VZCZCXYZ0000
OO RUEHWEB

DE RUEHBU #0839/01 1972149
ZNY CCCCC ZZH
O 162149Z JUL 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/DEPT OF LABOR WASHINGTON DC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 4083
INFO RUCNMER/MERCOSUR COLLECTIVE IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE

C O N F I D E N T I A L BUENOS AIRES 000839 
 
SIPDIS 
 
DRL FOR MITTELHAUSER 
USDOL FOR CHANTENIA GAY 
 
E.O. 12958: DECL: 06/15/2024 
TAGS: PGOV PREL ELAB AR
SUBJECT: ARGENTINA: KIRCHNERS AND LABOR LEADER MOYANO RENEW 
THEIR MARRIAGE OF CONVENIENCE 
 
REF: A. BUENOS AIRES 0750 
     ¶B. BUENOS AIRES 0752 
     ¶C. BUENOS AIRES 0802 
 
Classified By: CDA Tom P. Kelly for reasons 1.4 (b) and (d) 
 
¶1. (C) Summary:  Argentine President Cristina Fernandez de 
Kirchner (CFK) and her husband, former President Nestor 
Kirchner, are solicitously rewarding General Workers 
Confederation (CGT) leader Hugo Moyano in order to ensure his 
support at a time when many others seem to be defecting from 
government ranks.  First, the Kirchners named CGT lawyer 
Mariano Recalde to head Aerolineas Argentinas.  Next, they 
withdrew a subcabinet nomination in the Health Ministry that 
threatened CGT control over healthcare subsidies worth 
millions.  Later, they freed up money owed to transportation 
companies to offset indirectly the costs of a 17% wage 
increase for Moyano's main supporters, the truck drivers. 
These decisions have strengthened Moyano's standing within 
the CGT at a time when he himself is facing challenges to his 
leadership within the CGT and seem to have bought the 
Kirchners, for at least a little while longer, Moyano's 
continued support.  This has made the ruling first couple 
more dependent than ever on organized labor, which is 
willing, ready, and able to exploit its enhanced leverage 
over the government.  End Summary. 
 
The Battle for Control over the CGT... 
-------------------------------------- 
 
¶2. (SBU) In the wake of CFK and NK's June 28 midterm 
electoral defeat (ref A), the political star of long-time 
Kirchner ally and labor leader, Hugo Moyano, also appeared to 
be fading.  Immediately after the elections, rumors began 
circulating that Moyano's rivals were conspiring to remove 
him as head of Argentina's powerful General Workers' 
Confederation (CGT).  In particular, some union leaders were 
chafing at Moyano's discretionary dispensation of government 
subsidies as a means to exert control over other union 
leaders. 
 
¶3. (SBU) The unions seeking to remove Moyano are the very 
ones who helped him climb to the top in the first place. 
They include ""Los Gordos"" (The Fat Guys), ""The Independents"", 
as well as the ""Dissident CGT-Blue and White "" led by Luis 
Barrionuevo, the outspoken and powerful head of the Food 
Service Union, who left the CGT umbrella last year, taking 15 
unions with him.  In an attempt to isolate Moyano, ""Los 
Gordos"" have publicly withdrawn from the CGT's Board of 
Directors and refuse to participate in meetings convoked by 
Moyano.  They have agreed to meet with ""The Independents"" and 
Barrionuevo in late July to discuss ways to wrest control 
from Moyano.  According to left-of-center newspaper 
""Critica,"" some are calling for an emergency CGT Congress to 
vote on whether Moyano should stay or go.  Others suggest 
pressuring Moyano to return to a tripartite leadership 
structure that was in place when former President Nestor 
Kirchner (NK) first took office in 2003. 
 
...and GOA Healthcare Subsidies to Unions 
----------------------------------------- 
 
¶4. (SBU) After Health Minister Graciela Ocana resigned on 
June 29, Moyano lobbied the Casa Rosada to name a replacement 
who would be more favorably disposed to union control over 
the MOH's Special Medical Programs Agency (APE) which 
distributes over USD 342 million (AR$ 1,300 million) a year 
to reimburse labor unions for healthcare costs.  (Note: 
Previously, Ocana had waged a long and ultimately 
unsuccessful battle with Moyano for control of the APE, 
arguing for enhanced MOH oversight of the program when she 
discovered that unions were not providing adequate 
documentation to back up their claims for healthcare 
reimbursements.  Many believe that this is one of several 
reasons why she resigned.)  On July 1, however, CFK named 
vice-Governor of Tucuman Province and medical doctor Juan 
Manzur as her new Health Minister (ref B). 
 
¶5. (SBU) On July 6, Manzur promptly named his trusted 
advisor, Mario Koltan, to replace Moyano's right-hand man, 
Hugo Sola, who was serving as APE's Acting Director.  In 
taking over the helm, Koltan indicated that he sought to 
implement a more transparent and equitable distribution of 
APE funds among the unions.  (Note: Many labor leaders had 
complained that Sola used APE funds as a means to reward 
Moyano's supporters and punish his detractors.)  Moyano's 
detractors in the CGT celebrated Koltan's appointment, 
 
believing it to be a clear sign from the Government that it 
was scaling back its support for Moyano. 
 
