This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 GUATEMALA 000128 
 
SIPDIS 
 
DEPT FOR WHA/CEN 
 
E.O. 12958: DECL: 01/14/2013 
TAGS: PGOV PINR SNAR GT
SUBJECT: PAN IN THE PROCESS OF OVERCOMING INTERNAL RIVALRY 
 
REF: A. 02 GUATEMALA 2891 
 
     ¶B. 02 GUATEMALA 2977 
     ¶C. 02 GUATEMALA 3158 
 
Classified By: Political Officer Erik Hall for reason 1.5 (d) 
 
¶1.  (C) Summary:  The National Advancement Party's two rival 
leaders, presidential candidate Oscar Berger and party 
Secretary General Leonel Lopez Rodas, announced their accord 
 
SIPDIS 
to work together in support of Berger's presidential 
candidacy.  In a symbolic media event on January 13, 
bulldozers demolished a cement block wall between PAN 
headquarters and the adjacent Berger campaign office.  The 
deal worked out between the two men consolidates the support 
of Lopez loyalists for Berger's presidential candidacy in 
exchange for Berger's support for other candidacies backed by 
Lopez.  While details about the deal are partial, they 
apparently include an even split of Congressional 
candidacies, consensual decision-making in the PAN's 
executive committee, and future consideration of an accord on 
the vice presidency and mayoralty of the capital.  Key 
private sector backers of Berger are happy with the accord, 
and some hope Berger will now reach outside the PAN in 
selecting his running-mate.  By assuring party unity for the 
moment, the agreement between the two men boosts Berger's 
presidential prospects.  End Summary. 
 
Background 
---------- 
 
¶2.  (SBU) The PAN's November primary generated significant 
animosity between the two leaders of the Party -- Oscar 
Berger and Leonel Lopez (see RefTels -- and neither side 
sought a rapprochement with the other in the early days after 
the election.  Despite Berger's overwhelming primary victory, 
Lopez Rodas continued to exercise significant control over 
the party organization through his influence with its local 
affiliates and his majority in the party's Executive 
Committee.  Several of Berger's financial backers echoed the 
views of a Prensa Libre editorial calling on Berger to broker 
peace with Lopez in order to preserve party unity.  They 
argued that Berger's unwillingness to make concessions to 
Lopez threatened to split the party, making a loss in the 
national elections more likely. 
 
The Deal:  Lopez Rodas' Version 
------------------------------- 
 
¶3.  (C) Leonel Lopez Rodas told us on January 12 that he and 
Oscar Berger had reached a firm agreement on the following: 
 
--  They will name an equal number of congressional 
candidates on the national list with Berger getting even 
numbers and Lopez getting odd numbers.  The same applies to 
the list for congressmen representing Guatemala City. 
 
--  Mauricio Urruela (a Lopez supporter) is the candidate for 
mayor of Guatemala City (for now).  He will receive the full 
support of the party.  In early April, the PAN will conduct a 
poll, and if it looks as if Urruela will not win, he will be 
replaced by Berger's candidate, Eduardo Castillo. 
 
--  Lopez Rodas is the favorite to become the Vice 
Presidential candidate.  However, if by April it looks as if 
the PAN needs to bring in someone from outside to boost their 
chances, then Lopez and Berger will make a decision on who to 
ultimately fill this slot. 
 
-- Lopez considers Berger's campaign manager, banker Eduardo 
Gonzalez, to be the main barrier to effective communication 
and collaboration between his camp and Berger's.  Lopez 
believes Gonzalez has been the strongest advocate of not 
making concessions to Lopez that could later undermine 
Berger's ability to carry out his own plan of government if 
elected. 
 
The Deal:  View from Berger Supporters 
-------------------------------------- 
 
¶4.  (C) The Berger-Lopez Rodas agreement is viewed somewhat 
differently by Berger supporters.  Carlos Arias, CACIF's 
Labor Commission chief and purportedly a political strategist 
for Berger's major sponsors, gave PolOff a different account 
of the Berger-Lopez Rodas deal in a discussion on January 10. 
 The sponsors, which Arias refers to as the "organized 
private sector" (SPO), is comprised of the Gutierrez-Bosch 
clan and others, including Peter Lamport, who acts as the 
group's international affairs person.  Cement king Enrique 
Novella was part of the team before he died in a plane crash 
in El Salvador late in 2002.  According to Arias: 
 
--  The SPO is happy that Berger has accommodated Lopez 
Rodas.  The deal includes an even split of Congressional 
candidates and consensual decision-making in the PAN 
executive committee (Lopez Rodas had a one-vote margin of 
control there, but has agreed that Berger will be added to 
the group). 
--  The Vice Presidency is not part of the bargain.  That 
issue will be revisited in March or April.  Arias implied 
that there was an agreement that the Vice Presidential 
candidate should come from outside the PAN (ruling out Lopez 
Rodas).  Ideally, it would be someone who could first unify 
the small third parties and bring leftist votes to Berger. 
Arias said his personal preference would be Alvaro Colom. 
There have also been talks with Mayan organizations about 
Rigoberto Queme, the indigenous Mayor of Quetzaltenango. 
(Comment:  Queme has registered a party to give him an option 
to run for president.  End Comment.) 
 
