PRESIDENTIAL CANDIDATE RICARDO TOLEDO SWIMMING

C O N F I D E N T I A L SECTION 01 OF 02 SAN JOSE 000158

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/17/2016
TAGS: PGOV PINR PREL ECON CS
SUBJECT: PRESIDENTIAL CANDIDATE RICARDO TOLEDO SWIMMING
AGAINST THE CURRENT, AND SINKING


Classified By: Ambassador Mark Langdale for reasons 1.4 (b) and (d)

Summary
--------------

1. (C) In a meeting with Ambassador on January 9, President
Pacheco's confidant and former chief of staff Ricardo Toledo
tried to put the best light possible on his foundering
presidential campaign--a difficult task considering he has
not broken 5 percent in the polls and now appears to have
slipped from fifth to sixth place in a field of 14
candidates. His Social Christian Unity Party (PUSC) is
hampered with two former presidents being investigated for
corruption and a third (Pacheco himself) who is widely seen
as a failure. Toledo believes he is being "punished (by the
voters) by association." Toledo made it clear that we have
not seen the last of him and that several Costa Rican
presidents were elected only on their second or even third
try. End summary.

What Toledo Stands For
--------------

2. (C) On January 9, Ambassador paid a courtesy call on
Ricardo Toledo, presidential candidate for the ruling Social
Christian Unity Party (PUSC). For the election Toledo is
trying to position himself as a centrist. He told Ambassador
that frontrunner Oscar Arias and Libertarian candidate Otto
Guevara both represented the economically powerful who would
like to privatize electricity, telecommunications, insurance,
and even social security. On the other side is leftist
candidate Otton Solis "who resembles Hugo Chavez and Evo
Morales." Toledo said: "My position is in the middle, where
things are discussed to arrive at agreements, without
imposition or being imperial." (Note: In practical terms,
this means nominal support for CAFTA-DR in the style of
President Pacheco.)


3. (C) Toledo is a traditional politician who sees his role
primarily as doling out government benefits to the people.
His main criticism of Pacheco is that Pacheco listened too
much to his four consecutive cost-cutting finance ministers,
the first three of whom quit in disgust because they believed
he did not listen enough. Toledo has proposed to increase
spending dramatically on education, provide subsidies for
first-time home-buyers, and give a computer to every
high-school graduate, a program for which he was roundly
ridiculed in the press. When asked where he will get the
money he mentioned consolidating ministries and cutting the
Foreign Trade Ministry, which is responsible for implementing
CAFTA-DR. He worries that the Costa Rican Electricity
Institute (ICE),which will lose its monopoly status in
telecommunications under CAFTA-DR, will be swallowed up by
foreign private investors like Carlos Slim of Mexico. Toledo
distrusts public concessions to private companies. He
opposes an existing concession to a Spanish company for
vehicle inspection, is lukewarm toward the airport concession
to an American company, and supported the cancellation of a
concession to an American company to build a prison.

Election Campaign
--------------

4. (C) Until this election, being the PUSC nominee meant
having at least an even chance of being elected (three out of
the four most recent presidents, including the current one,
are from PUSC). That changed in 2006, and perhaps
permanently, because two of those former presidents have been
under investigation since late 2004 for corruption (with a
lot of damning evidence made public) and the third, President
Pacheco, is seen as incompetent and ineffective. Toledo
cannot, as much as he might try, distance himself from
Pacheco. He was for a time Pacheco's Minister of the
Presidency (Chief of Staff) and most trusted confidant.
Further, he was behind many of Pacheco's worst decisions,
e.g., caving to public sector unions, opposing "neoliberal"
policies of consecutive finance ministers, wavering on free
trade. The voters are making Toledo pay; polls show that he
is below 5 percent and has sunk from fifth to sixth place in
a field of 14 candidates.


5. (C) Toledo complained that he is being "punished (by the
voters) by association" with Pacheco and that voters are not
aware of the many accomplishments (which he did not
enumerate) of the Pacheco administration. Though Toledo
seemed resigned to ultimate defeat, he put the best possible
light on his campaign and his personal popularity. He told
Ambassador that he had had successful political rallies in
Limon province and that 3,000 people greeted him in the
Talamanca indigenous district. He cautioned against trusting
the polls "because they are done by phone, and our strength
is with the poor who are phoneless." Toledo said that he
believes he can win 20 percent of the vote, forcing a runoff
with frontrunner Oscar Arias.

Future of PUSC
--------------

6. (C) Toledo claimed that despite scandals and the negative
perception some have of the Pacheco administration, PUSC
continues to be a strong party at the grassroots level. He
pointed out that 51 of Costa Rica's 81 mayors are from PUSC
compared to 26 from Arias's National Liberation Party (PLN).
(Four mayors are from neither.) He said that PUSC was
especially strong among the poor and in the poorest
provinces--Limon, Guanacaste, and Puntarenas--because the
party is a natural descendant of Costa Rica's great social
reformer, Rafael Angel Calderon Guardia, creator of Social
Security and a progressive labor code. Fifty years ago,
Toledo said, the PLN adopted and even expanded on many of
Calderon Guardia's reforms but under Arias has turned its
back on the poor. Arias has therefore been able to attract
fat-cat campaign contributions, according to Toledo, even
from those who formerly supported PUSC. Toledo predicted
that the number of PUSC municipal officials and deputies
(members of the Legislative Assembly) would decline after the
election, but not dramatically.

Future of Toledo
--------------

7. (C) Toledo confided to Ambassador that he already has a
job lined up to begin February 15, ten days after the
election. He will be the general manager of a company that
provides courier services. As former head of the Costa Rican
postal system, Toledo has experience in that area. He is
also trained as a lawyer and agronomist, and he once operated
a donut franchise in Miami. Toledo said he will return to
politics as a presidential candidate, noting that former
presidents Daniel Obuder and Miguel Angel Rodriguez each lost
an election and Rafael Angel Calderon Fournier, son of
Calderon Guardia, lost twice before being elected president.

Comment
--------------

8. (C) Toledo engaged in a lot of wishful thinking.
Although he did manage to get the PUSC presidential
nomination, it was mainly due to the lack of serious
competition. The party banner, because of scandal and
fecklessness, is badly tattered, and there were few
volunteers to do what Toledo is willing to do--go down in
flames. Moreover, the party is divided, and Toledo
represents a minority wing. Rafael Angel Calderon Fournier,
who was forced to resign as party president after his 2004
arrest for corruption, is still pulling the party strings.
The PUSC list for deputies, for example, was put together by
Calderon, not Toledo. The deputies are not campaigning
together with the presidential candidate (Toledo),as is
customary, but separately from him. We know anecdotally that
many PUSC loyalists plan to vote for the PUSC party list for
the Legislative Assembly but for a non-PUSC presidential
candidate like Oscar Arias, Otto Guevara, or even Otton
Solis. Toledo's dream of a second chance, even though he is
only 47 years old, is no sure thing.
LANGDALE