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FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7716
INFO RUCNMER/MERCOSUR COLLECTIVE PRIORITY
RHMFISS/HQ USSOUTHCOM MIAMI FL PRIORITY
RHMFISS/USSOCOM MACDILL AFB FL PRIORITY

...id: 199404
date: 3/28/2009 20:24
refid: 09ASUNCION189
origin: Embassy Asuncion
classification: SECRET
destination: 07ASUNCION910|08ASUNCION535|08ASUNCION598|08ASUNCION611|09ASUNCION188
header:
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OO RUEHWEB
DE RUEHAC #0189/01 0872024
ZNY SSSSS ZZH
O 282024Z MAR 09
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7716
INFO RUCNMER/MERCOSUR COLLECTIVE PRIORITY
RHMFISS/HQ USSOUTHCOM MIAMI FL PRIORITY
RHMFISS/USSOCOM MACDILL AFB FL PRIORITY
----------------- header ends ----------------
S E C R E T ASUNCION 000189
SIPDIS
STATE FOR WHA/BSC MDASCHBACH
E.O. 12958: DECL: 03/23/2029
TAGS: PGOV PREL MARR PINS PA
SUBJECT: PARAGUAYAN POLS PLOT PARLIAMENTARY PUTSCH
REF: A. 08 ASUNCION 00611
¶B. 08 ASUNCION 00598
¶C. 08 ASUNCION 00535
¶D. 07 ASUNCION 00910
¶E. 09 ASUNCION 00188
Classified By: DCM Michael J. Fitzpatrick; reasons 1.4 (b) and (d).
--------
SUMMARY
--------
¶1. (C) SUMMARY: Rumors persist that discredited General and
UNACE party leader Lino Oviedo and ex-president Nicanor
Duarte Frutos are now working together to assume power via
(mostly) legal means should President Lugo stumble in coming
months. Their goal: Capitalize on any Lugo mis-steps to
break the political deadlock in Congress, impeach Lugo and
assure their own political supremacy. While many predicted
political shenanigans in March during the traditional social
protest season that accompanies the opening of Congress,
little has come of it (largely because Lugo has been careful
not to provide the political or legal rope with which to hang
him, thus depriving Oviedo and Duarte the numbers in Congress
for their supposed "democratic coup"). But that could change
quickly here. Mid-March outrage over multi-million dollar
subsidies for sesame growers via a discredited NGO was
considered as a possible ground for impeachment before Lugo
walked away from the program (though the controversy
continues). For a president already facing many challenges
-- internal political struggles, corruption, and the
perception that his own leadership style is ineffective --
Lugo must now also worry about making a mis-step that could
be his last. END SUMMARY.
------------------
DOWN, BUT NOT OUT?
------------------
¶2. (S) Paraguay's two-most controversial politicians --
cashiered General and UNACE party leader Lino Oviedo and
discredited ex-president Nicanor Duarte Frutos -- simply
refuse to go away. After using the first six months of the
Lugo administration to quietly lick their electoral wounds
the duo are now positioning themselves to assume power should
President Lugo stumble in coming months. Sensitive reporting
(and other Embassy contacts) indicate that Duarte and Oviedo
would like to create circumstances which could lead to a
constitutional change of government (ref A). An
Oviedo-Duarte partnership began long before President Lugo's
inauguration last August. As President in 2007, it was
Duarte who used his control of the Supreme Court to free
Oviedo from jail. (NOTE: Oviedo was serving time for
involvement in the 1999 assassination of Vice President Luis
Argana and the subsequent Marzo Paraguayo massacre of unarmed
student protesters (ref B). END NOTE). Duarte incorrectly
assumed that if Oviedo ran for president, he would split the
opposition vote, thus ensuring a win for his own Colorado
puppet candidate, Blanca Ovelar.
¶3. (C) In return for Oviedo's freedom, his political party
UNACE supported Duarte's constitutionally dubious Senate bid
(ref C). Senate President Enrique Gonzalez Quintana swore in
Duarte last August in his private chambers after failing
several times to get a quorum for that purpose. However, the
Senate rejected Gonzalez Quintana's unilateral act and swore
in Duarte's substitute in early September (ref D).
¶4. (C) Oviedo also suffered a political setback last
September, when the military's congressional liaison, General
Diaz, informed President Lugo that Oviedo, Duarte and others
had invited him to a meeting at which they then discussed the
possibility of a coup. Lugo immediately exposed the meeting,
further damaging Oviedo's "democratic credentials." Oviedo
since has become Lugo's principal political adversary,
instructing his "troops" in UNACE party to oppose all
Congressional initiatives and reforms Lugo pursues, and
refusing to meet with Lugo. There is no deeper political and
personal divide in Asuncion today that that between Lugo and
Oviedo. And the distaste and distrust are as mutual as they
are deep.
