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09LIMA1120 2009-08-05 14:56:00 CONFIDENTIAL Embassy Lima
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1. (C) Summary: The Peruvian National Police (PNP) on July
21st launched an attack on a Shining Path (SL) camp in the
Upper Huallaga Valley (UHV), possibly injuring a key
terrorist leader and capturing various munitions and
supplies. Several contacts report that the raid was part of
an increased PNP effort to target the SL UHV faction after
nearly a year-long lull. The increased operations may be a
response to an expansion of SL UHV, which several observers
agree has recovered somewhat since mid-2008 after being
nearly destroyed. Local contacts say SL's increased activity
since mid-2008 has put pressure on USAID alternative
development plans in the area. End Summary.

PNP Attack Artemio Camp


2. (C) The Peruvian National Police (PNP) on July 21st
launched an attack on a Shining Path (SL) camp in the Upper
Huallaga Valley (UHV) chasing away the defenders and
capturing various munitions and supplies. The UHV -- a
stretch of jungle river valley in northern Peru -- is the
operational base for the SL faction led by alias "Artemio",
whose fighters are located in the northern part of Huanuco
region, along a 135 kilometer stretch of the valley between
Nuevo Progreso and Tingo Maria towns. Our contacts say the
PNP planned the attack based on information obtained from a
source inside Artemio's camp, and the PNP announced that it
believes it injured the terrorist leader. The chief of
security for USAID's main alternative development contractor
in the UHV -- a Peruvian ex-naval intelligence officer --
said his sources in the area reported that Artemio was
injured in the arm and leg, but not severely.

Seizures Include Weapons, Propaganda


3. (C) Our police contacts tell us they seized hand grenades,
ammunition, rifles, ignition devices, and military-style
uniforms labelled "EGP" ("Ejercito Guerrillero Popular" or
"Popular Guerrilla Army") from the captured camp. The police
also recovered 3,000 leaflets with subversive propaganda
encouraging residents in the area to defend coca plants with
force. In addition, the police found notebooks describing
plans to attack coca eradication workers and their police
escorts from the CORAH program funded by our Narcotics
Affairs Section. Analysts told us this propaganda was
consistent with leaflets spread by SL in May that called for
the defense of coca growers.

General Increase in Police Operations


3. (C) Our police contacts and two prominent counter-drug
analysts report that the camp raid was part of an increased
PNP effort to target SL in recent months after nearly a
year-long lull. Chief of the PNP Huallaga Front General Luis
Valencia, who took the job in March 2009, told us he has
already carried out 14 counter-terrorist operations,
including the latest attack. He also ordered his units to
step up counter-drug and crime operations in the UHV. He
said his main goal is to locate and arrest Artemio, and he
believes, based on his intelligence, this will be
accomplished soon. The two analysts confirm they have seen
indications of an increased PNP tempo, and one underscored
the significance of the successful use of intelligence from
inside Artemio's camp. The contract security chief added
that SL columns appeared to be moving around less thanks to
the increased operations. The analysts cautioned, however,
that the PNP has long thought it was on the verge of
capturing Artemio.

Increased PNP Ops Response to SL Expansion?


4. (C) The PNP operations may be a response to the
recuperation of SL in the UHV. Up to mid-2008, the police
had scored a number of key successes against the faction,
capturing several key leaders and reportedly forcing Artemio
on the run. But changes in the Ministry of Interior and PNP,
and a renewed GOP focus on the SL faction in the VRAE, gave
Artemio time to regroup. The security chief told us that
when PNP pressured eased in 2008 after SL UHV was nearly
destroyed, Artemio's senior commander "Ruben" launched a

recruitment drive, travelling from community to community
targeting former army recruits who had finished their
military service. He offered them as much as 750 Soles per
month -- about $250, presumably mostly from drug money -- to
join SL compared to the 400 or 450 Soles they earned with the
Army, the security chief asserted.

5. (C) The security chief said SL used this method to grow
from around 50 active fighters to around 200 or 225, divided
into five commands, plus an unknown number of logistical
supporters living in area communities. A team of PNP
intelligence analysts in the UHV reported a similar process
of recruitment since 2008, but argued that SL had grown no
larger than 75 active fighters and said the 200 figure was
overblown. Most police and analyst observers put the total
number of fighters somewhere between these two figures.

6. (C) The contractor security chief said SL's increased
activity since mid-2008 has put pressure on USAID alternative
development plans in the area. While USAID projects have had
no problems north of Nuevo Progreso, field staff for the
contractor report that local leaders say SL representatives
have entered their communities to warn that SL will seek to
prevent the expansion of alternative development south of
this point. Our United Nations partners working on
alternative development in the same area say they have also
been warned to withdraw. Coca eradication teams operating
with police protection, on the other hand, have so far faced
no pressure from SL in these areas.

Comment: SL UHV Growing or on the Run?


7. (C) The PNP's renewed efforts in the UHV are welcome news
after the GOP in 2008 refocused attention on the other
principal SL faction operating in the VRAE. We do not know
for sure the level of SL UHV strength, but we find very
plausible the contention that it has recuperated to some
extent. Either way, the PNP reportedly has good intelligence
on Artemio's whereabouts, and his capture would rapidly
overshadow any expansion in the past year.