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SUBJECT: CODEL PRICE


1. (SBU) SUMMARY: House Democracy Assistance Committee Chair David
Price (D-
North Carolina) led a bipartisan delegation to Paraguay August
19-20. Codel
Price conveyed U.S. support for democratic institutions to
Paraguay's
congressional leadership. The two sets of Congressional
representatives
discussed Honduras and the U.S. delegation visited both houses of
Congress
while in session. President Lugo told the delegation that relations
with
Congress 'aren't always easy,' but are important to the country's
consolidation of democracy. Lugo asked the Codel about U.S.
experience
handling the financial crisis and outlined his anti-poverty,
anti-corruption
agenda for the delegation. On foreign policy, Lugo assured the
delegation
that Paraguay was following its own course and wants close relations
with the
United States. END SUMMARY.

2. (U) Codel Price also included Ranking Minority Member David
Dreier (R-
California),Lois Capps (D-California),Sam Farr (D-California),
Lucille
Roybal-Allard (D-California),Jim McDermott (D-Washington),Ed
Whitfield (R-
Kentucky),and Brian Bilbray (R-California). Ambassador and
Pol/Econ Chief
(notetaker) accompanied the delegation on meetings with Congress and
President
Lugo.
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PARAGUAYAN CONGRESSIONAL LEADERSHIP: WE WANT TO LEARN FROM YOU
--------------

3. (U) Senate President Senador Miguel Carrizosa welcomed the
delegation to
Congress for a meeting with congressional leadership August 19.
Carrizosa
said the United States and Paraguay share visions and expressed
interest in
sharing experiences given 'all that the United States has achieved.'
Lower
House President Salyn Buzarquis thanked the USG for its cooperation
in
Paraguay. He and his colleagues cited the MCC Threshold Program in

particular as important for Paraguay's fight against corruption.
'We're a
small country,' he said, 'but we have many strengths.' Buzarquis
hoped that
Codel Price's visit represented U.S. interest in Latin America and
Paraguay.


4. (U) Congressman Price affirmed his delegation's interest in
helping
strengthen Paraguayan institutions. He said Paraguay's 2008
peaceful
transition is the mark of a stable democracy and shouldn't be taken
lightly.
'Democracy is not just elections,' Price said, emphasizing that what
happens
between elections is more important and the role of Congress after
the
elections is key. The U.S. delegation congratulated their
counterparts on
Paraguay's deal with Brazil on the Itaipu dam and its electricity.
Senate
Foreign Relations President Miguel Abdon Saguier said Paraguay's
relationship
with both Brazil and Argentina is "vital". He explained that
Paraguay's
Itaipu treaty with Brazil and its Yacyreta treaty with Argentina
were signed
in 1973 by dictators for all three nations and that both treaties
were
disadvantageous for Paraguay. Saguier said Lula's political will
made the new
deal with Brazil possible and that Paraguay will now look to
renegotiating
Yacyreta with Argentina. Saguier lamented that Paraguay's portion
of Yacyreta
is still not complete after over 35 years, earning it infamy as
Paraguay's
'monument to corruption.' Saguier noted the overwhelming support
for the
Itaipu negotiations from all political sectors, and hoped both the
Brazilian
and Paraguayan Congresses will quickly approve the deal.

5. (U) Carizzosa briefly touched on the situation in Honduras,
stating that
'the military cannot remove a democratically president in his
pajamas in the
middle of night, whether we like him or not.' Saguier noted that
there is no
unanimity on Honduras in Paraguay's Congress. He said he
appreciates the
international community's stand, and referred to President Bush's
statement
(expressed by then-Ambassador Cason) that the United States isn't
concerned
about whether a country leans left or right as long as it is
democratic. He
said it is more important that we share values, such as the
principles of
democracy, human rights, and non-intervention. Saguier called
criticism of
the United States related to Honduras 'hypocrisy,' saying 'they
criticize you
for interfering, but demand you interfere in Honduras.'

6. (U) Codel Price had the opportunity to address sessions of both
the Senate
and the Lower House August 20. Lower House President Buzarquis
reiterated
Paraguay's commitment to representative democracy. He admitted the
country's
failures (including corruption) but said they won't backslide in
their
progress. Buzarquis criticized 'destabilizing elements in the
region' which
close down the media and fail to respect rights. He asserted
Paraguay's right
to self-determination, coupled with a desire to work together to
consolidate
democracy. Buzarquis urged his own colleagues to put aside
differences 'when
our country needs us' and to defend institutionalism.
Representatives Price
and Roybal-Allard addressed the session, with the latter speaking in
Spanish.
Price expressed admiration for Paraguay's handling of its democratic

transition and conveyed his appreciation for our countries' enduring

friendship. Roybal-Allard noted the delegation's interest in
strengthening
ties between both institutions and countries. She emphasized that
the success
of Paraguay's institutions would be critical to the country's
success. One
deputy asked the delegation to convey his thanks to Representative
Engel for
introducing legislation (H.R. 1837, which would extend the Andean
Trade
Preference Act (ATPA) to Paraguay) in the U.S. Congress in April;
several
others thanked the United States for its historical support and
friendship.

