Wiki Leaks Argent in A

CABLES CONFIDENCIALES Y SECRETOS SOBRE ARGENTINA
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C O N F I D E N T I A L SECTION 01 OF 05 BUENOS AIRES 001462
SIPDIS
SIPDIS
STATE FOR WHA TOM SHANNON, JOHN MAISTO, AND CHARLES SHAPIRO
NSC FOR DAN FISK
TREASURY FOR DAS NANCY LEE
USCINCSO FOR POLAD
E.O. 12958: DECL: 06/28/2016

TAGS: PGOV PHUM PREL AR
SUBJECT: ARGENTINA: THE K-STYLE OF POLITICS
REF: A. BUENOS AIRES 01090

¶B. BUENOS AIRES 01403
¶C. BUENOS AIRES 02974
¶D. 05 BUENOS AIRES 00141
¶E. 05 BUENOS AIRES 02835
¶F. 05 BUENOS AIRES 00115
Classified By: Ambassador Lino Gutierrez for Reasons 1.4 (B) and (D).
------------------------
SUMMARY AND INTRODUCTION
------------------------
¶1. (C) This cable is designed to examine President Nestor

Kirchner's unique operating and decision-making style that
has become known as the "K-Style." Given Kirchner's control
over all aspects of GOA policymaking, knowledge of Kirchner's
motivations and methods in arriving at decisions is essential
to understanding GOA actions.
¶2. (C) President Nestor Kirchner's personalistic, often

erratic operating and decision-making style defines current
Argentine policymaking and is characterized by an overarching
focus on the short-term and politically expedient
accumulation and maintenance of domestic political power.
Kirchner's domestic political style leaves no room for
dissent and utilizes divide-and-conquer tactics to weaken the
political opposition. While utilizing leftist, populist
rhetoric at times, in practice Kirchner has demonstrated that
his ideological leanings are always less important than the
practicalities of domestic politics. Studies show that
Kirchner's psychological profile includes a need to always be
in control, quick and decisive decision making, a constant
struggle against perceived enemies, and a tendency to respond
to challenges by lashing out, rather than negotiation.
Foreign policy in the Kirchner government is always
subservient to domestic political considerations. President

Kirchner is not skilled at international diplomacy and often
ignores basic protocol. Kirchner relies on an ever-shrinking
group of long-time advisors to make key decisions, many of
whom lack international, business and economic expertise.
END SUMMARY AND INTRODUCTION.
--------------------------------
THE K-STYLE IN DOMESTIC POLITICS
--------------------------------
¶3. (C) President Nestor Kirchner's personalistic, often

erratic operating and decision-making style defines current
Argentine policymaking and is characterized by an overarching
focus on the short-term and politically expedient
accumulation and maintenance of domestic political power.
Close Kirchner insiders have described Kirchner's
decision-making process to Emboffs as one in which Kirchner
consults with a small number of trusted advisors, generally
one-on-one, and then makes all of the final decisions
himself. The Argentine political system places a great deal
of authority into the hands of the President, and President
Kirchner is a strong president even in the Argentine
historical context. As a result, the "K-Style" defines the
GOA policymaking process and gives the policy process a
short-term focus. As Legal and Technical Secretary Carlos
Zannini, a close Kirchner advisor, told the DCM, "The
President and I get up every morning, look at the morning
papers, and try to figure out how to survive the day."
Another long-time Kirchner associate, former Santa Cruz
Governor Sergio Acevedo told us that Kirchner focuses very
much on day-to-day issues, but always with the long-term
strategic goal of retaining political power. (COMMENT:
Kirchner's focus on retaining political power leads us to
discount speculation that Kirchner will step aside in 2007

and make his wife Cristina the presidential candidate. For
2011, assuming Kirchner's health holds, we would expect him
to either modify the Constitution to allow him to run for a
third term, or to pass the mantel on to his wife. END
COMMENT.)
¶4. (C) Kirchner's domestic political style leaves no room

for dissent and utilizes divide-and-conquer tactics to weaken
BUENOS AIR 00001462 002 OF 005
the political opposition. Kirchner is quick to silence any

opposition to his policies from within his movement, as when
he recently expelled congresswoman Maria del Carmen Alarcon
from the presidency of the Lower House Agricultural Committee
and from Kirchner's Victory Front (FPV) after Alarcon
criticized the GOA beef policy (See Reftel A). Kirchner has
also proven adept at co-opting members of the opposition and
exploiting divisions within opposition parties. Through the
skillful use of his fiscal powers, Kirchner has been able to
draw in the majority of the Radical Civic Union (UCR)
governors, and many UCR mayors (See Septel on deteriorating
provincial finances and Kirchner's use of fiscal power for
political aims). He has also been able to co-opt the
political leadership from the now defunct center-left Frepaso
and most of the Peronists formerly aligned in opposition to
Kirchner with former President Eduardo Duhalde. Kirchner has
exploited divisions within the UCR by heavily courting
Mendoza Governor Julio Cobos, long-time rival of UCR
President Roberto Iglesias, even encouraging rumors that
Cobos may be Kirchner's running mate in 2007. Kirchner also
does not accept criticism from those outside of the political
arena, attacking the press, the Catholic Church and business

leaders that have been publicly critical of the GOA.
¶5. (C) While utilizing leftist, populist rhetoric at times,

in practice Kirchner has demonstrated that his ideological
leanings are always less important than the practicalities of
domestic politics. As Acevedo recently told us, President
Kirchner has no true ideology. For example, the issue of
human rights and his political affiliations in the 1970s were
non-issues in the 20 years of Kirchner's political life as
Mayor of Rio Gallegos and Governor of Santa Cruz province.
Acevedo said Kirchner's recent support for the Mothers of the
Plaza de Mayo and a renewed focus on human rights crimes
committed under the last dictatorship was driven by his need
to develop a core base of support within the left wing of the
Peronist movement. Kirchner was also a big proponent of the
1990s privatizations at the time they occurred, but has since
vehemently attacked them. This does not mean that Kirchner
does not have left-wing sympathies, but rather that these are
completely subordinate to his personal political interests
and ambition (See Reftel B). Kirchner's left-wing sympathies
have not stopped him from forming alliances of convenience
with center-right Peronist leaders, such as Luis Barrionuevo
of Catamarca, Cordoba Governor Jose Manuel de la Sota, or the
largely conservative Peronist political machine in Buenos
Aires province.
¶6. (C) Kirchner's style of policymaking has become more
pronounced after the October 2005 elections and November 2005
cabinet changes left Kirchner firmly in charge of all aspects
of GOA decision making (See Reftel C). Prior to the October
elections, Kirchner had to consider former President
Duhalde's opinion in making major decisions. Kirchner's
resounding victory in Buenos Aires province in the elections
left him in control of the Peronist Party (PJ) and banished

Duhalde from the center stage of the political scene. Before
Kirchner's November cabinet changes, Kirchner also had to
contend with his independent-minded Minister of the Economy,
Roberto Lavagna, in making economic policy decisions, and
with then-Foreign Minister Rafael Bielsa, who occasionally
exhibited an independent streak. Their replacements, Felisa
Miceli and Jorge Taiana are loyal soldiers who follow
presidential orders. For example, recently Miceli was give a
copy of a communique that had been issued to a news agency by
the Casa Rosada with Miceli's comments criticizing a recent
speech by Lavagna before Miceli had actually spoken. As
leading pollster Roberto Bacman told Poloff, "Never since the
return to democracy (1983) has Argentina had a President that
was also the Minister of the Economy."
---------------------------------------------
KIRCHNER'S PSYCHOLOGICAL PROFILE SETS K-STYLE
---------------------------------------------
¶7. (C) According to recent studies, Kirchner's psychological

profile includes a need to always be in control, quick and
decisive decision making, and a constant struggle against
perceived enemies. Kirchner does not delegate policymaking,
BUENOS AIR 00001462 003 OF 005

making all of the important decisions himself. Kirchner only
consults with a narrow group of long-time advisors, who are
part of Kirchner's inner circle primarily because of their
loyalty, not their technical abilities (See Reftel D). He
often does not even consult or give warning to top GOA
officials before making major policy statements in their
respective areas of responsibility. According to Central

