ARGENTINA: FAREWELL CALL ON KIRCHNER INNER CIRCLE

C O N F I D E N T I A L SECTION 01 OF 03 BUENOS AIRES 001632

SIPDIS

SIPDIS

STATE FOR WHA TOM SHANNON, JOHN MAISTO, AND CHARLES SHAPIRO
NSC FOR DAN FISK
TREASURY FOR DAS NANCY LEE
USCINCSO FOR POLAD

E.O. 12958: DECL: 07/21/2016

TAGS: PGOV PHUM PREL AR

SUBJECT: ARGENTINA: FAREWELL CALL ON KIRCHNER INNER CIRCLE

MEMBER



REF: A. 05 BUENOS AIRES 00141


B. BUENOS AIRES 01610



Classified By: CDA, a.i., Hugo Llorens, Reasons 1.4(b) and (d)




1. (C) SUMMARY: On July 19, the DCM paid a farewell call on

President Kirchner's closest and most influential advisor,

Technical and Legal Secretary Carlos Zannini, that included a

discussion on the bilateral relationship and GOA regional

policy. Reviewing the U.S. bilateral objectives over the

past three years, the DCM said he and the Ambassador had

sought to support Argentina's democracy, economic recovery

and political stability, cooperate with the GOA on security

and counterterrorism issues, and after Argentina recovered,

seek the GOA's constructive role in the region. The DCM

praised Argentina's economic recovery and Zannini thanked the

U.S. for its help during the crisis. Turning to regional

issues, the DCM noted U.S. regional concerns regarding

Venezuela and Bolivia. The DCM said that Kirchner's close

relationship with Venezuelan President Hugo Chavez and

Chavez's threats against democracy, as well as his penchant

for slandering President Bush and the USG, made it difficult

for the Embassy to maintain constructive bilateral relations

with the GOA. Zannini said that the GOA's relationship with

Venezuela was based on economics and that Mercosur membership

would change Venezuela, not the other way around. On

Bolivia, both the DCM and Zannini agreed that isolating

President Morales would not be good, but the DCM said that

both countries needed to work to moderate Morales' actions.

Looking towards the future, Zannini said he hoped

communication between the two countries would be further

strengthened. The DCM highlighted incoming Ambassador

Wayne's strong qualifications and noted that he would

continue Ambassador Gutierrez's professional diplomacy. END

SUMMARY.



--------------

REVIEWING THE RELATIONSHIP

--------------




2. (C) On July 19, the DCM paid a farewell call on Technical

and Legal Secretary Carlos Zannini that included a discussion

on the bilateral relationship and GOA regional policy.

Carlos Zannini is a long-time, close Kirchner advisor and

probably his most influential policy confidant (See reftel

A). Zannini began the discussion by noting the good

relationship the Casa Rosada enjoyed with the Ambassador and

DCM and expressed appreciation for U.S. help during the

crisis. The DCM said the U.S. is pleased that Argentina's

economic recovery has been strong and said that Kirchner

deserves a great deal of the credit for it. Zannini replied

that Argentina's process of recovery was unfinished, but that

they too were pleased they were on the way.




3. (C) The DCM reiterated U.S. objectives in Argentina. The

DCM said that in the past three years he and the Ambassador

had sought to support Argentina's democracy, economic

recovery and political stability, strengthen cooperation with

the GOA on security and counterterrorism issues, and after

Argentina recovered, seek the GOA's constructive role in the

region. The DCM detailed the support that the U.S. gave to

Argentina during the depth of the financial crisis, from

advocating for Argentina within the G-7 to the U.S.

Treasury's decision to support the private sector debt

exchange that allowed Argentina to secure a higher rate of

participation in the deal. The DCM noted that no major U.S.

company left Argentina during the crisis and that roughly 500

U.S. companies currently operate in Argentina generating

roughly 200,000 jobs.



--------------

REGIONAL ISSUES

--------------




4. (C) Turning to regional issues, the DCM noted U.S.

regional concerns and said the U.S. wanted to see Argentina

take a more active role in supporting regional democracy.



BUENOS AIR 00001632 002 OF 003





The DCM thanked Zannini for the GOA's continued help in

Haiti. The DCM raised the issue of Venezuela, stating that

Kirchner's close relationship with Venezuelan President Hugo

Chavez and Chavez's threats against democracy, as well as his

penchant for slandering President Bush and the USG, made it

difficult for the Embassy to maintain constructive bilateral

relations with the GOA. The DCM said, ""One day Kirchner is

meeting with Chavez, and Chavez may be on good behavior

because Kirchner has asked Chavez to avoid incidents, but the

next day Chavez is calling President Bush a drunkard, a

genocidal maniac and worse than Hitler."" The DCM said that

by so closely associating himself with a leader like Chavez,

Kirchner risks being viewed by Washington as sharing Chavez's

views. The DCM said that the U.S. does not oppose

Argentina's economic ties with Venezuela, as the

U.S.-Venezuelan trade relationship is extensive, but both

Argentina and the U.S. need to support Venezuela's democracy.






5. (C) Zannini responded by emphasizing the economic nature

of Argentina's relationship with Venezuela and noted that the

U.S. and Argentina ""have different definitions of democracy.""

Zannini said, ""Our relations with Venezuela are not

anti-U.S., but based on economic interests."" Zannini

acknowledged Chavez's anti-U.S. tendencies, ""Attacking the

U.S. is a way for him (Chavez) to build power in Venezuela.""

