VZCZCXYZ0000
OO RUEHWEB

DE RUEHQT #0300/01 0371648
ZNY SSSSS ZZH
O 061648Z FEB 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6258
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 6411
RUEHCV/AMEMBASSY CARACAS PRIORITY 2342
RUEHLP/AMEMBASSY LA PAZ FEB 0391
RUEHPE/AMEMBASSY LIMA PRIORITY 1380
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 1829
RHMFISS/CDR USSOUTHCOM MIAMI FL

S E C R E T QUITO 000300 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: TWENTY FIVE YEARS 
TAGS: PGOV EC PGOV PREL VE
SUBJECT: CORREA NAMES CHAVEZ' BUDDY AS AMB TO VENEZUELA 
 
 
Classified By: PolOff Erik Martini for reasons 1.4 (b&d). 
 
¶1.  (S) Sum...



id: 95515
date: 2/6/2007 16:48
refid: 07QUITO300
origin: Embassy Quito
classification: SECRET
destination: 
header:
VZCZCXYZ0000
OO RUEHWEB

DE RUEHQT #0300/01 0371648
ZNY SSSSS ZZH
O 061648Z FEB 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6258
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 6411
RUEHCV/AMEMBASSY CARACAS PRIORITY 2342
RUEHLP/AMEMBASSY LA PAZ FEB 0391
RUEHPE/AMEMBASSY LIMA PRIORITY 1380
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 1829
RHMFISS/CDR USSOUTHCOM MIAMI FL


----------------- header ends ----------------

S E C R E T QUITO 000300 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: TWENTY FIVE YEARS 
TAGS: PGOV EC PGOV PREL VE
SUBJECT: CORREA NAMES CHAVEZ' BUDDY AS AMB TO VENEZUELA 
 
 
Classified By: PolOff Erik Martini for reasons 1.4 (b&d). 
 
¶1.  (S) Summary:  Rafael Correa named his first Ambassador on 
January 29 -- Gen. (ret.) Rene Vargas Pazzos to Venezuela. 
Passed over for the MinDef portfolio, Vargas has a long 
history of military administration in Ecuador and more 
recently as a "Bolivarian" politician.  He is also a personal 
friend of Venezuelan President Hugo Chavez.  Vargas has 
described his function as "cementing" Venezuelan assistance 
promised in multiple agreements and representing Correa 
before Chavez' court.  A renegade by temperament, and very 
familiar with GOE spigots of petro-corruption, Vargas is 
especially prepared to be Correa's envoy to Chavez.  End 
Summary. 
 
The Early Years: Military Chieftain 
----------------------------------- 
 
¶2.  (U) Born in Chone, Manabi province, April 13, 1932, Rene 
Vargas comes from a family of long military tradition.  His 
father was a colonel, his brother Frank was a general and 
commander of the Air Force, and his sons and nephews also 
entered the armed forces.  Rene graduated from Ecuador's 
military academy, Colegio Eloy Alfaro, in 1953 as a second 
lieutenant and went on to become an engineer in the 
Ecuadorian Army.  He studied engineering for several months 
at the U.S. Army School of the Americas in the Panama Canal 
Zone in 1970 and made two official trips ("orientation 
tours") to the U.S. in 1967 and 1970.  Rene eventually rose 
to the rank of general and commanded the Ecuadorian Army from 
1984-87.  He was forced to resign in 1987 when an officer 
junior to him was appointed Minister of Defense.  Rene is 
married to Nidia Penaherrera and has four children, one of 
whom studied for a time in Texas. 
 
¶3.  (S) Embassy officers in the late 1980s labeled Vargas a 
"Slick Schemer," highlighting his ambitious and sophisticated 
nature.  During military dictatorships in the 1970s, he 
shrewdly engineered assignments to the Ecuadorian state oil 
corporation, also serving as Minister of Natural Resources 
and Minister of Energy and Mines.  These assignments 
reputedly netted him huge illegal commissions on oil sales 
and contracts.  He also reportedly profited from graft on 
purchases of Army supplies and equipment.  Embassy officers 
at the time found that Rene had enriched himself "on a scale 
unusual even in a nation where corruption is the norm." 
Vargas continues to champion military participation in 
private businesses, from which he is presumed to have 
benefited in the past. 
 
