PARAGUAY: CASTIGLIONI FACES UPHILL BATTLE IN BID

C O N F I D E N T I A L ASUNCION 000577 SIPDIS SIPDIS E.O. 12958: DECL: 05/03/2027 TAGS: PGOV PREL KDEM PA SUBJECT: PARAGUAY: CASTIGLIONI FACES UPHILL BATTLE IN BID FOR THE PRESIDENCY REF: A. ASUNCION 0255 ¶B. ASUNCION 0252 ¶C. ASUNCION 0431 ¶D. ASUNCION 0489 Classified By: DCM MICHAEL J. FITZPATRICK; Reasons 1.4(b),(d) ¶1. (C) SUMMARY: President Duarte has endorsed his Education Minister Blanca Ovelar as the Colorado Party candidate to succeed him. Seeking to obstruct the bid launched by his Vice-President Luis Castiglioni, he forced the party to embrace a "socialist" ideology at its recent convention and has fired officials senior and lower ranking for too closely identifying themselves with Castiglioni or Acting Colorado Party President Jose Alberto Alderete. Castiglioni has effectively peeled away the support of Colorado leaders around the country but he faces an uphill battle in winning the Colorado Party nomination for lack of the structure, organization and perhaps even the drive Duarte brings to bear in the race. END SUMMARY. Throwing Up Roadblocks ¶2. (U) The Colorado Party's internal electoral tribunal poses a significant challenge to Castiglioni's prospects. This body was installed during the Colorado Party Convention April 28 and will assume the lead responsibility for running the Colorado Party's December primary. (NOTE: The Party's electoral tribunal is separate from the national Electoral Tribunal (TSJE). The TSJE provides assistance to the Party electoral tribunals but does not control the balloting or monitoring, unless specifically asked by the Party. END NOTE.) Duarte supporters control the electoral tribunal (3 to 2) and the Colorado Party machine is notorious for its corruption in elections. In the February 2006 election for the presidency of the Colorado Party, Duarte's machine controlled the electoral tribunal and announced a landslide victory which did not jibe with polls. (NOTE: The three major newspapers are all owned or controlled by the opposition, which may have been a factor in the poll results. END NOTE.) Duarte won all of the Department's with the margin of victory between 8 to as much as 52 percentage points (most jurisdictions were in the 30 percentile range). ¶3. (U) The Colorado Party's establishment is dominated by the Colorado Reconciliation Movement (MRC) which enjoys the allegiance of roughly 600 of the party's 800 convention members. Duarte continues to dominate the MRC. During the April Party Convention, Duarte won adoption of his proposal to embrace a "socialist" ideology for the Colorado Party. This initiative was inspired by a desire to win potential Venezuealan support -- financial and political -- and isolate Castiglioni who is widely perceived as right of center. ¶4. (C) Of course the biggest problem that Castiglioni faces is his lack of the kind of organization and structure Duarte can bring to bear as the Colorado Party's dominate leader. Duarte relies heavily on the Colorado Party's network of grassroots leaders. A novice when it comes to campaigning on the national level, Castiglioni has nowhere near the structure and apparatus available to Duarte's team. Castiglioni is also perceived as not having the kind drive and determination demonstrated by Duarte. Whereas Castiglioni is notorious for being a late riser and arriving late for meetings, Duarte rises early and is in his element as he campaigns practically without pause days on end. PEELING AN ONION ¶5. (U) Castiglioni has focused his efforts on gaining the support of disenchanted Colorado Party leaders. The Mayor of Ciudad Del Este Javier Zacarias Irun declared his support for Castiglioni once Duarte rebuffed his bid for a senior position on Duarte's team. Castiglioni has made Zacarias his running mate. Castiglioni has also won the endorsement of former Interior Minister Orlando Fiorroto -- the leader of a small Colorado movement, the leader of the Colorado Party's Women's Movement Lilian Samaniego, Colorado Deputy Juan Dario Monges (who sought Duarte's support as a candidate for Governor of Paraguai but was rebuffed) and former Aviation Director Tomas Bitar. Duarte opponents Goli Stroessner (grandson of the former dictator and the leader of his own movement),former Health Minister Julio Velazquez, and Osvaldo Dominguez Dibb (a rich and influential businessman who heads a separate Colorado movement) have flirted with Castiglioni but have not yet officially signed up to his campaign. Alderete: The Wild Card ¶6. (U) Winning the support of Acting Colorado Party President Jose Alberto Alderete would represent a major coup for Castiglioni. Alderete enjoys the respect of much of the party's grassroots leadership responsible for rallying folks in the countryside to vote for their candidate. Alderete rebuffed Duarte's request he fill in as Ovelar's running mate. While he has declined to throw his support to Castiglioni, they have met on a number of occasions. Of course, Alderete appears to weighing his own prospects as a candidate for the Colorado Party nomination. Duarte, angered with Alderete -- a childhood friend and long standing political ally -- for not throwing his unconditional support to Ovelar, has taken to making some strong attacks on Alderete's character and manhood and fired some of Alderete's supporters in government. If Castiglioni were to secure Alderete's support he could borrow on his impressive network of support throughout the country. Ovelar's Vulnerabilities ¶7. (C) Blanca Ovelar, Duarte's Education Minister over the last four years, came under criticism in April when the Controller General's office announced that