VZCZCXYZ0000
PP RUEHWEB

DE RUEHBU #0988/01 2432311
ZNY CCCCC ZZH
P 312311Z AUG 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC PRIORITY 4293
INFO RUCNMER/MERCOSUR COLLECTIVE PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY

C O N F I D E N T I A L BUENOS AIRES 000988

SIPDIS

E.O. 12958: DECL: 08/31/2039
TAGS: PREL PGOV ECON EAGR AR
SUBJECT: ARGENTINA'S CORDOBA GOVERNOR ON THE KIRCHNERS,
2011 PRESIDENTIAL CANDIDATES, AND BUDGET WOES

REF: A. 08 BUENOS AIRES 0980 AND PREVIOUS
¶B. BUENOS AIRES 0750

Classified By: CDA Thomas P. Kelly for reasons 1.4 (b) & (d).

¶1. (C) Summary: Cordoba province Governor and Peronist
dissident Juan Schiaretti engaged with the CDA on Argentina's
First Couple, 2011 presidential candidates, and the
province's budgetary woes. Schiaretti said that former
President and First Spouse Nestor Kirchner (NK) sees a
divided opposition as giving him the space necessary "to do
what he wants" despite his defeat in the June 28
congressional midterms (ref B). Schiaretti said the Peronist
Party (PJ) needs to identify soon a 2011 presidential
candidate. While he sees Santa Fe Senator Carlos Reutemann
as the "best candidate," he described VP Julio Cobos as
possibly Argentina's next President -- and spoke favorably of
Cobos as well. Schiaretti said NK probably wants to run, but
cannot win. Schiaretti believes his province is being
singled out by President Cristina Fernandez de Kirchner (CFK)
and NK because Schiaretti's provincial slate performed better
than the Kirchner-allied Victory Front (FpV) slate in the
June midterms in Cordoba. He said the province has
repeatedly asked the government for the federal
revenue-sharing funds it owes Cordoba. He noted he has
warned the government that if they do not receive the funds,
the province will issue scrip. Despite his province's
current economic problems, he seemed upbeat and unfazed by
the conflict with the national government. Schiaretti will
visit Washington in late October and would welcome the
opportunity to speak with USG officials. End Summary.

¶2. (SBU) The CDA met August 26 with Peronist dissident Juan
Schiaretti of Cordoba Province, the Governor of Argentina's
third largest electoral district. Schiaretti was elected to
office with the First Couple's endorsement, but over the past
year he has maintained shaky relations with President
Cristina Fernandez de Kirchner (CFK) and former President and
First Spouse Nestor Kirchner (NK) over the government's
extended conflict with the agricultural sector (ref A), which
has not gone over well with Cordoba's farm-dependent
population. In the June midterms, Schiaretti and his allies
withheld support from the Kirchner-allied Victory Front (FpV)
alliance and ran on a separate ticket (ref B). The
Schiaretti-backed ticket came in third with 26% behind the
Radicals and the Civic Coalition, but well ahead of the
Kirchner ticket (9%). Schiaretti told the CDA that he plans
to travel to Washington in late October to visit the
Inter-American Development Bank to discuss projects in the
province, and would welcome the opportunity to speak with USG
officials about Argentina.

Views of the Kirchners
----------------------

¶3. (C) Schiaretti said that although the FpV lost the June
midterms, NK sees a divided opposition as giving him the
space necessary "to do what he wants." The Governor said
that NK's problems and missteps with the farm sector stem
from his origins in oil-dependent Santa Cruz province, where
the agricultural sector barely registers. For NK, he said
the farm sector, in particular the soy crop, is little more
than a cash cow. Schiaretti described NK as a "special
character," noting he cannot speak frankly with him and does
not understand his mindset. On the other hand, Schiaretti
confided that he continues to enjoy a constructive and fluid
relationship with CFK. For example, he relayed that during
his August 12 meeting with the President, he asked her what
the government was doing with all its money, since the
country has the same high levels of poverty and low
investment. Schiaretti believes the CFK administration
should focus on bringing credibility back to the national
statistical agency, INDEC; establishing a secure investment
climate; and resolving its disagreements with the IMF. He
added "the big question is...will they do it?"

Nestor Eyeing the 2011 Presidential Race
----------------------------------------

¶4. (C) Schiaretti said the Peronist Party (PJ) needs to
identify soon a 2011 presidential candidate. He said he
shares former President Eduardo Duhalde's concerns that if
the PJ is not able to select a candidate from Argentina's
fertile Pampas region, where 80 percent of the country's
population lives, the party will lose the race. Schiaretti
did not discount the possibility that NK is considering a
2011 presidential bid, and said that he thought that the
government's recent suggestion that the PJ presidential
candidate be selected in a series of four regional primaries
was intended to preserve the Kirchners' chances of

prevailing. He explained that the primaries would be set
first in smaller, poorer provinces, where the Kirchners could
use the power of the purse to woo Peronist voters, then
entering the larger primaries with political momentum.

