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



                              SECRET        PTQ9872

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      DOEE-00  DOTE-00  WHA-00   DS-00    EB-00    EUR-01   FAAE-00  
      FBIE-00  VC-01    TEDE-00  LAB-01   VCE-00   AC-01    NRRC-00  
      NSAE-00  PM-00    ACE-00   SSO-00   SNIS-00  NISC-00  PMB-00   
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FM AMEMBASSY LIMA
TO SECSTATE WASHDC IMMEDIATE 4092
INFO AMEMBASSY BOGOTA 
AMEMBASSY CARACAS 
AMEMBASSY BRASILIA 
AMEMBASSY QUITO 
AMEMBASSY SANTIAGO 
AMEMBASSY BUENOS AIRES 
AMEMBASSY LA PAZ 
AMEMBASSY MOSCOW 
USCINCSO MIAMI FL

S E C R E T SECTION 01 OF 03 LIMA 002475 
 
SIPDIS 
 
DEPARTMENT FOR INR/B 
 
E.O. 12958: DECL: 4/24/05 
TAGS: PINR PGOV PREL PGOV PREL PGOV PREL PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF
SUBJECT:  ALEJANDRO TOLEDO BIOGRAPHY:  POLITICAL ASSETS AND 
LIABILITIES 
 
REFS:  (A) LIMA 1638 
 
¶1.  (U) CLASSIFIED BY AMBASSADOR JOHN HAMILTON, REASONS 1.5 
B AND D. 
 
¶2.  (S) SUMMARY: PRESIDENTIAL ASPIRANT ALEJANDRO TOLEDO'S 
CHARISMA, ABILITY TO APPEAL TO VARIOUS AUDIENCES, INCLUDING 
PERU'S INDIGENOUS AND POOREST COMMUNITIES, AND POSITIVE 
HUMAN RIGHTS AND ECONOMIC MESSAGE HAVE HELPED TO CATAPULT 
HIM INTO A RUN-OFF ELECTION WITH PRESIDENT FUJIMORI.  HIS 
NEGATIVES INCLUDE A HOT TEMPER, A TENDENCY TOWARD LECTURING, 
SOME DOUBTS ABOUT HIS ECONOMIC CREDENTIALS, AND A REPUTATION 
FOR HAVING BEEN A PHILANDERER AND OCCASIONALLY HEAVY 
DRINKER.  WHILE TOLEDO WON FAVOR WITH MIDDLE CLASS STUDENTS 
FOR DONNING A RED HEAD BAND AND LEADING 50,000 PROTESTORS TO 
THE PRESIDENTIAL PALACE AFTER THE POLLS CLOSED APRIL 9, PRO- 
FUJIMORI SUPPORTERS HAVE ALREADY BRANDED HIM A RABBLE ROUSER 
FOR THE SAME REASON.  PERU 2000 OFFICIALS HAVE ALSO TRIED TO 
LINK TOLEDO TO THE HIGHLY CONTROVERSIAL EX-PRESIDENT ALAN 
GARCIA, AND TV TALK SHOWS REVISITED ALLEGATIONS THAT HE 
REFUSED TO RECOGNIZE PATERNITY AND PROVIDE SUPPORT TO AN 
ILLEGITIMATE DAUGHTER.  OTHER PRO-GOVERNMENT PRESS REPORTED 
HE AND HIS WIFE WERE DIVORCED AND HAVE NOT REMARRIED. 
DOMESTIC VIOLENCE AND DRUG USE ARE AMONG OTHER, UNCONFIRMED 
RUMORS THAT COULD SURFACE BETWEEN NOW AND THE NEXT ROUND. 
END SUMMARY 
 
                          SECRET 
 
PAGE 03        LIMA  02475  01 OF 03  251228Z 
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DARLING OF THE INTERNATIONAL PRESS 
---------------------------------- 
 
¶3.  (SBU) TOLEDO'S EARLY YEARS READ LIKE (AND HE PORTRAYS 
THEM AS) A HOLLYWOOD SCRIPT.  (NO LESS THAN 10 U.S. DAILIES 
AND 2 INTERNATIONAL WEEKLIES INCLUDED HIS RAGS-TO-RICHES 
STORY IN THEIR COVERAGE OF PERU'S ELECTIONS.)  BORN MARCH 
28, 1946, TO PARENTS OF 16 CHILDREN (SEVEN OF WHOM DIED 
PREMATURELY) IN THE SMALL HIGHLAND HAMLET OF CABANA (ANCASH 
DEPARTMENT), HE GREW UP IN THE SEAPORT TOWN OF CHIMBOTE.  BY 
AGE EIGHT, HE WAS WORKING PART TIME AS A SHOESHINE BOY TO 
SUPPLEMENT THE FAMILY'S INCOME.  IN SECONDARY SCHOOL, HE WON 
RECOGNITION FOR HIS WRITING SKILLS AND SOON AFTER LANDED A 
JOB WORKING FOR A LOCAL PAPER. IN HIS LAST YEAR OF HIGH 
SCHOOL (1962-63), HE WON (WITH THE HELP OF U.S. PEACE CORPS 
VOLUNTEER JOEL MEISNER) A ONE-YEAR ROTARY SCHOLARSHIP TO SAN 
FRANCISCO UNIVERSITY TO STUDY ECONOMICS. 
 
