UNIDAD NACIONAL TO SUPPORT APRA GOVERNMENT BUT

C O N F I D E N T I A L LIMA 002416

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/13/2016
TAGS: PGOV PE
SUBJECT: UNIDAD NACIONAL TO SUPPORT APRA GOVERNMENT BUT
REMAIN INDEPENDENT AND WATCHFUL


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


1. (SBU) Summary: The Ambassador met with former presidential
candidate Lourdes Flores of the Unidad Nacional (UN)
coalition on 6/9. Flores said UN would work with the APRA
government, but would remain independent and objective. Her
focus has turned to municipal and regional elections where UN
aims to consolidate its support in Lima. Flores indicated
her coalition may distance itself from APRA in order to be
critical, which would leave UN as a spectator and not a
participant in an APRA government. End Summary.


2. (C) In a meeting with Ambassador Struble, Flores said the
following:

The Political Landscape:

-- Flores said UN will support the APRA government but remain
independent and watch APRA closely. Lourdes said her Partido
Popular Cristiano (PPC) party got badly burned in 1980-85 by
joining a coalition with President Belaunde's Accion Popular.
Her party took a real hit to its popularity through
identification with Belaunde, justifying a hands-off attitude
towards APRA on this basis.

-- UN must win Lima in the November elections. It can then
aspire to build outward from that base. Flores was confident
that popular Lima Mayor Luis Castaneda's Solidaridad Nacional
party would renew its commitment to the UN alliance. (Note:
Rafael Rey, elected to the Andean Parliament as a UN
candidate, withdrew his Renovacion Nacional party from the UN
coalition on 5/17. On 6/9 Rey began accusing Castaneda of
contracting irregularities in his administration. End Note.)
Flores said she expects Rey will continue to give Castaneda
problems, but it is unclear whether the accusations will have
a great impact. Flores said Rafael Rey is honorable and
honest but ambitious; he believes he is "on a holy mission".
Though he has left the UN alliance, they still talk and she
respects him. Flores said that she will try to convince Rey
to run for President of the Lima region; he and Castaneda can
then join forces rather than be at each other's throats. She
opined however, that if APRA were to co-opt Rey, especially
for Lima elections, this could be a problem for UN.

-- Flores said Rey's Renovacion Nacional group will probably
stay in the UN congressional caucus as it takes six
congressmen to form a bloc and Rey's party has only two.

-- The UN priority for November's regional elections will be
to form alliances with regional movements outside of Lima.
The UN goal is to win the Lima Region (which she believes is
likely) plus one other region - Ica or San Martin. Flores
said that in San Martin, current congressman Arturo
Maldonado, who did not run for re-election, might run on a
regional ticket.

-- She acknowledged UN is not a superforce, but has a role to
play representing the emerging lower-middle/middle class (not
just in Lima).

-- Flores said if Ollanta Humala's party wins more than 10
regions there is real cause for concern as it will show that
the country is truly divided. However, she added that in the
longer term having egional governments that can't deliver
could be a problem for Humala's party, given APRA's
experience in Arequipa and Ayacucho. (Note: APRA regional
presidents in Arequipa and Ayacucho were not able to pull in
votes for Alan Garcia; Humala won both departments with 64
percent and 83 percent, respectively. End Note.) Flores said
she was concerned about opportunists (including leftists)
joining the Humala bandwagon.

Garcia:

-- She said Garcia must walk the fine line of giving some
ministerial jobs to his APRA base but also including other
parties. Flores said though no offers have been made, UN
would not accept a ministry, since it must remain independent
from an APRA government. She noted current UN congressman
Antero Flores-Araoz would be interested in the Prime Minister
position, but the PPC strongly opposes such a role; this may
become a divisive issue. She said technocrats close to the
UN could work in an APRA government, but could not accept
political appointments.

-- She said the risk with Garcia is his tendency to throw
money at problems when he is unpopular or under pressure -
popularity motivates him.

-- Flores congratulated Garcia by phone, but they only spoke
for 3 minutes with a promise to talk more later.

The Congress:

-- Flores said UN Lima congressman-elect Javier Bedoya will
be the UN Congressional spokesperson.

-- She expects the UPP congressional delegation to eventually
fragment.

--Flores said Alvaro Gutierrez (Union por el Peru, UPP
Congressman-elect for Arequipa) called her to say that UPP
would support UN for the Presidency of Congress. She
declined, remarking to us that she thinks APRA is entitled to
have that position. (Comment: This offer shows that UPP is
maneuvering to create problems for Garcia by attempting to
have the opposition seize control of Congress from the
outset. End Comment.)

-- UN plans in Congress are to generally back APRA, support
fiscal responsibility, and oppose violence/Humala
irresponsibility. She saw early action on education, health,
and tax reform as possible if pushed by APRA. She said the
south needs immediate help, and it needs to be more than
offers of credit; the south needs technical assistance.

-- Flores expects APRA to seek a multi-party congressional
leadership slate with APRA in the Presidency. She said APRA
and the Fujimorista Alianza para el Futuro may form a block
of 40-50 votes to manage Congress.

The Peru Trade Promotion Agreement (PTPA):

-- Flores agrees with our take on Garcia's PTPA perspective,
to wit Garcia supports the PTPA when it comes down to it, but
will pick at some of the details.

-- Flores noted a Peru Society for Foreign Trade (COMEX)
internal poll of Congressmen that showed the PTPA would pass
with the current Congress.


3. (C) Comment: Flores was much less forward-leaning about
the relationship UN is prepared to have with APRA/Garcia than
in her April meeting with the Ambassador. This is worrisome
because it has been accompanied by a couple of public digs at
APRA that will estrange relations. If UN plays its cards
wrong, it will lose a voice in ensuring that regulatory
agencies are headed by competent and independent technocrats.
Moreover, it will force Garcia to look left for support (to
groups that splinter off of the Peruvian Nationalist
Party/UPP bloc),which could drive politics in a more
populist direction. We will keep pushing UN to engage
constructively with APRA. End Comment.
STRUBLE