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DE RUEHAC #0014/01 0092228
ZNY SSSSS ZZH
O 092228Z JAN 09
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7512
INFO RUCNMER/MERCOSUR COLLECTIVE PRIORITY
RHEHNCS/NSC WASHDC PRIORITY
RHMFISS/USSOCOM MACDILL AFB FL PRIORITY
RUEKJCS/USSOCOM WO WASHDC PRIORITY
RHMFISS/HQ USSOUTHCOM MIAMI FL PRIORITY

S E C R E T ASUNCION 000014

SIPDIS

STATE FOR WHA/BSC MDASCHBACH

E.O. 12958: DECL: 12/31/2034
TAGS: MASS PTER SNAR PREL PARM PA
SUBJECT: PRESIDENT LUGO DISCUSSES SECURITY AND DEFENSE
ISSUES WITH CHARGE

REF: A. ASUNCION 001
¶B. ASUNCION 003

Classified By: Charge d'Affaires, a.i. Michael J. Fitzpatrick for reaso
ns 1.4 (b) and (d).

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SUMMARY
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¶1. (S) President Lugo, joined by two close confidants,
frankly and amicably discussed with Charge January 5 current
security issues, principally the Paraguayan People's Army's
New Year's Eve attack on an Army outpost and the separate
subsequent capture by police of stolen plastic explosives by
Army personnel (refs A and B); the U.S.-trained Joint Rapid
Response Detachment (DCEI) and security cooperation; and
possible threats of violence against himself, or his
ministers. While the President was not overly concerned that
any of the incidents represented clear or immediate threats
to the government, he clearly was unhappy with the lack of
inter-agency cooperation among his ministers and ministries.
Lugo's posture during the meeting clearly indicated that he
remains strongly supportive of USG assistance to DCEI, but,
especially in the absence of his ministers, he remained his
(usual) noncommital self. He did repeatedly commit, however,
to have his government provide the Embassy with a written
response as to the way forward on USG support for the DCEI,
and perhaps even on US security assistance more generally, by
January 16. END SUMMARY.

------------------------------------
LUGO ON EPP AND EXPLOSIVES THEFT
------------------------------------

¶2. (S) President Fernando Lugo, Paraguayan National
Anti-Drug Secretariat (SENAD) Minister Cesar Aquino, and
informal advisor Omar Castarino discussed security issues
January 5 with Charge and poloff (notetaker) in a cordial
one-hour meeting in the President's office. Lugo told Charge
that he was pleased with the government's initial response to
the Paraguayan People's Army's (EPP) December 31 attack on an
Army outpost in Tacuati, San Pedro Department (ref A). Lugo
based his feedback on initial reports from the military
detailing the deployment of 35 members of the Military's
Joint Rapid Response Detachment (DCEI) to Tacuati to search
for EPP suspects. He was decidely not pleased, however, with
the interagency bickering that the attack provoked among the
police, military, prosecutors and various public officials as
to who was in charge of responding to the overall situation.

¶3. (S) President Lugo told Charge he was convinced the EPP
was definitely not as large as the 300 members alleged in
some reports. Rather, he said, it was a small group of known
individuals (20-30) repeatedly committing the same illegal
acts. "It,s the same people as always," he said, those
responsible for a series of high-profile kidnappings in
recenter years, first as members of the armed wing of the
Free Homeland Party (PPL), and now as the EPP. Lugo said
there were reports that law enforcement had surrounded one
EPP member, and Lugo said he hoped that having a high-profile
arrest by the end of the week would convince people of his
genuine interest in shutting down the EPP. (NOTE:
Paraguayan security forces have not yet apprehended any
suspects in the Tacuati attack; additional military and
police units, however, have since been sent into the area in
the hopes of cornering or flushing out those involved. END
NOTE.) Lugo also mentioned that the rural areas of the
Concepcion/San Pedro border area (such as Tacuati) and the
hilly areas of Paraguari Department as the two most troubling
areas for these types of security threats. He was troubled
by, but convinced that, the EPP was receving local support
from narcotics traffickers (including some large land holders
in San Pedro). He based that, he said, on his intimate
knowledge of the area from his (eleven) years as Bishop in
San Pedro. Lugo estimated that the EPP was not really a
direct security threat to the nation but rather were stirring
up trouble, scaring off legitimate investors, and providing
an opportunity for many quarters to criticize the government
-- and ultimately to trip him up.

