ARGENTINA: K CAMPAIGNING ON CONFRONTATION?

C O N F I D E N T I A L BUENOS AIRES 000687

SIPDIS

SIPDIS

EMBASSY VILNIUS FOR THOMAS P. KELLY
EMBASSY GUATEMALA FOR ALEX FEATHERSTONE

E.O. 12958: DECL: 04/11/2017
TAGS: PGOV PREL AR
SUBJECT: ARGENTINA: K CAMPAIGNING ON CONFRONTATION?

REF: A. BUENOS AIRES 00603

B. BUENOS AIRES 00576

Classified By: Ambassador E. Anthony Wayne for Reasons 1.4(b) and (d).


1. (C) SUMMARY: While opposition politicians are busy
conducting their pre-campaigns, President Nestor Kirchner,
with an overwhelming lead in all the polls, remains mum about
whether he will run for reelection in October. Kirchner
associates and rumors favor First Lady Senator Cristina
Fernandez de Kirchner as the likely Kirchnerista candidate
for president, and she appears to be conducting a
pre-campaign with a number of recent public appearances and
foreign trips. Kirchner, however, remains very much in the
mix and in control, his irascible personality at the fore.
With an overarching focus on the short-term and maintenance
of domestic political power, Kirchner continues to co-opt
domestic politicians and is happy to take on all challenges
-- real or perceived -- whether it be HMG and control of the
Falklands/Malvinas islands, the purported slowness of 1980s
rights cases in the Court of Appeals, the Catholic Church for
supporting teachers pay raise demands, the police for the
accidental death of a teacher/demonstrator, or the USG's
perceived criticism after Hugo Chavez's last visit. This odd
combative style, while wearing thin with the chattering
classes, has served Kirchner well. Given his high poll
ratings, we see no reason why he will change tactics in the
countdown to October elections. END SUMMARY.

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Will He or Will She?
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2. (C) The Casa Rosada remains mum on whether President
Kirchner will seek a second term or will decide to run the
First Lady, Senator Cristina Fernandez de Kirchner. We
believe the Kirchners will likely hold their tongue until at
least after the June mayoral elections in Buenos Aires.
Rumors and smart money favor the First Lady. Recent public
appearances and a number of high profile trips abroad are
being portrayed as the Casa Rosada laying the ground work for
Cristina's eventual candidacy. After visiting Paris in early
February, she made a three-day visit to Ecuador and Venezuela
in late March, during which the presidents of both countries
referred to her as the likely presidential candidate. She is
off to Mexico this week and reportedly will travel to the
U.S. in May. It is unclear, however, whether stylistic
differences between husband and wife would translate into
measured policy changes in a Cristina administration.
(COMMENT: The line circulating in the press -- likely
instigated by Cristina intimates -- is that, should she win,
there would be a shift toward the center politically, a more
orthodox approach to economic and financial policy and
perhaps some more stress on defending human rights and
democracy internationally. It is much too early to speculate
on what a Cristina victory might mean policy-wise, however
and, given that Argentine campaigns are usually bereft of
policy content, we are unlikely to get a clear indication if
and when she declares and the campaign begins in earnest.
END COMMENT.)

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Picking Off the Opposition
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3. (C) As in the October 2005 legislative elections,
Kirchner is making an assiduous effort to co-opt
opportunistic opposition leaders in preparation for this
year's presidential and legislative elections. Kirchner's
poaching of other parties has netted him both left- and
right-wing leaders and has left the opposition weakened and
fragmented across the ideological spectrum. Radical Civic
Union (UCR),previously the most viable national opposition
party, for instance, has lost five of its six governors and
several mayors to Kirchner's "concertacion" -- an alliance of
Peronists and non-Peronists who have switched allegiance from
their parties to Kirchner's political program.


4. (C) Kirchner has skillfully utilized his power over the
budget purse strings to entice allies and undermine would-be
opponents; Argentina's budget and tax system affords the
national government control over the distribution of
currently sizable federal funds to the provinces, which
shoulder the majority of expenditures. Political contacts
here describe Kirchner's support as broad but not deep, with
most of his new adherents content to ride the swell until the
next big political wave comes along.

