PARAGUAYAN FIREWORKS OVER CHAVEZ MEDDLING

S E C R E T ASUNCION 000098

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/02/2027
TAGS: PGOV PREL PA VE
SUBJECT: PARAGUAYAN FIREWORKS OVER CHAVEZ MEDDLING

REF: ASUNCION 0054

Classified By: DCM Michael J. Fitzpatrick; Reasons 1.4(b),(d)


1. (C) SUMMARY: The heavy-handed response by Venezuelan
President Chavez at the Mercosur Summit in Brazil against
Paraguayan Vice President Castiglioni's criticism opened the
hornets' nest in Paraguay. President Duarte claimed he
challenged Chavez for attacking his VP and for interfering in
Paraguayan internal politics. Venezuelan Ambassador Jose
Huerta Castillo confirmed he has met repeatedly Presidential
candidate Monsignor Lugo but denied he is meddling (separate
reporting contradicts his account of the Venezuela-Lugo
relationship). Opposition parties and news organizations
have requested explanations from the Venezuelan government
and called for expulsion of its Ambassador. Lugo supporters
have sought information on developments and social movements
in neighboring countries. END SUMMARY.

DUARTE DEFENDS CASTIGLIONI, INTERNAL POLITICS


2. (U) Venezuelan President Hugo Chavez lashed out at VP
Castiglioni during the Mercosur Summit in Brazil (reftel),
hurling accusations of Castiglioni being an imperialist and a
CIA operative, sparking criticism from every corner in
Paraguay. President Duarte Frutos defended Castiglioni
during a news program January 25, stating he told Chavez that
Castiglioni is not an agent of the CIA, nor an imperialist,
and not to meddle in the internal affairs of Paraguay.
Duarte also reportedly told Chavez that Presidential
candidate (and former Monsignor) Lugo is not a socialist but
that he is "fainthearted or is lying about his political
aspirations."

VENEZUELAN AMBASSADOR ADMITS TO LUGO MEETINGS


3. (U) Venezuelan Ambassador Jose Huerta Castillo confirmed
January 24 that he met with Lugo on three separate occasions
since December 2005. According to Huerta, he met Lugo at his
residence in 2005 regarding Lugo's trip to Venezuela for the
World Social Forum and other meetings. The second meeting in
early 2006 was supposedly about Lugo wanting to know more
about their (Venezuela's) "process" and hopes of meeting
Chavez and his ministers. He claims Chavez and Lugo have
never personally met. In the third meeting, Huerta claims
that Lugo and his aides wanted to know "more about our
process and especially about the social welfare missions."
Huerta also made mention that he has had conversations with
imprisoned former coup leader and presidential aspirant, Lino
Oviedo as well.


4. (S) Confidential sources note that Ambassador Huerta is
not telling the whole truth about the Lugo visits and
meetings. Lugo has reportedly met on several different
occasions with numerous officials within the Chavez
Administration. He also maintains a relationship with the
Free Fatherland Party (PPL),which maintains strong ties to
the Bolivarian Movement which is tied to Chavez. (NOTE: Some
members of Lugo's campaign team are PPL members. In
addition, militant members of the PPL are responsible for the
Cecilia Cubas kidnapping and murder and at least one of those
convicted were seminary students of Lugo. End Note).

POLITICAL PARTY AND PRESS CHIME IN


5. (U) The Beloved Fatherland Party (PPQ) requested a full
explanation from Venezuela about the Chavez comments and the
activities of Ambassador Huerta. A recent editorial in
Asuncion's La Nacion newspaper blasted Venezuela for
"criticizing the USG for being an interventionalist nation
but at the same time proceeding in an identical manner." The
article called for Huerta to be declared persona non grata
and expelled from Paraguay because of his intervention in
local politics.


6. (U) Some die-hard Lugo supporters announced their interest
in the developments and processes in leftist regimes such as
Venezuela, Bolivia, Chile and Brazil. These supporters have
made it clear their intent to use those nations as models.
However, Lugo has since tried to tamp down fears by saying
Paraguay has its own political process and "there is no
comparison with the political processes of neighboring
countries."

COMMENT


7. (C) President Duarte's tepid attempt to defend VP
Castiglioni is significant for both regional and domestic
reasons. Paraguay has signaled that there are indeed limits
to how far it can be pushed around - at least without
squawking about it - by Mercosur's new "bad boy." Duarte is
also obviously uncomfortable with Venezuela's possible
support for a Lugo candidacy in 2008.


8. (C) Castiglioni and Duarte have not had a good
relationship of late and this could be a sign that
Castiglioni may have the advantage in a Colorado primary.
Duarte has in the past identified other possible persons he
might support and Castiglioni was not one of them.
Venezuelan meddling and association with Lugo brings with it
much controversy and could derail the Lugo plan of becoming
the standard bearer for the opposition in 2008. Lugo already
has the difficult task of building an opposition coalition
that can hold together. Meanwhile, the Colorados and Lugo's
supporters have begun attacking each other and the months
ahead will likely bring much more mudslinging. Charges of
stealing past elections, ill-gotten wealth and corruption
have laid the foundation for what looks to be a virulent
fight. END COMMENT.
CASON