COMRADE CHAVEZ'S CHECKS COVER THE COUNTRY

UNCLAS LA PAZ 002112

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL ECON BL
SUBJECT: COMRADE CHAVEZ'S CHECKS COVER THE COUNTRY

REF: A. LA PAZ 859

B. LA PAZ 1664

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Summary
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1. (SBU) Over the past week, President Morales has handed out
Venezuelan checks or goods amounting to over USD 18 million.
During a July 31 visit to Oruro where he delivered over USD
two million in Venezuelan aid checks President Morales
likened Venezuelan President Hugo Chavez to Simon Bolivar.
On July 30, Venezuela's DCM and President Morales delivered
USD 10 million in heavy equipment to Bolivia's
opposition-controlled Beni department. On July 27, Morales
announced that he was giving a Venezuelan donation of USD 5.5
million to the armed forces. The opposition argues that the
checks circumvent the GOB's normal budgetary and foreign
assistance accounting procedures (reftel A),and that
President Morales is illegally channeling the funds for
political patronage. The opposition wants Bolivia's
controller to audit the GOB's alleged irregularities in
parsing out Venezuelan assistance. The GOB argues the
donations are legal as they comply with its Supreme Decree

29079. The opposition may be looking to the controller to
audit the GOB because they recognize the Constitutional
Tribunal -- where four of its five magistrates are under
politically motivated impeachment proceedings (reftel B) --
may never get a chance to rule on the legality of SD 29079.
End Summary.

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Hugo and Evo Deliver
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2. (SBU) President Morales, during a July 31 visit to Oruro
where he delivered over USD two million in Venezuelan aid
checks to the Oruro mayor, likened Venezuelan President Hugo
Chavez to Simon Bolivar. Morales stated " . . . a
Venezuelan, Simon Bolivar founded Bolivia, this is the
fatherland (Patria Grande); they (the United States) have
divided us, no north American founded Bolivia and now comrade
Hugo Chavez continues to strive for the fatherland." The
checks, according to the GOB, are destined for infrastructure
projects, such as the construction of a new market, a
stadium, recreation centers, and classrooms.


3. (SBU) Venezuela's DCM Douglas Perez announced a donation
of USD 10 million in heavy equipment to Bolivia's
opposition-controlled Beni department on July 30. Beni
suffered extreme flooding earlier this year. President
Morales and his ministers of defense and presidency were on
hand in Trinidad for the donation. Neither Beni prefect
Ernesto Suarez nor the Trinidad mayor attended the donation
ceremony. Prefecture officials claim the prefect was not
invited.


4. (SBU) President Morales on July 27 announced that he was
giving a Venezuelan donation of USD 5.5 million to the armed
forces. MILGRP officers confirmed that donations are
destined for regimental units and below (200 to 300
soldiers),each unit receiving approximately USD 50,000.
This Venezuelan donation would amount to close to four
percent of the military's USD 150 million budget. In making
the donation, Morales stated, "this unconditional Venezuelan
aid cannot simply go to mayors, social sector groups, and a
few departments, that is why I decided to send some to the
armed forces and police."

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The Opposition Objects
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5. (SBU) The opposition argues that the checks circumvent the
GOB's normal budgetary and foreign assistance accounting
procedures (reftel A). PODEMOS (opposition) deputy Edwin
Jiminez announced on July 31 that he would submit a proposal
before Congress to authorize Bolivia's Controller to
investigate the GOB's irregularities in parsing out
Venezuelan assistance. Jiminez alleges the GOB has violated
a number of Bolivian laws. He also accuses that President
Morales is illegally channeling the funds for political
patronage.


6. (SBU) In June, Jiminez sent a letter to the Ministry of
Foreign Affairs (MFA) requesting an explanation of how the
donations were legally being distributed. The MFA, according
to Cochabamba newspaper Los Tiempos, sent Jiminez a note that
explained that the GOB was executing the donations as
provided for under the Bolivarian Alternative for the
Americas (ALBA) and the GOB's March 27 Supreme Decree 29079.
President Morales, via SD 29079, essentially legalized large
direct Venezuelan payments to mayors. Under SD 29079, mayors
can directly procure more than USD $225,000 in funds for
municipal projects. (Note: Under the old law, mayors were
only authorized to direct donations of up to USD $20,000).

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Comment
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7. (SBU) The opposition may be looking to the controller to
audit the GOB because they recognize the courts may never get
a chance to rule on the legality of SD 29079. With four of
five Constitutional Tribunal Magistrates under politically
motivated impeachment proceedings (reftel B),the court may
essentially be closed by the time a case regarding SD 29079
could be heard. While the Controller searches for GOB
irregularities, President Morales continues to enjoy the
goodwill he is generating by doling out large sums of
Venezuelan money. End Comment.
GOLDBERG