BOLIVIA: CORRUPTION ALLEGATIONS INCREASE

C O N F I D E N T I A L LA PAZ 002567 SIPDIS E.O. 12958: DECL: 12/10/2018 TAGS: PGOV PREL KDEM PHUM SNAR BL SUBJECT: BOLIVIA: CORRUPTION ALLEGATIONS INCREASE REF: 07 LA PAZ 2234 Classified By: EcoPol Chief Mike Hammer for reasons 1.4 b,d ¶1. (C) Summary: On December 10, Emboff met with Daniel Caceres, president of Social Control Movement (MCS) which is comprised of leaders of social groups and unions, including the nationally powerful mining cooperative union and a number of small business associations. Caceres was a 2008 International Visitor (Anti-Corruption and Accountability in Government and Business). Caceres worried that corruption is increasing in Bolivia and that the international community is unwittingly contributing by donating money to corrupt organizations. He likened corruption to a cancer in Bolivia, saying that by the time the international community recognizes the illness, it will be too late to operate. End summary. - - - - - - - - - - - - - - - - "Evo Knows There's Corruption" - - - - - - - - - - - - - - - - ¶2. (C) Caceres complained that despite President Evo Morales' public anti-corruption stance and rhetoric in support of "social control", his organization gets no support from the government and is even blocked by ruling party Movement Toward Socialism (MAS) officials. At a time when many Bolivians still insist that Morales is "clean" or, at worst, well-meaning and misled by bad advisors, Caceres was less forgiving of the Bolivian teflon-president, saying doubtfully, "maybe the President is still transparent and anti-corruption, but he is surrounded by corruption in every ministry and he knows it." When pressed as to how Morales could be anti-corruption if he knows his associates are corrupt, Caceres would only reply, "Evo has changed." ¶3. (SBU) Despite growing calls (even from MAS-aligned groups) for Presidency Minister Quintana's resignation, on December 11 Morales publicly supported his most powerful minister, who has been accused by a former head of the Bolivian Customs Agency of negotiating with smugglers to allow contraband to exit the country in exchange for political support. While acknowledging that he knew of Quintana's meetings with the smugglers, Morales argued, "What is the crime of minister Juan Ramon Quintana? Investigating the funds of USAID and how they paid the opposition, (using) the money of the U.S. people to pay the opposition to conspire against the national government." During the press conference, Morales also publicly harassed a reporter who had published a story on the contraband case, calling the reporter up to stand next to him, demanding evidence, and then saying, "We have this class of newspapers and of journalists who lie and lie." Even some of the smugglers are calling for Quintana's resignation; one--who claimed to be related to Morales--said "For the dignity of this government, Quintana should come out and tell the truth. He should resign so that he does not damage the government, since we know that our President is honest." - - - - - - - - - - - - - - - - - - - - - "Social Control" Can't Control Corruption - - - - - - - - - - - - - - - - - - - - - ¶4. (C) Caceres listed specific examples of corruption or transparency failures that are impeding the work of his organization: --The DUF (Directorio Unico de Fondos),an independent agency which is tasked to provide monthly reports of international cooperation and programs supported, has not published a report in five months. Caceres' organization now has no way to track the flow of money or to investigate alleged corruption reported by affected communities. --Caceres claimed that MAS officials are protected from anti-corruption investigations. In their last meeting with the inter-ministerial committee which investigates corruption, an case of USD 5 million allegedly embezzled by the Cochabamba mayor was presented. According to Caceres, Presidency Minister Quintana railed against the allegedly corrupt mayor, saying that he should be kicked out of office. Caceres reports that another participant in the meeting mentioned that President Morales already knew about the situation and that the mayor was MAS, suggesting that maybe they should just move to the next item. According to Caceres, Quintana immediately dropped the subject. --Caceres' organization tried to investigate a case of possible corruption in which multiple millions of dollars have been spent on subsidized housing in El Alto that still has not been built. Caceres discovered that the money had been funneled through the MAS-created campesino organization CSUTCB (headed by Isaac Avalos),but when the Caceres tried to investigate government officials told him that Avalos is a good MASista and should be left alone. - - - - - - - - - - - - - - - - - - - - - Social Control Equals No Control on Drugs - - - - - - - - - - - - - - - - - - - - - ¶5. (C) As an aside, Caceres spoke of drug trafficking on the border with Chile, where his hometown is located. He said trafficking has doubled and that criminals are walking around with full pockets and paying off the police. Caceres wryly suggested that this situation damages his organization's grassroots support, since no one particularly wants anti-corruption programs which might cut down on local income. ¶6. (SBU) President Morales has publicly advocated for "social control" as a way to legitimize coca cultivation, however. On December 8, Morales spoke in Chapare in favor of legalizing coca: "Why do I say that we could go much further? Because if there is rationalization and there is social control under the direction of the (cocalero) union, I am sure that we would achieve the legalization of coca at an international level." (Note: On December 8, a group of altiplano emigrants to the lowlands of Santa Cruz department declared indefinite road blockades until the rural counternarcotic UMOPAR police forces are expelled from the Yapacani region and every family is allowed a cato--roughly a quarter hectare--of coca. Yapacani is not a traditional coca growing area, and after the recent killing of an UMOPAR policeman in Yapacani the government has vowed to irradicate the approximately 250 hectares in the municipality. End note.) ¶7. (C) When asked about how social control might regulate coca, Caceres laughed, saying the MAS talks a lot about "social control" but they don't want a fourth power, or any group that would restrain them. In political situations, he said, the MAS defines "social control" as "MAS control of other groups, and no control of the MAS": therefore he said he was not surprised that the MAS would want "social control" (that is, no control) over coca. URS