VISIT OF SENATOR CHUCK HAGEL TO BOGOTA AND

C O N F I D E N T I A L BOGOTA 003433

SIPDIS

E.O. 12958: DECL: 09/11/2018
TAGS: PREL ETRD PTER ENRG SNAR MARR KJUS CO
SUBJECT: VISIT OF SENATOR CHUCK HAGEL TO BOGOTA AND
CARTAGENA -- AUGUST 28-31, 2008

Classified By: CDA Brian A. Nichols
Reasons 1.4 (b and d)


1. (C) Summary. Senator Chuck Hagel, Southcom Deputy
Commander General Glen Spears and delegation visited Bogota
and Cartagena from August 28-31, 2008. In Bogota, Senator
Hagel, the Ambassador and delegation met with President
Alvaro Uribe, who urged support for the U.S.-Colombia Trade
Promotion Act, and raised concerns over Venezuela, Ecuador,
and Panama. The Senator also met with Finance Minister Oscar
Zuluaga, Prosecutor General Mario Iguaran, and key business
leaders in Bogota to discuss the country's economic outlook.
In Cartagena, the Senator met with the mayor and received a
DEA briefing on counterdrug efforts, toured a port security
program co-sponsored by the USG and a USAID-sponsored service
center for demobilized ex-combatants. End Summary.

URIBE PUSHES FOR CTPA
--------------

2. (C) In an August 29 meeting with President Uribe and
Foreign Minister Jaime Bermudez, President Uribe told Senator
Hagel's delegation and Ambassador Brownfield that he
understood the U.S. political situation that stymied the
passage of the U.S.-Colombia Trade Promotion Act (CTPA).
Uribe urged that Hagel try to convince Speaker of the House
Nancy Pelosi to allow the agreement to come to the floor for
a vote during the November 2008 lame duck session. Uribe
underscored the need for Colombia to attract foreign
investment so it can better confront terrorists and illicit
crops by offering alternative development and economic
growth. He said Colombia had addressed the labor-concerns
voiced by the Democrats; Uribe had ratified both the legality
of strikes bill and cooperative bills into law -- enhancing
Colombia's labor rights regime. Uribe noted he would travel
with a large delegation to the U.S. Congress during the three
week session in September, urging passage of the CTPA this
year. Uribe told Hagel that waiting until a new
administration took office to bring the CTPA to a vote would
require the Government of Colombia (GOC) to re-educate new
congressmen on the issue.

REGIONAL STRATEGIC INTERESTS
--------------

3. (C) Uribe noted the strategic political interests the USG
had in maintaining a strong relationship with Colombia, one
of its strongest allies in the region, particularly regarding
foreign investment and open markets. He noted with the CTPA
the United States had the opportunity to "develop an economic
and diplomatic front" to counter the anti-democratic,
anti-capitalistic governments of Chavez, Correa and Morales.
He noted that Chavez recently expropriated two important
international banks, signaling an increase in his statist
approach. Uribe said Chavez was more worrisome to him than
Correa, as Correa lacked petroleum resources and would suffer
more from the economic decline associated with
anti-international investment policies. Uribe noted that
eventually -- perhaps not in the next election, but the
following -- Correa would face electoral difficulties due to
his economic policies.

CONCERN OVER PANAMA
--------------

4. (C) Uribe told Hagel he was increasingly concerned over
Panama's political future. He said President Martin
Torrijos' relationship with the U.S. and international
investment was good, but noted that leading members of
Torrijos' Democratic Revolutionary Party (PRD),including its
likely presidential candidate, would likely hold views
adverse to U.S. and Colombian interests. If the USG was not
careful with the fate of Panama's Free Trade Agreement, it
could face an unfriendly president in Panama, creating a
hostile climate for U.S. investment.

ENERGY SECTOR REPRESENTATIVES: OUTLOOK GOOD
--------------

5. (SBU) Representatives from Exxon-Mobil, Chevron,
Occidental Petroleum, and Ecopetrol jointly briefed Senator
Hagel and General Spears on the positive state of the
hydrocarbons sector in Colombia. All agreed that improved
security and pro-investment policies had helped spur a
significant increase in investment since 2002. Oxy Colombia

President David Stangor praised GOC efforts to improve
security and support social programs with the community, but
noted that transparency of royalty investment at the
municipal and departmental levels remained weak. Exxon-Mobil
Government Affairs Director Jose Noguera said his company was
optimistic about natural gas exploration, but watchful of
potential new regulations that might complicate marketing of
gas. Ecopetrol Vice President Alvaro Vargas said his company
planned to double exploration and production to 1 million
barrels per day by 2015 as well as increase biofuels
production to 100,000 tons per year by 2009. Chevron
Colombia President David Bantz noted that Chevron had
invested $300 million in Colombia since 2005, and grown its
gas production 50 percent. All four representatives told
Hagel their biggest concern was the continuance of political
stability and contract sanctity; they remained confident
pro-investment conditions would prevail for the foreseeable
future.