¶4.  (SBU) WORKING DURING HIS FIRST YEAR OF UNIVERSITY 
STUDIES AS A PART-TIME GAS STATION ATTENDANT, HE PLAYED HIS 
WAY ONTO THE UNIVERSITY'S SOCCER TEAM AND WON A SCHOLARSHIP. 
HE GRADUATED IN 1970 WITH A BA IN ECONOMICS AND BUSINESS 
ADMINISTRATION AND THEN STUDIED AT STANFORD, WHERE HE 
COMPLETED MASTERS DEGREES IN HUMAN RESOURCES (1971) AND 
ECONOMICS (1972) AND MARRIED FELLOW STANFORD STUDENT ELIANE 
KARP, A BELGIAN BORN AMCIT, IN 1972.  STARTING IN 1973, HE 
WORKED ON A PHD IN HUMAN RESOURCES AND COMPLETED HIS 
COURSEWORK AND EXAMS IN 1976.  (NOTE:  TOLEDO RECEIVED 
RESEARCH GRANTS FROM USAID AND THE FORD FOUNDATION DURING 
1973-76.  WE HAVE NO RECORDS ON HOW HE FINANCED HIS STUDIES 
                          SECRET 
 
PAGE 04        LIMA  02475  01 OF 03  251228Z 
AT STANFORD BETWEEN 1971-1972.  TOLEDO DID NOT COMPLETE HIS 
PHD IN ECONOMICS OF HUMAN RESOURCES UNTIL 1992.) 
 
¶5.  (SBU) BETWEEN 1976 AND 1991, HE WAS A LIMA-BASED 
CONSULTANT TO THE UN, WORLD BANK, IBD, AND WORKED FOR THE 
ILO IN GENEVA AND THE OECD IN PARIS.  TOLEDO THEN TAUGHT AS 
A PERMANENT PROFESSOR AT THE GRADUATE SCHOOL OF BUSINESS 
ADMINISTRATION (ESAN) IN LIMA FROM 1991-1994.  DURING THIS 
SAME PERIOD HE WAS A VISITING SCHOLAR AT HARVARD.  (NOTE: 
TOLEDO DID A STUDY ON MACRO ECONOMIC ISSUES IN 1988 FOR 
USAID; HE ALSO CONSULTED FOR USAID WHILE AT HARVARD.) 
 
¶6.  (SBU) TOLEDO CLAIMS THAT, AFTER FINISHING HIS PHD 
COURSEWORK IN 1976 (AND IN BETWEEN CONSULTING JOBS), HE 
ADVISED SEVERAL (UNSPECIFIED) LATIN AMERICAN COUNTRIES.  HIS 
CV SAYS BETWEEN 1983-1991 HE "PROVIDED PERIODICAL TECHNICAL 
AND INDEPENDENT ADVICE TO PERU'S PRESIDENTS BELAUNDE, 
GARCIA, AND FUJIMORI," ON EXTERNAL DEBT, STRUCTURAL REFORMS, 
AND ECONOMIC GROWTH STRATEGIES.  (NOTE: FUJIMORI DENIED THAT 
TOLEDO HAD ANY ASSOCIATION WITH HIS GOVERNMENT.)  HE ALSO 
WORKED AS THE DIRECTOR GENERAL AND VICE MINISTER OF 
ECONOMICS AND LABOR STUDIES AND THE MINISTRY OF LABOR (1981- 
1983). 
 