Bank officials, for example, Central Bank President Martin
Redrado found out that the GOA was going to use nearly 10 USD
billion in Central Bank reserves to pay off the IMF when
Kirchner publicly announced it. Casa Rosada insiders have
described Kirchner as prone to making quick, sometimes even
rash decisions. For example, Kirchner reportedly made a snap
decision to institute a six-month ban on beef exports after
learning that the price of beef had risen a significant
amount the previous day in the country's most important beef
market. Kirchner has lashed out at has perceived enemies,
both domestic and foreign, throughout his presidency.
Kirchner's targets have included the IMF, the U.S., the
media, the Catholic Church, the Argentine military, the
foreign and domestic business community, supermarkets,
foreign gas stations, anything that happened in the 1990s,
former Presidents Carlos Menem, Fernando de la Rua and
Eduardo Duhalde. Kirchner often targets unpopular groups or
individuals as a means to increase his own public approval
ratings.
¶8. (C) When confronted with a problem, Kirchner's first

instinct is to go on the offensive, rather than negotiate,
upping the ante if his initial efforts fail to win the
desired result. When Kirchner faced resistance from the
business and agricultural sector on his efforts to control
inflation earlier in the year, Kirchner instituted a ban on
the export of beef and appointed the unorthodox Peronist
economist Guillermo Moreno to run the GOA's anti-inflation
efforts through bullying and threatening individual producers
to lower their prices. When Uruguayan President Tabare
Vazquez did not respond well to Kirchner's insistence that
Uruguay halt the construction of two paper plants on the
Argentine border to conduct additional environmental studies,
Kirchner's rhetoric encouraged the residents of the affected

province to step up their blockade of the bridges connecting
the two countries, resulting in millions of dollars of lost
trade and tourism income for Uruguay. Faced with rising gas
prices in early 2005, Kirchner called for a national boycott
of Shell Oil and sent thousands of piqueteros to blockade
Shell Oil gas stations until they agreed to lower their
prices.
¶9. (C) Kirchner has a reputation for taking slights or any

perceived lack of respect from others personally, but is also
known for quick changes in temperament. Acevedo told the DCM
that once then-Governor Kirchner became enraged with his
Deputy Energy Minister for making a statement regarding Santa
Cruz energy policy he did not personally approve. Kirchner
called the Deputy Minister into his office and proceeded to
scream at him at the top of his lungs, ultimately effectively
throwing him out of his office physically. Everyone in the
provincial government leadership expected the Deputy Minister
to be fired. Kirchner did not speak to him for two weeks,
until he unexpectedly called him asking for some trout for a
dinner that Kirchner was hosting. Acevedo said this
individual had a reputation for knowing where to get the best
trout in Rio Gallegos. The Deputy Minister complied with the
request, and two days later Kirchner invited him for coffee.
Kirchner greeted him warmly, thanked him for the trout, and
proceeded to chat with him for a long period, as if the
previous incident had never happened, to the shock of
everyone else present, including the Deputy Minister. In the
end, the Deputy Minister was not fired, and Kirchner did not
raise the issue again.
¶10. (C) Kirchner's health condition exacerbates, and perhaps

helps define, Kirchner's emotions and psychology. President
Kirchner has reportedly suffered from irritable bowel

syndrome for many years. According to the American Medical
Association, the psychological effects of this condition
leads those who suffer from it to be "often rigid, methodical
persons who are conscientious, with obsessive-compulsive
BUENOS AIR 00001462 004 OF 005
tendencies." Kirchner also reportedly works himself to

exhaustion and needs to take frequent vacations to recover.
The AMA further states "Psychologic and social stresses are
often present in patients with irritable bowel syndrome, and
may be related in a temporal sense to the exacerbation of
symptoms." This may account for Kirchner's lack of attention
to protocol that involves long ceremonies or tight schedules,
where Kirchner would not have quick access to a bathroom.
-----------------------------------
FOREIGN POLICY NOT KIRCHNER'S FOCUS
-----------------------------------
¶11. (C) Foreign policy in the Kirchner government is always

subservient to domestic political considerations. Kirchner,
at least initially, took a hard line on the paper mills
dispute with Uruguay -- despite the damage to Mercosur and
regional relations -- because of the strong Argentine public
concern about the paper mills, particularly in
ruling-party-run Entre Rios province that is on the opposite
side of the river from the plants. Kirchner's explicit and
harsh criticism of the U.S. during his speech during the
Summit of the Americas in Mar del Plata can only be
understood in the context of dismal public perceptions of the
U.S. and Kirchner's desire to appeal to his leftist political
base (See Reftel E). Kirchner's hardball tactics during

negotiations over Argentina's private sector debt and his
criticism of foreign companies that run major enterprises
that were privatized in the 1990s do not earn him any support
from foreign investors, but are popular with the Argentine
public. Likewise, Kirchner cut Argentine gas exports to
Chile in 2005 to cover shortages in the internal market
despite the existence of valid contracts between Chile and
local gas suppliers.
¶12. (C) President Kirchner is not skilled at international

diplomacy and often ignores basic protocol. Kirchner's
gaffes with foreign dignitaries are legendary. In June 2004,
Kirchner left Russian leader Vladimir Putin waiting at the
Moscow airport for a meeting that never happened, reportedly
because Cristina Kirchner wanted to spend more time shopping
at their previous stop in Prague. The GOA claimed that "bad
weather" had delayed their takeoff when weather reports
showed sunny conditions in Prague. Later that year,
President Kirchner failed to attend a state dinner he was
supposed to host for visiting Vietnamese President Tran Duc
Luong. In like fashion, Kirchner failed to attend a
reception in honor of the State visit of Queen Beatriz of
Holland in March of 2006. Kirchner also never receives new
Ambassadors, as state protocol would dictate, relegating this
responsibility to Vice President Daniel Scioli.
¶13. (C) Kirchner relies on an ever-shrinking group of
long-time advisors to make key decisions, many of whom lack
international, business and economic expertise (See Reftel
D). No one from the Foreign Ministry is part of Kirchner's
inner circle of advisors, and very few of Kirchner's close
associates had overseas experience before Kirchner became
President (See Reftel F). As a result, Kirchner often
receives poor advice on international issues, such as when

Legal and Technical Secretary Carlos Zannini reportedly
convinced Kirchner that taking a tough line publicly on
counter terrorism would, in the eyes of the USG, compensate
for being critical of the U.S. in other areas and opposing
the FTAA at the Summit of the Americas (See Reftel E).
------------------------------------
COMMENT -- IMPLICATIONS FOR THE U.S.
------------------------------------
¶14. (C) Kirchner's peculiar operating and decision-making

style defines Argentine policymaking, and in the coming year,
may lead to more challenges in the U.S.-Argentine
relationship, as Kirchner focuses on shoring up his
center-left political base for the 2007 elections. Given
poll numbers that show Argentines have the least positive
view of the U.S. out of all nations in the region, the U.S.
will be a convenient target for Kirchner. As during the 2003
presidential campaign, Kirchner will likely portray himself
BUENOS AIR 00001462 005 OF 005
as the lone true defender of Argentina in the world

community. The Casa Rosada has reportedly already begun an
effort to link Roberto Lavagna to the U.S., for example by
encouraging press articles that the U.S. approved and is
sponsoring a potential Lavagna campaign for President.
¶15. (C) Kirchner has a history of using international

