ARENA: EL SALVADOR'S RIGHT FACES UNCERTAIN

C O N F I D E N T I A L SAN SALVADOR 001045

SIPDIS

E.O. 12958: DECL: 08/07/2018
TAGS: PGOV PREL ES
SUBJECT: ARENA: EL SALVADOR'S RIGHT FACES UNCERTAIN
POLITICAL FUTURE

REF: A. 2007 SAN SALVADOR 01623

B. 2007 SAN SALVADOR 01764

C. 2008 SAN SALVADOR 00750

Classified By: The Ambassador, for reasons 1.4 (b) and (d)


1. (C) Summary: The Nationalist Republican Alliance Party
(ARENA),the dominant Salvadoran political party, has evolved
from its hard right origins and positioned itself as the
standard bearer for pro-business policies, middle class
values, and law and order. Since the 1992 signing of the
Peace Accords, ARENA has consistently stressed free-market
economics, strong ties with the U.S., and, in recent years,
efforts to reduce El Salvador,s spiraling rates of violent
crime. These efforts notwithstanding, ARENA's image has
suffered of late. Public perception of the party as an
exclusive political club of insiders, coupled with
unsubstantiated allegations of high-level corruption and the
global spike in food and fuel prices, have contributed to
ARENA's current deficit at the polls and left the party
scrambling for a viable strategy to hold on to power. Part
of the scrambling includes populist initiatives, such as
subsidies, price controls, and welfare handouts. End Summary.

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Party Origins: Forged in War
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2. (SBU) ARENA was founded on September 30, 1981, by Roberto
D'Aubuisson and other hardline anti-communists, including
members of the military. D'Aubuisson was a controversial
figure, widely assumed to have been linked to wartime "death
squads," which were purported to have murdered civilians
prior to and during El Salvador's civil war (Note: Both the
left and right ran death squads during the conflict. End
Note). They formed ARENA in order to oppose the
Revolutionary Government Junta (JRG) government, which ruled
El Salvador from 1979-1982, amidst the civil war. They were
particularly incensed at the Junta land reform program. This
stance gave them the instant support of the land-owning
oligarchy, which traditionally held a monopoly on power in El
Salvador. From the outset, ARENA pledged to eradicate
communism, making the party a natural enemy of the Farabundo
Marti Liberation Front (FMLN),the left-wing guerilla
insurgency, which waged war on the Salvadoran state from the
late 1970,s until 1992.

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Growth of Support: From the Elite to the Mainstream
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3. (SBU) ARENA has held the Salvadoran presidency since 1989,
but the party's public support has fluctuated during that
time. The initial base of support for ARENA was the landed
oligarchy, the rural farming community, conservative segments
of the Catholic Church, and the military. With D'Aubuisson
as its first presidential candidate, this base was sufficient
for ARENA to seriously challenge for the presidency in 1984.
However, D'Aubuisson ultimately fell short, losing to Jose
Napoleon Duarte of the Christian Democratic Party (PDC).
While ARENA had gained popularity, many blame public
trepidation surrounding the polarizing nature of D,Aubuisson
for the election loss.


4. (SBU) Leading up to the 1989 presidential election, ARENA
increasingly began to garner the support of business groups.
This, combined with the deteriorating reputation of the PDC,
led to ARENA victories, first in the Legislative Assembly
elections in 1988, and then in Alfredo Cristiani's 1989
presidential campaign. The Cristiani administration
(1989-94) focused immediately on bringing an end to the civil
war, and succeeded in negotiating a peace agreement in 1992.
Cristiani's presidency also concentrated on improving the
nation,s economy, and the successes of the administration
continued to bolster popular support.

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Modernizing the Economy and Strengthening U.S. Relations
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5. (SBU) The 1994 elections marked the transition from a
focus on conflict to one of rebuilding. ARENA candidate and
former San Salvador mayor Armando Calderon Sol won the 1994
presidential race, and ARENA also maintained a working
majority in the Legislative Assembly. The Calderon Sol
administration (1994-99) concentrated efforts on post-war
reconstruction: modernizing the Salvadoran economy and
facilitating international investment and globalization. To
this end, Calderon Sol supported privatization of public
services and pensions, and also initiated a program to
attract foreign direct investment by reducing import tariffs
and fixing the exchange rate of the colon to the U.S. dollar.

ARENA broadened its appeal to include entrepreneurs and
commercial classes, which expanded the party's support base
and led to a victory in the subsequent presidential race.


6. (SBU) The Francisco Guillermo Flores Perez administration
focused on further modernizing the Salvadoran economy during
its 1999-2004 term. El Salvador officially dollarized its
economy in early 2001, and the Flores administration played a
central role in successful negotiations for the Central
American Free Trade Agreement (CAFTA-DR). Flores also
strengthened bilateral ties with the United States. El
Salvador committed troops to the reconstruction effort in
Iraq, and pledged to combat international terrorism. Flores'
policy decisions were controversial, and the left-wing
opposition party, the Farabundo Marti Liberation Front
(FMLN),took advantage of the opportunity to make significant
gains in the 2003 legislative and municipal elections.


7. (SBU) Despite the apparent inroads made by the FMLN, the
ARENA candidate for the 2003 presidential election, Elias
Antonio "Tony" Saca, soundly defeated his opposition,
legendary former guerilla leader and FMLN candidate Schafik
Handal. Saca received 57.7 percent of the vote, with a 67
percent voter turnout. During the campaign, Saca was
criticized for his lack of political experience. However,
his prominent background as a sports announcer and
corresponding popular public persona may have been a decisive
factor in his successful bid for the presidency.