--  Arias said that the PAN's candidate for Mayor of 
Guatemala City was also not part of the Lopez Rodas-Berger 
deal.  He noted that Prensa Libre had a story saying Berger 
had selected Mauricio Urruela as his preferred candidate. 
Arias called Urruela "a thief" from a good family who is 
hated by the SPO.  He called the press article a trial 
balloon. 
 
--  Asked what role Eduardo Gonzalez would have in a 
potential Berger administration, Arias said Gonzalez would 
run it from within.  He credited Gonzalez with engineering 
Berger's primary victory. 
 
--  The SPO invested heavily in the PAN primaries, and also 
contracted a U.S. political consultant and Felipe Noguera, an 
Argentine based in Miami for technical assistance.  For now, 
they have retained only Noguera's services. 
 
--  SPO members recognize that to recoup power they must 
focus on the 2003 election (supporting Berger) while also 
looking beyond the presidency and cultivating Congressional 
deputies in as many parties as possible.  They are now 
totally committed to legal, constitutional pursuit of lasting 
influence in the GOG, "whatever their attitudes may have been 
in the past." 
 
--  The immediate task now is to finalize Berger's political 
platform.  In parallel, the SPO will also produce its own 
proposals on a plan of government, including how to finance 
it, and distribute it to all political parties. 
 
--  With the new accommodation between Lopez Rodas and 
Berger, the main losers, according to Arias, will be the 
Unionist party.  The Unionist split from the PAN was a 
reaction by former president Arzu against Lopez Rodas.  While 
some Unionists will return to the PAN to support Berger 
nevertheless, some Unionists closest to Arzu will not be 
welcomed by Lopez Rodas. 
 
--  According to Arias the SPO's "kings" of the private 
sector have changed their thinking:  first, by deciding to 
work together for mutual rather than private interests, and 
second, to accommodate to new rules of the game under 
globalization by seeking influence by operating within the 
democratic system.  He believes it is in the interest of the 
SPO for the USG to be aware of this democratic evolution and 
hopefully to welcome it. 
 
¶5.  (C) Note:  Felipe Noguera, the Argentine consultant, has 
a long history as consultant to El Salvador's ARENA party, 
according to Pollo Campero magnate Juan Luis Bosch in a 
conversation with EconCouns.  ARENA is the political model 
the SPO is emulating, including its support for Berger and 
the PAN, and resuscitating the local pro-private sector think 
tank FUNDESA as a copy of El Salvador's FUSADES.  Bosch paid 
for Noguera's participation in CACIF's general annual 
assembly a year ago, which was orchestrated around 
presentations by Noguera y Associates that purported, by 
"scientific" and "objective" criteria, to show that the PAN 
was the only option for right-thinking Guatemalans.  End 
Note. 
 
Berger Campaign Worried About Possible Narco-Financing 
--------------------------------------------- --------- 
 
¶6.  (C) We met on January 13 with Eduardo Gonzalez, Berger's 
campaign manager, at his request.  Gonzalez is worried that 
the Berger campaign will be offered financing from dubious 
sources that might have links to illegal activities, and 
asked for Embassy assistance in "vetting" contributors.  We 
informed Gonzalez that the Embassy can not vet their campaign 
contributors, and urged the PAN to check out campaign 
contributors locally, as their supporters in distant areas 
were likely to know who is a druggie and who isn't, and to 
just say "no" if they have any doubts. 
 
¶7.  (C) Gonzalez also said that Berger is worried about how 
to limit the influence of organized crime in their 
government.  We responded that the key is appointing honest, 
reliable, incorruptible Ministers of Government and Defense, 
passing effective conspiracy legislation, and pressing the 
Courts and Public Ministry for results.  Gonzalez said that 
Berger is determined to carry out a profound reform of the 
military, but that he would want USG advice in the process. 
Once in Government, he said, Berger would need counsel from 
the USG on which officers are close to Ortega Menaldo. 
Gonzalez added that he is worried about the possible use of 
violence by organized crime to keep Berger from taking 
office. 
 
Comment 
------- 
 
¶8.  (C) The Berger-Lopez Rodas agreement is an important 
milestone for Berger, who emerges considerably strengthened 
by the alliance.  On January 15 a major national daily 
supporting Berger reported polls showing Berger way ahead in 
popular preferences, at 45%, followed by Colom, with 9.7% and 
the FRG's Rios Montt at only 2.6% (Note: Guatemalan polls are 
not historically reliable.  End Note).  A good vice 
presidential pick would further boost Berger's chances. 
 
¶9.  (C) Berger also emerges from the accord hostage to Lopez 
Rodas' influence until the election.  Lopez Rodas detests 
Gonzalez, who is widely viewed as the power behind the Berger 
throne.  We suspect that Gonzalez will play a far greater 
role in a Berger government, should it come about, than Lopez 
Rodas.  Lopez knows that after the election he will be of 
less value to Berger unless he is able to establish a firm 
base in Congress for his allies.  Gonzalez is not only the 
architect of Berger's campaign, he is also the guy CACIF and 
the SPO trusts to keep the next government running in their 
direction. 
Hamilton