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

S E C R E T SECTION 01 OF 03 ASUNCION 001222

SIPDIS

NOFORN

STATE PASS TO USAID LAC/AA
NSC FOR SUE CRONIN
SOUTHCOM FOR POLAD DAN JOHNSON

E.O. 12958: DECL: 09/23/2015
TAGS: PGOV PREL PTER PINR MARR ETRD PA VE
SUBJECT: PARAGUAY AND VENEZUELA: MORE ON CHAVEZ ACTIVITIES
IN THE REGION

REF: A. ASUNCION 01186
     ¶B. ASUNCION 01162
     ¶C. ASUNCION 01154 AND PRECEDING
     ¶D. ASUNCION 01076
     ¶E. ASUNCION 01025
     ¶F. TD-314/46316-05 (02 AUG 05)
     ¶G. ASUNCION 00807
     ¶H. STATE 116522
     ¶I. ASUNCION 00487 AND PRECEDING
     ¶J. STATE 43965
     ¶K. TD-314/12121-05 (28 FEB 05)

Classified By: PolOff Mark A. Stamilio, reasons 1.4(b) and (d).

¶1. (U) The following information responds to Department's
action request in ref H and supplements information
previously reported in ref I.

¶2. (S/NF) SUMMARY: Post has no new information regarding
campesino trips to Venezuela funded by the GOV for ""special
indoctrination training.""  The website
www.congresobolivariano.org and recent sensitive reporting
list several Paraguayan social, political and religious
organizations that belong to the Paraguay Chapter of the
Bolivarian People's Congress.  Sensitive reporting indicates
that Venezuelan and Cuban officials are systematically
organizing activities of leftist organizations in Paraguay.
The GOP continues to maintain lukewarm relations with the
GOV.  The GOP and GOV reportedly are discussing a new oil
purchase agreement, and possible GOV investment in a
Paraguayan oil refinery and idle Paraguayan vegetable oil
factories.  Paraguay's mainstream media continue to focus on
issues other than Venezuela, Chavez and the Bolivarian
Revolution.  However, Chavez could be behind the spread of
blatantly false rumors of U.S. plans to build a base in
Paraguay, deploy 400 troops to Paraguay to protect oil and
natural gas reserves in Bolivia, and steal the region's fresh
water supplies from the Guarani Aquifer.  END SUMMARY.

¶3. (S/NF) CAMPESINO TRIPS: Post has no new information to
report regarding campesino trips to Venezuela funded by the
GOV for ""special indoctrination training"" (refs H and I).
But see ref K, regarding travel by members of the leftist
Patria Libre Party from Paraguay through Venezuela to
Colombia for FARC training.

¶4. (S/NF) BOLIVARIAN ACTIVITIES: Post directs Department's
attention to the website www.congresobolivariano.org and ref
F for information regarding the Paraguay Chapter of the
Bolivarian People's Congress (Congreso Bolivariano de los
Pueblos).  An August 16 website entry entitled ""Get Out of
Paraguay, Yankees"" (""Fuera Yanquis de Paraguay"") and a
September 12 entry entitled ""Third People's Summit Opens in
Paraguay"" (""Lanzamiento de la III Cumbre de los Pueblos en
Paraguay"") list several Paraguayan social, political and
religious organizations that purportedly belong to the
Congress's Paraguay Chapter.  (NOTE: The organizations
include at least two campesino movements, the Paraguayan
Campesino Movement (MCP) and the National Front for the
Struggle for Sovereignty and Life (FNLSV), and Senate
President Carlos Filizzola's Country in Solidarity Movement
(Movimiento Pais Solidario).  END NOTE.)  Various articles
opposing the recent SECDEF visit to Paraguay (ref C), the
presence of U.S. troops in Paraguay for joint exercises,
immunities for those troops, erroneous reports of U.S.
intentions to establish a military base in Paraguay, and
plans to establish an FBI (LEGATT) office in Asuncion are
posted to the Paraguay Chapter's page of the website.

¶5. (C) VENEZUELAN EMBASSY ACTIVITIES: Sensitive reporting
indicates that Venezuelan and Cuban officials are
systematically organizing activities of leftist organizations
in Paraguay.  For example, on July 12 the Cuban embassy in
Asuncion sponsored a public rally on ""Terrorism and the
Struggle for Peace.""  The Cuban ambassador and a
representative of the Venezuelan embassy attended the rally.
The main themes of the rally were ""U.S. Imperialism"" and ""USG
Responsibility for Operation Condor.""

¶6. (C) GOP-GOV RELATIONS: The GOP continues to maintain
lukewarm relations with the GOV (refs D and I).  Following
the recent SECDEF visit, President Duarte did his best to
strike a neutral pose.  In the face of claims by Brazil and
Argentina that Paraguay was cozying up to the U.S. and
distancing itself from its Mercosur trading partners, Duarte
defended Paraguay's sovereign right to maintain relations
with any country of its choosing.  At the same time, seeking
to play down SECDEF's statements that Venezuela and Cuba were
attempting to destabilize the region, Duarte emphasized that
the GOP would continue to maintain normal relations with
those two countries.  The following day, MOD Gonzalez issued
a press release that criticized countries whose foreign
policies sought to ""satanize"" the U.S.  At the same time, the
MOD's press release commended the GOV for providing economic
assistance to Paraguay, and the GOC for providing
scholarships for Paraguayan students to study in Cuba.
(NOTE: Venezuelan Ambassador to Paraguay Jose Huerta Castillo
retorted on a local radio program that the U.S. was
attempting to destabilize democratic governments in Latin
America, and that the GOV was winning hearts and minds in
Paraguay.  END NOTE.)  Oscar Rodriguez Kennedy, who is a
member of President Duarte's Colorado Party but makes no
secret of his disdain for Duarte, recently told PolCouns that
he had been informed that Duarte recently passed a letter to
Paraguay's ambassador to Venezuela -- without FM Rachid's
knowledge -- for delivery to Chavez, assuring him that
nothing had changed in terms of Paraguay's relationship with
Venezuela notwithstanding the SECDEF visit.  (COMMENT:
Rodriguez is notorious for rumor mongering Post has no
secondary verification.  END COMMENT.)

