SCENESETTER FOR LATVIAN PRESIDENT VIKE-FREIBERGA'S

C O N F I D E N T I A L SECTION 01 OF 03 RIGA 000290 SIPDIS SIPDIS E.O. 12958: DECL: 04/23/2017 TAGS: PREL PGOV CVIS MOPS LG SUBJECT: SCENESETTER FOR LATVIAN PRESIDENT VIKE-FREIBERGA'S VISIT TO WASHINGTON REF: RIGA 192 Classified By: Ambassador Catherine Todd Bailey. Reason: 1.4 (D) ¶1. (C) Summary: Latvian President Vaira Vike-Freiberga will make her final official visit to Washington the week of April ¶30. In her eight years in office she has been a leader in securing democratic values in Latvia and bringing it into the EU and NATO, and a force in supporting others who wish to make a similar transition. In typical fashion, she is not going out quietly, but forcefully pushing against the influence of moneyed interests in Latvian politics and promoting the continued adherence to democracy. She will press for Washington to maintain a strong interest in Latvia, noting that much work remains here, urge continued support for Latvia's military transformation, and advocate for greater economic ties between the two countries. She will of course raise Latvia's membership in the visa waiver program. From our side, we need to thank her for her leadership in the forward march of freedom and stress the importance of continued Latvian activity in this area, offer support for efforts to increase Latvian troops in Afghanistan, and stress the importance of transparency and the rule of law. Vike-Freiberga's plans post-presidency are not yet known, but her candidacy for the UN SYG position last year makes clear that she does not plan to fade off into the sunset. End summary. The trip -------------- ¶2. (SBU) President Vike-Freiberga will visit the United States April 29 - May 6. During this time, she will have her final meetings in Washington before leaving office in early July. In addition to meetings at the White House and at the State Department, she is scheduled to see Speaker Pelosi and host a reception marking 85 years of unbroken Latvian - U.S. relations. She will also be the guest of honor at the American Jewish Committee's (AJC) annual dinner on May 3. ¶3. (C) Vike-Freiberga epitomizes Latvia's recent history. A WWII refugee whose family fled to Germany, she grew up in Canada but never lost her ties with Latvia, doing her academic research on Latvian national folk songs. While achieving stature in international academic circles, her top priority always remained restoring the independence of Latvia. When that happened in 1991, she returned to help her country make the difficult transition from communism. Her election to the presidency in 1999, her first political position, was something of a fluke. She as not backed by any political party and electing a woman was not expected given Latvian cultural views of the time. But she was chosen as the safe and neutral candidate when the parliament could not agree on other choices. The politicians had no idea what they were getting. Her Presidency -------------- ¶4. (C) Constitutionally, Latvia's president has rather limited powers, but Vike-Freiberga has used the power of her personality and intellect to raise the profile and stature of the office both at home and abroad. Outside of Latvia she has been a fierce critic of totalitarian regimes and a strong supporter of advancing freedom and democracy. She has pushed the GOL to engage more actively to support democracy in Ukraine, Georgia and Moldova. She was an early and consistent supporter of our efforts in Afghanistan and Iraq and a critic of repressive regimes in Belarus, Burma and elsewhere. She believes that Latvia's experience, and her personal history, offer an opportunity to engage far more actively than Latvia's small size would normally warrant. She was a leader in bringing Latvia into the EU and NATO and a key reason for the Alliance agreeing to hold its 2006 summit in Riga -- certainly a highlight of her tenure in office. Her relationship with Russia has been difficult but pragmatic. While recognizing the economic necessity for Latvia of good relations with the eastern neighbor, Vike-Freiberga has not pulled any punches in criticizing Soviet actions in Latvia or the democracy deficit in Putin's Russia. Yet she strongly supported the recent signing of a border treaty with Russia and hopes for a visit to Moscow before the end of her term. ¶5. (C) At home, Vike-Freiberga has used the "bully pulpit" of the President's office quite effectively. Her strong and widespread popularity mean that few, if any, politicians criticize her publicly. Her efforts to call attention to backroom deals and middle of the night government decisions have slowed the rate at which oligarchs increase their power in Latvia. She has been a voice for tolerance and inclusion of all people, for fighting corruption, and for increased accountability in government. In her last year in office, she turned back laws on anti-discrimination that excluded RIGA 00000290 002 OF 003 sexual orientation as a protected category (contrary to EU directives),rejected lustration of an incomplete set of KGB files (much of the material was taken back to Moscow in the waning days of the USSR),and spoke out against an attempt to slide a sweetheart privatization deal through at the height of the summer vacation season. ¶6. (C) Her strongest actions of late were reserved for attempts to change the oversight of Latvia's security services (reftel). She truly felt that these changes would have allowed oligarchs and their associates to have greater insight into (and to interfere with) the operations of law enforcement organizations and would have called into question Latvia's ability to protect classified information received from Allies and friends. For the first time ever, she invoked a clause in the constitution that allows her to delay implementation of a law for two months while signatures are gathered for a referendum. While it remains uncertain if enough signatures will be collected for a referendum, her action stunned the political elite here and the parliament moved to revoke the laws in record time. The subsequent arrest of Ventspils mayor Aivars Lembergs on corruption and bribery charges only reinforced in the minds of many common people that Vike-Freiberga was the bulwark to protect Latvia from government by the richest. Her agenda -------------- ¶7. (C) While Vike-Freiberga comes to Washington on something of a valedictory tour, she will have a full agenda. Topping that list will be ensuring that the U.S. continues to take an interest in Latvia. She believes that U.S. engagement is essential to ensuring the continued development of rule in