SACA NAMES TACA VETERAN FINANCE MINISTER

C O N F I D E N T I A L SAN SALVADOR 001152

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/28/2026
TAGS: ECON PINR ES
SUBJECT: SACA NAMES TACA VETERAN FINANCE MINISTER

REF: SAN SALVADOR 1027

Classified By: DCM Michael Butler. Reasons 1.4 (B) and (D).


1. (U) On April 23, President Saca named William J. Handal
Minister of Finance, to replace Gullermo Lopez Suarez
effective May 1. Handal is from the Department of Usulutan,
the home of President Saca. Handal graduated from
Southeastern Louisiana University with a Bachelor,s Degree
in Economics in 1974. Working with TACA International
Airlines since 1975, Handal has held a variety of positions,
mostly in administration and sales. He was most recently
Vice President and General Manager. Handal also owns and
manages an independent advertising firm, Redes.


2. (U) Handal was also a member of the Board of Directors of
Finsepro, a Salvadoran investment firm run by former ARENA
stalwart Roberto Mathies Hill. Newspaper reports indicate
that regulators closed the firm in 1997 and accused Mathies,
Handal, and other directors of defrauding more than 500
investors of $22.7 million. Handal never faced criminal
charges, while Mathies and another director were absolved of
criminal charges in 2001. President Saca recently deflected a
press inquiry on the subject saying "Handal is an honest man
who loves his country, and I believe we've found the right
person to be Minister of Finance."


3. (U) Handal was Director of the Salvadoran Port
Authority's Executive Committee from 1980 to 1984 and again
from 1989 to 1991. He was also Vice President of the
Salvadoran Tourism Institute, ISTU, a public institution that
directs, coordinates, and controls the development of tourism
activities, and from 2000 until 2006 he was a Director the
Salvadoran Tourism Corporation, CORSATUR, an autonomous
entity that promotes international tourism. Handal is also an
active supporter of professional and amateur sports and is
owner of a local first-division soccer team.


4. (U) While in office, Lopez Suarez had pushed through
significant tax reform--without raising tax rates--that
increased tax collection from $1.7 billion in 2003 to $2
billion in 2005. Saca has offered no public explanation for
Lopez Suarez' dismissal, but many believe it was because
Lopez Suarez recently had begun to publicly discuss increases
in tax rates and the possibility of new taxes, earning him
the ire of the economic elite and ARENA insiders (Reftel).
In contrast, Handal has already stated publicly that "In the
three years President Saca has left in office, there will be
no tax increases." Handal is extremely well known in the
business community, and his appointment prompted public
statements of support from National Association of Private
Enterprise (ANEP) and other business groups.


5. (C) Lopez Suarez will remain in government as an Advisor
to the President on Economic Issues, a position that sources
close to President Saca say was invented to allow the
continuation of Lopez Suarez' security detail. Those sources
say Lopez Suarez fears reprisal for his role in reporting
corruption allegations to President Saca (Reftel).


6. (U) The Ambassador will call on Minister Handal within the
next few weeks. One goal of that meeting will be to seek the
Minister's continued support for USAID's ongoing project to
improve tax administration.
Barclay