GETTING AHEAD OF THE POLICY CURVE IN GUATEMALA

C O N F I D E N T I A L SECTION 01 OF 04 GUATEMALA 002040

SIPDIS

FOR WHA/AS NORIEGA AND DAS FISK FROM THE AMBASSADOR

E.O. 12958: DECL: 08/11/2013
TAGS: PREL PGOV PINR KDEM PHUM ETRD GT
SUBJECT: GETTING AHEAD OF THE POLICY CURVE IN GUATEMALA


Classified By: Ambassador John R. Hamilton for reason 1.5 (b) and (d).


1. (C) Summary: We need to be planning now as to how we
would respond to a variety of contingencies during the
campaign and as a result of the November 9 elections. I
believe we have in place most of the policy elements we need:
a sound public position on the Rios Montt candidacy in the
May 27 Boucher statement (relations with a Rios Montt
government would not be "cordial"); a robust ($2.4 million)
program of support to the elections, including both national
and international (OAS) election observation; grants to
monitor possible misuse of state resources; support to the
elections tribunal and a campaign to educate the rural poor
in particular that the ballot is genuinely secret. Among
these, the OAS mission may require plus-ing up from its
current $640,000 budget. Although legal challenges to the
candidacy of General Rios Montt are still being filed, the
political opposition, sensibly, has decided to oppose him at
the polls, not pull out of the elections. But in persistent,
loud cries of fraud, the opposition and civil society are
laying the groundwork for challenging the legitimacy of a
putative Rios Montt victory, however remote that appears now.
(He stands at 11% in the polls, with disapproval ratings
above 60%.) Our major challenge during the elections is to
encourage a high rate of participation. We are doing that
through campaigns to convince the public the ballot is secret
and that the safeguards against election-day fraud are
adequate.


2. (C) Rios Montt is determined to run and, if wins in a
reasonably fair process, we should recognize his victory and
deal with him, albeit coolly, and by putting down tough
markers on organized crime, corruption, human rights and
reform of the military. We need not/not be concerned that he
would refuse to deal with us: to the contrary, our problem
will be fending off a charm offensive designed to gain
legitimacy through U.S. acceptance of him. If he wins in a
badly flawed election, however, we should re-jigger CAFTA to
exclude Guatemala and go to the OAS to seek new elections (as
in the Dominican Republic in 1994) or, at the very minimum,
an OAS-monitored reform process (as in Peru in 2000). We
should set the stage for that contingency by having the OAS
election mission report to the OAS Permanent Council in
October.


3. (C) We should also plan for the more likely outcome: a
credible victory by, say, Oscar Berger or Alvaro Colom (a win
by any of the others is improbable). We should embrace such
a government publicly and provide significant new resources
for rule of law and anti-corruption programs, peace accords
implementation and other bilateral aid programs. However,
our responses would be handicapped by the historically low
levels of DA and ESF currently being planned for Guatemala,
especially relative to its more politically stable neighbors.
Therefore, I urge that WHY FY 2004 DA and ESF allocations be
flexible, in order to preserve the option of increasing them
significantly. Whoever wins, we need to support the
Commission (in formation) to investigate clandestine groups
and use our military-to-military programs to push the
Guatemalan military toward reform. End summary.

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

4. (C) The intense political confrontation that has
characterized the four years of the Portillo Government has
effectively polarized the ruling FRG and its opposition --
which includes practically all sectors of Guatemalan society.
This has led to an increasingly poisonous electoral
environment with growing violence (12 provincial party
activists dead already),mutual hostility, and cries of fraud
by the opposition to discredit FRG candidate Efrain Rios
Montt. Manipulation by the FRG and/and the opposition
temporarily transferred the electoral debate to the
judiciary, effectively damaging the credibility of both the
Constitutional Court and the Supreme Court, and generating
more public cynicism. Guatemala's now past that impasse, by
virtue of the Constitutional Court's July 30 slam dunk of the
Supreme Court, ordering the registration of Rios Montt.
Although legal challenges to his candidacy are still being
filed, the likelihood that one would at this point succeed is
remote. The opposition and civil society -- sensibly -- have
decided to contest his candidacy at the polls, not to boycott
the elections. Although the Guatemalan Constitution thus
takes a hit, the political result (assuming the General
loses) may be better for Guatemala.


5. (C) An unintended casualty of the warnings of potential
fraud has been the discrediting of the elections themselves.
A July poll shows that two-thirds of Guatemalans have no
interest in the elections and don't believe they will change
anything in Guatemala. Voter turnout (traditionally low)
will surely suffer, benefiting the party best able to turn
out its core supporters (probably the FRG). By convincing
the population that electoral fraud is already in progress,
the opposition is setting the stage to challenge the results
of the election in the event they lose. There is a risk that
the new government, whoever wins, may lack the legitimacy of
being recognized by all political actors.