law in Latvia, especially as EU states are unwilling to criticize a current member in the same way as they would a candidate. She fears that U.S. attention has flagged since Latvia made it in to the EU and NATO and following the two Presidential visits here in May 2005 and November 2006. President Vike-Freiberga has been particularly appreciative of our efforts to support the transformation of Latvia's military. She takes an active interest each year in our FMF and IMET allocations and has expressed concern at the declining levels. Vike-Freiberga will note that Latvia has been with us in Iraq for four years, where it has lost three soldiers, but the troops will be coming out this summer as security in the Latvian area of activity is handed over to the Iraqis. Nevertheless, Latvia plans to leave as many as 15 soldiers behind to assist with training and headquarters activities. Latvia has also been a reliable partner in Afghanistan and, as the contribution in Iraq draws down, looks to increase the size of its ISAF commitment. She may ask for our assistance in making that happen. The President will also be interested in our assessments of the latest developments and future outlook in both Iraq and Afghanistan. She will also want the latest U.S. thinking on the future of NATO's air policing mission for the Baltic States. ¶8. (C) The President is very focused on increasing commercial ties between Latvia and the United States. We sometimes have a challenge in showing her just how well we are doing. Given Latvia's size and location, we will never be the top investor here, but our activity is growing very quickly. Total Foreign Direct Investment from the United States into Latvia grew significantly in 2006, with nearly USD 110 million in new investment, one-third of the total amount invested in the previous ten years combined! Since 2002, the amount of US FDI in Latvia has doubled. In the past six months, General Electric and Hyatt Hotels have announced significant new investments in Latvia. We agree with Vike-Freiberga that the economic links between the two countries reinforce our close political ties, especially as commercial ties are tangible and help make the bilateral relationship real to the people of Latvia. Our 2006 pan-Baltic trade and investment conference and this June's energy forum will help increase the visibility of Latvia for American businesses and hopefully contribute to increased investment. The President may raise the continuing issue of Liepajas Metalurgs, Latvia's largest private employer that faces anti-dumping duties on its exports of steel rebar to the United States. She may push for Latvian membership in the OECD as a sign of our strong economic ties. ¶9. (C) Vike-Freiberga will raise Latvia's participation in the Visa Waiver Program in her meetings. It is a domestic political imperative. She welcomed President Bush's announcement in Tallinn on administration efforts to create greater flexibility in the program and appreciates recent efforts by DHS to increase dialogue with Latvia on steps it can take to enhance security efforts. She will look for an administration update on progress and will use her meeting with Speaker Pelosi to make the case to Congress. RIGA 00000290 003 OF 003 Our response -------------- ¶10. (C) We would encourage Washington interlocutors to thank Vike-Freiberga for her leadership on the freedom agenda and stress the importance of Latvia continuing to tell its story and share its experience to benefit others. We should encourage their active engagement in the EU's neighborhood policy. As a neighbor, Latvia has a particularly important role to play in fostering democratic change in Belarus. Comparing notes on the latest developments in Russia and getting her view on Latvian - Russian relations would also be helpful. ¶11. (C) It is important to acknowledge that Latvia has backed up its words with actions. Among NATO members, it has one of the most active deployment rates to stabilization missions on a per capita basis. Latvian officials have fully coordinated with us on their drawdown in Iraq and increase of troops in Afghanistan and we should not revisit the decisions. ¶12. (C) President Vike-Freiberga also needs to hear that we attach great importance to further strengthening the rule of law and increasing transparency in Latvia. It will bolster her efforts to deal with any backsliding on these principles by the government in her waning days in office and strengthen her message that this is essential for Latvia's future. She also needs to hear that this is important for American businesses and is one of the most important things for American investors to consider about the business climate in Latvia. The public announcement, which could come during her visit, that Latvia is being removed from the Special 301 Watch List will be a sign that we do acknowledge progress in these areas and demonstrate that concerted efforts to address thorny issues like IPR do pay off and improve Latvia's image in the international business community. ¶13. (C) After some initial hesitation in her early days in office, the President has become an advocate for Latvia dealing fully and openly with the Holocaust activity that occurred here, leading to the AJC invitation. We expect that the President will hear from the AJC their disappointment at the stalled process for restitution of Jewish communal property and heirless private property seized in the Holocaust. (Comment: Latvia completed restitution in the 1990's for all private property, including Jewish property, seized by the Soviet or Nazi regimes for which living heirs existed. End comment.) USG should add our voice of disappointment that the government and local Jewish community had a deal that was painstakingly negotiated and from which the government walked away when a leading Latvian oligarch expressed his opposition. That the Parliament refused even to send the bill to committee demonstrated a serious lack of political leadership. The President has been a helpful voice on the restitution issue in general, but rather muted in her criticism of the way this fell apart last autumn. ¶14. (C) We also raise one note of caution: A Latvian journalist, Ilze Juanalksne, was the European regional recipient of the Secretary's "International Women of Courage" Award. There is a negative personal history between the President and Juanalksne, related to an unflattering term the journalist used about the President in a candid conversation with a colleague caught on tape. It would not be wise for interlocutors to raise Juanalksne's receipt of the award to Vike-Freiberga. BAILEY