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Picking Fights
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5. (C) Kirchner, lacking the charisma of a natural
politician, appears happiest and most effective when he is
picking a fight either domestically or internationally.
Although this proclivity has worn thin with much of the
chattering classes, it has proved an effective and popular
formula with the average Argentine. Four years into his
tenure and with the highest approval ratings in Latin America
(73 percent according to Mexican polling firm Consulta
Mitofsky),Kirchner continues to look for targets. His
recent decision to walk away from a 1995 agreement with the
UK for oil exploration in the Falkland/Malvinas islands is a
case in point (ref A). Kirchner, more than any president
since the return of democracy in 1983, has aggressively
promoted Argentina's sovereign claim to the islands -- a
policy that plays well with nationalistic sentiments here.
He has used the 25th anniversary of Argentina's disastrous
island war with the UK as an opportunity to push the issue
again with a view to October presidential elections.


6. (C) Ironically, Kirchner does not need to revive the
Falklands/Malvinas issue -- or any issue -- to help his
position in the polls. Kirchner is projected to win the
election by at least 40 points by almost every polling firm
in Buenos Aires. With center right opposition leader
Mauricio Macri running for Buenos Aires Mayor and out of the
race for president, the next closest candidates to Kirchner
-- center-left politician Elisa Carrio and former Economy
Minister Roberto Lavagna -- are each expected to pull less
than 20 percent of the vote.

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Harsh Words for the U.S. and other International Icons
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7. (C) The thin-skinned Kirchner is consistently intolerant
of real or perceived criticism from any source, including the
United States. He regularly strikes out at the very
unpopular IMF as well as others. The fact that the Argentine
public has the most negative view of the US's international
role of any country in the hemisphere makes Washington an
easy target. Kirchner and some of his cabinet members also
reportedly believe that Washington did little to aid
Argentina during and after the 2001-2002 economic crisis and
default. Kirchner was also reportedly upset that the USG
resisted language addressing the question of sovereignty over
the Falklands/Malvinas islands in the November 2005 Summit of
the Americas declaration. He apparently viewed President
Bush's March 9-11 visit to Uruguay as an effort to divide
Mercosur and felt the need to reassert Argentina's presence
as Brazil and the U.S. announced new cooperation.


8. (C) Pundits here were waiting for Kirchner's explosion
following Under Secretary Burns' balanced and polite March 22
public comments to the Council of the Americas about USG
disappointment of the March 9 Chavez-led anti-Bush rally in
Buenos Aires (ref B). Embassy contacts report that Foreign
Minister Jorge Taiana, Chief of Cabinet Alberto Fernandez,
and Interior Minister Anibal Fernandez moved quickly to
criticize U/S Burns' comments in order to preempt a Kirchner
response.

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Meddling in the Appeals Court
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9. (C) Kirchner also regularly goes after targets at home.
He recently accused four of the Criminal Appeals Court's
judges, including the Court's president Alfredo Bisordi, of
purposely stalling proceedings on human rights cases relating
to the military dictatorship. According to press coverage,
the judges first received "suggestions" that they should
resign their posts in the interest of the country, then were
told by Planning Minister Julio De Vido to vacate their
positions or face investigation. For its part, the Court has
strongly pushed back, contending that "never in the history
of Argentine democracy has any president interfered so much
in judicial activity" and maintaining that human rights cases
are caught up in the same backlog that all cases before the
Court are currently facing. The opposition has also lost no
time using the issue to accuse the president of overstepping
his executive powers. Despite continued criticism, however,
Kirchner has refused to back down. The Council of
Magistrates has opened investigations of the four judges,
while the Supreme Court appears to be trying to mitigate the
situation by giving credit to Kirchner's due diligence but
warning of the inherent dangers of interfering in judicial
independence. One judge has gone on medical leave and
another has said she will retire. (COMMENT: Kirchner's
apparently politically-motivated attack of the court was
originally most likely an attempt to intimidate judges into
retirement, thereby giving him a chance to replace some of
the judges appointed to life-terms by former President Menem
in 1993. The Court's public resistance to pressure from the
administration may have forced Kirchner to carry the
accusations of malfeasance farther than initially planned.
Septel will report the Ambassador's discussions with the
Supreme Court President. END COMMENT.)

