RECALL PRIMER 2 OF 3: CONALDE'S RISING ROLE

C O N F I D E N T I A L LA PAZ 001523

SIPDIS

E.O. 12958: DECL: 07/08/2018
TAGS: PGOV PREL PTER ASEC ECON ENRG EPET BL
SUBJECT: RECALL PRIMER 2 OF 3: CONALDE'S RISING ROLE

REF: LA PAZ 1522

Classified By: A/EcoPol Chief Brian Quigley for reasons 1.4 (b),(d)


1. (C) Summary: The strength of the National Democratic
Council (CONALDE),a pro-autonomy group of the prefects
(governors) and civic committees from five opposition-led
departments (states),was bolstered by recent opposition
electoral victories. But divisions that erupted last week
concerning the August 10 recall referendum threaten to divide
the nascent organization and reduce its effectiveness as it
simultaneously works to assert its pro-autonomy agenda with
the national government. Four of the five constituent member
prefects agreed to participate in the recall last week in
contradiction the June 23 CONALDE statement rejecting the
recall, prompting criticisms from civic committee members and
dissenting prefect Manfred Reyes Villa. CONALDE is also
considering a number of actions, including turning off
natural gas lines, to force the national government to return
hydrocarbon revenue it claims was illegally expropriated from
the departments. The Morales administration responded to the
threats July 3 with a one-day freeze of payments to Tarija
Department and Evo has refused to meet with the group until
after the August 10 recall. This is part two of a three-part
series examining the political landscape one month before the
planned recall referendum. End Summary.

Civic Committees/Reyes Protest Recall Decision
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2. (U) Four of the five department prefect (state governor)
members of the opposition-aligned National Democratic Council
(CONALDE) announced on July 4 and 6 that they would recognize
the proposed August 10 recall referendum (reftel). The
decision runs counter to the June 23 CONALDE pronouncement
rejecting the recall outright and was immediately criticized
by dissenting Cochabamba Prefect Manfred Reyes Villa. He
emphasized July 4 that the resolution of other prefects to
endorse the recall "is not a decision of CONALDE" and that
CONALDE's June 23 announcement was the last official word on
the subject.


3. (U) Many civic committee leaders from the opposition-led
departments have likewise rabidly criticized the prefects'
recall endorsements, particularly because they were not
involved in the decision. Prefects and civic committee
members of all five CONALDE departments (Santa Cruz, Beni,
Pando, Tarija, and Cochabamba) will meet to consider
contentious referendum and hydrocarbon revenue issues July 9
and 10, respectively.

CONALDE's Pass at Evo Rejected
--------------


4. (U) The CONALDE prefects requested to meet with President
Morales for a "dialogue of reconciliation" after declaring
June 23 that they would not recognize the August 10 recall
referendum on the mandates of the president and prefects.
Morales refused to dialogue with CONALDE prefects, citing
their rejection of his previous efforts to meet with them,
and declared all political negotiations between the
government and the prefects "suspended" until after the
August 10 recall.

Prefects Petition for Return of IDH Funds
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5. (U) In 2007, the Morales administration redistributed
resources generated by IDH, a national tax on the hydrocarbon
industry. According to frequently cited figures, the move
reallocated 51 percent of the prefects previous budget to
municipalities, cutting their portion of IDH revenue from
32.8 percent to 14.2 percent, and directed 30 percent of
their remaining share toward Renta Dignidad, a national
social security program. Without these funds, prefects say
they have trouble implementing needed projects and
administrating their departments.


6. (C) CONALDE announced demands for the return of some 500
million Bs ($70 million) to departmental budgets July 1.
Tarija threatened to initiate road blocks, regional strikes,
and a closure of natural gas lines if the IDH "debt" isn't
repaid. Two days after Tarija's threats, the central
government froze all Tarija department resources for
"technical reasons," but released the funds the following
day. (COMMENT: Despite GOB claims to the contrary, freezing
national funds to Tarija was an act of retaliation for
opposition threats to cut off gas supply, a tactic the GOB
had previously used against Santa Cruz. END COMMENT). On
July 5, the other CONALDE departments came on-board, sending
joint demands to the president, and scheduling a meeting on
July 10 to consider harsher measures if the government fails
to return the money. Civic committees in affected regions
will meet to analyze the topic on July 8.

Evo Punts IDH Issue to Grandpa
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7. (U) Morales replied that the money is already out of his
hands and the issue must be decided by the mayors and elderly
to whom it has been re-allocated. "If our grandfathers and
grandmothers say they want this money returned to the
prefectures, we'll return it." Morales also suggested
calling a referendum on the subject. The national government
continued to argue that extra tax revenue generated by an
unforeseen rise in gas prices will more than restore the lost
portion of the prefects' budgets, but CONALDE continues to
focus on the change in the percentage of tax revenue received
and demand compensation.

Comment
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8. (C) Although divisions concerning recall strategy
threaten to hamper the pro-autonomy organization in the short
term, we see CONALDE's overall influence continuing to rise.
With the opposition's June 29 win in the Chuquisaca
Department prefect election, the addition of a fourth
department (Tarija) voting in favor of autonomy on June 22,
and plans brewing for autonomy votes in Chuquisaca and
Cochabamba departments, CONALDE seems poised to continue
growing in both size and power in the immediate future. New
Chuquisaca Prefect Savina Cuellar announced plans to join
CONALDE last week. End Comment.
GOLDBERG