disputes, like the paper mill conflict with Uruguay, to gain
domestic popular support. We have been told by our British
colleagues that relations between the U.K. and Argentina are
at their lowest point in 15 years because Kirchner has chosen

a confrontational attitude with the U.K. on the Falkland
Islands dispute, thereby making political use of an issue
that is at the core of Argentine national identity. As
leading political analyst Rosendo Fraga told Poloff, "This
year, Kirchner will use the U.K. and Uruguay as targets, and
next year, it will be the U.S." Kirchner has been described
to us by his close associates as someone who constantly
focuses on the costs and benefits of his political decisions.
During a recent trip to Spain, Kirchner criticized the
U.S.'s "absence" and lack of significant assistance to the
region. Former Minister Lavagna told the Ambassador that
Kirchner did this in order to counter the image that he had
been too forthcoming with Spanish multinationals during the
trip. As the 2007 presidential campaign approaches, we
cannot rule out occasional anti-U.S. diatribes by Kirchner in
order to placate his leftist supporters.
GUTIERREZ
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S E C R E T SECTION 01 OF 05 BUENOS AIRES 001594
SIPDIS
SIPDIS
STATE FOR WHA TOM SHANNON, JOHN MAISTO, AND CHARLES SHAPIRO
NSC FOR DAN FISK
TREASURY FOR DAS NANCY LEE
USCINCSO FOR POLAD
E.O. 12958: DECL: 07/19/2016

TAGS: PGOV PHUM PREL AR
SUBJECT: ARGENTINA: KIRCHNER AT THREE YEARS
REF: A. 05 BUENOS AIRES 02728
¶B. 05 BUENOS AIRES 03056

¶D. BUENOS AIRES 01403
¶E. BUENOS AIRES 00097
¶F. BUENOS AIRES 01566
Classified By: Ambassador Lino Gutierrez for Reasons 1.4 (B) and (D).
-------
SUMMARY
-------
¶1. (C) Coming to power after one of the worst economic,

political and social crises in Argentina's history, President
Nestor Kirchner has had a successful first three years in
office. He is seen as a strong and decisive leader and is
credited with restoring governability to the executive branch
and promoting Argentina's impressive economic recovery.
Kirchner has high public approval ratings and has restored
public optimism in Argentina. Despite these major successes,
Kirchner continues to face considerable challenges in dealing
with poverty, crime, inflation, and the need to attract more
foreign investment and resolve Argentina's long-term energy
shortage. Although Kirchner started his presidency by
strengthening the independence of the Supreme Court, Kirchner
has since then failed to strengthen Argentina's institutional
democracy, and in many cases has weakened it. Kirchner's
reliance on presidential decrees, manipulation of the
electoral system, tightened control over the Judiciary, and
pursuit of permanent "super" budgetary powers have enhanced
presidential power at the expense of Argentina's already weak
institutional framework. Kirchner campaigned in 2003 on a
strong anti-corruption message and his first Justice
Minister, Gustavo Beliz, championed the cause of rooting out
official corruption, but the GOA has placed less emphasis on
fighting corruption since Beliz was fired in 2004. On the
foreign policy front, President Kirchner's lack of attention
and understanding in the international relations arena has
resulted in an erratic GOA foreign policy. The Kirchner
administration's most important foreign policy theme is the
promotion of regional integration, which in practice has
meant the strengthening of relations with Venezuela and
Brazil. End Summary.
-------------------------
KIRCHNER'S MANY SUCCESSES
-------------------------
¶2. (C) Coming to power after one of the worst economic,

political and social crises in Argentina's history, President
Nestor Kirchner has had a successful first three years in
office. When Kirchner first took office in May 2003, many
analysts doubted he would finish his term. Since that time,
Kirchner has gained full control of the Peronis Party (PJ),
asserted his authority over the military, largely co-opted
the piquetero movement that threatened the stability of past
governments, won control of Congress in the October 2005
elections and maintained high public approval ratings. Not
only is Kirchner's survival no longer in doubt, polls show
that Kirchner would easily win reelection if elections were
held today. Kirchner controls Argentina's political system
and faces a weak and divided opposition. Kirchner has also
proven adept at the traditional Peronist art of co-opting key
elements of the opposition, including a majority of the
opposition governors.
¶3. (C) He is seen as a strong and decisive leader and is

credited with restoring governability to the executive branch
and promoting Argentina's impressive economic recovery.
Polls show that the Argentine public views Kirchner as a
decisive leader who was able to take charge and turn the
country around during a difficult time in Argentine history.
The wave of public demonstrations that stemmed from the
2001-2002 economic crisis that brought presidential authority
in Argentina to one of its lowest ebbs has subsided and
Kirchner has adeptly managed relations with protest leaders.
On the economic front, Argentina has strongly rebounded from
the crisis, with GDP growth rates of 9 percent for the past
BUENOS AIR 00001594 002 OF 005
three years. Through the GOA's private sector debt deal and
by paying off Argentina's IMF debt, Argentina's external debt
has been brought to a manageable level for the first time in
a decade. Under Kirchner's watch, Argentina has amassed
record budget surpluses. The tax collection system -- a
perennial problem for Argentine governments -- has been
significantly improved, albeit aided by the use of
distortionary taxes like the financial transaction tax and
the export tax. Argentina's move to a market-based exchange
rate regime in 2002 has triggered an export-led boom during
Kirchner's presidency that has been the driving factor behind
robust growth, accompanied by significant declines in
unemployment and poverty levels.
¶4. (C) Kirchner has high public approval ratings and has
restored public optimism in Argentina. Kirchner's approval
ratings stand at 65-75 percentage points -- depending on the
poll and how the question is asked -- a historical high for
an Argentine president three years into his term. Polls by
leading Argentine pollsters show that Kirchner receives high
marks for his handling of the economy and for promoting
political stability. Argentines also have developed a
renewed sense of optimism under Kirchner's administration.
In recent polling by a leading opinion research firm, a
plurality of respondents -- 44 percent -- thought that
conditions in Argentina would improve over the coming year,
while only 12 percent thought things would get worse. In
March 2003, the month Kirchner was elected, polling by the
same firm showed that only 29 percent of the population
thought things would get better in the coming year, while 30
percent thought things would get worse.
-----------------
CHALLENGES REMAIN
-----------------
¶5. (C) Despite these major successes, Kirchner continues to

face considerable challenges in dealing with persistent
poverty and high crime. Poverty rates have been nearly
halved from almost 60 percent of the population at the height
of the economic crisis to 34 percent today. At the same
time, however, reducing poverty in this traditionally
affluent country continues to be a major social policy
imperative for the Kirchner administration. The continued
problem of inflation -- which stood at 12.3 percent in 2005
and is on track to maintain a double digit rate in 2006 -- is
also of a top GOA concern. The GOA has resorted to price
controls, bullying producers to lower prices, and even banned
the export of beef as a means to control inflation. (See
Septel on evaluating Kirchner's economic policy.) Crime
continues to be a major public focus according to opinion
surveys. Argentines accustomed to minimal crime rates,
particularly in the Greater Buenos Aires area, have since the
economic crisis faced a major problem with street crime, home
invasions, kidnappings and other types of violent crime. The
Capital has had several recent cases of shootings, robberies
and rapes that have garnered a lot of media attention, giving
the public the sensation of a surge in crime. Interior
Minister Anibal Fernandez recently stated that GOA statistics
in fact show that crime is down, but this assertion is
impossible to verify because the GOA has not published
national crime statistics since 2004.
¶6. (C) On the economic front, sustained growth requires

increasing infusions of foreign investment, dealing with the
energy shortage and controlling inflation. Private Direct
Foreign Investment has increased significantly since the
crisis, particularly in the tradable goods and services

