PARAGUAY POLITICAL AND ECONOMIC UPDATE, AUGUST 5 -

UNCLAS ASUNCION 000832 SIPDIS SIPDIS STATE FOR EB/IFD/OIA AND INL STATE PASS TO USAID FOR LAC/AA STATE PASS TO USTR FOR LYANG NSC FOR SUE CRONIN TREASURY FOR OSIA MAUREEN WAFER TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR COMMERCE FOR ITA SARAH COOK SOUTHCOM FOR POLAD E.O. 12958: N/A TAGS: PGOV PHUM PREL ECON PA SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, AUGUST 5 - 11 2006 ¶1. (U) SUMMARY: -- Finance Ministry Avoids Labor Strike -- Take 3 Steps and Dig Here -- Another Narco-Trafficker Captured -- Bomb Threat at Local Country Club -------------- Finance Ministry Avoids Labor Strike -------------- ¶2. (U) On 8/9, Eileen Browne, the U.S. Treasury Technical Advisor working with the GOP Finance Ministry, reported that Finance Minister Ernst Bergen and the executive staff had apparently agreed to a series of negotiations in lieu of a union strike at the ministry. The union representatives and members seek a pay for time-in-grade scheme and funded private health insurance. However, the Finance Ministry simply does not have money to finance these demands. The union claims that the International Monetary Fund and the World Bank are responsible for imposing spending ceilings that prevent the Ministry from meeting union demands. Over the past few days union representatives have taken on a more anti-American tone, which we interpret as deriving from the perception these institutions work at the bidding of the U.S. -------------- Take 3 Steps and Dig Here -------------- ¶3. (U) On 8/8, under the cover of night, a large Asuncion city-owned tractor excavated a portion of Caballero Park, which is the home site of former General Bernardino Caballero (hero of the Triple Alliance War of 1864 - 1870),in search of treasure. The alleged treasure was to include precious metals and historical objects that were thought to be buried on the property according to a map an orthodontist discovered inside a tree trunk (Note: Rumor has it many Paraguayans sought to hide their valuables from Brazilians after Pafaguay lost the Triple Alliance War. End Note). Supreme Court Justice Victor Nunez, Military Court official Porfirio Ramirez and three unknown persons acquired permission from Asuncion Mayor Enrique Riera to excavate the property. The agreement amongst them indicated that the petitioners (Nunez and Ramirez) and the city would get a 50 to 50 percentage split on the value of any treasure found. The tractor dug more than 7 meters (almost 23 feet) deep but found nothing. Those involved have since come under withering criticism for their actions. -------------- Another Narco-Trafficker Captured -------------- ¶4. (U) On 8/8, AntiNarcotics Secretariat (SENAD) Agents, with the assistance of prosecutor Adelaida Vazquez, arrested Ubiratan Brescovich, a Brazilian narco-trafficker and two others in Ciudad del Este. Brescovich had a Brazilian warrant out for his arrest for narcatics trafficking and is a close associate of Marcelinho Niteroi who was arrested on 7/26 in Pedro Juan Caballero. Brazilian authorities had requested that Paraguayan authorities exercise this warrant. Both men are also connected to Brazil's notorious Fernandinho Beira-Mar narco-trafficking oorganization. SENAD seized evidence including documents, a small amount of cocaine and a Global Positioning System (GPS). -------------- Bomb Threat at Local Country Club -------------- ¶5. (U) On 8/9, an anonymous caller with an Argentine accent called to say he had placed two explosive devices in the Casino at the American-owned Yacht and Golf Country Club of Paraguay. The man threatened to set off the explosives remotely by cell phone if he did not receive USD 90,000. The special tactical police unit (FOPE) and the military personnel located two suspicious packages in the men's lavatory of the Casino, which is adjacent to the hotel. Neither contained an explosive device. No one has been apprehended in connection with this incident. (NOTE: Several FSOs are members of this Club. However, none were present at the hotel on the evening of this incident. End Note.) CASON