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IdentifierCreatedClassificationOrigin
07BUENOSAIRES1646 2007-08-22 19:23:00 UNCLASSIFIED Embassy Buenos Aires
Cable title:  

MEDIA REACTION; CHAVEZ-KIRCHNER AND THE SUITCASE SCANDAL;

Tags:   KPAO OPRC KMDR PREL 
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VZCZCXYZ0021
OO RUEHWEB

DE RUEHBU #1646/01 2341923
ZNR UUUUU ZZH
O 221923Z AUG 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8991
INFO RHMFISS/CDR USSOCOM MACDILL AFB FL//SCJ2//
RULGPUA/USCOMSOLANT
					  UNCLAS BUENOS AIRES 001646 

SIPDIS

STATE FOR INR/R/MR, I/GWHA, WHA, WHA/PDA, WHA/BSC,
WHA/EPSC
CDR USSOCOM FOR J-2 IAD/LAMA

SIPDIS

E.O. 12958: N/A
TAGS: KPAO OPRC KMDR PREL
SUBJECT: MEDIA REACTION; CHAVEZ-KIRCHNER AND THE SUITCASE SCANDAL;
WORLD FINANCIAL CRISIS; 08/21/07




1. SUMMARY STATEMENT

The main weekend international stories are related to the
implications of the suitcase scandal in the Argentine-Venezuelan
relationship; and the role played by US vulture funds in the world
financial crisis.



2. OPINION PIECES AND EDITORIALS

- "Santa Cruz, Carris and Chvez against Kirchner"

Joaqun Morales Sol, political analyst of daily-of-record "La
Nacisn," writes (08/19) "... What kind of unlimited power permitted
an Argentine aircraft on an official mission to give a seat to a
foreigner with a suitcase containing 800,000 US dollars that was
surely illegal?.. And the most important question - what destination
did those 800,000 US dollars have?.. Was it money laundering or
narco-trafficking money...? Was it money to pay for bribes or to
help argentine friends of Chvez? The judicial case has not closed
yet.

"However, the gist of the political problem lies with Argentina's
ties to Venezuela, which are not normal...
Diplomacy should definitely replace the shadowy economic operators
in dealing with Chvez...

"Chvez does whatever he wants in Venezuela but it would be
intolerable that he acted as he wanted in Argentina. This now only
depends on Kirchner.

"The (Argentine) Government has noticed that the Bush administration
used the suitcase scandal in its confrontation with the Venezuelan
caudillo. That is not new. It is only natural that Washington use
such a scandal against Chvez...

"... (Elisa) Carris's insistent denunciation against the most
influential government officials and important businessmen, the
problems created by Chvez, the violence in Santa Cruz and also
inflation shrunk the error margin as the election that will change
Argentina's president gets closer."

- "Suitcase or sootcase?

An editorial in liberal, English-language "Buenos Aires Herald"
reads (08/18) "Almost a fortnight after the Venezuelan businessman
Guido Antonini Wilson tried to pass through Customs at Jorge Newbery
Airport with a suitcase containing nearly 800,000 undeclared
dollars, thus triggering a major uproar a few days later, the
resolution of this scandal seems to be falling slowly into place...

"In fact, various loose ends remaining both legal and political
terms, even if the proceedings now underway are satisfactorily
concluded. Various questions await an answer: What was the purpose
of the 800,000 dollars? How many similar suitcases have Venezuelan
and other visitors slipped through customs and did the reasons for
the strict inspection of a weekend flight stem from political
factors rather than routine control? The various legal questions can
be multiplied but there is also the question of the relationship
with Venezuela. The belated mini-purge of Chvez seems ideal for
letting the Nstor Kirchner administration off the hook because the
Venezuelan leader thus appears to accept responsibility without
taking offence unduly. But is salvaging the relationship with the
controversial Chvez necessarily good news at a time of global
financial turbulence? Kirchner thought he was defending the 10.6
percent interest paid out for the debt bonds purchased by Venezuela
when he said that he would probably have to pay double anywhere else
but this only underlines the corner into which Argentina has painted
itself.

"Corruption scandals and sagging money markets might seem to belong
to different worlds but the distance between the two cannot be so
neatly compartmentalized - in this context moral and financial
solvency go together with political scandal and financial collapse
feeding each other. Even more importantly for the government at
least, this also applies to opposition prospects in the elections -
normally fragmentation is an electoral liability but when problems
have political, ethical, financial and institutional aspects, an
opposition with a multiple personality can only gain."

- "'Vulture' funds - the best applied qualifier"

Oscar Ral Cardoso, international analyst of leading "Clarn,"
opines (08/18) "According to Scott Baker, a US investor who was
trapped in his country's outrageous financial crisis, the investment
funds industry is spoiling the international market and needs to be
regulated...

"... After all, investors resort to them because the so-called 'free
investment funds' are ferocious profit machines in spite of the fact
that their heads are the most expensive financial agents to be
found.

"... This innate passion to create wealth is unlimited... The most
recent example is the so-called 'securitization' of the real estate
financial market, based on an impossible illusion - the belief that
real estate prices could only go up, never go back. This is one of
the chimeras on which the prosperity claimed by Washington was based
during the Bush administration...

"... The malaise has been transferred to the global financial
system, in which the main world economic power finds out that much
of its sovereign debt ended up in speculation... No one in the US is
in a position to assess how much national wealth has been lost in
the real estate crash."

To see more Buenos Aires reporting, visit our
classified website at:
http://www.state.sqov.gov/p/wha/buenosaires

WAYNE