Identifier
Created
Classification
Origin
05LIMA2919
2005-07-05 15:26:00
CONFIDENTIAL
Embassy Lima
Cable title:  

PRESIDENTIAL ADVISORS ON POLITICAL SCENE

Tags:  PGOV EFIN PREL PINS PE 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 03 LIMA 002919 

SIPDIS

E.O. 12958: DECL: 06/28/2015
TAGS: PGOV EFIN PREL PINS PE
SUBJECT: PRESIDENTIAL ADVISORS ON POLITICAL SCENE


Classified By: Political Counselor Alexander Margulies. Reason: 1.4(b
/d).

C O N F I D E N T I A L SECTION 01 OF 03 LIMA 002919

SIPDIS

E.O. 12958: DECL: 06/28/2015
TAGS: PGOV EFIN PREL PINS PE
SUBJECT: PRESIDENTIAL ADVISORS ON POLITICAL SCENE


Classified By: Political Counselor Alexander Margulies. Reason: 1.4(b
/d).


1. (C) SUMMARY: Two top presidential political counselors
recently reviewed the political scene with Polcouns. They
were optimistic that President Alejandro Toledo and the GOP
will work out a modus vivendi with the opposition parties on
a new Congress President and a smooth transition to the
successor government, that electoral code revisions will be
passed to prevent minor parties from obtaining an undue
number of congressional seats in 2006, and that the governing
Peru Posible party's prospects in the upcoming elections are
brightening. While Cabinet changes are forthcoming in July,
the advisors agreed that Prime Minister Carlos Ferrero is
likely to stay on until October, when he must resign in order
to run for re-election to Congress. END SUMMARY.


2. (C) Polcouns met with Presidency Political Advisor Juan
de la Puente on 6/21 and lunched with Labor Minister Juan
Sheput on 6/27. The discussions in both meetings
concentrated on the current political scene and the prospects
for the 2006 election and addressed the following specific
issues:

-- POLITICAL STABILITY: The political situation has
stabilized following the opposition's unsuccessfull attempt
to sanction Toledo over the false signatures scandal. Both
de la Puente and Sheput said that they were personally
involved in discussions with the opposition APRA party and
Unidad Nacional alliance to work out a modus vivendi on
governability and a transition to the successor government in

2006. This will entail agreement on a new President of
Congress to be elected in late-July, as well as the
opposition's acceptance of a new Prime Minister.

-- NEW CONGRESS PRESIDENT: De la Puente and Sheput said
that there was general agreement between the three big
parties that they should agree on a consensus candidate in
order to marginalize the smaller blocs as well as the 30
legislators who have abandoned the parties that brought them
to office. According to de la Puente, no consensus candidate
has yet been agreed on. He said that all could support

current Congress President Antero Flores-Araoz, but that the
latter is weighing a bid for the national presidency and may
not seek re-election. Sheput, on the other hand, insisted
that 2003-2004 Congress President Henry Pease (Peru Posible)
has been decided upon. (COMMENT: Sheput may be engaged in
wishful thinking. Our recent contacts with APRA legislators
indicate that this issue is still up in the air. END
COMMENT.)

-- NEW PRIME MINISTER: De la Puente stated that we should
expect to see Prime Minister Ferrero remain in office well
past July, conceivably until the first week of October, when
he will have to resign in order to be eligible for
re-election to Congress. He explained that Toledo is
comfortable with Ferrero, that Ferrero is happy with his job,
that there is no one else who looks like a good fit, and that
rumored successor Henry Pease may be the front-runner to
succeed Ferrero, but that Pease can be a difficult character
to work with. Sheput agreed that Ferrero will stay on for
the time being, and would not speculate on a possible
successor.

-- OTHER CABINET CHANGES: Other than Finance Minister Pedro
Pablo Kuczynski, whose imminent departure is common knowledge
within the GOP, de la Puente and Sheput agreed that Foreign
Minister Manuel Rodriguez is almost certain to depart in
July. De la Puente said that Rodriguez would be sent as
Ambassador to either Paris or Geneva. He also predicted that
Defense Minister Roberto Chiabra and Interior Minister Felix
Murazzo would be sent packing; Chiabra over his recent
complaints regarding the Finance Ministry's unwillingness to
release funds for the Armed Forces and Murazzo over his
tendency to look out first for the parochial interests of the
National Police (he was previously National Police Commander)
rather than for those of the GOP. Sheput would not identify
specific ministers destined for the chop, but suggested that
a recent article in daily "La Republica" was close to the
mark. That article looked at the popularity, relations with
the President and political weight of Cabinet members,
indicating that Rodriguez, Murazzo, Chiabra, and Agriculture
Minister Manuel Manrique are vulnerable.