¶5. (C) Schiaretti predicted, however, that if the PJ wants
to win in 2011, it has to find another candidate. That is
particularly true in Cordoba, he said, where the Kirchners,
with an 85% disapproval rating, fare worse than anywhere else
in the country. (Note: According to polling published in
leading daily "Clarin" on August 23, only 2.5% of those
polled identified NK as their top choice for President in
2011, which is almost the same level of support garnered by
unpopular former President Carlos Menem.)

Cobos and Reutemann are Front-Runners
-------------------------------------

¶6. (C) Schiaretti said Peronist dissident Senator Carlos
Reutemann from Santa Fe is the best 2011 presidential
candidate, but added that the Senator marches to a different
drummer and is not likely to declare his candidacy any time
soon. He said that Schiaretti agreed with Duhalde that
Reutemann and the PJ would be better off if the Senator
declared his intentions sooner rather than later; otherwise,
he feared, the Peronist leadership would look for other
champions, especially given Reutemann's reputation for
indecisiveness. Unlike Duhalde, who earned a harsh public
rebuke from Reutemann last week for his comments on that
subject, Schiaretti said that he has not expressed his
opinion publicly out of deference to Reutemann, whom he said
had explicitly asked him to not pressure him on that score
(septel on CDA's August 27 conversation with Reutemann).
Schiaretti described Reutemann, a former Formula One racing
champion whom he knows well, as "a very special person with a
unique mindset." Stressing his point, he added, "there are
only ten people on the planet who can drive a car at speeds
of 300 km/hour." As to CFK's highly-popular Vice-President
Julio Cobos, Schiaretti described Cobos as a "good person"
and very possibly Argentina's next President.

Cordoba's Economic Troubles
---------------------------

¶7. (C) Schiaretti discussed in depth his concerns about
Cordoba's economy. He said his province is being singled out
by CFK and NK because in the June midterms in Cordoba
Schiaretti's provincial slate performed better than the FPV's
slate (reftel A). Schiaretti added that if NK wants to
strengthen Argentina's economy, then NK cannot help but
invest national resources in Cordoba. Schiaretti said he has
repeatedly asked the central government to provide the
revenue-sharing funds it owes the province. He added, "We
have a huge debt. If they do not send the funds, we will be
in trouble," adding that there are ten provinces financially
worse off than Cordoba. (Note: Newspaper-of-record "La
Nacion" reported on August 27 that Cordoba is one of 13 (out
of 23) provinces in addition to Buenos Aires City with
particularly high levels of debt. As of 2008, Cordoba's debt
was AR 8.1 billion pesos (estimated USD 2.1 billion).
Economy Minister Amado Boudou told CDA that the national
government will not allow Cordoba to issue bonds to help
service its debt.) Schiaretti said he may have to delay
payment for one week in September of government employees'
salaries. In addition, he said if they do not receive the
revenue-sharing funds, the province will be forced to issue
scrip and can do so without permission from the national
government. (Note: During the 2001 crisis, Cordoba was among
15 provinces that issued scrip to meet its obligations.)

Bio Data
--------

¶8. (SBU) Schiaretti brings three decades of experience
working at various levels in the Cordoba provincial
administration. Schiaretti won the 2007 gubernatorial race
with 37.17% of the votes under Cordoba Union, a coalition of
parties backed by NK. (Note: NK also supported Schiaretti's
main rival, Luis Juez, who came in second by a difference of
0.8%. Both Schiaretti and Juez are bitter opponents of NK,
though they also bitterly oppose each other.) Schiaretti
served as Vice Governor of Cordoba Province from 2003 until
assuming his current post. His previous public sector
positions include: Minister of Production and Finance in
Cordoba province (2002-2003); National Deputy for Cordoba
(2001-2002); Minister of Production in Cordoba province
(1999-2001); National Deputy for Cordoba (1995-1997); Federal
Trustee in Santiago del Estero province (1994-1995); National
Deputy for Cordoba (October-December 1993); Undersecretary
for Latin-American Integration in the Ministry of Foreign

Affairs (1989-1990); Secretary of Industry and Commerce in
the Ministry of Economy (1991-1993); Legal Technician for the
Implementation of the Industrial Promotion Law for Cordoba
(1972-1974); and Budget Technician in the Agriculture
Secretariat of Cordoba Province (1971-1972). Schiaretti has
also worked in the private sector. In 1977, FIAT Company in
Belo Horizonte, Brazil, hired him as a financial assistant.
Schiaretti worked in the company for seven years, becoming
its deputy director for management.

¶9. (SBU) Born on June 19, 1949 in Cordoba City, Governor
Schiaretti earned an accounting degree from the National
University of Cordoba in 1970. In 1997, Schiaretti married
Alejandra Maria Vigo, then secretary general of the Cordoba
section of the province-based Housewives' Union. Vigo, who
served as a provincial legislator (2003-2007) for the
dissident Peronist-aligned Cordoba Union coalition, lost her
bid for a national deputy seat in the June 2009 midterms.
The couple has two children.

Comment
-------

¶10. (C) As in past occasions, the Governor was a friendly and
candid interlocutor. Despite his province's glum fiscal
prospects, he seemed upbeat and determined in his
confrontation with the national government over revenue
sharing. Given that the Argentine Embassy is unlikely to
help him get meetings in Washington, we would be pleased to
arrange for Washington-based Argentina watchers to meet with
this important politician.

KELLY