8. (SBU) The Saca administration has continued to stress
free-market politics and U.S. ties, along with the principal
ARENA tenets of property rights and anti-communism. ARENA
has remained extremely pro-U.S.; the Salvadoran presence in
Iraq since 2003, still unpopular with Salvadoran voters, is a
product of the Saca administration and ARENA legislative
support (with the backing of the PDC and the National
Conciliation Party (PCN)). In addition, Saca has taken a
strong stance against crime, introducing controversial
policies to crack down on rampant gang activity in El
Salvador. ARENA as a whole has attempted to shape itself as
the party of law and order.

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Party Structure: The Seat of Power
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9. (SBU) ARENA is led by its National Executive Council
(COENA),comprised of thirteen members. COENA controls the
party platform, and as such, represents the true seat of
power in ARENA. President Saca has exerted more power over
COENA than past leaders. The current lineup is: President
Rodrigo Avila, Vice President of Ideology Ricardo Martinez,
Vice President of Organization Gerardo Suvillaga, Vice
President of Campaigns Cesar Funes, Executive Director Luis
Mario Rodriguez, Director of Acts and Agreements Oscar
Santamaria, Director of Legal and Electoral Affairs Silvia
Aguilar, Director of Communication and Transportation Mariano
Turcios, Director of Economic and Social Affairs Elias
Bahaia, Director of Affiliation and Statistics Eduardo Lemus
O'Byrne, Director of Information Mauricio Suvillaga, Director
of Political Affairs Guillermo Gallegos, and Director of
Municipal Affairs Milagro Navas.

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Current Outlook: Growing Pains
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10. (C) Despite having ushered in measurable and observable
economic growth and prosperity, the public image of ARENA has
suffered. ARENA has attempted to broaden the impact of
economic growth, but the middle class, which benefits
overall, now feels squeezed by higher food and fuel prices.
The good news is that many more Salvadorans own cars; the bad
news is that more voters are now complaining about what it
costs to fill the gas tank.


11. (C) From its inception, ARENA inherited the legacy of the
traditional landed oligarchs, and, despite a notable movement
towards inclusiveness, the party has never fully shaken the
image that it is first and foremost the political vehicle of
the Salvadoran monied elite. Particularly in the wake of
lingering allegations of corruption within the Saca inner
circle (see Ref A and Ref B),there is a widespread
perception that ARENA is an insider's club. ARENA fights
this perception by announcing and carrying out populist
programs of subsidies, price controls and welfare handouts,
thoroughly inconsistent with its proclaimed free-market
orientation.


12. (C) ARENA's law and order programs, such as the "Mano
Dura" and "Super Mano Dura" (Iron Fist and Super Iron Fist,
respectively) crackdowns on street gangs, have met with

limited initial success but yielded few long-term
improvements in overall levels of violent crime. Attempts to
strengthen law enforcement, as well as a clash with
anti-privatization protestors in the village of Suchitoto,
have drawn the ire of Salvadoran and U.S. non-governmental
organizations. Despite NGO allegations to the contrary,
however, there has been no credible evidence linking the
ARENA party to any human rights violations since the signing
of the 1992 peace accords.

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2009 Election Landscape
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13. (C) In keeping with its focus on law and order, ARENA
chose Rodrigo Avila as its candidate for the March 2009
presidential elections. Avila, a young technocrat with
strong ties to the Salvadoran business community, served two
terms as Director of the National Civilian Police (PNC) as
well as Vice Minister of Public Security and Justice. In
addition to cashing in on Avila,s "law and order"
credentials, his campaign has also promised a more inclusive
ARENA that will pursue "a more just and equitable" El
Salvador. The party has tried to insert fresh faces into
COENA to combat its image troubles, but is still struggling
to convince the public that it offers something other than a
continuation of Saca's current policies and legacy. FMLN
candidate Mauricio Funes, a well-known former political talk
show host, has positioned himself as the "candidate of
change" (see Ref C). Recent polling data, although somewhat
inconsistent, seem to indicate that Funes holds a
significant, though narrowing, lead over Avila.

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Comment
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14. (C) The most significant tactical problems facing ARENA
in the upcoming elections are public perceptions of
insularity and arrogance, as well as some still
unsubstantiated allegations of corruption amongst Saca
insiders. ARENA also has the bad luck of being the incumbent
party during a period of skyrocketing food and fuel prices,
over which it has little control. Meanwhile, the FMLN
imports subsidized diesel fuel from Hugo Chavez, undercutting
the mainstream retail fuel market and winning hearts and
minds.


15. (C) Over the long haul, ARENA must also come up with a
strategy for convincing Salvadoran voters that they deserve
to maintain their near 20-year grip on political power.
Strong identification with the USG can be part of that
strategy; Funes and Avila have both visited the USA and
sought campaign donations from the Salvadoran-American
community. Although centrist and undecided Salvadoran voters
have historically proven reluctant to back the FMLN at crunch
time, ARENA,s uneven results in terms of broadening the
effects of economic growth and tackling soaring crime rates
may well convince a significant percentage of the electorate
to vote for the opposition. It is difficult for any single
political entity to maintain control for nearly two decades
without eventually suffering image fatigue, regardless of
their record. ARENA, as currently structured, appears more
vulnerable at the ballot box than at any previous time in its
history.
BLAU