                          SECRET 
 
                              SECRET        PTQ9873 
 
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INFO  LOG-00   NP-00    ACQ-00   CIAE-00  SMEC-00  INL-01   DODE-00 
      DOEE-00  DOTE-00  WHA-00   DS-00    EB-00    EUR-01   FAAE-00 
      FBIE-00  VC-01    TEDE-00  LAB-01   VCE-00   AC-01    NRRC-00 
      NSAE-00  PM-00    ACE-00   SSO-00   SNIS-00  NISC-00  PMB-00 
      DSCC-00  DRL-02   G-00     NFAT-00  SAS-00     /007W 
                  ------------------4F97B5  251230Z /38 
O 251230Z APR 00 
FM AMEMBASSY LIMA 
TO SECSTATE WASHDC IMMEDIATE 4093 
INFO AMEMBASSY BOGOTA 
AMEMBASSY CARACAS 
AMEMBASSY BRASILIA 
AMEMBASSY QUITO 
AMEMBASSY SANTIAGO 
AMEMBASSY BUENOS AIRES 
AMEMBASSY LA PAZ 
AMEMBASSY MOSCOW 
USCINCSO MIAMI FL 
 
S E C R E T SECTION 02 OF 03 LIMA 002475 
 
SIPDIS 
 
DEPARTMENT FOR INR/B 
 
E.O. 12958: DECL: 4/24/05 
TAGS: PINR PGOV PREL PGOV PREL PGOV PREL PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF
                          SECRET 
 
PAGE 02        LIMA  02475  02 OF 03  251229Z 
SUBJECT:  ALEJANDRO TOLEDO BIOGRAPHY:  POLITICAL ASSETS AND 
LIABILITIES 
 
¶7.  (C) TOLEDO RAN FOR PRESIDENT IN 1995, COMING OUT OF 
NOWHERE TO PEAK AT 15 PERCENT BEFORE FADING TO THREE PERCENT 
(AFTER BEING ACCUSED OF TIES TO THE CLAE PYRAMID SCHEME -- 
SEE BELOW) AND A FOURTH-PLACE FINISH. HIS CAMPAIGN CENTERED 
ON JOB CREATION AND INSTITUTIONALIZING PERU'S PRIVATIZATION 
PROGRAM.  ACCORDING TO EMBASSY FILES, TOLEDO MAINTAINED 
CLOSE CONTACTS TO THE FUJIMORI GOVERNMENT AFTER THE ELECTION 
AND WAS MANEUVERING TO LAND A HIGH-PROFILE MINISTRY OF TRADE 
OR FINANCE JOB THAT ULTIMATELY NEVER MATERIALIZED.  HE 
RETURNED TO HIS JOB AT ESAN AND BECAME DIRECTOR OF THE 
RESEARCH AND INTERNATIONAL DEVELOPMENT DEPARTMENT IN 1998. 
A RELIABLE AND REGULAR EMBASSY CONTACT, HE VOICED HIS 
INTENTION TO RUN FOR PRESIDENT IN 2000 TO THE DCM IN 
NOVEMBER 1996. 
 
------------------------------- 
BLACK MARK I:  THE CLAE SCANDAL 
------------------------------- 
 
¶8.  (SBU) TOLEDO'S REPUTATION IN THE 1995 ELECTIONS SUFFERED 
FROM ALLEGATIONS OF TIES TO THE 1993 COLLAPSE OF A MULTI- 
MILLION DOLLAR PYRAMID SCHEME (CALLED CLAE -- THE LATIN 
AMERICAN CENTER OF BUSINESS ADVICE) IN WHICH THOUSANDS OF 
PERUVIANS LOST THEIR SAVINGS AND SEVERAL PEOPLE WERE 
CONVICTED OF FRAUD.  TOLEDO'S DIRECT INVOLVEMENT WAS NEVER 
ESTABLISHED, BUT HE HAD WELL KNOWN PERSONAL (AND ALLEGED 
PROFESSIONAL) TIES TO CLAE'S OWNERS, CARLOS MANRIQUE AND HIS 
WIFE VIOLETA MORI, BOTH OF WHOM ARE IN JAIL AND HAVE 
                          SECRET 
 
PAGE 03        LIMA  02475  02 OF 03  251229Z 
SUBSEQUENTLY STATED THAT TOLEDO HAD WORKED FOR CLAE (A 
CHARGE HE DENIES).  TOLEDO HAS BEEN ACCUSED OF HELPING HIS 
BROTHER WITHDRAW MONEY BEFORE CLAE'S COLLAPSE.  THE CLAE 
STORY RESURFACED IN MARCH 2000 AS TOLEDO'S POLL NUMBERS 
GREW.  PRO-GOVERNMENT DAILY EXPRESO AND YELLOW PRESS PAPERS 
PRINTED PICTURES OF TOLEDO AND MANRIQUE IN BOSTON.  TOLEDO 
ADMITTED THAT HE AND MANRIQUE HAD BEEN PERSONAL FRIENDS BUT 
DENIED ANY BUSINESS ASSOCIATION.  THE CLAE STORY RE- 
CIRCULATED DOUBTS ABOUT TOLEDO, BUT NOTHING NEW TURNED UP. 
 
