ARENA'S MELTDOWN

C O N F I D E N T I A L SAN SALVADOR 001011 SIPDIS E.O. 12958: DECL: 10/27/2019 TAGS: PGOV PREL ES SUBJECT: ARENA'S MELTDOWN REF: SAN SALVADOR 978 Classified By: Charge d'Affaires, for reasons 1.4 (b) and (d) ¶1. (SBU) Summary: On October 22, twelve dissident legislative deputies from the (conservative) National Republican Alliance (ARENA) formalized their break with the party and cast a symbolic vote with ARENA's rival party, the (left-wing) Farabundo Marti National Liberation Front (FMLN). This move comes ten days after the dissidents first voiced their discontent with the ARENA's governing body, the National Executive Council (COENA) (see reftel). This news strengthens the hand of the FMLN, which now has more partners to craft a legislative majority. End Summary. ¶2. (SBU) The newly independent bloc is led by former ARENA floor leader Guillermo Gallegos, a four-term ARENA deputy. Four others in the bloc have served two or more terms as ARENA deputies; the remaining seven are in their first term. The group announced their threat to break with the party on October 12, the day after ARENA,s annual national convention. On October 22, after more than a week of steadily deteriorating dialogue between the bloc and COENA, the bloc announced they would leave the party. That same day, the bloc voted with the FMLN to kill an ARENA-sponsored agricultural aid initiative. ¶3. (SBU) The resulting legislative arithmetic favors the FMLN. The new breakdown of the 84 seats in the unicameral legislature is as follows: FMLN ) 35 seats, ARENA loyalist ) 20 seats, "Independent Bloc" ) 12 seats, National Conciliation Party (PCN) ) 10 seats, Christian Democratic Party ) 5 seats, Democratic Change ) 1 seat, Independents (PCN dissident) ) 1 seat. The FMLN could craft a simple majority of 43 votes with the support of either the newly-independent bloc or the PCN. They could potentially achieve a two thirds supermajority of 56 votes (required for constitutional amendments and public debt issuance) without the consent of ARENA. ¶4. (C) ARENA founding member Mario Acosta Oertel (protect) told POLOFF it will be "difficult, but not impossible" to bring some of the twelve dissidents back to the party. While he expressed hope that some of the dissidents might return to the fold, he told POLOFF that the dissidents' departure was in the long term interests of the party because it removes many of the divisive elements responsible for the party's malaise. Acosta said the bloc's separation would not only hurt ARENA in the short term, but President Funes as well. He characterized Funes as "a man who needs our help" against the radical elements of the FMLN, but clarified that "he is neither our ally nor our rival." Acosta said COENA president Alfredo Cristiani would attempt to strengthen ARENA's ties with Funes, with whom Acosta says Cristiani already has a good relationship. ¶5. (C) Comment: If former President Saca is indeed behind the dissident deputies, as we believe, then this is all about money. Saca built a money machine while in power, and ARENA is now bereft of money and patronage as an opposition party. To regain its balance and influence, ARENA needs to develop independent sources of funding. The FMLN, on the other hand, now benefits from government patronage (in the ministries it controls),while still collecting subsidies from Hugo Chavez. BLAU