U.S. IN EVO'S CROSSHAIRS: WHAT NEXT?

C O N F I D E N T I A L LA PAZ 003029

SIPDIS

SIPDIS

FOR DEA/OEL/TOTH

E.O. 12958: DECL: 08/29/2017
TAGS: ECON PGOV PREL EAID SNAR BL
SUBJECT: U.S. IN EVO'S CROSSHAIRS: WHAT NEXT?

Classified By: EcoPol chief Mike Hammer for reasons 1.4 (b) and (d).

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Summary
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1. (C) In a closed Movement Toward Socialism (MAS) party
meeting on November 12 that was taped and leaked to the
press, Minister of the Presidency Juan Ramon Quintana
repeated his outrageous conspiracy charges against USAID
while upping the ante by threatening USAID's expulsion from
Bolivia. This latest threat follows a string of bogus
accusations against the USG, most recently that Ambassador
Goldberg is conspiring with the opposition and Colombian
paramilitaries to overthrow President Evo Morales'
government. In addition to his USAID attacks, Quintana
parroted Venezuelan President Hugo Chavez's accusations
against former Spanish President Jose Maria Aznar, claiming
that Aznar and the Spanish Partido Popular are supporting
Bolivia's opposition-led departments to destabilize the
Morales government. Quintana then linked the USG and Aznar to
the Bolivian media, stating the government would
"investigate" the media's sources of financing. Quintana's
statements coincide with a string of reports from other
Embassy sources that indicate that the Evo's inner circle is
planning further attacks against the United States. Among
the anti-US actions Evo may be considering are: making it
impossible for USAID to carry out its programs, restricting
or even expelling DEA, and possibly PNGing the Ambassador.
End Summary

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USAID a Constant Target
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2. (SBU) Bolivian press outlets are reporting that
Presidency Minister Juan Ramon Quintana convened a meeting of
MAS party stalwarts in Tarija November 12 to reveal the
government's strategy for combating a plot to topple
President Evo Morales' government. (Note: Apparently
unbeknownst to Quintana his remarks in Tarija were recorded
and were then leaked to the press. Post is seeking a
transcript of Quintana's comments. End Note). Quintana is
alleged to have stated USAID will be expelled because it
finances the political "resistance." Quintana's attacks on
USAID began back on August 29, when he held a press briefing
to level spurious charges against USAID's assistance: stating
it lacked transparency, rarely reached Bolivians, and
supported a conspiracy against the Morales administration.
(Comment: During that press conference, Minister Quintana
foreshadowed that the government would issue new rules on
foreign assistance. The government made good on that promise
on October 11 via Supreme decree 29308. Although the decree
leaves much room for interpretation, it states that
international aid may not/not imply "political or ideological
conditions." It is unclear whether Quintana plans to use
decree 29308 as the "legal" basis against USAID programs, but
clearly (in his mind at least) USG assistance carries
"ideological conditions." End Comment).

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Another Decree, Yet More Trouble for USAID
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3. (C) Hot on the heels of last month's decree outlining
requirements on foreign assistance, President Morales signed
another decree creating four program implementing units in
the Ministry of Rural Development. Ministry of Rural
Development officials told USAID representatives November 14
that they intend the decree to require these units to receive
donor funding and implement projects directly. This is a
significant change from current practice, whereby
USAID-funded projects are implemented by USAID contracted
firms and NGOs in close coordination with Ministry
counterparts. In order for USAID to comply with the decree,
major and time-consuming adjustments to its Bolivian programs
would be required. The decree also seems to present
difficulties for some technical counterparts in the Ministry
of Rural Development because they depend on USAID projects to
achieve their objectives within our shared bilateral agenda.
Some Embassy sources have indicated that this is exactly the
point: to set USAID projects up to fail so that we will
discontinue them. The decree impacts all or parts of USAID's
alternative development, environment, economic opportunity,
and PL 480 title 2 food security programs.

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Hugo Chavez: The Quintana Whisperer
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4. (C) USAID was not the only target of Quintana's baseless
charges. As if Venezuelan President Hugo Chavez were
whispering into his ear, Quintana also levied charges against
former Spanish President Jose Maria Aznar. The Presidency
Minister told the MAS supporters that the Bolivian government
has evidence that Aznar's Partido Popular is conspiring
against Morales by siding with the Bolivian states that are
seeking autonomy. Quintana stated, "Partido Popular . . . is
financing the department that voted "Yes" on the autonomy
referendum, there is proof, this is now clear and we will
show it with figures." (Comment: The fact that Quintana's
attacks on Aznar follow Hugo Chavez's diatribe against the
former Spanish president at the November 8-10 Ibero-American
summit is surely no coincidence. The statements point to
Chavez' profound influence over Evo. Unfortunately, Spain's
King Juan Carlos is not in Bolivia to ask Quintana to
"shut-up." End Comment).

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Pressuring the Press
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5. (U) More troubling for Bolivia's democracy (and freedom
of expression) are Quintana's statements directed at the
press. The Presidency Minister announced November 14 that
the government would "investigate press financing," once
again insinuating that the press receives funds from the USG
and other sources to write negative stories about the Morales
administration. Quintana has previously accused the USG of
paying journalists to write articles that foment conflict.
President of the Bolivian Press Association Renan Paz
Estensorro challenged Quintana to substantiate his
allegations, but Quintana has never provided any evidence.