industries. Nevertheless, other sectors (e.g. public
services) are badly in need of investment in order to sustain
continued growth. A strategic flaw in the economic equation
continues to be the energy sector. The Kirchner
administration has faced serious pressure from utility
companies and the G-7 to raise utility rates that have been
pesified and then frozen for residential users since the peso
devalued in 2002. So far, the GOA has been unwilling to
raise utility rates for residential users, but Kirchner
recently said he is open to discussions on the issue,
although he made no promises. Without a utility rate
BUENOS AIR 00001594 003 OF 005
increase, it is doubtful that Argentina will see major new

foreign investments in public utilities in the short-term.
Argentina's gas and electricity production has not kept up
with the rapid growth of demand due to the absence of market
incentives (price) to invest or expand production. (Comment:
Kirchner's unorthodox methods of controlling inflation,
frozen utility rates and hardball tactics with the private
sector may earn Kirchner short-term benefits, but they are
not long-term solutions to Argentina's economic problems
because they scare away foreign investment that Argentina
needs to sustain its economic growth. End Comment.)
--------------------------------------------- -------
KIRCHNER WEAK ON SUPPORT FOR INSTITUTIONAL DEMOCRACY
--------------------------------------------- -------
¶7. (C) Although Kirchner began his presidency by

strengthening the independence of the Supreme Court, his
record since then on institutional-democracy building has

been poor. Upon assuming office, Kirchner moved quickly to
clean up former President Carlos Menem's "automatic majority"
Supreme Court that was widely regarded as corrupt. Kirchner
and his supporters in Congress forced three Menem-era Supreme
Court justices to resign and impeached two others. Kirchner
then appointed four well-respected jurists to succeed them.
However, since that time Kirchner has failed to fill the
remaining vacancies on the high court -- a second vacancy
opened up after another justice retired -- reducing the
effectiveness of the court. (Note: Rulings still require the
support of five justices, which is more difficult to achieve
with only seven instead of nine on the bench. End Note.) A
proposal by legal experts to reduce the number of Supreme
Court justices from nine to five, as it was before Menem's
1990 controversial judicial reform, has not been pursued by
the Kirchner administration.
¶8. (C) Over the past year, Kirchner has instigated a number
of actions that have further debilitated Argentina's already
weak democratic institutions. Kirchner has issued hundreds
of presidential decrees during his presidency, preferring to
avoid discussion or delay in Congress, and signed more
decrees in his third year of his presidency than laws
approved by Congress. A new law sponsored by his wife,
Cristina Fernandez de Kirchner, nominally is designed to
regulate the presidential-decree-making process. The bill,
which will likely be signed into law shortly, would authorize
presidential decrees that are not voted down by both houses
of Congress. The proposed bill does not set a time limit on
when Congress is required to vote after a presidential decree
is issued and allows decrees to remain in force pending a
congressional vote. (Note: Senator Cristina Kirchner
proposed a bill in 2000 designed to regulate presidential
decrees when Fernando de la Rua of the Radical Civic Union

(UCR) was President. Unlike her current bill, the 2000
Cristina Kirchner bill required Congress to vote on
presidential decrees within 20 days of their issuance and
made the decrees invalid if just one house of Congress voted
against them. Senator Kirchner's bill was not approved in
2000, but UCR Senator Rodolfo Terragno reintroduced
Kirchner's exact bill in the Senate earlier this year, to
which Senator Kirchner responded with the current modified
version of the bill. End Note.) (Comment: Congress'
regulation of presidential decrees is a long-overdue action
that was supposed to be addressed shortly following the 1994
constitutional reform. The current bill will serve to
legitimate what has become an arbitrary use of presidential
powers. Kirchner is not the first president to abuse the use
of presidential decrees, but he has taken their use to new
levels. End Comment.)
¶9. (C) Kirchner and his supporters' manipulation of the

electoral system before and after the October 2005
legislative elections gained them more power in Congress, but
sometimes ran counter to voters' wishes and the spirit of the
Constitution and electoral law. In the October elections,
the ruling PJ party split in five of the eight provinces that
were electing national senators, allowing them to gain all
three Senate seats in the five provinces. (Note: By dividing
in several provinces, and in most cases reuniting after the
BUENOS AIR 00001594 004 OF 005
election, the PJ circumvented a constitutional provision

reserving a portion of the Senate seats to miniority parties.
Electoral law further stipulates that those parties that
cannot agree on a unified electoral list hold primary

elections to choose candidates, which the PJ did not do in
most provinces. See Reftel A. End Note.) Kirchner's allies
in Congress also prevented right-wing Paufe leader Luis Patti
from taking his seat in Congress due to as yet unproven
allegations of human rights abuses when Patti was a police
commissioner during the last military dictatorship. Patti
was prevented from taking his seat despite a ruling by the
National Electoral Committee prior to the election that there
was nothing preventing Patti from assuming office and despite
the nearly 400,000 people that voted for him in Buenos Aires
province (See Reftel B).
¶10. (C) Kirchner and his allies have used other questionable
tactics that contradicted voters' intentions and have
supporting provincial allies in overturning term limits.
Cabinet Chief Alberto Fernandez drew newly-elected
congressman for the opposition Republican Proposal (PRO)
Eduardo Lorenzo Borocoto over to Kirchner's bloc by offering
his son a lucrative government job. Several Kirchner
congressmen elected in October never assumed their seats,
such as Jorge Taiana, who became Foreign Minister, and La
Rioja Governor Angel Maza, who left his newly-won Senate seat
to his sister, Ada Maza. Tucuman Governor Jose Alperovich,
with Kirchner's blessing, recently changed his province's
constitution to allow himself to run for reelection.
Kirchner is supporting similar efforts by friendly Governors
in Jujuy and Misiones, and Buenos Aires Governor Felipe Sola
is in discussions with Kirchner to allow him to change the
Buenos Aires Constitution or ensure a favorable legal ruling
so he also can run for reelection next year.
¶11. (C) Kirchner has achieved an unprecedented

centralization of decision-making, but has weakened
Argentina's system of checks and balances in the process. In

February 2006, Kirchner and his allies in Congress succeeded
in modifying the Council of Magistrates that regulates the
Argentine judicial system, strengthening the Casa Rosada's
control over the judiciary (See Reftel C). Congress is also
likely to shortly approve granting Cabinet Chief Alberto
Fernandez permanent "super" budgetary powers that will enable
him to freely move funds from one area of the budget to
another without approval from Congress. The opposition in
Congress claim the proposed law will strip Congress of its
fundamental democratic role of controlling the budget and
that these powers are no longer necessary because the
economic crisis is over. The opposition further argues that
the measure is simply designed to allow the GOA to spend
money however it wants during an election year, pointing out
that Alberto Fernandez reassigned ARP 500 million to social
and public works projects just two weeks before the October
2005 legislative elections using these same powers. The
Kirchners have lashed out repeatedly at the press and the
opposition for their criticism of the Casa Rosada's recent
actions in Congress. The GOA claims these are necessary
powers to ensure the smooth functioning of the government.
Regardless of the opposition's objections, the Casa Rosada
appears to have the necessary votes to approve the measure by
early August. (Note: These "super" budgetary powers were
first granted by Congress to the GOA at the start of the
economic crisis in 2001 and were re-approved every year
through the 2005 budget. They were not included in the 2006
budget -- passed before the October elections gave Kirchner
control of Congress -- because of opposition resistance. The
current bill would make these special budgetary powers
permanent. End Note.)
¶12. (S) Kirchner campaigned in 2003 on a strong

anti-corruption message and his first Justice Minister,
Gustavo Beliz, came with impeccable credentials and
championed the cause of rooting out official corruption.
Unfortunately, the GOA has placed less emphasis on fighting
corruption since then. In fact, since Beliz was fired in
2004, Kirchner has avoiding speaking publicly about official
corruption and the much-vaunted new Office of Anti-Corruption
has failed to live up to its envisioned potential. There
BUENOS AIR 00001594 005 OF 005
also have been credible allegations that Planning Minister

