CORREA NAMES CHAVEZ' BUDDY AS AMB TO VENEZUELA

S E C R E T QUITO 000300 SIPDIS SIPDIS E.O. 12958: DECL: TWENTY FIVE YEARS TAGS: PGOV EC PGOV PREL VE SUBJECT: CORREA NAMES CHAVEZ' BUDDY AS AMB TO VENEZUELA Classified By: PolOff Erik Martini for reasons 1.4 (b&d). ¶1. (S) Sum... id: 95515 date: 2/6/2007 16:48 refid: 07QUITO300 origin: Embassy Quito classification: SECRET destination: header: VZCZCXYZ0000 OO RUEHWEB DE RUEHQT #0300/01 0371648 ZNY SSSSS ZZH O 061648Z FEB 07 FM AMEMBASSY QUITO TO RUEHC/SECSTATE WASHDC IMMEDIATE 6258 INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 6411 RUEHCV/AMEMBASSY CARACAS PRIORITY 2342 RUEHLP/AMEMBASSY LA PAZ FEB 0391 RUEHPE/AMEMBASSY LIMA PRIORITY 1380 RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 1829 RHMFISS/CDR USSOUTHCOM MIAMI FL -------------- header ends -------------- S E C R E T QUITO 000300 SIPDIS SIPDIS E.O. 12958: DECL: TWENTY FIVE YEARS TAGS: PGOV EC PGOV PREL VE SUBJECT: CORREA NAMES CHAVEZ' BUDDY AS AMB TO VENEZUELA Classified By: PolOff Erik Martini for reasons 1.4 (b&d). ¶1. (S) Summary: Rafael Correa named his first Ambassador on January 29 -- Gen. (ret.) Rene Vargas Pazzos to Venezuela. Passed over for the MinDef portfolio, Vargas has a long history of military administration in Ecuador and more recently as a "Bolivarian" politician. He is also a personal friend of Venezuelan President Hugo Chavez. Vargas has described his function as "cementing" Venezuelan assistance promised in multiple agreements and representing Correa before Chavez' court. A renegade by temperament, and very familiar with GOE spigots of petro-corruption, Vargas is especially prepared to be Correa's envoy to Chavez. End Summary. The Early Years: Military Chieftain -------------- ¶2. (U) Born in Chone, Manabi province, April 13, 1932, Rene Vargas comes from a family of long military tradition. His father was a colonel, his brother Frank was a general and commander of the Air Force, and his sons and nephews also entered the armed forces. Rene graduated from Ecuador's military academy, Colegio Eloy Alfaro, in 1953 as a second lieutenant and went on to become an engineer in the Ecuadorian Army. He studied engineering for several months at the U.S. Army School of the Americas in the Panama Canal Zone in 1970 and made two official trips ("orientation tours") to the U.S. in 1967 and 1970. Rene eventually rose to the rank of general and commanded the Ecuadorian Army from 1984-87. He was forced to resign in 1987 when an officer junior to him was appointed Minister of Defense. Rene is married to Nidia Penaherrera and has four children, one of whom studied for a time in Texas. ¶3. (S) Embassy officers in the late 1980s labeled Vargas a "Slick Schemer," highlighting his ambitious and sophisticated nature. During military dictatorships in the 1970s, he shrewdly engineered assignments to the Ecuadorian state oil corporation, also serving as Minister of Natural Resources and Minister of Energy and Mines. These assignments reputedly netted him huge illegal commissions on oil sales and contracts. He also reportedly profited from graft on purchases of Army supplies and equipment. Embassy officers at the time found that Rene had enriched himself "on a scale unusual even in a nation where corruption is the norm." Vargas continues to champion military participation in private businesses, from which he is presumed to have benefited in the past. ¶4. (S) Rene's brother "crazy" Frank Vargas, with whom he has collaborated politically, was judged by Embassy officers and the Ecuadorian media to suffer from a severe personality disorder. In March 1986 Frank demanded that then-president Leon Febres Cordero promote him to be the first four star Air Force general in Ecuador's history. When LFC refused, Frank led a military uprising, which was put down, landing Frank in prison (Rene was also temporarily held under suspicion of complicity). From prison, Frank ordered his Air Force subordinates to kidnap president Febres Cordero and hold him hostage in exchange for Frank's release, boasting he would personally behead Febres Cordero with his sword. Both men were released shortly thereafter. "Crazy Frank" then ran three times unsuccessfully for president, with financing and other support from his brother Rene. Rene himself served as a member of Congress representing the Popular Democracy Party (now UDC) from 1988-92. Rene's Comeback -------------- ¶5. (S) Rene Vargas has not held high office or actively participated in politics since the early 1990s. More recently, since 2005 Vargas has served as a member of the Administrative Council (CAD) of the Ecuadorian state oil company, Petroecuador. The CAD is reputed to control massive Petroecuador funds. He is also a director of the populist Permanent Assembly for Human Rights (APDH) where he serves as President of the Plan Colombia Monitoring Group, which mainly criticizes all aspects of Plan Colombia. Sensitive reporting also indicates that Rene has ties to FARC leader Raul Reyes. He proudly calls himself "Bolivarian" and heads the Bolivarian Alfarista Movement in Manabi. Soon after Rafael Correa was elected president, Rene was rumored to be under consideration for the post of Minister of Defense, but was not selected. Vargas to Cement Venezuelan Assistance -------------- ¶6. (U) In a television interview on January 30, Vargas said his goal as Ecuador's Ambassador in Caracas will be to bring to fruition numerous agreements Ecuador has signed with Venezuela. He brushed off assertions that Chavez' terms offered in financing a petroleum refining deal were above those offered by international financial institutions, expressing confidence that Ecuador's Finance Minister had the issue well in hand. In an earlier interview in December 2006, Vargas claimed the U.S. military presence at the Forward Operating Location in Manta, Ecuador, was dangerous because it provided the U.S. a "beachhead in case of regional conflict." ¶7. (C) Vargas is well suited to join Chavez' court of admirers. Vargas' contacts with Chavez are reputedly direct and personal, and Vargas introduced then-Finance Minister Rafael Correa to Chavez while Correa was serving as Finance Minister in 2005. Vargas is also suspected by some here of serving as the conduit for cash from the GOV to the Correa campaign. Since serving as military administrator of petroleum resources, Vargas has championed greater state control of this strategic sector, as in Venezuela. Clearly seeking to ingratiate himself in advance in Caracas, Vargas has declared in recent interviews that Chavez's leadership was legitimately backed by Venezuelan voters in six elections. Agreeing that Chavez was the "absolute leader" of Venezuela, Vargas asked rhetorically, "wouldn't it be marvelous if South America were united as a world power?" Comment -------------- ¶8. (C) The Venezuelan Ambassadorship has taken on new significance since Correa took office on January 15, in Chavez' visible public embrace. Correa's cabinet is looking to Venezuela for assistance on several fronts and expects Vargas to make sure Chavez delivers on his promises. We are very glad not to have Vargas as Defense Minister and to see him on his way to Caracas, well outside the inner policy loop. JEWELL =======================CABLE ENDS============================