He said that Argentina does not share Chavez's anti-U.S.

message. Regarding Venezuela's democracy, Zannini said that

for the GOA, the most important part of a democracy is

voting, pointing out that Chavez has won numerous national

elections. Zannini said that part of the problem with

Venezuela's democracy is the intransigence of Venezuela's

opposition. Zannini noted the many ways that Venezuela was

helping Argentina, from buying bonds, helping to meeting

Argentina's energy needs, to selling Argentina agricultural

equipment.




6. (C) The DCM responded by noting the increasingly

authoritarian nature of the Chavez government. He stressed

Chavez's concerted efforts to weaken judicial independence

and retain monopoly control of Venezuela's Congress, as well

as his crackdown against the political opposition and media.

The DCM said that many in the opposition and in the media in

Venezuela lived in fear. The DCM also noted the foreign

policy dimension of the problem, citing Chavez's cultivation

of the rogue regimes in Iran and North Korea. Zannini

replied by highlighting the GOA's cooperation with the U.S.

on counterproliferation efforts on both Iran and North Korea

in the UN Security Council.




7. (C) On Bolivia, the DCM said that the U.S. is not trying

to isolate Bolivian President Morales, but is instead seeking

to moderate Morales' actions. Zannini said that isolating

Morales would just create a worse situation. Zannini said

that Morales and Chavez often have rhetoric that is much

worse than their actions. The DCM acknowledged that focusing

exclusively on rhetoric was not helpful, but reaffirmed that

the U.S. is also concerned with some of the actions of both

Morales and Chavez.




8. (C) Zannini raised the issue of the Mercosur Summit in

Cordoba. Zannini said Venezuela's incorporation into

Mercosur should not concern the U.S. ""Venezuela will adapt

to Mercosur, not the other way around. Argentina does not

have a regime like Venezuela's; Argentina has its own

characteristics."" Zannini acknowledged that

misunderstandings about Argentina's relationship with

Venezuela could cause many problems with the GOA's

relationship with the U.S. However, he again sought to allay

U.S. fears, ""Argentina is not going to be a tool of Cuba.""

Zannini said that the highlights of the Summit in Cordoba

would be announcing the creation of a South American

parliament and a regional infrastructure fund. Zannini noted

that Mercosur's success would lead to stronger democracies in

the region, ""With better economies, democracy can grow.""



--------------



BUENOS AIR 00001632 003 OF 003





LOOKING TO THE FUTURE

--------------




9. (C) Looking towards the future, Zannini said he hoped

communication between the two countries would improve.

Zannini said that ""Argentina is focused just on the region

and the U.S. is focused on the world. At times, the U.S. has

not exercised the leadership in the region that was needed.""

The DCM replied that Argentina has benefited first-hand from

the U.S. regional leadership in recent years. The DCM

highlighted incoming Ambassador Wayne's strong

qualifications, predicting that he would maintain Ambassador

Gutierrez's efforts to reach out and seek to strengthen

bilateral ties.




10. (C) Zannini, noting incoming Ambassador Wayne's economic

background, appealed for more U.S. investment in Argentina as

the best way to improve bilateral relations. The DCM said

that the GOA needs to ensure that U.S. companies have the

freedom to operate in Argentina without GOA price controls

and interference that would harm the U.S. companies' ability

to compete. The DCM said that U.S. companies need open and

clear regulations in order to encourage them to invest.

Zannini acknowledged the benefits of the U.S.-style of

business-government relations, which he said was superior to

the common practice in Europe.



--------------

COMMENT

--------------




11. (C) As Secretary of the Presidency Oscar Parrilli did in

his recent meeting with the DCM (See reftel B),Kirchner's

inner circle always attempts to allay our concerns regarding

Argentina's relationship with Venezuela. Although the GOA's

goals in their dealings with Chavez are primarily economic,

Chavez's primary goals are political. President Kirchner is

playing a dangerous game as he is drawing Argentina ever

closer to Venezuela. Chavez, and his ally Fidel Castro, are

much more capable and adept at manipulating regional politics

than is President Kirchner. Kirchner likely thinks he can

continue to strengthen his ties to the leftist bloc in Latin

America, while maintaining positive relations with the United

States. Kirchner's foreign policy ineptness and lack of

competent international relations advisors will likely

prevent him from understanding the potential negative

consequences of his actions.




12. (C) Our experience has been that the GOA is difficult

government to work with and one with a lack of foreign policy

expertise. The Kirchner administration's lack of

understanding in the international relations area, coupled

with their sophomoric, 1970s leftist tendencies, make them

easily susceptible to manipulation by more radical regional

leaders, such as Chavez and Castro. It is therefore

extremely important for the U.S., both in Washington and in

Buenos Aires, to actively engage the GOA at a high level at

this critical juncture to avoid any further slippage of

Argentina towards the Chavez orbit. Despite differences, we

have been able to achieve excellent cooperation with the GOA

on a range of issues, including counternarcotics,

counterterrorism, non-proliferation and in Haiti. We need to

further reach out to the GOA to achieve more cooperation in

other areas. The consequences of not maintaining a fluid

dialogue with the GOA can only be negative for the U.S. END

COMMENT.





LLORENS


=======================CABLE ENDS============================