Julio De Vido, a key Kirchner insider, has been involved in
questionable federal and provincial public works contracts
during Kirchner's presidency (See Reftel D).
--------------------------------------------
KIRCHNER FOREIGN POLICY SUFFERS FROM NEGLECT
--------------------------------------------
¶13. (C) President Kirchner's lack of attention and

understanding in the international relations arena has
resulted in an erratic GOA foreign policy. President
Kirchner is not skilled at international diplomacy and relies
on an ever-shrinking group of long-time advisors who lack
foreign policy expertise to make key decisions. Kirchner has
touted Mercosur as a regional alternative to the FTAA, but
his conflict with Uruguay over the construction of two paper
plants has caused a crisis within the trading bloc.
President Kirchner has recently sought closer relations with
Spain, even as he is putting more pressure on Spanish
companies with major investments in Argentina, such as Repsol
and Aerolineas Argentinas. Kirchner has repeatedly thanked
the U.S. for its support to Argentina during the crisis and
sought to strengthen the bilateral relationship after
short-circuits during the Summit of the Americas, but took
the opportunity during a recent press conference in Madrid to
criticize the U.S. and claim that the U.S. left Argentina to
face the crisis alone (See Reftel E).
¶14. (C) The Kirchner administration's most important foreign

policy theme is the promotion of regional integration, which
in practice has meant the strengthening of relations with
Venezuela and Brazil. Argentina's most important goal during
its recent presidency of Mercosur was the integration of
Venezuela into the trading bloc (See Reftel F). Kirchner's
top officials have repeatedly told Embassy officials that the
GOA's relationship with Venezuela is based on economics and
Mercosur. Kirchner sees Venezuela as a solution for
Argentina's energy and financing problems. Kirchner, who
normally places a low priority on foreign relations, in the
past 12 months has traveled twice to Caracas and hosted
Chavez three times in Argentina. Kirchner will host Chavez
again for the July 20-21 Mercosur Summit in Cordoba,
Argentina. Kirchner has also sought to strengthen relations
with Brazil, recently endorsing Brazilian President Lula's
reelection and signing an accord on automobile sales between
the two countries.
¶15. (C) To his credit, Kirchner has remained committed to
OAS efforts to return Haiti to stability and constitutional
democracy. Senior GOA officials assure us that Argentine
peacekeepers will remain on the island for the long-term.
-------
COMMENT
-------
¶16. (C) President Kirchner has numerous successes to show

after three years in office. The economy is booming and
Argentines feel a level of stability and dignity has been
restored to their country which was lost in the political,
economic and social disaster of 2001-2002. In Kirchner's
first years in office, Argentina needed a strong hand to lead
it out of the depths of crisis. History has shown that
long-term, broad-based economic growth needs to be
accompanied by a strong institutional framework. Now that
the crisis has past, the country needs a leader that is
willing to spend some of his built-up capital to strengthen
Argentina's weak democratic institutions. To date, it is
unclear whether Kirchner has the will or capacity to make
this transition. End Comment
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E.O. 12958: DECL: 02/27/2017

TAGS: PREL PGOV ECON VZ AR
SUBJECT: (C) U.S.- ARGENTINE RELATIONS: DR. JEKYL AND MR.
KIRCHNER

Classified By: Ambassador E. Anthony Wayne for reasons 1.4

(b)and(d)
¶1. (C) Summary and Comment: Argentina's President Nestor

Kirchner is trying to stake out a position for himself close
to Chavez yet still working well with the U.S. on issues

important to Argentina. With domestic political advantage
and 2007 elections in mind, we expect Kirchner to continue
the balancing act. Kirchner will lash out with largely
indirect criticism, he will cozy up to Chavez, and yet he
will maintain a number of open doors to us. Kirchner
recognizes the value of maintaining quiet, positive relations
with the U.S. -- particularly on key strategic issues, e.g.
non-proliferation and counterterrorism -- but sees no value
domestically in aligning himself publicly with the U.S. or
its policies. In fact, he gets a domestic boost from lashing
out at perceived pressure and in striking an independent
pose, a la Charles de Gaulle. Argentina's commercial and
economic relationship with Venezuela is also of strategic
importance (refs. a, b), the difference being that,
domestically, Kirchner does perceive value, in particular
electorally, in publicly linking himself to Chavez; he is
bringing home the bacon. The meetings between senior GoA
ministers and AG Gonzalez and U/S Burns and A/S Shannon were
uniformly positive, recognizing an important common agenda in
many areas (refs c-d and septels), and the press play from
the visits was positive and profuse. In light of this
dynamic, Kirchner's statements in Venezuela -- that Argentina
will "not contain Venezuela" and his invitation for Chavez to
visit in March are indicative of the GoA's desire to maintain
what they see as a "balance" in relations with the U.S. and
Venezuela. End Summary.
¶2. (C) Attorney General Gonzales' February 6-7 visit, and U/S
Nick Burns and A/S Shannon's February 8-9 visit to Buenos
Aires and meetings with senior Kirchner ministers served to
underscore improving bilateral relations, the breadth of that
relationship, as well as highlight U.S. policy priorities in
the region. Kirchner insiders, Cabinet Chief Alberto
Fernandez and Planning Minister Julio De Vido, confirmed to

Burns and Shannon the importance of the relationship to the
GoA, the strong working-level cooperation on
counterterrorism, counternarcotics, and international support
for non-proliferation. Together with Foreign Minister
Taiana, they shared concerns about the situation in Bolivia
and Ecuador, and the need for strengthening stability in the
region, including through joint efforts in Haiti. They also
emphasized the importance they place on attracting U.S.
investment (although a negative decision made public during
the visit regarding a U.S. investment fund seeking a share of
a local energy transmitting company, indicates that the
actual message to potential investors, at best, is mixed).
Cabinet Chief Fernandez publicly characterized relations as
"good" the day after Burns' visit.
¶3. (C) The Kirchner style from the beginning, however, has
been combative in the face of real, imagined and fabricated
challenges from sources as varied as the Catholic church,
neoliberalism and the "Washington consensus," the World Bank
and IMF, parasitic foreign multi-nationals, the press and
political opponents (whether from within or from outside the
Peronist party) and -- indirectly stated -- the the U.S.
This style has stood him in good stead. As the economy
boomed, buoyed by favorable external factors, his popularity
ratings have soared, and have remained high, due in no small
part to his pugnacious character.
¶4. (SBU) Kirchner demonstrated again over the last two weeks
his willingness to attack external institutions for domestic
political gain. He lashed out on several occasions at the
IFIs and other international organizations, rejecting their
latest gentle criticisms of GoA economic policies and blaming
them again for the 2001/2002 financial crisis and also for
current high poverty levels. His outburst followed mildly

critical comments from the World Bank and World Trade
Organization officials about the sustainability of the GoA's
economic policies. He was also responding to an IMF
spokesman's comment to the press that an IMF agreement was
normally a prerequisite for Paris Club debt rescheduling.
Despite the IMF's explanation that this was a Paris Club, not
IMF, requirement, Kirchner blamed the IMF -- his favorite
whipping boy -- for blocking a Paris Club deal. He and his
Economic Minister, Felisa Miceli, also used the opportunity
to pander to the public's extreme hostility towards the IMF
by rejecting categorically any possibility of a Fund program
with Argentina.
¶5. (C) This dynamic helps explain the two faces of Kirchner
we see in our bilateral relations. Kirchner is essentially
pragmatic but excessively focused on domestic issues and
public opinion. The low point in recent bilateral relations,
occasioned by the GoA performance at the Mar del Plata Summit
of the Americas in November 2005, perhaps convinced Kirchner
he had gone a bit too far down the populist route. Since
then, we have seen a gradual and steady improvement in
relations with an increasing willingness by senior-level
officials in engaging in dialogue with us and in identifying
areas where we can strengthen cooperation.
¶6. (C) However, we do not expect to see a public embrace of

the U.S. or many of our policies. The public image of the
U.S. in Argentina is the lowest in the region. Kirchner's
regular verbal assaults on policies and institutions linked
in the public mind to the U.S., e.g. globalization and the
international financial institutions, resonate very well here
as long as they don't foretell a serious break (see latest
INR U.S Image paper from the Oct-Nov 2006 Latinobarometro
poll comparing Argentina with 17 other regional publics).

