PARAGUAY POLITICAL AND ECONOMIC UPDATE, MAY 7-13

C O N F I D E N T I A L SECTION 01 OF 02 ASUNCION 000649 SIPDIS STATE FOR WHA/BSC AND EB/IFD/OIA STATE PASS TO USAID FOR LAC/AA STATE PASS TO USTR FOR SCRONIN AND LYANG NSC FOR KIM BREIER 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: DECL: 05/13/2015 TAGS: PGOV PREL PINR PHUM ETRD SNAR KCRM PA VE 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 -------------- -- 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 -------------- --- ¶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 -------------- ¶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 -------------- -------------- ¶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 -------------- -------------- ¶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