PARAGUAY POLITICAL AND ECONOMIC UPDATE, MAY 7-13

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E.O. 12958: DECL: 05/13/2015
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SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, MAY 7-13

REF: A. ASUNCION 00627


B. BRASILIA 01252

Classified By: PolCouns James P. Merz, reasons 1.4(b) and (d).


1. (U) Summary
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-- Human rights agenda takes center stage this week
-- Justice Rienzi re-appointment saga continues
-- NDF and Rachid pursue increased trade with Arab countries
-- SENAD agents capture narco-pilot wanted in Brazil

Human rights agenda takes center stage this week
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2. (U) At the MFA's invitation, the Inter-American Human
Rights Court held a special session in Asuncion this week.
It was the first time the Court convened a session outside
its permanent seat in San Jose, Costa Rica. A panel of seven
Judges from Mexico, Venezuela, Barbados, Brazil, Chile, Costa
Rica, and Peru heard testimony in public hearings in four
cases dealing with freedom of expression in Chile, pretrial
detention of suspected terrorists in Peru, prison conditions
in Argentina, and indigenous rights in Ecuador. Vice
President Luis Castiglioni, Supreme Court President Antonio
Fretes, Deputy FM Jose Martinez, and the Presidents of the
Senate and Chamber of Deputies presided over the opening
ceremony, and between 75 and 100 spectators were present
during the hearing that PolOff attended. In addition to the
public hearings, the Judges signed a cooperation agreement
with the Supreme Court, participated in conferences at three
universities, met with President Duarte, the Congress, and FM
Rachid, and visited the Mercosur Permanent Tribunal.


3. (U) In the context of ongoing Mercosur discussions this
week, Paraguay continued to push for the Human Rights
Protocol it has proposed for the regional bloc. According to
Colombian PolCouns Raul Sanchez, who represented Colombia at
the discussions, there is general consensus among Member
countries with respect to the text of the Protocol. The only
sticking point is Article 3, which lays out procedures for
determining violations and imposing sanctions.


4. (C) Comment: These are positive developments. The GOP and
FM Rachid are actively pursuing initiatives that quietly
advance U.S. interests, often contrary to the objectives that
others, such as Venezuela, are pursuing in the region.
Rachid has told the Ambassador that the Human Rights Protocol
is, among other things, aimed at allowing Mercosur to stave
off or condition a Venezuelan attempt to join. End Comment.

Justice Rienzi re-appointment saga continues
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5. (U) In an apparent move to quiet discussion of the
Senate's questionable authority to re-appoint tarnished
Colorado (ANR) party stalwart Wildo Rienzi to the Supreme
Court until he reaches the mandatory retirement age in two
years (ref A),on May 7 President Duarte signed a decree
"confirming" Rienzi's re-appointment. Then, contrary to
earlier signals that it would challenge the Senate's action,
the Council of Magistrates instead canceled its call for
candidates to compete for the vacancy created by the
expiration of Rienzi's term. Patria Querida (PQ) party
Senator Ana Maria Mendoza de Acha called the Council's
actions "incoherent" and called for a thorough review of the
constitutionality of the re-appointment.


6. (C) Separately, the Liberal (PLRA) party's Executive Board
submitted a report to the party's Court of Honor on the
conduct of dissident PLRA Senators Domingo Laino, Modesto
Guggiari, and Candido Vera Bejarano, particularly as relates
to their vote in favor of Reizi's re-appointment over the
opposition of the PLRA leadership. PLRA Senate bench leader
Armando Espinola advised PolCouns that he favors expelling
the three. However, according to Espinola, inasmuch as the
PLRA is in the midst of a campaign to determine the party's
leadership in a July 17 election, Blas Llano, the PLRA's
leading candidate to be its next President, opposed this
measure mostly out of concern about the damage it could pose
to the PLRA's voting base. As such, Espinola considered
expulsion unlikely. In the meantime, the three have been
prohibited from using party symbols and from invoking the
party's name when exercising their functions.

NDF and Rachid pursue increased trade with Arab countries
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7. (U) In his address at this week's Arab-South American
Summit in Brasilia (ref B),President Duarte signaled the
GOP's desire to develop the country's agricultural industry
by attracting new foreign investment. Duarte highlighted
inexpensive hydro-electrical energy, low taxes, fertile land,
and abundant natural resources as some of the benefits of
doing business in Paraguay. Arab businesses reportedly
expressed interest in a highway construction project in
Asuncion, as well as Paraguayan beef, soybean, and sesame
seed. In her role as President Pro Tempore of Mercosur, FM
Rachid signed a framework agreement for economic cooperation
between Mercosur and the Arab states that participated in the
Summit. The framework agreement is intended to serve as a
mechanism for concluding bilateral agreements, which Paraguay
promptly did with Sudan. The press quoted Duarte as saying
Arab states were interested in trading oil for Paraguayan
water.

SENAD agents capture narco-pilot wanted in Brazil
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8. (U) On May 9, agents from Paraguay's Counter-narcotics
Secretariat (SENAD) captured 50-year-old Brazilian pilot Joao

SIPDIS
Freitas de Carvalho in Pedro Juan Caballero. Freitas is
wanted in Brazil for trafficking cocaine for Fernandinho
Beira Mar, Claudaire Lopes de Faria, and Ivan Mendes
Mesquita. SENAD believes Freitas was involved in a plot to
help Mendes escape from detention prior to his pending
extradition to the United States. There are no charges
pending against Freitas in Paraguay. GOP officials are
processing Brazil's request for Freitas' extradition.


9. (U) In a separate case, an INL drug dog found a kilo of
cocaine hidden in the handle of luggage on its way from
Paraguay to Cameroon. SENAD showed improved investigative
abilities and aggressiveness and developed a controlled
delivery plan, including gaining judicial permission in
Paraguay. Logistical issues in Africa and other transit
countries led to cancellation of the controlled delivery and
seizure here, but this case showed investigative progress.
KEANE