--------------------------- 
ILLEGITIMATE CHILD, DIVORCE 
--------------------------- 
 
¶9.  (C) ON MARCH 28, LUCRECIA OROZCO ZAPATA APPEARED ON A 
POPULAR DAYTIME TV TALK SHOW AND ALLEGED THAT TOLEDO HAD 
FATHERED HER SIX-YEAR OLD DAUGHTER AND REFUSED TO RECOGNIZE 
AND SUPPORT HER.  THOUGH TOLEDO HAD WON TWO PATERNITY COURT 
JUDGMENTS SEVERAL YEARS AGO, THE SHOW'S HOSTESS, LAURA 
BOZZO, CLAIMED THE COURTS WERE CORRUPT AND HAD IGNORED A 
POSITIVE BLOOD TYPE MATCH.  BOZZO LED THE TV STUDIO AUDIENCE 
IN CHANTS CALLING ON TOLEDO TO TAKE A DNA TEST FOR SEVERAL 
DAYS THEREAFTER.  TOLEDO REFUSED COMMENT ON THE CHARGES, 
NOTED THE COURTS' PREVIOUS RULINGS, AND SAID HE HAD ONLY ONE 
WIFE AND CHILD.  OUR FILES CONTAIN NO MENTION OF OROZCO, BUT 
EMBASSY SOURCES TELL US THAT TOLEDO DATED HER OPENLY IN THE 
EARLY 1990S AFTER HE AND HIS WIFE SEPARATED SOMETIME IN 
¶1988. 
 
¶10.  (SBU) IN THE LAST TWO WEEKS LEADING TO THIS YEAR'S 
ELECTIONS, EXPRESSO BROKE A STORY THAT TOLEDO AND HIS WIFE 
                          SECRET 
 
PAGE 04        LIMA  02475  02 OF 03  251229Z 
HAD DIVORCED IN 1992, COMPLETE WITH A PHOTOCOPY OF THE 
WASHINGTON, DC DIVORCE DECREE.  EXPRESSO CLAIMED THAT TOLEDO 
HAD COMMITTED PERJURY WHEN HE CLAIMED TO BE MARRIED IN AN 
APPLICATION FOR OFFICIAL DOCUMENTS IN 1997.  TOLEDO REFUSED 
COMMENT ON WHETHER HE AND KARP HAD EVER DIVORCED OR 
REMARRIED. 
 
------------------- 
OTHER DIRTY LAUNDRY 
------------------- 
 
¶11.  (C) TOLEDO'S DOMESTIC PROBLEMS WERE WIDELY KNOWN WITHIN 
THE MISSION COMMUNITY BECAUSE BOTH HE AND HIS WIFE HAD TIES 
TO USAID.  ELIANE KARP WORKED FOR USAID LIMA FROM 1985-87 
AND HAD A REPUTATION FOR BEING BRILLIANT BUT UNRELIABLE AND 
DIFFICULT TO WORK WITH.  SHE SPOKE FLUENT QUECHUA AND WAS 
ACTIVE IN LIMA'S SMALL JEWISH COMMUNITY.  MISSION STAFF 
RECALL HER HAVING MARITAL DIFFICULTIES.  THERE WERE ALSO 
STORIES THAT SHE WAS A VICTIM OF SPOUSAL ABUSE.  USAID 
DECIDED NOT TO RENEW HER CONTRACT IN 1987 (MAINLY BECAUSE 
HER WORK ATTENDANCE BECAME TOO UNPREDICTABLE AS HER MARRIAGE 
CAME UNDER GROWING STRESS) AND IN JANUARY 1988 SHE SEPARATED 
FROM TOLEDO AND FOUND EMPLOYMENT IN THE WORLD BANK IN 
WASHINGTON.  EVENTUALLY SHE MOVED TO ISRAEL UNTIL SHE AND 
 
                          SECRET 
 
                              SECRET        PTQ9876 
 
PAGE 01        LIMA  02475  03 OF 03  251229Z 
ACTION INR-00 
 
INFO  LOG-00   NP-00    ACQ-00   CIAE-00  SMEC-00  INL-01   DODE-00 
      DOEE-00  DOTE-00  WHA-00   DS-00    EB-00    EUR-01   FAAE-00 
      FBIE-00  VC-01    TEDE-00  LAB-01   VCE-00   AC-01    NRRC-00 
      NSAE-00  PM-00    ACE-00   SSO-00   SNIS-00  NISC-00  PMB-00 
      DSCC-00  DRL-02   G-00     NFAT-00  SAS-00     /007W 
                  ------------------4F97BD  251231Z /38 
O 251230Z APR 00 
FM AMEMBASSY LIMA 
TO SECSTATE WASHDC IMMEDIATE 4094 
INFO AMEMBASSY BOGOTA 
AMEMBASSY CARACAS 
AMEMBASSY BRASILIA 
AMEMBASSY QUITO 
AMEMBASSY SANTIAGO 
AMEMBASSY BUENOS AIRES 
AMEMBASSY LA PAZ 
AMEMBASSY MOSCOW 
USCINCSO MIAMI FL 
 