7. (U) Representatives Dreier and Roybal-Allard also briefly
addressed a tense
Senate session on behalf of the delegation just minutes before the
Senate's
vote on a controversial Supreme Court vacancy. Despite the pressing
business
at hand, the Senate warmly welcomed the delegation. (NOTE: One
senator told
Pol/Econ Chief that this was the first time a member of a foreign
Congress
addressed the Senate from the floor. END NOTE). Senate President
Carrizosa
underscored that Paraguay prefers trade preferences to assistance.
He urged
the delegation to support Paraguay by voting in favor of the
legislation
sponsored by Representative Engel in the U.S. Congress.
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LUGO TO PRICE: CONGRESSIONAL RELATIONS NOT ALWAYS EASY
--------------

8. (SBU) President Lugo told the delegation August 20 that relations
with
Congress are 'not always easy' but are important to the country's
consolidation of democracy. Price explained that HDAC is engaged in
outreach
to democracies around the world, focusing on Congressional
relations. Price
said the challenge is to get executive-legislative branch relations
right.
Lugo recognized the political parties represented in Congress are a
valid
democratic instrument, but also noted the emergence of social
movements in
Paraguayan politics. He said the face of a democracy should be its
citizens.
Lugo described political parties and social movements as 'two feet'
on which
Paraguay will walk, but admitted that the debate on the issue had
not yet
matured. He said political interference in government institutions
had been a
frequent practice in Paraguay, particularly in the courts. Lugo
said several
of his Cabinet members with congressional experience were helping
him
understand Congress. He assured the delegation that he is not
afraid of
diversity or pluralism, and in his belief that fragile democracies
need
institutional support.

9. (SBU) Lugo asked Representative Price how the United States
handled the
financial crisis. Price said that the Bush administration first
anticipated
the crisis, and while there was some debate in Congress, Republicans
and
Democrats worked together to avoid an economic collapse. The Obama

administration, Price said, had been trying to stimulate the economy
with tax
relief and safety nets for states and individuals. Price said the
package
took six weeks total to pass Congress, which was an exception to the
norm.
Finance Minister Borda, who joined Lugo for the meeting along with
Foreign
Minister Lacognata, said that while Paraguay needs to stimulate
economic
growth, he is reluctant to raise taxes during the financial crisis
(even
though Paraguay's tax revenues are the lowest in the region). Borda
urged the
delegation to vote for ATPA benefits for Paraguay, saying 'we need
markets.'
Dreier agreed that trade is the best way to fight poverty and
encourage
economic growth and highlighted Peru's nine percent growth leading
up to the
financial crisis as result of signing an FTA with the United States.
Lugo
said Paraguay had never hosted so many international forums as this
year,
which had helped them understand 'how complex the modern world is
and how
small we are.'

10. (SBU) In response to the delegation's inquiry about his
priorities, Lugo
and his team cited an anti-poverty agenda centered on economic
growth. He
also mentioned anti-corruption, recuperation of 'energy
sovereignty',
improvements in education, health, housing, and judicial and land
reform as
top goals. Lugo convoked his cabinet for a 6 a.m. meeting to
discuss how to
reconcile technical and political criteria in the national budget,
which his
administration was preparing for the first time. With the process
fresh on
his mind, Lugo complained about Paraguay's rigid budget process and
Congress'
control over same (mostly as a holdover from the post-Stroessner
era, when the
intent was to weaken the executive branch). Foreign Minister
Lacognata
explained that moving Lugo's agenda forward is complicated by the
'high
political fragmentation' in Congress. Lacognata told the delegation
that the
Colorado Party has at least three factions and that the Liberals
have four,
producing a 'multitude of interlocutors' for the executive branch.
Lugo said
Paraguayans have high expectations and that he wants his people to
trust his
government. He said it's an uphill battle for his team: while
Congress asked
his predecessor to report to Congress only four times in five years,
Congress
has already asked Lugo's government to report 79 times in one year.
On
budgetary issues, Lugo reported vetoing 19 laws which would have
irresponsibly
increased spending (his predecessor vetoed only eight in five
years).

11. (SBU) With respect to foreign policy, Lugo assured the
delegation that
Paraguay was following its own course and wants close relations with
the
United States. He said Paraguay is redirecting its focus on its
neighbors and
must recover its dignity as a nation. Lugo said Paraguay would not
copy any
other model, but wants 'friendly relations among equals.' He said
Paraguay
will talk to the United States, Taiwan, Bolivia, Venezuela, and
others while
retaining its own identity. Lugo recounted that at the UNASUR
meeting, Lugo
(and not Lula or Bachelet) stopped Chavez from 'talking behind
Uribe's back'
about U.S. use of Colombian military bases. Lugo added that 'Chavez
knows he
has limits in Paraguay' and lamented that regional infighting
undermines
integration efforts. Lugo said he would go to the UNASUR meeting in

Bariloche, Argentina August 27-28 'not as a blind ally, but as a
just defender
looking for balance.' Lugo summed up Paraguay's position by stating
that 'We
want bread- it doesn't matter if it comes from the right or the
left. Our
enemy is poverty ' and we want relations with all.'

12. (SBU) COMMENT: Codel Price's visit was a positive first step in

establishing Congress-to-Congress relations. Paraguay's democratic

institutions need support, and Congress is a good place to start,
both because
of need and because Paraguay's Congress warmly welcomes U.S.
assistance. With
these important contacts in place, we hope that our legislative
branch can
build a strong relationship with its Paraguayan counterparts. END
COMMENT.
CODEL PRICE CLEARED THIS MESSAGE.

AYALDE