Kirchner calculates -- with at least one eye always on the
next election -- that there is little up-side to being linked
too closely with the U.S., and little down-side to
occasionally "standing firm" and "protecting the people's
interests" before the hegemonic power.
¶7. (C) The press here eggs this on, couching many issues as
the ideological struggle between the U.S. and Venezuela for
predominance in the region. As a reflection of this, GoA
actions are either portrayed as pro-Chavez or as a
rapprochement with the U.S. Contacts inform us that Kirchner
also sees himself as maintaining this balance between the two
-- a la Charles de Gualle between the cold war powers U.S.
and USSR. The Embassy has seen on several occasions, when
the press appears to be too caught up in portraying the
improving U.S.- GoA relations, that Kirchner will find an
opportunity to publicly stick a pin in that balloon. In the
aftermath of the Gonzalez/Burns/Shannon visits, Kirchner,
while in Venezuela recently to sign a number of commercial
agreements, may have felt compelled to "right the balance"
and demonstrate his independence with his gratuitous remark
that Argentina would not "contain" Chavez (ref. A). The
media here has, in fact, tied Kirchner's comments in
Venezuela to Burns/Shannon remarks made here during their
recent visit that the U.S. could work well with governments
like Argentina and Brazil but that Venezuela was "another
matter."
¶8. (C) Comment: It is clear we have foreign policy

differences with the Kirchner administration, particularly
over how we view Chavez and his actions in Venezuela and the
region. Press reports here say Chavez will be paying a
return visit to Kirchner next week, coinciding with President
Bush's visit to Uruguay (septel - Senior GoA contacts tell us

the visit is still unconfirmed). Ambassador has expressed
our strong concerns that Chavez will use the occasion to
organize another anti-U.S. rally (as is being reported in the
press), and that such an act would negatively impact our
bilateral relations. This, unfortunately, would be the type
of gesture to be expected of Kirchner; one focused on
short-term electoral political gain, with little thought for
longer-term consequences. We should not expect significant
changes in the GOA's foreign policy or GOA public statements
in support of the U.S. Nor is Kirchner likely to change many
of his interventionist economic tendencies. All of this is
especially true in an election year. But on most of the key
bilateral and multilateral issues important to the U.S., in
fact, we believe we can continue to build strong cooperation
in a quiet, deliberate way.
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E.O. 12958: DECL: 09/21/2022

TAGS: PGOV PREL OVIP EFIN EINV EAIR AR
SUBJECT: CRISTINA IN HER WORDS: WILL ARGENTINA'S
PRESIDENTIAL FRONT-RUNNER BE A BETTER PARTNER FOR US?

Classified By: DCM Tom Kelly for reasons b, d.
¶1. (C) Summary. A well-briefed, confident Cristina

Fernandez de Kirchner (CFK) described her policy priorities
to the Ambassador on September 20, a few days before she
departs for a five-day program in New York. Although she
defended GOA positions on controversial economic issues, CFK
expressed a strong desire to promote foreign investment,
increase scientific and educational exchange with the United
States, and "tell it like it is" with American policymakers.
The discussion's conciliatory content and tone confirms our
expectation that CFK will prove a more reliable, trustworthy,
and accessible partner of the United States than her husband,
Nestor Kirchner. End Summary.
¶2. (C) CFK met with the Ambassador for 45 minutes at the
Presidential Residence in Los Olivos on September 20.
Argentina's first lady and presumptive next president was in
full command of her brief, speaking without notes on a broad
range of topics. At one point, noting that she and the
Ambassador were reviewing topics that would resurface
throughout her New York trip, she said (referring to her
travels and speeches), "This is good preparation, but hey,
I'm already prepared!" She was gracious and relaxed

throughout, not rushing through any part of the conversation
and listening as well as talking. The meeting was CFK's
second with the Ambassador; in contrast, President Kirchner
has never met privately with the Ambassador. She also went
out of her way to ask the Ambassador to "send greetings to
Shannon," whom she recalled meeting early on in Washington
just before the Assistant Secretary was confirmed by the
Senate.
Paris Club: Willing to Deal "Without Preconceptions"

------------------------------------
¶3. (C) After CFK previewed her schedule in New York (ref A),
the Ambassador noted the great international interest in her
policy views. He commented that CFK's interest in the world
and willingness to countenance policy changes, especially in
the economic realm, were well-received abroad, including in
the United States, as is her evident openness to dialogue.
The Ambassador also mentioned issues that may well draw
questions from journalists, businessmen, and others during
her program, including prospects for a deal with the Paris
Club, the investment climate, prospects for inflation, and
the GOA's relationship with Iran and Venezuela.
¶4. (C) CFK replied in great detail on economic themes, but

refrained from commenting on Iran and Venezuela. On the
Paris Club (PC), she stressed Argentina's desire to reach an
agreement, but reiterated the current government's insistence
that a deal not be conditioned on a GOA accord with the IMF.
She said that Argentina's attitude stemmed not from a
anti-IMF bias, but from a conviction that IMF policies as
currently constituted are anti-growth -- and therefore
unacceptable. That is why, in her view, the IMF had
experienced a "serious loss of prestige in Latin American

societies." "If we don't grow," she continued, "we can't
pay. You can't collect debts from the dead."
¶5. (C) CFK characterized debt agreements reached by previous

Argentine governments as illusory, made by desperate
governments that never intended to repay. The current
government, and the one that she hopes to lead, sought to
break what she called "a cycle of lies" and restructure
Argentine debt without inhibiting growth. Such a
negotiation, she said, would need to occur "without
preconceptions," and both sides should come to the table with
flexibility and an open mind. She claimed that, during his
campaign swing through Argentina (ref B), French candidate
for IMF Managing Director Strauss-Kahn had expressed sympathy
for Argentina's approach and criticism of the IMF's track
record in Argentina. She acknowledged, however, that "he's
running for office, so maybe he was just telling us what we
wanted to hear." The Ambassador said that the United States
stands ready to engage constructively to move to a Paris Club
solution.
¶6. (C) The Ambassador mentioned the issue of bond-holdots

as another potential topic that CFK will face in New York,
noting that the U.S. bondholders are carrying out a
well-organized effort to win support for their cause. CFK
indicated awareness of the lobbying resources holdouts bring
to bear and their negative attitude towards the current
BUENOS AIR 00001888 002 OF 003
government. She said that she had encountered their

publicity campaign during her recent trip to Germany, and
knew they were active in Japan, too. At the same time, she
offered little hope that the holdouts would get a deal
anytime soon, noting that a law circumscribes what the
government can offer them. She told the Ambassador that "I
know this isn't what you want to hear," but said that
previous Argentine leaders would tell foreign Ambassadors
what their interlocutors wanted to hear, not what they really
thought or intended to do. She and her husband were
different, she insisted; they told it straight. CFK said
that she understood that Americans valued straight talk, and
she hoped that this quality would earn her trust and respect
in the United States.
Foreign Investment: Bring It On

