PARAGUAY POLITICAL AND ECONOMIC UPDATE, JUNE 18-24

UNCLAS ASUNCION 000813

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: N/A
TAGS: PGOV PREL CJAN CVIS KCRM SNAR EFIN MOPS PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, JUNE 18-24

REF: A. ASUNCION 786

B. ASUNCION 741

C. ASUNCION 730


1. (SBU) Summary
--------------
-- Mendes Mesquita,s Extradition Expected
-- Customs Official Guilty of Enrichment
-- New Senate Leadership
-- Delay on U.S.-Paraguayan Military Exercises

Mendes Mesquita,s Extradition Expected
--------------

2. (SBU) On June 22, the Cassation Tribunal of the Supreme
Court rejected Carlos Ivan Mendes Mesquita,s appeal,
clearing the way for his extradition (ref B and C).
Mesquita,s turnover to US authorities is expected for June
27, although several final judicial and administrative steps
must first occur. Embassy expects no complications or delays
and GOP has taken extraordinary security precautions against
possible bribes or violence to free Mendes Mesquita. This
extradition would be the first major trafficker turned over
to the U.S. and a dramatic step against the FARC-linked
trafficking organization.

Customs Official Guilty of Enrichment
--------------

3. (U) A customs official has been sentenced to three years
in jail for illegal enrichment. All assets believed to be
gained in an illegal manner will be seized, and he will be
forced to pay a hefty fine. The prosecutor claimed that the
official had illicitly earned USD $410,000. The inability of
the official to explain his obvious wealth given his meager
customs salary was key to the conviction. The prosecutor
lauded the decision as a significant precedent for
prosecuting officials on the basis of a law on illicit
enrichment adopted just last year.

New Senate Leadership
--------------

4. (U) On the heels of senior leadership changes in the
House of Deputies last week, the Senate elected Senator
Carlos Filizzola, the candidate from the Country in
Solidarity Party (PPS) as its new President on June 23.
Filizzola won his seat with support from President Duarte,s
17-member ruling Colorado (ANR) party; the six-member
"multiparty bloc" consisting of two senators from the PPS,
one independent from the National Encountering Party (PEN),
and three dissidents from the Authentic Radical Liberal Party
(PLRA); and one dissenter from the National Union of Ethical
Citizens (UNACE) party. In exchange for their support for
Filizzola, dissident Senators Alejandro Velazquez (UNACE) and
Modesto Guggiari (PLRA) were elected as first and second Vice
Presidents respectively.

Delay on U.S.-Paraguayan Military Exercises
--------------

5. (U) The Senate postponed until June 28 consideration of
granting permission for U.S. forces to enter Paraguay for
military exercises. The delay is due to time constraints
during the June 23 session dealing with Senate leadership.
With the more controversial immunities law already approved,
post expects this final step to be approved next week.
KEANE