U.S. COMPANIES: TRADE PROMOTION AGREEMENT KEY
-------------- -

6. (SBU) In a luncheon with the Board of Directors of the
Council of American Enterprises in Colombia (CEA),U.S.
company representatives stressed the importance of U.S.
Congressional approval of the Colombia Trade Promotion
Agreement (CTPA). Hagel described the challenges of
achieving passage during the remainder of the current
Congress, but expressed optimism that there still existed
sufficient time for consideration. The Senator pointed out
the various challenges facing the United States around the
world and stated that the CTPA was important for the U.S. and
Colombia for political, economic, and strategic reasons. He
encouraged U.S.-based senior leadership of the major U.S.
companies in Colombia to engage their members of Congress and
emphasize the importance of the CTPA to their businesses and
workers.

PROSECUTOR GENERAL: HUMAN RIGHTS PROGRESS
--------------

7. (SBU) Prosecutor General Iguaran thanked Hagel and the
DCM for the USG's continued support of Colombia's justice
system, especially the new accusatory system, and the Justice
and Peace and Human Rights Units. Human Rights Unit chief
Sandra Castro briefed the delegation on recent convictions in
human rights cases. Senator Hagel encouraged Iguaran to
accompany President Uribe to Washington to lobby for the
passage of the CTPA, and to travel to Washington after U.S.
elections to brief officials in the new Administration.
Iguaran, responding to a question from General Spears, told
the group that information collected from the Raul Reyes
computers had been useful in advancing investigations of the
FARC.

FINANCE MINISTER: SECURITY AND A STRONG ECONOMY
-------------- ---

8. (SBU) In a private meeting with the delegation, Finance
Minister Oscar Zuluaga told Hagel and the DCM that, despite
turmoil in world markets, rising inflation and the steep
appreciation of the Colombian Peso, the long-term outlook for
Colombia's economy was bright. Zuluaga highlighted the
improved security situation and economic liberalization under
President Uribe as key to Colombia's strong economic
performance since 2002. Zuluaga identified the energy and
infrastructure sectors as prime investment opportunities. He
cited the post-Uribe political outlook as the top risk to the
economy, insisting that strong leadership must continue to
make economic reforms and security gains permanent. Zuluaga
added that the worsening economic situation in Venezuela,
Ecuador, and Bolivia could hurt Colombia's export sector. He
emphasized that conclusion of the CTPA was critical to
promoting investment, increasing competitiveness and
achieving investment grade status for Colombian national
debt. Senator Hagel reiterated his support for the CTPA and
noted the political and economic implications of continued
delay.

CARTAGENA: DRUGS AND PORT SECURITY
--------------

9. (SBU) On August 30, the Ambassador and Hagel delegation
visited the Embassy Office in Cartagena, and received DEA and
Colombian Navy briefings on drug interdiction efforts and

successes in the region. Hagel also visited the Cartagena
Seaport, one of eight participating Colombian seaports in the
USG-sponsored Port Security Program aimed at deterring and
preventing the shipment of illicit narcotics. The Senator
received an orientation brief and walk-through of ongoing
Colombian National Police anti-narcotics inspections of
various international cargo, a tour of the port operations
center, and brief on Port security and expansion plans that
would more than double the port's capacity.


10. (SBU) Cartagena Mayor Judith Pinedo told Hagel, the
Ambassador, and delegation that Cartagena was set to take
advantage of the CTPA, enhanced security, and tourism in
order to tackle the city's poverty problem. She asked for
assistance with "crazy" World Bank regulations. Pinedo said
Cartagena would only be able to improve the lives of its
citizens -- including many displaced as a result of
Colombia's armed conflict -- through the benefits of free
trade and tourism. Pinedo said Cartagena was trying to
expand public transport and plan for infrastructure
development (including water and sewer) to support up to a
million more residents expected to relocate to the city in
coming decades. She lamented "crazy" World Bank regulations
that forced the city to accept the lowest bids on contracts
on key infrastructure--terms that led companies to game the
system, provide poor quality work and later inevitable
demands for contract re-negotiation. Hagel asked the mayor
for details, and said he would be willing to call Bank
President Robert Zoellick to discuss the problems.

DEMOBILIZED COMBATANTS
--------------

11. (SBU) Senator Hagel's delegation, accompanied by the
Ambassador, also visited a USAID-supported service center for
demobilized ex-combatants from Colombia's illegal armed
groups to learn about the scope, advances and challenges of
demobilization and reintegration. The Senator had the
opportunity to meet with a group of the center's
beneficiaries, including four ex-paramilitaries and one
ex-FARC member. The Cartagena service center serves 669
demobilized ex-combatants--621 collectively demobilized and
48 deserters. The Center's director explained that the
Centers were established to provide access to health care,
formal education, vocational training, income generation
opportunities, and psychological assistance to ex-combatants
and their families. Senator Hagel told the group that the
programs to bring former-combatants back into society were
worthy of continued USG support and represented an example
for other countries facing post-conflict reintegration
problems to follow.

NICHOLS