for the USG to be aware of this democratic evolution and
hopefully to welcome it.


5. (C) Note: Felipe Noguera, the Argentine consultant, has
a long history as consultant to El Salvador's ARENA party,
according to Pollo Campero magnate Juan Luis Bosch in a
conversation with EconCouns. ARENA is the political model
the SPO is emulating, including its support for Berger and
the PAN, and resuscitating the local pro-private sector think
tank FUNDESA as a copy of El Salvador's FUSADES. Bosch paid
for Noguera's participation in CACIF's general annual
assembly a year ago, which was orchestrated around
presentations by Noguera y Associates that purported, by
"scientific" and "objective" criteria, to show that the PAN
was the only option for right-thinking Guatemalans. End
Note.

Berger Campaign Worried About Possible Narco-Financing
-------------- --------------


6. (C) We met on January 13 with Eduardo Gonzalez, Berger's
campaign manager, at his request. Gonzalez is worried that
the Berger campaign will be offered financing from dubious
sources that might have links to illegal activities, and
asked for Embassy assistance in "vetting" contributors. We
informed Gonzalez that the Embassy can not vet their campaign
contributors, and urged the PAN to check out campaign
contributors locally, as their supporters in distant areas
were likely to know who is a druggie and who isn't, and to
just say "no" if they have any doubts.


7. (C) Gonzalez also said that Berger is worried about how
to limit the influence of organized crime in their
government. We responded that the key is appointing honest,
reliable, incorruptible Ministers of Government and Defense,
passing effective conspiracy legislation, and pressing the
Courts and Public Ministry for results. Gonzalez said that
Berger is determined to carry out a profound reform of the
military, but that he would want USG advice in the process.
Once in Government, he said, Berger would need counsel from
the USG on which officers are close to Ortega Menaldo.
Gonzalez added that he is worried about the possible use of
violence by organized crime to keep Berger from taking
office.

Comment
--------------


8. (C) The Berger-Lopez Rodas agreement is an important
milestone for Berger, who emerges considerably strengthened
by the alliance. On January 15 a major national daily
supporting Berger reported polls showing Berger way ahead in
popular preferences, at 45%, followed by Colom, with 9.7% and
the FRG's Rios Montt at only 2.6% (Note: Guatemalan polls are
not historically reliable. End Note). A good vice
presidential pick would further boost Berger's chances.


9. (C) Berger also emerges from the accord hostage to Lopez
Rodas' influence until the election. Lopez Rodas detests
Gonzalez, who is widely viewed as the power behind the Berger
throne. We suspect that Gonzalez will play a far greater
role in a Berger government, should it come about, than Lopez
Rodas. Lopez knows that after the election he will be of
less value to Berger unless he is able to establish a firm
base in Congress for his allies. Gonzalez is not only the
architect of Berger's campaign, he is also the guy CACIF and
the SPO trusts to keep the next government running in their
direction.
Hamilton