S E C R E T SECTION 03 OF 03 LIMA 002475 
 
SIPDIS 
 
DEPARTMENT FOR INR/B 
 
E.O. 12958: DECL: 4/24/05 
TAGS: PINR PGOV PREL PGOV PREL PGOV PREL PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF PINR PE SECRET PAGE LIMA OF
                          SECRET 
 
PAGE 02        LIMA  02475  03 OF 03  251229Z 
SUBJECT:  ALEJANDRO TOLEDO BIOGRAPHY:  POLITICAL ASSETS AND 
LIABILITIES 
 
TOLEDO RECONCILED IN LATE 1996. 
 
¶12.  (C) SINCE THEN KARP HAS WORKED AS A MANAGER IN AN 
AGRICULTURE BANK.  THOUGH CREDITED WITH HELPING TOLEDO'S 
CAMPAIGN BY USING HER KNOWLEDGE OF PERU AND FLUENT QUECHUA 
TO APPEAL TO VOTERS, SHE HAS COME UNDER ATTACK FROM THE 
YELLOW PRESS AND OTHERS FOR HER LIBERAL VIEWS AND STATUS AS 
A FOREIGNER.  SOURCES CLOSE TO TOLEDO CONFIRM THAT KARP 
URGED HER HUSBAND TO DON A HEADBAND AND LEAD PROTESTERS IN A 
MARCH ON THE PRESIDENTIAL PALACE AFTER THE POLLS CLOSED 
APRIL 9, A DECISION THAT MANY PERUVIAN OPINION MAKERS 
FOUND QUESTIONABLE. 
¶13.  (S) A FUJIMORI POLLSTER AND OTHER PRO-GOVERNMENT 
SOURCES HAVE CONVEYED TO CURRENT AND FORMER EMBOFFS THAT THE 
GOP HAS EVIDENCE OF DRUG (INCLUDING COCAINE) USE BY TOLEDO; 
JUST WHEN THE DRUG USE IS SUPPOSED TO HAVE OCCURRED IS 
UNCLEAR.  IT MAY HAVE BEEN DURING TOLEDO'S STUDENT DAYS AT 
THE UNIVERSITY OF SAN FRANCISCO AND STANFORD 25-30 YEARS 
AGO.  THUS FAR, THERE IS NOTHING TO SUGGEST HE CONTINUED, 
BUT THIS ISSUE COULD PROVE EXPLOSIVE IN THE LEAD UP TO THE 
SECOND ROUND. 
 
------- 
COMMENT 
------- 
 
¶14. (S) THE FUJIMORI CAMP SEEMS INTENT ON MAKING CHARACTER A 
                          SECRET 
 
PAGE 03        LIMA  02475  03 OF 03  251229Z 
CENTRAL ISSUE IN THE SECOND ROUND (I.E., CONTINUE WITH SMEAR 
TACTICS), AS EVERYONE FROM VICE PRESIDENTIAL CANDIDATE 
TUDELA ON DOWN HAS FOUND REASONS NOT TO SUPPORT HUMAN RIGHTS 
OMBUDSMAN JORGE SANTISTEVAN'S PROPOSAL FOR AN ELECTORAL CODE 
OF CONDUCT AND ETHICS TRIBUNAL. FUJIMORI'S SUPPORTERS HAVE 
ALREADY PORTRAYED TOLEDO AS A RABBLE ROUSING DEMAGOGUE CUT 
IN THE MOLD OF ALAN GARCIA.  WE EXPECT PRO-GOVERNMENT 
JOURNALISTS TO EGG TOLEDO TO ISSUE AN ON-THE-RECORD DENIAL 
OF DRUG USE AND DOMESTIC VIOLENCE, FOLLOWED BY LEAKING OF 
WHATEVER EVIDENCE THE GOVERNMENT HAS.   FOR HIS PART, TOLEDO 
IS LIKELY TO REFUSE ANY COMMENT ON THE ALLEGATIONS.  WE 
SHOULD ALSO REFUSE COMMENT. 
 
HAMILTON 
 
                          SECRET 
 
>