¶4. (S) Lugo shared his concerns with Charge over that
morning's breaking news story -- the arrest of Army personnel
in possession of hundreds of pounds of C4 plastic explosives,
possibly stolen from Paraguayan Army depots. Lugo said he
was convinced that the the three sergeants publicly implicted

"would not dare" to steal the explosives and guns recovered
on their own. He saw it more in the context of the Army's
"traditional" involvement in black market arms trafficking --
and he said he expected that officers "with stars on their
shoulderboards" were those really behind the incident.
Charge committed USG efforts to work closely with prosecutors
to trace the origins and possible chain of custody to any of
the materials seized. The President lamented lack of controls
on the country's stored munitions and the Charge reviewed
September's USG-assisted destruction activity which reduced
by some 60 percent Paraguay's stores of (often old/unstable
munitions. The Pesident reiterated his concern for he lack
of cooperation and coordination among the security forces,
the police and prosecutors. Castorino told Lugo that a good
model for just such coordination does indeed exist -- the
DCEI.

-----------------
SUPPORT FOR DCEI?
-----------------

¶5. (S) Charge and Castorino reviewed for the President the
history and development of the DCEI, noting that the DCEI is
tentatively scheduled to receive up to USD 1.2 million in USG
assistance this year, including assistance for final round of
selections and qualifications courses slated to start in
March. (NOTE: The USG has provided USD 5 million in total
assistance to DCEI since December 2006. END NOTE.)
Castorino noted that had it not been for USG support for
standing up the DCEI, the President would have been left
without any rapid response capability at all -- like the DCEI
he had just ordered deployed. Aquino noted that the DCEI had
been very supportive of SENAD by providing cross-training to
liaison officers and logistical support during
counter-narcotics operations. Charge noted that, in the end,
it had been the USG that paid for the gas and expenses for
the DCEI to deploy in response to the President's orders that
week. Lugo took that on board, and recalled favorably his
November 18 visit to the DCEI headquarters in Asuncion and
his field trip to Amambay Department with Ambassador Ayalde
to observe SENAD and DCEI jointly conduct counter-narcotics
operations.

¶6. (S) Charge told Lugo that the USG-Paraguayan bilateral
support effort for the DCEI had been drafted, but never
signed by the previous Paraguayan administration. President
Lugo asked why that had been the case. Charge explained the
USG had operated in good faith that we were responding to
joint US-Paraguayan priorities in helping stand up the DCEI.
President Duarte promised repeatedly to sign, but then took
an increasingly anti-US stance as the Paraguayan elections
came closer. (Lugo laughed at that, as Duarte's tactics had
obviously failed.) Then we had to wait for those elections;
and then President Lugo's inauguration; and then his meeting
with President Bush; and then OUR elections and now the U.S.
inauguration... President Lugo laughed aloud again in
apparent agreement as Charge suggested this really has to
stop. Charge emphasized to Lugo that the USG sought from his
administration a written statement of support for the DCEI to
share with the incoming Obama administration before the
Embassy could even consider recommending continued USG
support for DCEI. Charge put this in the context of the
larger questions that the new US Administration would have:
Where does Lugo wish to take Paraguay; where does he wish
relations with the USG to go; and, specifically, where does
he wish to take the relationship in terms of security and
defense issues. Aquino and Castorino explained to Lugo that
although the DCEI is operating legally under Paraguayan law
and under the military's Special Forces division, it still
needs to be codified in the law (for instance, to ultimately
take receipt of U.S.-provided weapons) and it needs its own
line item in the official budget. (NOTE: Both Aquino and
Castorino -- who seem to have Lugo's ear, and seem to be
among the select few he trusts -- were bullish about USG
support for DCEI. Castorino told Lugo that Defense Minister
Bareiro had been "playing games" with the USG and with the
President. They disparaged Bareiro as increasingly
influenced by the Paraguayan Movement Toward Socialism
(P-MAS) leader Camilo Soares and Vice Foreign Minister Jorge
Lara Castro (also viewed by many as an ideological leftist).
END NOTE.)

