Identifier
Created
Classification
Origin
06ASUNCION602
2006-06-09 14:06:00
UNCLASSIFIED
Embassy Asuncion
Cable title:  

PARAGUAY: COURT SENTENCES FORMER PRESIDENT

Tags:  PGOV PREL KJUS PA 
pdf how-to read a cable
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DE RUEHAC #0602/01 1601406
ZNR UUUUU ZZH
R 091406Z JUN 06
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC 4374
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEAIIA/CIA WASHDC
RUEAWJB/DEPT OF JUSTICE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUMIAAA/USCINCSO MIAMI FL//SCJ5/LNO//
RHEHNSC/WHITE HOUSE NSC WASHDC
UNCLAS ASUNCION 000602 

SIPDIS

SIPDIS

STATE FOR WHA/BSC
STATE PASS TO USTR FOR LYANG
NSC FOR SUE CRONIN
TREASURY FOR OSIA MAUREEN WAFER
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR
SOUTHCOM FOR POLAD

E.O. 12958: N/A
TAGS: PGOV PREL KJUS PA
SUBJECT: PARAGUAY: COURT SENTENCES FORMER PRESIDENT
GONZALEZ MACCHI TO SIX YEARS PRISON

UNCLAS ASUNCION 000602

SIPDIS

SIPDIS

STATE FOR WHA/BSC
STATE PASS TO USTR FOR LYANG
NSC FOR SUE CRONIN
TREASURY FOR OSIA MAUREEN WAFER
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR
SOUTHCOM FOR POLAD

E.O. 12958: N/A
TAGS: PGOV PREL KJUS PA
SUBJECT: PARAGUAY: COURT SENTENCES FORMER PRESIDENT
GONZALEZ MACCHI TO SIX YEARS PRISON


1. SUMMARY: On June 5 a court sentenced former President
Gonzalez Macchi to six years in prison for his involvement in
the illegal transfer of USD 16 million from a liquidated bank
in 2000. Five others were also convicted in separate
hearings for their involvement in the case. This is the
biggest penalty given to a former senior official in
Paraguayan history, making this case significant given the
lack of confidence in the Paraguayan judicial system and
problems with impunity. Despite such history making, the
former President remains free while his case is in appeal.
END SUMMARY.

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Historic Conviction
--------------


2. On June 5, a court composed of three judges sentenced
former President Luis Angel Gonzalez Macchi (GM) to six years
in prison for his involvement in the illegal transfer of USD
16 million from the liquidated Oriental Bank in 2000.
Prosecutor Victoria Acuna from the Economic Crimes Unit
within the Public Ministry, explained to POLOFF that GM had
detailed knowledge of the transfer and used his position of
power, his father, and his brother (a then criminal court
judge) to persuade others that the actions were in fact
legal. Acuna noted that the conviction was unanimous by all
three judges leaving little doubt as to his involvement.
Currently, GM remains free while his case is in appeal.
Acuna explained that this signifies GM received special
treatment, as many Paraguayans must await their trial in
jail. Acuna noted that GM,s passport is suspended, but he
remains free to travel internally in the country. Gonzalez
Macchi does not have a valid U.S. visa.


3. In separate court cases, five others were also convicted
for their involvement in the illegal funds transfer. These
include the "mastermind" behind the transfer scheme, former
Central Bank Director Julio Gonzalez Ugarte (10 years
prison),former Superintendent of Banks Carlos Pecci (8
years),and former Oriental Bank liquidator Valeria Ortiz de
Esteche (4 years). In addition, the courts convicted former
Presidential Advisor Roman Guillen (3 years, eight months)
and the President of the Paraguayan Humanitarian Foundation
Juan Rodriguez Leith (4 years). The sentence handed down by
the court is the longest sentence given to a former senior
official. In 2006, former President Juan Carlos Wasmosy was
sentenced to four years in prison for illicit enrichment; his
case is currently under appeal.

--------------
Next Steps
--------------


4. GM will likely appeal the case and maintains his
innocence. The defense has until June 27 to file an appeal
after which an appellate tribunal has 15 working days to
confirm or overturn the sentence. If the appellate tribunal
were to overturn the ruling for misinterpretation of the law,
the case would revert back to the criminal court for
reconsideration or a reduction in sentence. If the ruling is
upheld, the defense will likely appeal to the Supreme Court.
Acuna told POLOFF that she believes the appellate tribunal
will uphold the conviction. She also noted that the defense
is likely to call in political favors to delay the
proceedings. Interestingly, Acuna noted that she had not
received any threats or offers of bribes for her work in the
case, unlike the pressure prosecutors can face in taking on
cases targeting powerful politicians and/or their
friends/interests. (Note: GM and his wife also face
additional charges of illicit enrichment in a separate
pending case. Their trial date is set for late 2006. End
Note.)


5. COMMENT: The fact that the court unanimously convicted a
former President and gave him a lengthy sentence is
significant given Paraguay's notorious record for impunity
when it comes to powerful, well connected political and/or
business leaders. (Note: Prosecutors asked for the maximum
sentence of 10 years in prison, a six-year sentence is

considered a grave sentence by the Paraguayan judiciary and
legal community. End Note.) It remains to be seen whether
the conviction will stand through the appeals process.
Politics, favors, and corruption could well play a larger
role during the next phase of the case. Post will continue
to monitor the appeals process and report as appropriate.
END COMMENT.

CASON