¶4.  (S) Rene's brother "crazy" Frank Vargas, with whom he has 
collaborated politically, was judged by Embassy officers and 
the Ecuadorian media to suffer from a severe personality 
disorder.  In March 1986 Frank demanded that then-president 
Leon Febres Cordero promote him to be the first four star Air 
Force general in Ecuador's history.  When LFC refused, Frank 
led a military uprising, which was put down, landing Frank in 
prison (Rene was also temporarily held under suspicion of 
complicity).  From prison, Frank ordered his Air Force 
subordinates to kidnap president Febres Cordero and hold him 
hostage in exchange for Frank's release, boasting he would 
personally behead Febres Cordero with his sword.  Both men 
were released shortly thereafter.  "Crazy Frank" then ran 
three times unsuccessfully for president, with financing and 
other support from his brother Rene.  Rene himself served as 
a member of Congress representing the Popular Democracy Party 
(now UDC) from 1988-92. 
 
Rene's Comeback 
--------------- 
 
¶5.  (S) Rene Vargas has not held high office or actively 
participated in politics since the early 1990s.  More 
recently, since 2005 Vargas has served as a member of the 
Administrative Council (CAD) of the Ecuadorian state oil 
company, Petroecuador.  The CAD is reputed to control massive 
Petroecuador funds.  He is also a director of the populist 
Permanent Assembly for Human Rights (APDH) where he serves as 
President of the Plan Colombia Monitoring Group, which mainly 
criticizes all aspects of Plan Colombia.  Sensitive reporting 
also indicates that Rene has ties to FARC leader Raul Reyes. 
He proudly calls himself "Bolivarian" and heads the 
Bolivarian Alfarista Movement in Manabi.  Soon after Rafael 
Correa was elected president, Rene was rumored to be under 
consideration for the post of Minister of Defense, but was 
not selected. 
 
Vargas to Cement Venezuelan Assistance 
-------------------------------------- 
 
¶6.  (U) In a television interview on January 30, Vargas said 
his goal as Ecuador's Ambassador in Caracas will be to bring 
to fruition numerous agreements Ecuador has signed with 
Venezuela.  He brushed off assertions that Chavez' terms 
offered in financing a petroleum refining deal were above 
those offered by international financial institutions, 
expressing confidence that Ecuador's Finance Minister had the 
issue well in hand.  In an earlier interview in December 
2006, Vargas claimed the U.S. military presence at the 
Forward Operating Location in Manta, Ecuador, was dangerous 
because it provided the U.S. a "beachhead in case of regional 
conflict." 
 
¶7.  (C) Vargas is well suited to join Chavez' court of 
admirers.  Vargas' contacts with Chavez are reputedly direct 
and personal, and Vargas introduced then-Finance Minister 
Rafael Correa to Chavez while Correa was serving as Finance 
Minister in 2005.  Vargas is also suspected by some here of 
serving as the conduit for cash from the GOV to the Correa 
campaign.  Since serving as military administrator of 
petroleum resources, Vargas has championed greater state 
control of this strategic sector, as in Venezuela.  Clearly 
seeking to ingratiate himself in advance in Caracas, Vargas 
has declared in recent interviews that Chavez's leadership 
was legitimately backed by Venezuelan voters in six 
elections.  Agreeing that Chavez was the "absolute leader" of 
Venezuela, Vargas asked rhetorically, "wouldn't it be 
marvelous if South America were united as a world power?" 
 
Comment 
------- 
 
¶8.  (C) The Venezuelan Ambassadorship has taken on new 
significance since Correa took office on January 15, in 
Chavez' visible public embrace.  Correa's cabinet is looking 
to Venezuela for assistance on several fronts and expects 
Vargas to make sure Chavez delivers on his promises. We are 
very glad not to have Vargas as Defense Minister and to see 
him on his way to Caracas, well outside the inner policy loop. 
JEWELL 

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