6. (C) The polls currently give pro-business GANA candidate
Oscar Berger a 40% to 11% lead over FRG candidate Efrain Rios
Montt (though conventional wisdom and past experience tell us
that the polls underestimate the rural vote, where the FRG
has its strength). Alvaro Colom, of the centrist National
Union for Hope Party (UNE),could sneak into a second round
runoff against Berger, in which case he could emerge the
victor. Guatemala's unbroken tradition of not reelecting the
party in power and the large number of voters who say they
would never vote for the former dictator add to the view that
the chances of Rios Montt winning the presidency are not
high. However, with three months left in the campaign and
little popular enthusiasm for the other candidates, we can
not rule out the possibility of a genuine Rios Montt victory.


7. (C) Guatemala's history has led the political actors to
view elections as a winner-take-all, zero sum game. The FRG
is desperate to hold onto power, in part to protect itself
from investigations into Portillo-era corruption and to
ensure continued access to resources. The opposition also
sees this as its last chance to prevent "Colombianization,"
and therefore it is do or die for them, too. Guatemala lacks
good mediating institutions, as no one institution is above
the political fray, able to communicate, and serve as a go
between for all sides. The church, which plays this role in
some Latin American societies, suffers from weak leadership.
The international community has played this role effectively
since the negotiation of the Peace Accords, but at the cost
of Guatemalans not developing their own institutions to play
this role. The OAS is best positioned to serve as a
go-between, as it has the best combination of communication
to both sides. The U.S. has these credentials as well. But
there are risks for us if we get into the middle of this, as
neither side is open to concessions and each wants us to
impose its will on the other.


8. (C) On the up side, Guatemala has a good electoral law,
and the Supreme Electoral Tribunal (TSE) is viewed as
professional and honest. The magistrates are politically
divided (2 of 5 are hard-core FRG) and the three non-FRG are
hardly made of stern stuff, but the staff is highly
professional and neither the FRG nor the opposition question
the impartiality of how the TSE will carry out the elections.
The register of voters ("padron electoral") is in reasonably
good shape, and the use of indelible ink will control against
double voting. Each party is entitled to poll watchers who
can prevent fraud at the ballot box. One national and two
international election observation missions and at least two
quick counts will check fraud in the vote tabulation.


9. (C) The greatest concern of the opposition is the
potential for misuse of state resources for electoral ends.
In our view, that concern is much exaggerated, as the
Guatemalan state is chronically resource-scarce and has few
programs (fertilizers, ex-PAC payments and school lunches
aside) that in many countries lend themselves to electoral
manipulation. Anticipating this problem, we have awarded
several grants to NGO's to monitor and report publicly on
misuse of state resources. They are already reporting
publicly. We are also demarching the government about some
troubling early indications of possible misuse of state
resources; replacement of the professional, apolitical head
of Guatemala's national disaster relief organization (CONRED)
by an FRG political hack and Guatemala's recent move to pull
out of a joint customs operation with El Salvador, to set up
its own customs (and revenue-generating) control. Both
decisions were taken by the FRG hard-liner Vice President
Reyes Lopez, when President Portillo was out of the country.
Publicity, effective work of the TSE and a robust election
observation effort are the best ways to keep fraud in check.


10. (C) The use of violence, which has increased in recent
weeks, could become a tactic to keep the large swing vote at
home, and there is no easy cure for that. But as Codel
Ballenger did during their August 4-6 visit here, we will
continually hold up the example in our public diplomacy of
war-era El Salvador, where as many as 85% of registered
voters voted, despite threats. Public and private
admonitions to the FRG to control violence have received much
attention. We will use CAFTA and every other incentive and
disincentive at our disposal to induce decent FRG (and
opposition) behavior.

How do we respond if a large portion of the opposition and
civil society starts to boycott the elections?
--------------

11. (C) There have been calls by some segments of civil
society to boycott the elections, claiming that the
Constitutional Court decision in favor of Rios Montt has
already vitiated the process. None of the political parties
has joined this movement, in part because at this point they
believe the election will favor them. Short of abuse so
blatant as to totally discredit continuation of the election,
we should urge continued participation, i.e., not leaving the
field to the FRG. We will stay in close
coordination/communication with the observation missions.
The Embassy placed an op ed piece under the Ambassador's
signature in the August 8 press calling attention to
safeguards against fraud and urging voter participation,
rejection of cynicism and apathy. We have also inserted that
message into the op ed by Assistant Secretary Noriega.
Washington needs to give the same message to visiting
delegations and explain our position to the Washington NGO
community and to Congressional staff.