¶7. (C) COMMERCIAL TIES: Paraguay's state-owned oil company,
Petropar, reportedly will sign a new oil purchase agreement
with Venezuela in October, similar to the agreement the two
countries signed in November 2004 (refs G and I).  According
to source at the Ministry of Industry and Commerce, no oil
was ever purchased under the old agreement.  Additionally,
Venezuelan Petroleum S.A. (PDVSA) reportedly seeks to enter
an agreement with Petropar to conduct an economic and
engineering study of the Petropar oil refinery, with an eye
toward future investment by PDVSA (ref E).  There are similar
reports that the GOV seeks to invest money to reactivate
several idle vegetable oil factories in Paraguay, with an eye
toward creating jobs and eventually transferring ownership of
the factories to employees (ref E).  (COMMENT: Esso's country
director told Econ Chief that, with the major oil companies
closing much larger refineries elsewhere, it is hard to
conceive of any commercial justification for investing in
Petropar's refinery.  Similarly, the President of Paraguay's
National Development Bank dismissed the vegetable oil
proposal as ""fantasy,"" since most of the factories that were
left to the Bank have already been sold.  END COMMENT.)

¶8. (C) MAINSTREAM MEDIA: Paraguay's mainstream media continue
to focus on issues other than Venezuela, Chavez and the
Bolivarian Revolution (ref I).  This held true during the
recent SECDEF visit.  Rather than focusing on SECDEF's
statements that Venezuela and Cuba were attempting to
destabilize the region, or Venezuela's retort that the U.S.
was attempting to do the same, mainstream media focused on
the ""secrecy"" surrounding the SECDEF visit (his agenda was
kept very close hold and there were no press conferences
during the visit) and speculation about the ""real reasons""
for the visit (many commentators challenged official USG/GOP
explanations that it was a courtesy visit and asserted that
there must have been a hidden agenda).  (COMMENT: However,
speculation about the ""real reasons"" for the visit centered
primarily on the same themes carried on the web page for the
Paraguay Chapter of the Bolivarian People's Congress,
discussed above -- i.e., the debate over the presence of U.S.
troops in Paraguay for joint exercises, immunities for those
troops, erroneous reports of U.S. intentions to establish a
military base in Paraguay, and plans to establish an FBI
(LEGATT) office in Asuncion.  END COMMENT.)  In the wake of
the SECDEF visit, mainstream media focused on Brazil and
Argentina's claims that Paraguay was cozying up to the U.S.
and distancing itself from its Mercosur trading partners,
claims that raised the ire of many Paraguayans (ref A and C).

¶9. (C) On August 23, one week after the SECDEF visit, an
editorial entitled ""Pigs Preaching about Hygiene"" (""Los
Chanchos Hablando de Higiene"") appeared in Paraguay's leading
local daily, ABC Color, in response to Chavez's statements at
a medical school graduation ceremony in Cuba that U.S. joint
military exercises with countries such as Paraguay were part
of the U.S.'s alleged attempt to destabilize the region.  The
editorial was highly critical of Chavez and Castro, asserting
that neither leader had any moral authority.  The author
criticized Castro for being ""the oldest, most blood-thirsty
tyrant on the planet,"" and Chavez for being ""Latin America's
new populist authoritarian.""  The author added that Chavez
was ""not much better than Castro,"" since each uses his
respective military to silence dissent and advance his
political agenda, and surrounds himself with a political
elite that enjoys special privileges while the masses live in
poverty.  The author concluded by encouraging Paraguay's
leaders to look to other nations that recently achieved
prosperity and freedom as models for Paraguay to follow,
rather than the model espoused by the ""new Bolivars.""
¶10. (C) COMMENT: While it is possible that there is merely a
concurrence of opinion between Chavistas and Paraguay's more
radical left, it is also entirely possible that Bolivarian
groups are behind the spread of blatantly false rumors of
U.S. plans to build a base in Paraguay, deploy 400 troops to
Paraguay to protect oil and natural gas reserves in Bolivia,
and steal the region's fresh water supplies from the Guarani
Aquifer (refs B and C).  In addition to appearing on the web
page for the Paraguay Chapter of the Bolivarian People's
Congress, a consistent set of anti-U.S. themes -- namely,
opposition to the presence of U.S. troops in Paraguay for
joint exercises, immunities for those troops, and erroneous
reports of U.S. intentions to establish a military base in
Paraguay -- have arisen repeatedly in the context of recent
student protests, campesino demonstrations, and various news
reports out of Paraguay, Argentina, Brazil and Chile.  It is
unlikely that a misinformation campaign with such a
consistent message would emerge spontaneously from such a
wide range of sources.  It is now clear that someone is
orchestrating it.
KEANE