PARAGUAY POLITICAL AND ECONOMIC UPDATE, SEPTEMBER

UNCLAS SECTION 01 OF 02 ASUNCION 001219

SIPDIS

SENSITIVE

STATE FOR EB/IFD/OIA
STATE PASS TO USAID FOR LAC/AA
STATE PASS TO USTR FOR LYANG
NSC FOR SUE CRONIN
TREASURY FOR OSIA MAUREEN WAFER
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR
COMMERCE FOR ITA SARAH COOK
SOUTHCOM FOR POLAD DAN JOHNSON

E.O. 12958: N/A
TAGS: PGOV PREL ECON MASS MARR KDEM KJUS PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, SEPTEMBER
17-25

REF: A. ASUNCION 01047


B. ASUNCION 00412 AND PRECEDING


1. (U) Summary:
-- Colorado Deputy Receives Light Sentence
-- Dissident Liberals Return to the Fold
-- Congress Approves Controversial Expropriation
-- Youth March to Protest U.S. Military Presence
-- MEDRETE Sends Message of Hope

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Colorado Deputy Receives Light Sentence
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1. (U) On 9/18, Judge Silvio Flores of Ciudad del Este
imposed a suspended sentence on Colorado Deputy Julio Colman,
who was embroiled in a scandal in early February involving a
suspect load of timber and threats to a prosecutor (ref B).
The Chamber of Deputies voted to strip Colman of his immunity
from prosecution in March, permitting Environmental
Prosecutor Maria Bernarda Alvarez to investigate him on
charges of trafficking in timber. A plea-bargain arrangement
suspends Colman's sentence but requires him to plant 5,000
trees in Curuguaty Department within one year. Several
lawyers, who preferred to remain anonymous, reportedly
accused the prosecutor and the judge of giving in to
political pressure and a bribe.


2. (SBU) Emboff met with Martha Ferrera, a member of
"Citizens Against Immunity," to discuss the judge's decision.
Ferrera noted that the sentence was aimed at redressing the
loss of trees caused by illegal logging, but expressed
disappointment that the press did not play up the fact that
Colman committed a crime and pleaded guilty. The group plans
to organize demonstrations and run advertisements alerting
citizens to Colman's guilty plea. (COMMENT: While the
sentence is disappointing, it is noteworthy that Congress
voted to lift Colman's immunity. END COMMENT.)

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Dissident Liberals Return to the Fold
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3. (U) On 9/22, dissident PLRA senators Candido Vera Bejarano
and Modesto Luis Guggiari, who were members of the so-called
"multiparty bloc," decided to return to the PLRA fold,
depriving the Colorado Party of an absolute majority in the
Senate. According to the national press, Vera and Guggiari
decided to return to the PLRA bloc in fear of being expelled
from the party. Vera told the press that reason for his
return to the PLRA bloc was to organize an opposition
alliance for the municipal elections in 2006 and the
presidential elections in 2008. He added that the opposition
is working on a similar shift in the lower house of Congress.
Deputy Luis Carlos Neumann confirmed his intentions of
returning to the PLRA bloc.

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Congress Approves Controversial Expropriation
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4. (U) On 9/22, the Chamber of Deputies approved the
expropriation of 52,000 acres in Puerto Casado (ref A). On
9/24, President Duarte announced that he had signed the
expropriation bill into law. The land belongs to the
Victoria SA company headed by Korean Reverend Sun Moon. Days
prior to the Chamber,s decision to approve the
expropriation, the company offered the government 10,000
acres for the citizens of Puerto Casado and 1,000 head of
cattle to start a new cooperative in the city. They also
committed to make short-term and long-term investments in
Puerto Casado, in an attempt to avoid the expropriation.


5. (SBU) COMMENT: Arguments for and against the expropriation
covered the spectrum. Rafael Filizzola, a member of the
socialist Country in Solidarity Party, asserted that Congress
had a "constitutional and moral obligation" to expropriate
the land and put an end to "speculation" in Paraguay. Others
countered that the expropriation would violate the
government's obligation to protect private property, foreign
investment, and jobs. Colorado Deputy Oscar Salomon went
father, asserting that the expropriation would be subject to
constitutional challenge based on the government's duty to
protect the nation's woodlands. END COMMENT.

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Youth March to Protest U.S. Military Presence
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6. (U) On 9/17, hundreds of youth protested the presence of
alleged "U.S. Marines" in Paraguay. The majority of the
protesters were university students. The theme of the
protest was "Yankees, Go Home." According to press reports,
the students burned three U.S. flags during the march, as a
sign of protest against the presence of U.S. troops in the
country. The third flag was burned in front of a McDonald,s
restaurant. The march concluded with speeches against the
U.S. military presence in the country. Initially, the day of
the march there were US aid personnel in Paraguay to
participate in MEDRETE exercises. In general, approximately
35 military medical personnel visit Paraguay from 2-3 weeks
to participate in the exercises. False accusations of a
planned U.S. base on long-term military presence persist in
the country.

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MEDRETE Sends Message of Hope
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7. (U) On 9/10, a team of 35 medical professionals from the
Texas Army Reserve arrived in Paraguay to provide medical
care for thousands of Paraguayans in the Department of
Neembucu, located approximately 240 miles southwest of
Asuncion. The MEDRETE team provided medical services in
several locations with the last stop in Pilar, the capital
city of Neembucu. The services included optical and dental
care, and veterinarian medical services. The team
distributed 900 pairs of donated eye glasses. During their
10-day exercise, the team provided health care to
approximately 4000 patients, and about 6000 animals. They
completed their work on 9/21.
KEANE