¶7. (S) Charge provided Lugo a draft copy of a letter from
Charge to Defense Minister Bareiro, requesting such a written
affirmation of the Lugo administration's support for DCEI (as
first requested by the Ambassador of Bareiro in

mid-December). Lugo read the letter closely, asked that
Aquino and Castorino provide any suggested edits (they had
none). Lugo was relaxed and appeared supportive, but, in the
end, was his usual non-committal self (perhaps especially so
regarding something possibly still in debate within his
motley cabinet and circle of advisors). But he quickly told
Charge to proceed to send the letter to his Defense Minister,
with copies to the Foreign Minister and himself. (This was
done shortly after the meeting.) At no time was it suggested
that either the Foreign Minister or Defense Minister be made
aware of the Charge's discussion of this topic with the
President. President Lugo committed at several points,
however, to have a formal a response to the Embassy from his
government by the end of the following week (i.e., the Friday
before the U.S. Presidential inauguration/transition).
(NOTE: Defense Minister Luis Bareiro Spaini responded
January 8 to the Embassy's January 5 letter, thanking the
Embassy for also sharing the request with the President and
the Foreign Minister -- the two people, he said, with whom he
needed to first meet in order to prepare a more definitive
response. END NOTE.)

-----------------------------
POSSIBLE THREATS AGAINST LUGO
-----------------------------

¶8. (S) Lugo told Charge that his sister, Mercedes, had
received several calls with information about possible
attacks on himself or possibly one of his Ministers to occur
around the time of Holy Week (March). While he still only
had initial scraps of info (from his traveling sister), Lugo
said the threats appeared to be emanating from ex-military
and/or ex-police (and possibly narco- or criminal-tied
syndicates) -- not the EPP/Paraguayan People's Army. Lugo
asked that the Embassy share any information it receives
regarding possible threats against Lugo; as Charge and
Ambassador had committed to do so even before he assumed
office, Charge committed to bring forth any such threat
information we may have. (NOTE: Charge subsequently asked
Country Team members to check for any possible information
related to these threats, which we will then loop back to the
Presidency -- even if only to say that we have no such
information. END NOTE.) Lugo concluded by saying he did not
wish to jump to conclusions and "connect the dots" that did
not merit connecting; he said he saw the EPP attack, the
weapons thefts and the possible threat info his sister was
picking up as separate and unrelated items. The President
seemed relaxed and comfortable throughout the meeting, and,
as always, open to learning new information related to things
he did not know much about. At no time did he indicate he
was feeling defensive, insecure or rattled by any of the
threat information.

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COMMENT
-------

¶9. (S) President Lugo was warm, welcoming, relaxed
throughout the meeting. He conveyed the impression that he
remains strongly supportive of USG assistance to Paraguay in
general, and to the DCEI, in particular. The timing of this
meeting -- in the immediate wake of both the EPP attack and
the theft of military munitions -- was coincidental, though
it may prove to be providential. Even though he was, in the
end, positive yet non-commital (as is his style, to the
frustration of all around him), he clearly recognized: a) All
that the USG has done for Paraguay, b) The need for some
clarity of his government's position, and c) The need for his
government to get back to us formally (and with one common
position) ASAP. END COMMENT.

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FITZPATRICK