How do we deal with a Rios Montt government, if that comes to
pass?
--------------

12. (C) If current trends remain constant, Rios Montt will
not win the election. However, we should not discount the
possibility that it could happen. Under the assumption that
Rios Montt were elected in elections that were reasonably
free/fair, we should adopt a distinctly cool, cautious
approach, putting down stringent markers. Our biggest
problem will not/not be to repair damage to relations with
the FRG, but rather to deal with their charm offensive, their
wish to cooperate with us and to be embraced by us as their
avenue to internal and international legitimacy. At a
minimum, the Ambassador could be instructed to put down
markers in a meeting following the second round of the
elections (December 28). Sending a special emissary from
Washington is another possibility, although the optics of a
special emissary (squaring that with the May 27 Boucher
statement) are difficult. But we should not send a
high-level delegation to the inauguration. We can take as a
given the FRG/Rios Montt's profession of wanting to fully
cooperate on drugs, counter-terrorism, alien smuggling and
most international issues. They will also be committed to
CAFTA. But we should insist on their breaking all ties with
organized crime, fully supporting CICIACS (the commission to
investigate so-called clandestine groups),purging the police
of corrupt elements, reforming military intelligence and
making every possible effort to put an end to threats against
the human rights community.


13. (C) Whether his victory under these circumstances would
irreparably prejudice Congressional approval of CAFTA is
Washington's call. On the assumption that it would, we have
considered whether a direct private appeal -- possible
through a private emissary -- would yet dissuade Rios Montt
from running. We are convinced that it would not and that,
if it became public, could only make us look ingenuous for
having attempted it. Rios Montt did not go through the huge
effort to pack and pressure the Constitutional Court, and to
mount the July 24-25 protests only to withdraw now. He wants
to run, his wife and family want him to run, and his
followers in the FRG are convinced that they will virtually
disappear as an institution if he does not head the ticket.


14. (C) If Rios Montt wins in an election that does not meet
minimum standards, however, we should seek to invoke the
Inter-American Charter (or Resolution 1080) to seek new
elections (as in the Dominican Republic in 1994) or, at a
bare minimum, a resolution that would set up some sort of
OAS-brokered dialogue (as in Peru in 2000) that would
effectively put a Rios Montt government under international
observation. We should lay the groundwork now for that
contingency by asking the Secretary General to report to the
Permanent Council on the election process, once the OAS
election mission makes its first report at the beginning of
October. We could take that step sooner, should some new,
dramatic event alter the political landscape. The
assassination of a major candidate or prominent public
figure, for example, would surely constitute such an event
and, in that case, we should respond immediately and
positively to a request for FBI investigative assistance. We
should also lower the boom on a fraudulent Rios Montt victory
by revocation of GSP trade preferences and re-jiggering of
the CAFTA to exclude Guatemala. All sorts of lesser
responses to an unacceptably flawed election should be
planned in advance, including recall of the Ambassador and
non-attendance at a Rios Montt inauguration. The objective
would be not to let a Rios Montt victory through fraud stand
unchallenged.

How to engage with a good government?
--------------

15. (C) We should also plan now for a good outcome which, at
this stage, appears more likely. We will want to send a
high-level delegation to the inauguration (with a delegation
head who will symbolize our commitment to CAFTA/economic
prosperity; anti-corruption or aid on rule of law/public
security issues). We should review our bilateral programs to
see where they could be bolstered in the short term. Renewed
Guatemalan commitment to the Peace Accords could be rewarded
with increased assistance and a high-level delegation to a
mid-year Consultative Group Meeting. NAS and ICITAP programs
should be increased. The ATA anti-kidnapping training (an
assessment team was just here) is small, but could be of
invaluable assistance to a new government desperate to clamp
down on organized crime. We should also offer VIP protective
detail training Assuming no military misbehavior during the
campaign, the SouthCom Commander should visit in February or
March, to inaugurate the New Horizons exercise and to bolster
a new Government in the eyes of its military.

Using CICIACS to undermine the influence of organized crime
-------------- --------------

16. (C) Irrespective of who wins the elections, the next
government will be forced early on to confront organized
crime. We believe the establishment of CICIACS (the
Guatemalan/UN/OAS joint commission against clandestine
groups) offers the greatest hope for investigating and
containing the role of organized crime in politics and the
economy, and putting an end to the threats of against human
rights workers. We should give serious consideration to
providing new USG funding beyond the $500,000 currently
contemplated. We should also consider assigning a recently
retired prosecutor or some similarly qualified person as a
USG liaison to CICIACS during the duration of its work. We
need to start an inter-agency process now/now to give CICIACS
a product, shortly after its work starts, that details the
essence of what we know about clandestine groups and
organized crime in Guatemala. We should also consider
detailing a U.S. security expert to CICIACS itself.

Conclusion
--------------

17. (C) In conclusion, we face a difficult but by no means
impossible situation in Guatemala, and the opportunities to
advance our interests significantly are at least as good as
are the possibilities that things will get worse. A major
concern I have is that Guatemala-bashing and a tendency to
write Guatemala off have taken such strong hold in Washington
that, through budget planning, we may already have precluded
options for coming robustly to the support of a new, credible
government. I urge that ESF and DA allocation decisions for
FY2004 be marked with an asterisk for the moment, pending the
outcome of these elections, with a view toward upping them
considerably if a government we want to support comes to
office in January. In the meantime, we have good
communication with all the actors. That includes not only
the opposition, but the Portillo government and the FRG
itself. We will use every possible incentive and warning of
disincentives to coax them into acceptable election behavior.
HAMILTON