KEY CABINET RESIGNATION MAY SIGNAL TROUBLE FOR

C O N F I D E N T I A L SAN SALVADOR 001623 SIPDIS NOFORN SIPDIS WHA/CEN FOR JCORNFORTH E.O. 12958: DECL: 08/17/2017 TAGS: ES PGOV PREL SUBJECT: KEY CABINET RESIGNATION MAY SIGNAL TROUBLE FOR SACA ADMINISTRATION Classified By: Classified by Ambassador Charles L. Glazer for reasons 1 .4(b) and (d). ¶1. (U) On August 15 Eduardo Zablah, the Technical Secretary to the Presidency, resigned his position in the Saca administration effective September 1. During an official press conference, President Saca announced that Zablah was leaving his position in order to "dedicate himself to other professional activities." Zablah will be replaced by Eduardo Ayala Grimaldi, currently the Vice Minister of the Economy. ¶2. (C/NF) Zablah's departure is a major blow to the Saca administration. He is one of the most capable of President Saca's advisors. Zablah, a former Minister of Economy, came up with the mechanisms for funding pension legacy costs, and later education and security funds when the FMLN refused to approve international loans to finance the programs. He was also instrumental in establishing Salvadoran eligibility for Millennium Challenge Corporation funding, one of the principal economic achievements of the Saca administration so far. ¶3. (C/NF) Press speculation and rumors swirling around the Zablah resignation could hint at potential trouble within the Saca administration. The most common explanation offered around town regarding the resignation is that Zablah became increasingly disenchanted with advisors close to President Saca, including Elmer Charlaix and Herbert Saca, both of whom have been mentioned in association with alleged (and to date unsubstantiated) rumors of corruption and unexplained enrichment. Further press speculation indicates that Saca and Charlaix may have been the authors of a recent bad-mouthing campaign that contributed to Zablah's decision to leave the Saca administration. Zablah had apparently been unhappy for some time, and all indications are that at least two previous resignation attempts were rebuffed by President Saca. ¶4. (C/NF) Comment: Zablah's departure is a blow to the GOES. Honest, professional, and able to deliver on promises, Zablah's integrity will be sorely missed by the Saca administration. Zablah was a key player who was able to resolve some of President Saca's most pressing problems. Zablah's professionalism and aura of personal honesty generated credibility with private enterprise and international financial organizations, and enabled him to serve as an honest broker with the USG. Moreover, the ongoing speculation swirling around the motives for the resignation undermine public confidence in the Saca administration, as well as the ARENA leadership cadre surrounding the President. Substantiation of allegations of financial corruption close to the President would offer the FMLN an unearned political windfall that could reverberate well into the coming presidential elections. End comment. Glazer