-- ELECTORAL LAW CHANGES: Both de la Puente and Sheput
placed great importance on proposed changes to the electoral
law, principally the initiative to require parties to garner
five percent of the national vote in order to place
candidates in Congress. They viewed this revision as
essential to prevent smaller parties (currently 27 parties
are registered to run candidates for Congress) from allying
themselves with regional movements and electing 1-2
legislators each, which would result in a badly fractured
Congress. They were optimistic that his proposal will
eventually pass, as the major parties are in favor of it.
They also supported a proposal to eliminate the "preferential
vote" (voters cast ballots for parties, then select two
individual "preferences" among the candidates of the party
they chose; parties are then awarded seats based on their
proportional vote within each Department, with the seats
awarded to the party's candidates who receive the most
preferential votes) as this weakens the parties' control over
who is elected to office. They were pessimistic that this
initiative would pass, however, given that all legislators
benefitted from the "preferential vote" in gaining election
to Congress.

-- GOVERNMENT ALLIANCE: De la Puente expressed discomfort
over the actions of Fernando Olivera, the leader of the GOP's
junior coalition partner the Independent Moralizing Front
(FIM) and Peru's Ambassador to Spain. He blamed Olivera and
FIM legislator/Chairman of the Congressional Foreign
Relations Committee Gustavo Pacheco for problems in the
relations between Toledo and Foreign Minister Rodriguez, and
viewed the FIM as more of a hindrance than a help. He did
not, however, indicate that the alliance was in danger.
Sheput, on the other hand, stated that Toledo is warming to
advice from the Labor Minister and other members of the "Hard
Wing" of Peru Posible (which includes Prime Minister Ferrero)
to ditch Olivera and the FIM after the July 28 State of the
Nation address. Sheput argued that Olivera and his party
will break with the GOP, and the Government will earn
political points if it acts first. He added that the ongoing
talks on governability and a smooth transition will be
facilitated with Olivera's ouster, as both APRA and Unidad
Nacional leaders are unwilling to enter into an arrangement
with the GOP so long as Olivera maintains his influence.

-- STATE OF THE NATION ADDRESS: De la Puente said that he
is pushing for Toledo to make a visionary speech, looking
ahead to the election year and the transition, rather than
resort to the usual listing of public works carried out over
the previous twelve months. Sheput stated that Toledo has
bought into this concept, but will also use a power-point
presentation to demonstrate how successful his government has
been in comparison to the five previous governments in
promoting economic growth, job creation and poverty
reduction. He added that the President saw a videotape of
Colombian President Alvaro Uribe's last speech to the nation
and was captivated by how Uribe used visual aids to emphasize
and illustrate his points.

-- THE 2006 ELECTION: De la Puente's major concern with the
2006 election lay in preventing smaller parties from winning
seats and creating a fractionalized legislature that would
threaten governability. Sheput was enthusiastic about Peru
Posible's electoral prospects. Economic growth is trickling
down to the masses, he explained, and Finance Ministry
experts predict that this effect will really be seen in
November, just in time for a happy Christmas season and a
promising prelude to the April first round of balloting. He
noted that Toledo's popularity is inching up (rising to 16
percent in the most recent Lima poll) and that Peru Posible
strategists now see their party as winning a minimum of 15-20
seats in the next Congress, vice the 5-10 seats they foresaw
only a few months ago. The party has learned its lesson from
its current crop of unmanageable legislators, he added, and
will not turn to local personalities to stand as candidates
as it did in 2001. Instead, Sheput declared, it will turn to
qualified and respected candidates with a demonstrated
loyalty to the party. He thought that Finance Minister
Kuczynski could be prevailed upon to run on Peru Posible's
congressional slate, but doubted that he would make a
presidential bid, noting that Kuczynski's dual Peruvian-U.S.
citizenship would sink his chances in the provinces. He also
discounted the possibility that Housing Minister Carlos Bruce
would run for President, lamenting that while Bruce is the
most popular minister and could have a chance of winning, the
Housing Minister prefers to settle for a certain
congressional seat.


3. (C) COMMENT: The read-outs by de la Puente and Sheput
provide a good indication of how the GOP views the political
situation and prospects. We tend to suspect that de la
Puente is more on the mark as to the actual state of play,
while Sheput reflects where the GOP hopes to steer matters.
Their optimistic assessments of the GOP's current position
and of its chances of achieving its political objectives is a
welcome change from the relatively pessimistic views that
both have expressed in the past. With elections but nine
months away the country's focus is now on who will be the
next government, giving the GOP a welcome respite. Whether
Toledo and his administration can take advantage of this to
cement an accord on governability and a smooth transition
remains to be seen. END COMMENT.
STRUBLE