------------------
A FARFETCHED PLAN
------------------
¶5. (C) Duarte's and Oviedo's shared goal: Find a "cause
celebre" to champion so as to change the current political
equation, break the political deadlock in Congress, impeach
Lugo and regain their own political relevance. Oviedo's
dream scenario involves legally impeaching Lugo, even if on
spurious grounds. (With a two-thirds vote, the Chamber of
Deputies may bring impeachment proceedings against the
president. Like in the United States, the Senate tries
impeachments, again requiring two-thirds vote to convict).
The presidential baton would thus, in this scenario, pass to
Vice President Federico Franco, who would be
constituitionally required to call vice-presidential
elections within 90 days. Given the institutional collapse
and political fratricide reigning now within the Colorado
Party, Oviedo would be the obvious leading candidate.
Meanwhile, Duarte, having regained his Senate seat via
Supreme Court maneuvering, would assume the Senate presidency
and become number three in the line of presidential
succession. The Liberal Franco would be President, but
Oviedo and Duarte would control Congress -- and the courts.
Farfetched? Perhaps. But not entirely unprecedented in
Paraguayan politics.
---------------------------------
BACK TO REALITY: THE HARD NUMBERS
---------------------------------
¶6. (C) Throughout January and February, post heard increased
reports of a possible "constitutional" plot against Lugo
after Congress returned to session in March. However, Oviedo
and Duarte have not had the public excuse -- much less the
numbers in Congress -- for their supposed "democratic coup."
In order to bring impeachment charges in the lower house,
Oviedo/Duarte need 53 votes. Assuming the support of all 30
Colorados (not an easy assumption in light of divisions in
the Colorado Party between Duarte and his former Vice
President Luis Castiglioni) and 15 UNACE deputies,
Oviedo/Duarte today fall at least eight short of the votes
they need to bring impeachment charges. The environment in
the Senate is similar: Oviedo/Duarte need 30 votes to convict
but have only 24 in the best case scenario (15 Colorado
senators -- six of which are led by Luis Castiglioni -- plus
9 UNACE senators).
-------------------------------
NO BASIS (YET) FOR IMPEACHMENT
-------------------------------
¶7. (C) Several of Embassy's key political contacts conclude
that Lugo's best defense against impeachment is that most
political actors prefer working with him to the alternative:
Vice President Federico Franco. (BIO NOTE: Franco is known
for being an old-school Liberal party politician with an
oversized ego and a difficult personality. END NOTE).
Additionally, Congress cannot vote to impeach Lugo without at
least superficial political or legal grounds. Lugo has been
in office only seven months, and the situation is not ripe
for impeachment. Instead, despite rumblings about Lugo's
mild-mannered leadership style and his failure to set out a
national agenda, public support for the Lugo administration
remains high. The Bottom Line: Given the nightmare scenario
of General Oviedo and Nicanor Duarte Frutos jointly running
the show, the general political consensus here -- among
rationalists, anyways -- remains strong: For all foibles,
President Lugo remains Paraguay's least worst option.
-------
COMMENT
-------
¶8. (C) COMMENT: As history demonstrates, nothing is
impossible in Paraguay. But politics here can turn on a dime.
Witness Nicanor's masterful 2007 orchestration of Oviedo's
release from military prison -- and the clearing of all
charges -- just hours before the 2008 electoral campaign
registration deadline. Lugo is now confronted by sudden
political clashes after the announcement of USD 8 million in
sesame subsidies to a discredited campesino-run NGO. Lugo
immediately walked back the announcement, for fear (in part)
of providing legal basis for impeachment, even as he still
pursues subsidies for suffering sesame farmers. Campesino
leaders seem to currently have the upper hand, thus forcing
Lugo's Agriculture Minister to seek to quit. But this is far
from over. For a president already facing many challenges --
internal political struggles, corruption, and the perception
that his own leadership style is ineffective -- Lugo must now
also worry about possible impeachment charges. There is no
doubt that Oviedo and Duarte are bent on regaining leadership
roles in Paraguayan politics (and, ahem, economics). As
Defense Chief Admiral Benitez recently told Ambassador (ref
E), "Oviedo has been plotting since the day he was born."
Rumors and conspiracy theories are indeed the lifeblood of
Paraguayan politics, and should be viewed as the norm. It is
when the rumors stop that we really should start worrying.
END COMMENT.
Please visit us at http://www.state.sgov.gov/p/wha/asuncion
AYALDE
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