-------------------------------
¶7. (SBU) CFK said that the GOA's main motivation in striking
a deal with the Paris Club was to entice foreign export
credit agencies to go back on cover in Argentina,
facilitating her plans to bring more foreign investment here.
She noted that foreign investment in certain sectors was
already booming. Auto companies, including Mercedes-Benz,
Peugeot, Ford, and GM were pumping tens of millions of
dollars of new investment into their plants, with many adding
new assembly lines and exporting much of their output.
¶8. (U) CFK reserved her greatest enthusiasm for Argentina's

progress in attracting investment in the information
technology sector as a means to expand Argentina's global
economic role. She noted proudly that IT represented the
fastest growing sector in the economy during her husband's
presidency. She expected great things from the sector in the
future. "We have great soccer players in Argentina because
our kids play so much soccer," she said. "Now they spend all
their time on computers, so I know that there's an Argentine

Bill Gates out there. We just have to find him." The
Ambassador agreed that this was an area of great potential.
He noted the significant U.S. investment in this sector,
including the fact that IBM is the largest U.S. employer in
Argentina. He also made a pitch for quick approval of Turner
Broadcasting's purchase of Claxion, a local audiovisual
company, which will lead to Argentine creations being
distributed throughout Latin America.
Playing Defense: Energy, Inflation

----------------------------------
¶9. (SBU) Despite her expression of enthusiasm for foreign

investment, she was defensive about charges that the current
government is attacking foreign investors in the Argentine
energy sector (septel). She characterized Exxon's apparent
exit from the Argentine market as the result of a regional
draw-down in Latin America, and argued that "the energy
sector is a problem everywhere right now." She said that
private companies miscalculated domestic energy demand over
the past few years, failing to anticipate the government's
success in achieving extremely rapid rates of growth. Now,
there was little idle capacity in Argentina's energy sector.
The GOA, she insisted, was doing its part, presiding over the
construction of thousands of kilometers of new pipelines and
seeking new sources of supply.
¶10. (SBU) CFK was also defensive when she responded to

concerns that the GOA was manipulating economic statistics to
keep Argentine inflation numbers down. She said that there
were several biases in the way that the government's
statistical institute (INDEC) had previously collected price
data. She claimed that it did not account sufficiently for
seasonal variations in price data; collected food data in

posh food emporiums rather than in the modest groceries where
most Argentines shop; and focused on private school costs,
while the vast majority of Argentines sent their children to
public schools. She said that Argentina had revised its
inflation methodology six times since the 1930s. The
political opposition, she said, was behind the claims that
current methodological changes reflected a government plot to
understate inflation. She also blamed the opposition for the
growing warnings about electoral fraud in Argentina, which
she dismissed as "bizarre." CFK did acknowledge that the GOA
needs to settle with clarity the methodological issues as
well as to resolve the union problems troubling the
statistical institute.
Future Economic Goals

---------------------
¶11. (C) CFK returned to economic growth as the most
BUENOS AIR 00001888 003 OF 003

important objective of the government that she intends to
lead. She said that, if Argentina achieves positive growth
in 2007 and 2008, it will represent the first time in a
century that the country has grown for six straight years.
If its economy continues to grow at rates of five to six
percent for another decade, she continued, Argentina would
become "unbeatable."
¶12. (SBU) A key sector for the country's future, she said,
was tourism, an area in which her country had enormous
undeveloped potential. With the rise in ecotourism, the
wealthiest tourists were looking for unspoiled, safe venues,

which Argentina had in abundance. She noted that Argentina
experienced a travel boom after the Asian tsunami, as
tourists sought safer places in which to experience nature.
The Ambassador interjected that for the tourism sector to
achieve its potential, Argentina needed to address its
dysfunctional domestic aviation sector. She agreed,
identifying reform of domestic aviation as "one of our great
challenges." Without referring specifically to the
strike-prone national airline Aerolineas Argentinas, she
identified two specific problems in the sector: a need for
more resources and a conflictive labor environment in which a
handful of combative unions undermined all attempts to turn
the sector around.
Other Issues: Exchanges, TIP

----------------------------
¶13. (SBU) The Ambassador raised trafficking in persons (the

need to pass a federal law) and the importance of expanded
educational and cultural exchanges, especially among youth.
He asked for the Senator's support. CFK:
-- expressed strong interest in cultural and educational
exchanges with the United States, including an upcoming
Buenos Aires summit of hemispheric women leaders organized by
U.S. NGO Vital Voices;
-- told the Ambassador that Argentina "must not fail to take

advantage of your scientific resources; they're the best in
the world".
-- reassured the Ambassador that legislation to criminalize

trafficking in persons would pass the Argentine Congress
after the October elections "without any great difficulty."
Comment
-------
¶14. (C) The discussion's conciliatory content and tone

confirmed what we have observed in CFK's speeches and
gestures with increasing frequency: Argentina's presidential
front-runner seeks a rapprochement with the United States.
CFK seems to understand that a pragmatic, enmity-free
relationship with Washington will buy Argentina leeway on a
number of critical financial and geopolitical issues. At the
same time, this forward-leaning attitude is unlikely to
presage the next government's repudiation of the current
regime's nationalist, populist policies. CFK's defense of
GOA positions on the IMF, the investment climate, the energy
sector, and inflation numbers during this private discussion
suggests an unwillingness to break with the heterodox
policies of her husband. But even if the charm offensive is
calculated rather than heart-felt, there is no mistaking the
opportunities that await the USG beyond the Argentine
presidential election. CFK's conversation with the
Ambassador confirms our expectation that she will prove a
more reliable, trustworthy, and accessible partner of the
United States. That does not, however, take away from the
challenges we will face in forging solutions to such issues
as the Paris Club or bondholders' outstanding debt.
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E.O. 12958: DECL: 12/14/2017

TAGS: PREL SNAR CJAN ECON ASEC KJUS VE AR
SUBJECT: ARGENTINE FUROR CONTINUES OVER U.S. ALLEGATIONS
THAT VENEZUELAN MONEY WAS INTENDED FOR CRISTINA KIRCHNER
REF: (A) BUENOS AIRES 2336 (B) MCWHIRTER 12/14/07
E-MAIL TO DS COMMAND CENTER
Classified By: Ambassador Wayne for reasons 1.4 (b) & (d).
Summary
-------
¶1. (C) The GOA has repeatedly suspended Ministerial-level

contacts and has cut off some law enforcement contacts with
the USG in wake of the continuing furor (ref a) over DOJ
allegations that $800,000 intercepted August 4 by Argentine

officials was a BRV cash contribution for Cristina Kirchner's
(CFK) presidential campaign. The press reports that the GOA
is considering further responses, including the staging of a
massive protest in front of the Embassy which could involve
radical and sometimes violent groups. The Argentine Deputy
Foreign Minister advised the Ambassador that he would be
called in to the MFA on December 18. The Ambassador used a
previously scheduled holiday reception for more than 100
journalists to roll out Washington-cleared guidance
reinforcing the message that the recent arrests in Miami do
not constitute a U.S. conspiracy against the GOA and that the
United States wants a good relationship with Argentina. End
Summary.
GOA Ire Against USG Dominates Headlines

---------------------------------------
¶2. (SBU) Argentine media on December 14 continued to give

extensive coverage to the GOA's furious reaction (ref a) to
FBI allegations that $800,000 intercepted August 4 by
Argentine officials was a BRV cash contribution for Cristina
Kirchner's (CFK) presidential campaign. According to several
sources, CFK was very angry and upset, interpreting U.S.
arrests and charges as rejection of her overtures for better
relations, an attempt to destabilize
her new administration, and an effort to force her to
distance Argentina from Venezuela. Following the lead of
President Kirchner, her chief of staff and Justice Minister
-- whose remarks (ref a) were broadcast and re-broadcast
throughout the day and night -- a broad array of CFK's
congressional, gubernatorial, and mayoral allies have accused
the USG of slandering CFK and the GOA in premeditated fashion
in its effort to get Chavez.
¶3. (SBU) Opposition leader and presidential candidate Elisa

