LIBERAL PARTY POLITICS

C O N F I D E N T I A L ASUNCION 000007

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/03/2027
TAGS: PGOV PREL PA
SUBJECT: LIBERAL PARTY POLITICS


Classified By: Charge d'Affairs Bruce Kleiner; reasons 1.4 (b) and (d).


1. (C) Hermes "Rambo" Saguier (protect),an opposition
Liberal Party leader and one of presidential hopeful Fernando
Lugo's advisors, told Pol/Econ Chief December 28 that the
Liberal Party will not likely announce its December 9 primary
results (designating Lugo's running mate) before early
February. Saguier said the Liberals will probably declare
Federico Franco the winner. If so, Franco's opponent, Carlos
Mateo Balmelli, will challenge the Liberal Party's decision
in the courts (NOTE: Balmelli has already challenged partial
results. END NOTE). Saguier speculated that Mateo Balmelli's
appeal would not be resolved before the February 1 deadline
for registering all candidates. In that case, he said, the
Liberal Party would form a committee and its director would
choose Lugo's running mate from slate of Liberal candidates
(excluding Franco and Balmelli).


2. (C) Saguier told Pol/Econ Chief that Chilean socialists
visited Lugo in December and are interested in financing him
to "counter" Venezuelan President Chavez. The International
Socialist Party, according to Saguier, will sponsor a Lugo
trip to Chile and Europe. Saguier also said a socialist
named Ayala advised Lugo to get a "gringo" campaign advisor
in order to send the United States "the right signals."


3. (C) Saguier said President Duarte is courting
Cuba/Venezuela in an attempt to keep those countries from
funding Lugo. Lugo, Saguier confided, is funded in part by
Martin Heisecke, a Paraguayan businessman engaged in the
pharmaceutical industry. Saguier said Heisecke was having
trouble dealing directly with an American pharmaceutical
company and asked for Embassy assistance "so Heisecke could
keep funding Lugo and reduce Lugo's possible dependence on
Chavez." (NOTE: Econoff's initial investigation revealed that
the U.S. company decided not to pursue direct relations with
Heisecke for valid business reasons, but Embassy will
continue to explore. END NOTE).


4. (C) COMMENT: To the outside observer, the Liberals appear
to be coming apart a little at the seams. Judicial
challenges to the party's vice-presidential candidate could
divide the party and undermine Lugo's fragile coalition of
diverse interests-- the radical leftist P-MAS, the populist
social movement Tekojoja, the mainstream Liberal Party, and
others. However, all remain united behind a common goal--
ending 60 years of Colorado Party rule-- and many Embassy
contacts say that the ongoing controversy and extended
vote-counting is politics as usual in Paraguay. END COMMENT.

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KLEINER