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Teacher Protests
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10. (C) In another seemingly unpredictable and impulsive
reaction, Kirchner has also recently butted heads with Santa
Cruz Bishop and former ally Juan Carlos Romanin, apparently
because he perceives the Bishop is playing a prominent role
in fostering civil unrest in his native province. Several
thousand teachers from Santa Cruz, often accompanied by other
trade unions, have held a series of strikes and protests in
recent weeks demanding salary increases. Bishop Romanin has
supported their calls for increased wages, which have spread
to other provinces and are threatening to become a national
problem. A visibly irritated Kirchner has criticized Romanin
publicly and accused the strikers of extortion. Leverage
provided by the elections and skepticism over official
government inflation figures may well likely encourage
continued strikes and protests in support of substantial pay
increases in coming months. Kirchner is likely not to
overstate his criticism of a powerful representative of the
Catholic Church, which enjoys an overwhelming level of
credibility here. However, teacher strikes have spread to
various provinces resulting in violence and one death.


11. (C) In typical Kirchner form, the president went over
the top in public comments April 9, in reference to the
accidental police killing of a demonstrating teacher in
Neuquen province April 5. Chemistry teacher Carlos
Fuentealba died shortly after being struck in the head by a
tear gas canister fired by police at close range in efforts
to force protesting teachers to clear a blockaded highway.
Kirchner repudiated the "police repression" that led to
Fuentealba's "execution-style" death and ironically called on
all sectors of society for "coexistence and rationality."
Teachers and a number of labor unions staged strikes April 9
and 10 to protest Fuenteaba's death. Press reports indicate
it was the biggest social protest since Kirchner took office,
with around 200 rallies held throughout the country. About
30,000 took to the streets in the city of Neuquen, while
thousands also protested in Buenos Aires, Santa Cruz,
Mendoza, and Cordoba. The 24-hour teacher strike sparked
parallel work stoppages in public transport, banking, the
courts, and health sectors.

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Corruption in the Air
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12. (C) Four years into his administration, Kirchner and
his officials have faced relatively few allegations of
corruption or scandal. A couple of cases currently under
investigation, however, have gained momentum in recent
months. Swedish multinational Skanska has admitted
involvement in tax evasion and is suspected of bribe payments
to government officials, many of whom work under powerful
Planning Minister Julio De Vido, during its work expanding
the Northern Gas Pipeline. Not only has this put a cloud
over De Vido, one of the President's most trusted advisors,
it has raised questions -- and given the opposition
ammunition during an election year -- about the GoA's
frequent use of unregulated quasi-private sector
"fideicomisos" (Trust Funds) to finance large public works,
including the Gas Pipeline and a multi-billion dollar thermal
power generation project. Separately, Senate opposition
parties criticized the government for its lack of
transparency in reaching a financial settlement with the
Mendoza consortium Grupo Greco, which lost 45 companies in a
1980 military government confiscation. Media allegations of
corruption in the deal have prompted several court
investigations of Economic Ministry officials. This scandal
could have negative ramifications for Economy Minister Felisa
Miceli and other political appointees in the Ministry, who
have been accused, somewhat unjustly, of mismanaging the over
$100 million compensation deal for Greco's 1980 losses.
Numerous governments have dealt with this case since 1980,
and Miceli's predecessor, Roberto Lavagna, oversaw the final
negotiations with Greco. However, Miceli and her legal team
sent the deal to the Argentine Congress, provoking the
scandal, and are, therefore, bearing the brunt of the
backlash.

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Comment
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13. (C) Although it appears that Kirchner has the
presidential election well in hand, he is not likely to back
away from his aggressive responses to real and imagined
challenges. Despite Kirchner's consistently high approval
ratings and the lack of a viable opposition candidate, his
recent confrontational behavior suggests that Kirchner still
sees political benefit to appealing to his more radical voter
base in an election year. We can expect more firebrand
rhetoric and nationalistic gestures in the months leading to
the October elections, regardless of which Kirchner ends up
being the official candidate. Although Cristina's
pre-campaigning suggests she might formulate a more concrete
foreign policy and a more moderated domestic policy, it is
too early to speculate how much actual difference could be
expected if she becomes the new president in October. Many
comment that she has never had a management position.
Opposition politicians and political pundits seem tired of
the Kirchners' combative performance, but with a projected
50-70 percent of intended presidential votes slated for
Kirchner, the domestic audience writ-large is enjoying the
show and asking for an encore. END COMMENT.
WAYNE