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DEA Lowering its Profile Given the Climate
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6. (C) Our DEA Director has suspended participation of all
DEA personnel in operations during which there might be an
arrest, seizure, or search, until Bolivian Government
rhetoric aimed at U.S. counter-narcotics efforts subsides.
He will reassess at the end of November. Meanwhile, National
Police Commander General Miguel Vasquez Villamor and Colonel
Rene Sanabria, Director of the Bolivian Anti-Narcotics Police
have told the DEA Director that they felt DEA could continue
participating in operations with a low profile. Separately,
a reporter with good connections to the government asked the
Ambassador leading questions about when and how we expected
the government to expel or prevent DEA from participating in
operations, as if it were a foregone conclusion. Later an
emboff spoke to the reporter off the record to understand the
basis of the questioning. The reporter explained that he had
recently spoken with the Vice Minister of Justice Wilfredo
Chavez who told him that "ministers were working on a
resolution to withdraw DEA from interdiction." (Note: This
vice-minister is a member of CONALTID, the policy formulation
body for counter-narcotics which is comprised of several
government ministers. End Note). DEA is trying to verify
the existence of the resolution.


7. (SBU) President Morales continues to publicly call for
kicking out U.S. "agents" associated with counter-narcotics
efforts and/or "armed uniformed foreigners" since he brought
it up October 8 during an event honoring Che Guevara.
Although Morales had made similar comments shortly after
taking office in January 2006, he had been quiet on the issue
since then. Morales used an Associated Press story promoting
the November release of a new Morales documentary to make the
same argument. Morales asserted in the AP interview and the
documentary that he was beaten multiple times by
U.S.-supported Bolivian Counter-Narcotics police during the
1980s. He also regularly reiterates his refusal to allow
U.S. bases in Bolivia and encourages other countries to do
the same, most recently in his November 10 statements at the
Ibero-American Summit in Santiago, Chile (perplexing as there
are no U.S. bases in Bolivia).

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Something Brewing Against Us
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8. (C) President of the Congressional Foreign Relations
Committee Michiaki Nagatani (MNR- Santa Cruz) told Emboff on
November 15 that there are strong rumors circulating in
congress that the Presidential Palace is considering actions
that will come close to breaking relations with the United
States. Nagatani stated that hard-liners Quintana and
Presidential Spokesperson Alex Contreras are pushing the
break. Congressman Nagatani noted that there is a "hardening
by the day" inside the Presidential Palace. While Nagatani
believes that Evo will not go so far as to cut diplomatic
relations, he warns that we should expect further attacks and
measures aimed at the USG.


9. (C) Warning of future domestic turmoil, opposition
alternate senator Rafael Loayza now doubts that a deal can be
made to deliver a new constitution at the Constituent
Assembly. Only three weeks earlier Loayza had high hopes for
a negotiated agreement between the MAS and opposition. In
our meeting, he stated Bolivia is reverting to 2003, when the
country was ungovernable. As in 2003, Loayza now foresees
serious violence between MAS and opposition with the
possibility of "many deaths." Loayza repeatedly stated that
Evo and his insiders will continue to attack the USG since
the United States remains one of the few issues with which he
can rally his followers. The senator noted that he would not
be surprised if the government declared Ambassador Goldberg
persona-non-grata. (Comment: Loayza's conversion from
optimist to pessimist is particularly disturbing. He was
working with other pragmatic politicians within the
opposition and the MAS to craft a solution dubbed
"Constitution Lite" which could have averted a crisis. Per
Loayza, the Constitution Lite was close to completion when
the MAS killed the negotiations by announcing a new pension
system that would result in funding cuts to the opposition
departments. End Comment).


10. (C) Noted political commentator Carlos Valverde
contacted the Embassy to express his "grave concern" over the
current situation. Valverde mentioned that is hearing that
many in the MAS favor an "auto-golpe." Under this scenario
Evo's supporters and the possibly members of the military
loyal to the president will publicly urge Evo Morales to rule
by decree to restore stability. Some argue that members of
Morales' inner circle are clandestinely encouraging this
scenario. Valverde also mentioned that the "more moderate"
vice president has been sidelined, with the president's
insiders accusing Garcia Linera of conspiring against
Morales. According to Valverde, these "conspiracy"
accusations have forced Garcia Linera to try to avoid public
appearances and to take a more radical tone when he does
appear in public. Valverde's comments regarding the vice
president are consistent with Garcia Linera's own statement
to the Ambassador in September that he "is loosing
influence."

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Comment
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11. (C) Evo and his inner circle appear to be escalating
their attacks on the USG. From the manipulation of innocent
events (such as the legal importation of bullets for practice
shooting) to the blatant fabrication of alleged plots, Evo's
paranoia and domestic grandstanding are heading toward a
point of no return. Increasingly, it appears that part of
Evo's strategy is to cause difficulties or even a break with
the United States to distract from domestic problems,
energize his radical base, and possibly set the stage to
justify undemocratic action in order to force through a new
constitution that would enable his re-election.


12. (C) While there is little indication that working-level
contacts, particularly in the military and police, are less
inclined to work with the Embassy, good working relations are
no guarantee that Evo will not take radical action against
us. We fear that our contacts are likely to find out about
any draconian measures to break or "nearly break" relations
only after they are announced, as happened with the decision
to require visas for Amcits. This is because the government
of Bolivia is now basically a one-man "Evo" show, with a
small circle of advisors improvising as domestic problems
mount.


13. (C) As Evo and his advisors use the USG as a useful
distraction from domestic crises in Bolivia (increasing
inflation, scarcity of staple commodities, the
near-inevitable failure of the Constituent Assembly),we
expect more outrageous, inflammatory rhetoric. More
worrisome, we also see evidence that Evo is bound to take
concrete steps against USG activities in Bolivia, possibly
making DEA and USAID cooperation in Bolivia more difficult or
even impossible. The government's repeated attacks on USAID,
in particular the new rural development decree which may be
intended to make USAID's work impossible, seem to be designed
to force the USG to break with Bolivia -- something that
Evo's team may then spin as the United States abandoning
poor, victimized Bolivia.
GOLDBERG