Moyano Flexes His Muscles 
------------------------- 
 
¶6. (SBU) Moyano, however, reportedly complained to former 
President Nestor Kirchner and Planning Minister Julio DeVido 
about the Koltan appointment.  He also took to the airwaves 
on July 7 to praise Kirchner archenemy and former President 
Eduardo Duhalde.  In what many viewed as a not-so-veiled 
threat to switch allegiance from Kirchner to Duhalde he said, 
""I am not against Duhalde.  He took charge in 2002 when 
Argentina was in a grave situation.  I have spoken to him 
many times and may seek to do so again.  At times, we 
Peronists are divided, but we are always in continual 
dialogue.""  When asked about the possibility of Duhalde 
heading the Peronist Party, Moyano (who is a vice president 
of the Peronist Party) stated that he would agree if other 
Peronists supported the decision. 
 
¶7. (SBU) It appears the Casa Rosada got the message loud and 
clear.  On July 8, a mere 48 hours after Koltan's 
appointment, CFK accepted his ""resignation.""  Moyano's man, 
Sola, has resumed his job as APE's Acting Director.  In the 
following days, the GOA announced that it would disburse an 
additional 256 million pesos (USD 67.4 million) to APE to 
reimburse labor unions for providing healthcare to its 
affiliates-- a significant boost to Moyano's coffers. 
 
CGT Lawyer Named to Oversee Airline Nationalization 
--------------------------------------------- ------ 
 
¶8. (SBU) On July 7, CFK shuffled her Cabinet (ref C) and 
named CGT lawyer Mariano Recalde the new head of Aerolineas 
Argentinas.  Recalde, 37, is the son of National Deputy 
Hector Recalde, a Moyano ally, coordinator of the CGT's Legal 
Committee, and chair of the Committee on Labor and Social 
Security in the Chamber of Deputies.  The Recalde appointment 
virtually assures Moyano control over the recently 
re-nationalized and heavily subsidized airline, where unions 
are strong and have precipitated many labor conflicts. 
 
An Emboldened Moyano Asserts Control Over CGT... 
--------------------------------------------- --- 
 
¶9. (SBU) Emboldened by this show of Casa Rosada support, 
Moyano met with his supporters on July 8 to assert his 
control over the CGT.  Staunch Moyano ally Omar Viviani, head 
of the taxi drivers association, told the crowd that the CGT 
leader would not allow dissident leaders to ""put conditions 
on his leadership.""  Only about 24 hours after lauding 
Duhalde, Moyano also told supporters that he would continue 
to ""defend the Kirchner model and support the changes 
Kirchner proposes."" 
 
...And Holds Out for Wage Increases 
----------------------------------- 
 
¶10. (SBU) Moyano's newfound leverage also helped his efforts 
to negotiate higher wages from the transportation sector for 
his union, the truck drivers.  Transportation Secretary Juan 
Pablo Schiavi agreed to reimburse transportation companies 
470 million pesos (USD 123.7 million) in social security 
payments to offset the costs of funding a 17% wage increase 
for truck workers.  In another win for the union leader, the 
Ministry of Labor agreed on July 14 to Moyano's proposal to 
hold minimum wage negotiations between the CGT and 
Argentina's Chamber of Industry.  Moyano has publicly called 
for a 20% increase in the minimum wage. 
 
Onward Kirchner Soldier 
----------------------- 
 
¶11. (SBU) Now that the Kirchners have publicly cast their lot 
with him, Moyano has stepped up his efforts to defend the 
Kirchner model, singing the praises of Domestic Commerce 
Secretary Guillermo Moreno for his interventions in the 
economy.  Moyano also backed Kirchner's statements that 
""traitors within the Peronist party"" and the ""politics of 
old"" had contributed to NK's mid-term electoral loss.  In a 
July 14 interview with Radio 10, Moyano said that ""although 
there is no barometer to measure one's loyalty to Peronism, 
there is a barometer to measure treason.""   In the same 
breath, he dismissed speculation that Peronist dissident 
Francisco De Narvaez and Buenos Aires City mayor Mauricio 
Macri could take control of the Peronist party.  He also 
 
endorsed CFK's call for a government dialogue with all 
sectors, saying ""it is time to play down tensions.""  Later 
that evening, Moyano participated in a dinner hosted by the 
Casa Rosada for union and business leaders aimed at 
persuading them to participate in CFK'S dialogue. 
 
Comment 
------- 
 
¶12. (C) In the aftermath of their mid-term electoral defeat, 
many of the bulwarks of the Kirchners' political coalition -- 
Peronist governors, suburban Buenos Aires mayors, and 
industrialists -- have  abandoned ship.  Organized labor, a 
traditional bastion of support for the Peronists, is the last 
significant political force to remain within the Kirchner's 
tent.  When Nestor Kirchner first took office in 2003, he 
needed organized labor's support to maintain social order 
while he addressed the economic crisis.  Today, CFK needs 
union support to shore up the rapid erosion of her political 
base as well as to keep the peace amid deteriorating economic 
conditions.  Moyano knows that the Kirchners' political 
fortunes have changed, and he has made it clear through his 
public flirtation with Duhalde that for now they need him 
more than he needs them.  Moyano is pragmatic enough to join 
the exodus when the time is right, but he has decided for now 
to stay loyal in exchange for the concessions that the 
Kirchners have forked over with little resistance. 
KELLY