it had discovered several of the Education Ministry's programs had been grossly misappropriated and misadministered Ovelar has been cleared for the time being of direct involvement but the case does not speak well of her commitment to counter corruption. ¶8. (C) Ovelar has also faced resistance from some quarters at the grassroots lever for not hailing from a Colorado family -- an important consideration for many diehard Colorado members who consider party affiliation a core characteristic on a par with religion. Ovelar only joined the party within the last ten years and has never campaigned prior for elected office. Of course there is also some resistance to electing a woman as Paraguay's President, given prevailing chauvinistic attitudes. ¶9. (C) Ovelar insists she is her own person. However, it is difficult to escape the fact that Duarte not only hand-picked her but also Carlos Maria Santacruz, his 35 year old Private Secretary, creating the appearance Duarte intends to continue ruling from behind the scenes. Duarte does little to discredit this notion as at campaign just last week he spent an hour championing Ovelar's candidacy, leaving her no time give her own speech. ALL THE VP'S MEN ¶10. (C) Castiglioni's top policy advisors do not have any clout in the Colorado Party. They are a group of young, bright, untested, apparently honest friends of Castiglioni who have banded together for a campaign that sometimes appears over their heads. -- Juan Facetti regularly works as a consultant with the IDB. He is presently working on contract by USAID in support of El Salvador's MCA compact. While he may represent Castiglioni's smartest and most trusted advisor, Facetti lacks much experience in Paraguay's rough and tumble world of party politics. Under contract on the MCA program, he also is not dedicating himself full-time to Castiglioni's campaign traveling for extended periods to El Salvador. Facetti has received USG funded training on multiple occasions and has sought the assistance of former Clinton campaign advisor James Carville on behalf of the Castiglioni campaign. -- Justo Cardenas, Castiglioni's Secretary General, lost his bid last year to be a City Councilman in Asuncion. He traveled with Castiglioni in 2005 to the U.S. He has strong ties to the U.S. including family living there. He is expected to lead the VP's list of Diputados for the upcoming elections. -- Eric Salum, another close friend of Castiglioni's and his legal advisor recently lost his bid to gain election to an advisory board of the National University. He is smart but very short of experience in elections. -- Hugo Estigarribia is another friend of Castiglioni's who has served as his liaison with Congress. Estigarribia aspires to Congress but lacks the long experience most of Duarte's bring from campaigning in multiple elections. CAMPAIGN FINANCING AND A SEARCH FOR VOLUNTEERS ¶11. (U) Castiglioni has resorted to U.S. campaign style tactics in an attempt to raise funds and build his campaign team mainly due to a lack of access to national and Party funds and structure. He and his supporters are planning to use receptions and other events to raise money from dissident political figures and business leaders (who represent a core part of his support). Castiglioni also seeks to establish an army of grassroots supporters to monitor the polls and reach out to communities throughout the country. MAN IN THE MIRROR - THE SHORT BIO ¶12. (SBU) Prior to his election as the VP, Castiglioni was a member of the House of Deputies and a leader in the Colorado Party from 1998 to 2003. His sizable wealth is attributed to his private construction firm. Duarte is said to have selected him as a running mate to court support from the business community in general and the construction sector in particular. A Catholic member of Opus Dei, Castiglioni is projects himself as being very religious and is close to senior Church officials. He has a terrible reputation for arriving late and has been accused of being lazy. Castiglioni has gone on record criticizing Mercosur (for not delivering on its promise to Paraguay) and Venezuela's Chavez. He traveled to the U.S. on an IV as a Congressman. Modern thinking and well versed in business matters, he is widely considered as pro-U.S. ¶13. (U) Castiglioni is 44 and his wife Miriam Ayala have three children: Luis Osvaldo (22),Luis Idilio (19),and Maria Cecilia (7). His mother lives with him and is the President of a mattress company. His father (a former Colorado President in San Pedro during Stroessner's era) is deceased. His brother, Luis Osvaldo, lives in San Pedro and is a cattle rancher. He also has a sister, Ana, who is a supporter of former Minister of Interior Orlando Fiorotto. COMMENT ¶14. (C) VP Castiglioni faces a steep uphill battle to defeat the political establishment's machine. President Duarte controls the Colorado Party's apparatus throughout the country and his supporters represent a majority in the Party's electoral tribunal. Historically, the Colorado Party's internal elections have been riddled with corruption and malfeasance. There is no reason to believe this election will not face similar challenges. To win, Castiglioni will have to muster support from, not only dissident members of the Colorado Party (many of whom are/have been associated with corruption),but also acquire major defections from the MRC, the dominant political movement within the Colorado Party, including Party President Alderete. Castiglioni's ability to court support throughout the country in the weeks and months ahead will prove telling in determine whether Castilgioni's bid either surges or fizzles. CASON