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UNCLAS ASUNCION 000539 
 
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TO WHA/BSC MDASCHBACH 
E.O. 12958: N/A 
TAGS: PGOV OREP PREL ECON PA
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. 
----------------------------------- 
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. 
----------------------------- 
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