INL A/S JOHNSON MEETING WITH PRIME MINISTER DEL

C O N F I D E N T I A L LIMA 000281

SIPDIS

SENSITIVE
SIPDIS

STATE FOR INL/LP
STATE FOR WHA/PPC
ONDCP FOR LT COL RONALD GARNER

E.O. 12958: DECL: 02/14/2012
TAGS: SNAR KCRM ASEC PREL PE
SUBJECT: INL A/S JOHNSON MEETING WITH PRIME MINISTER DEL
CASTILLO

REF: LIMA 00145

Classified By: Susan Keogh, NAS Director for reasons 1.4 (b) and (d)


1. (SBU) Summary: During a 2-day visit to Peru, A/S David
Johnson met with high-level government officials in Lima, and
observed the nexus between eradication and alternative
development in the San Martin area, as well as the NAS police
training program. In his meeting with Prime Minister Jorge
del Castillo, the PM indicated preference for more efficient
interdiction of precursor chemicals over aggressive coca
eradication to curb drug production -- an argument reflecting
his earlier dialogue with cocaleros. Del Castillo seemed
unphased by the news of substantial budget cuts in 2008,
saying effective investment of available resources was more
important than the amount. The PM was aware that most of
Peru's cocaine was going to destinations other than the U.S.,
particularly Europe, but noted the EU had not put drug
control on the May EU-Latin America Summit Agenda - something
he would try to redress. Regarding the appointment of Judge
Carolina Lizarraga as the anti-corruption czar, the PM said
she would need help; A/S Johnson assured him that the USG was
ready to assist.
End Summary.


2. (C) INL Assistant Secretary David Johnson's visit to Peru
February 7-9 included a day of official meetings in Lima and
a day in the field in San Martin, viewing the eradication and
alternative development nexus and the NAS-PNP Police training
Academy at Santa Lucia. On February 8, he met with Prime
Minister Jorge Del Castillo. Ambassador Michael McKinley and
other Embassy officials accompanied him. Discussion focused
on developments in bilateral counter-narcotics (CN) efforts,
specifically on establishing state presence East of the
Andes; the intersection between the narco-trafficking threat
and the persistence of Sendero Luminoso; and the need for
increased GOP input to CN programs in the face of substantial
cuts in USG budget support.


3. (C) The PM explained the GOP,s political decision to
fight groups involved with narcotics trafficking in Peru and
to go after assets that have previously been protected
through lack of legal structures and the enormous corruptive
power of the drug industry on law enforcement. Recently, the
legislature had passed laws to strengthen penalties for
illegal precursor chemical diversion, for money laundering,
and asset forfeiture. He acknowledged that chemical controls
were still incipient and the government could do a lot better
than the current 10 percent seizure rate (Note: Analysts
estimate closer to 5 percent. End Note). Surprisingly, Del
Castillo reverted to the cocalero argument that an efficient
system of chemical control is better than interdiction of
drugs. Coca plantations cannot be used without chemical
input: a 30 percent reduction of illegal chemicals would be a
more efficient and cheaper way to fight drug production than
aggressive eradication and interdiction, he posited.
Cocaleros were mired in poverty and eliminating their crop
causes social conflict. Del Castillo said he preferred less
traumatic treatment to hard surgery. A/S Johnson concurred
that the extension of state presence and the rule of law
would facilitate the creation of choke points for chemical
control; however, he countered the GOP would need to continue
eradication as a disincentive to expansion of coca, and to
encourage a change to licit lifestyles.


4. (C) The Assistant Secretary said political will and
commitment by the GOP had been key to recent successes in
anti-narcotics efforts. He acknowledged that the real CN
challenge for the U.S. remains Latin America and those
efforts needed to be sustained. However, difficult global
challenges and responsibilities meant that U.S. funding for
both the narcotics control and alternative development
programs would drop in 2008 by almost 30 percent. He noted
that substantial investments in air mobility and
infrastructure had already been made. Ambassador McKinley
added that the funding cuts meant the GOP would have to
strengthen its own CN programs: the Millennium Challenge

Account would be a source of support for GOP anti-corruption
efforts. The PM said it was not always a question of more
money but effectively investing resources.


5. (C) Del Castillo said Judge Carolina Lizarraga was taking
on the task of rooting out corruption, but was frank in
noting that there has been more talk than action. He
acknowledged there are extensive rivalries between government
agencies on this issue and that Judge Lizarraga was still
seeking her niche. A/S Johnson assured him that the USG
would be pleased to work with her. There was a focus on the
APEC standing group on anti-corruption, and she had been
brought to INL,s attention as an effective proponent. The
Prime Minister said that social conflict around APEC would be
diffused, and he doubted the &anti-Summit8 would get much
support. Turning to the May EU-Latin America Summit in Lima,
Del Castillo commented that most of the cocaine exported from
Peru was not going to the U.S. but to Europe; the Europeans
were contributing very little to the counter-narcotics fight
and the EU had not put drug control on an agenda that focused
on poverty reduction and climate change. He said the GOP
would try to get it included. A/S Johnson noted that the
U.S. remains a big market but the UK is the fastest growing
cocaine market in the world. We needed to work together to
achieve mutual capacity building at the international summit
level, he said. (Note: Ambassador spoke with his EU
counterpart to urge a higher priority be given to
counter-narcotics in the EU-LAC Summit. The EU Ambassador
promised to raise this concern in a meeting he was having in
Brussels the week of February 18. He added, drugs would be
the subject of a working group tied to the summit. End note)



6. (SBU) Later in the day, A/S Johnson met with DEVIDA
Director Romulo Pizarro, responsible for setting the
country's overall counter-narcotics policy. Pizarro referred
to "shared concerns" between the U.S. and Peru in the war on
drugs, identifying narcotrafficking as a national issue
rather than just a consumer country problem. A/S Johnson
agreed that drugs constituted a worldwide challenge. He
explained that the changing political focus meant fewer
assistance funds would be available than in the past.
Reduced funding for CN programs could be seen as a sign of
progress, but that there would be difficult choices ahead.
He suggested reaching out to heads of state and other senior
officials visiting Lima this year for APEC events. Pizarro
agreed that 2008 would be a crucial year for Peru and
underscored the government's intention to combat
narco-trafficking through eradication, interdiction,
anti-corruption and alternative development efforts.


7. (C) Comment: Both PM Del Castillo and DEVIDA's Pizarro
reacted
calmly to the news that Peru will receive substantial cuts
in CN funding
this year, indicating that the GOP has internalized the
need to take on
more of the fight itself. The PM,s anti-eradication
stance does not
coincide with the views of President Garcia and most of
his Cabinet who
recognize that poverty cannot be used to justify
participation in the
drug production chain. Del Castillo was the point person
in negotiating
with cocalero leaders soon after the Garcia Government
came into power,
and he still reflects some of the social arguments used at
that time.
End Comment.
MCKINLEY