PARAGUAY POLITICAL AND ECONOMIC UPDATE MARCH 31 -

UNCLAS ASUNCION 000318

SIPDIS

SIPDIS

STATE FOR WHA/BSC, INL/LP (JIM HIDES)
EB/IFD/OIA
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 KWMN SMIG PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE MARCH 31 -
APRIL 13, 2007


1. (U) SUMMARY:

-- Ambassador Inaugurates Anti-Drug Out Post
-- Ambassador Donates Trucks to Customs
-- Japanese Nationals Kidnapped
-- Cabral Returns
-- TIP: Lebanese-Paraguayan Accused of Trafficking

AMBASSADOR INAUGURATES ANTI-DRUG OUTPOST


2. (U) The Ambassador inaugurated April 11 the new National
Anti-Narcotics Secretariat's (SENAD) helicopter hangar and
canine facility, in the city of Pedro Juan Caballero (PJC),
located in the Department of Amambay, on the Brazilian
border. The INL-funded project is designed to provide SENAD
a forward launch pad to conduct operational activities in the
region where much of the drug trafficking in Paraguay occurs.
In his speech, the Ambassador challenged the GOP to provide
the resources and demonstrate the political will necessary to
succeed in its fight against narcotics trafficking.

AMBASSADOR DONATES TRUCKS TO CUSTOMS


3. (U) The Ambassador donated 24 trucks April 13 to the
Paraguayan Ministry of Finance, principally for the Customs
office, the tax service and the Ministry's investigative
unit. Each of these institutions is working with USAID under
its MCA Threshold Program. The event garnered more than 130
guests including President Nicanor Duarte Frutos, numerous
cabinet members, international donors, officials from
development agencies and other Latin American Ambassadors.
Both the Ambassador and President Duarte remarked about the
progress made thus far but underscored that much more needs
to be done if Paraguay is to achieve the objective's of its
ambitious institution building and anti-corruption program.
President Duarte conceded there is widespread corruption in
government but blamed the private sector for offering bribes
in the first place.

JAPANESE NATIONALS KIDNAPPED


4. (SBU) Japanese nationals Hirokazu Ota and Sawako Takayama
were kidnapped April 1 near the city of Caaguazu, Paraguay --
150 km east of Asuncion. Ota is the President of Victoria
S.A. and the leader of the Unification Church in Paraguay,
while Takayama is employed as Ota's secretary. Victoria
S.A., a land management company, and the Unification Church
are both associated with South Korean Reverend Sun Myung
Moon. Reportedly, as Ota and Takayama were traveling from
Ciudad del Este to Asuncion, their vehicle was stopped and
they were kidnapped by unidentified individuals carrying
M-16s and wearing bullet resistant vests. As the two
Japanese nationals were being kidnapped, an off-duty local
police officer and his girlfriend came upon the scene and
were also kidnapped. Ransom requests for the release of Ota
initially were reported to be as high as $750,000. On April
10, 2007, Takayama was released unharmed. Ota and the two
Paraguayan nationals remain in the custody of the kidnappers.
Local media reporting indicates that the ransom request has
been lowered to approximately $150,000 and that the release
of the victims is expected within the next few days. This
kidnapping has attracted international attention due to the
involvement of the Japanese nationals and Japanese media
representatives have arrived in Paraguay to report on the
investigation. The April 1st kidnapping is reported to be
the seventh kidnapping to occur in Paraguay, all of which
appear to be financially motivated. Local police believe the
same criminal gang is responsible for all of the kidnapping
activity that has occurred this year but they don't really
know.

CABRAL RETURNS


5. (SBU) On April 10, 2007, the Ministry of Interior
announced that retired Comisario Principal Aristides Cabral
has been named as a Special Security Advisor for the Alto


Parana Department as part of a major shake-up in Ciudad del
Este police hierarchy in wake of rising crime/kidnapping wave
there. Cabral was retired from the Paraguayan National
Police in December 2006 after exhausting time in service
without a promotion. He has previously been publicly accused
by the U.S. Embassy of involvement in corruption with strong
ties to narco-traffickers. He also has an apparently well
deserved reputation for being ruthless -- shoot first, ask
questions later. Attorney General Ruben Candia reports
criminals involved in recent kidnappings are already on run
and crossing border into Brazil out of fear of assault by
Cabal and his cohorts. Cabral will report directly to the
Minister of Interior, Rogelio Benitez, and will wield
considerable authority over the local police commanders in
Alto Parana. Press reports note that a number of criminals
have shown up recently in CDE, shot at point blank range.

TIP: LEBANESE-PARAGUAYAN ACCUSED OF TRAFFICKING


6. (U) Interpol agents arrested Mohamad Ali Awala, a
Lebanese-Paraguayan, April 3 for allegedly producing false
documentation and trafficking more than 800 Paraguayan
females to Spain for prostitution. Awala allegedly
trafficked approximately 26 women per month for more than 4
years, according to Teresa Martinez, the lead prosecutor on
TIP. Martinez also stated that Awala is detained in Tacumbu
prison for a period of 6 months while the investigation gets
under way.

CASON