Carrio, who finished the October 28 polling in second place,
ridiculed the GOA's attempt to portray the arrests as part of
an anti-CFK conspiracy. "President Kirchner does not seem to
understand that the justice system in the U.S. is autonomous.
Thank God, (CFK) cannot stop the U.S. justice system. I am
happy that the Americans are investigating, because they're
the best guarantee (of an
impartial inestigation). Not even the U.S. president can
intervene." Leaders of other opposition parties questioned
CFK's ties to Caracas and criticized the GOA for having let
Antonini-Wilson leave the country before completing its own
investigation.
GOA Gives the USG the Silent Treatment

--------------------------------------
¶4. (SBU) The press is further reporting that cabinet

ministers have been instructed not to meet with the
Ambassador, and that all U.S. requests for high-level
meetings with GOA officials must be coordinated through the
MFA. We are also hearing from our law enforcement contacts
that they are being instructed by the GOA leadership to
minimize contacts with us. Several bilateral meetings were
cancelled under instruction on December 13. The Airport
Security Police told Embassy they had been instructed not to
meet with U.S. officials. On the afternoon of December 14,
the GOA ended more than 24 hours of shunning contacts with
the Embassy when Deputy Foreign Minister Garcia Moritan
called the Ambassador. He advised the Ambassador that he
should come to the MFA to meet Foreign Minister Taiana on the
evening of December 18. We anticipate this will entail a
protest and an explanation of the steps the GOA plans to
undertake.
GOA-Organized Anti-USG Protest in the Offing?

---------------------------------------------
¶5. (SBU) "La Nacion," the newspaper of record, and other

media have reported that CFK and her top advisers repeatedly
huddled Wednesday night and Thursday morning on how to deal
with "the worst moment of the bilateral relationship with the
United States" in the last four and a half years. According
to "La Nacion," "the Casa Rosada (presidential palace)
Thursday considered ordering mayors, social organizations,
and activists ("piqueteros") to organize a mass demonstration
of protest in front of the U.S. embassy." The article quotes
an unnamed official at Casa Rosada who said, "We have not
ruled it out. There is a great deal of anger with the United
States, but it has not yet been decided." (Mission ARSO sent
a report on this development and Mission counter-measures to
DS Command Center -- ref b.)
¶6. (SBU) The press reported remarks by WHA A/S Shannon that
the case was a law enforcement matter, not a political issue,
and that it should not be allowed to affect bilateral
relations. The press also quoted Department spokesman
McCormack on the strength of the bilateral relationship and
the independence of federal prosecutors, as well as similar
statements by the Embassy's spokesperson.
The Empire Strikes Back: Mission PD Response

---------------------------------------------
¶7. (U) The Ambassador used a previously scheduled holiday

reception for more than 100 print, radio, and TV journalists
December 14 to roll out Washington-cleared guidance on the

case. Several of the radio journalists used their cell
phones to transmit the Ambassador's words on the air through
their stations, and many rushed out after the Ambassador
concluded to call in stories. Several stories reporting on
the Ambassador's reception remarks have already hit the
wires. We expect that the Ambassador's remarks will dominate
Argentine headlines Saturday.
¶8. (U) We also gave the journalists recent quotes by

Assistant Secretary Shannon, Secretary Chao, Dana Perino, and
the Ambassador on the U.S.-Argentine relationship. We are
posting the Ambassador's remarks on the Mission's web page.
Comment
-------
¶9. (C) What began as a black day for the U.S. image in
Argentina -- with headlines filled with attacks by CFK and
others about our supposedly dark intentions -- is ending on a
more hopeful note, as the quick work by State, Justice, and
the FBI to review and clear our draft guidance on the issue
enabled us to get our story out to a captive group of
Argentine journalists. As the first week of the CFK
administration draws to a close, we have given pragmatists
within the GOA material to work with in their effort to
convince CFK to climb back from the precipice and re-engage
with the USG as she begins the second week of her
presidential term. We will see their reaction and response
in the days ahead.
WAYNE
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DOD FOR DASD STEPHEN JOHNSON
SOUTHCOM FOR ADM STAVRIDIS
FBI FOR TOM FUENTES
E.O. 12958: DECL: 02/22/2028

TAGS: PREL CJAN KJUS EFIN SNAR MASS VZ AR
SUBJECT: ARGENTINA: GETTING PAST SQUARE ONE WITH THE
FERNANDEZ DE KIRCHNER GOVERNMENT

¶F. BUENOS AIRES 225
Classified By: DCM Tom Kelly for reasons b, d.
¶1. (C) Summary: With a seven-week period of bilateral

estrangement in our rear-view window, we have an opportunity
-- again -- to build a more constructive relationship with
Argentina. The warming trend in the bilateral relationship
continues. President Cristina Fernandez de Kirchner and her
government rolled out the red carpet for CODEL Engel and
PDDNI Kerr, and the circle of GOA luminaries making positive
statements about the United States is growing. Capitalizing
on this opportunity, however, will be no easy task.
Confidence must be rebuilt on our side and in Buenos Aires.
The GOA must demonstrate its commitment to a constructive
relationship, including through visits to the United States.
But concerted effort is also needed from our side, including
visits to Argentina by senior USG officials. The presence of
authoritative USG officials here, and the attendant positive
media coverage it creates, feed the Argentine need for
attention, directly attacking one of the main causes of
anti-Americanism here -- the perception that the USG does not
care enough about Argentina. The hard work will be worth the
effort if we can make a dent in anti-U.S. sentiment and
influence Argentina to stay out of the Bolivarian camp.
Making Argentina a more cooperative interlocutor and
receptive audience for U.S. ideas is achievable. End Summary.
An Austral Warming Trend

------------------------
¶2. (C) Three weeks have passed since the GOA signaled an end
to its bilateral squabble with the USG via a highly
publicized meeting on January 31 betweQPresident Cristina
Fernandez de Kirchner (CFK) and Ambassador Wayne. (The U.S.
Ambassador is the only Chief of Mission who has been received
privately by CFK; she has now received him three times since
her inauguration.) The change in how the United States is
treated and portrayed by Argentine authorities is striking.
As we had agreed beforehand, CFK insiders followed the
January 31 session with positive and conciliatory statements
from Cabinet Chief Alberto Fernandez, Foreign Minister Jorge
Taiana, and others. From January 31 on, the Argentines have
given prominent positive public play to each event involving
a USG visitor, including the two (CODEL Engel and PDDNI) that
occurred in the last week.
¶3. (C) The chorus of anti-U.S. recriminations has fallen

silent. In their place, we are hearing positive
pronouncements about our country. On February 20, for
example, after a meeting between the Ambassador and Minister
of Defense Garre, a hold-over from the first Kirchner
administration who had previously resisted close cooperation
with the USG, the Defense Ministry issued an upbeat
communique on its website noting that "the Argentine side
expressed gratitude for American assistance." The statement
then proceeded to detail several areas of successful
bilateral cooperation that helped to train and transform
Argentina's military.
¶4. (C) In the wake of the meeting three weeks ago with CFK,
the Ambassador has had friendly and productive meetings with
Cabinet heavyweights such as Cabinet Chief Fernandez, MOD
Garre, Foreign Minister Taiana, Economy Minister Lousteau,
and Justice Minister Anibal Fernandez (reftels A-E).
¶5. (C) More importantly, CFK herself has demonstrated her

continuing personal interest in ties with the USG by hosting
two meetings in her presidential office at the Casa Rosada
with U.S. visitors in rapid succession: a positive,
well-covered session with CODEL Engel on February 21, and
PDDNI Kerr, who had a productive meeting with her on February
¶25. Privately, Rep. Engel described the CODEL's 90-minute
meeting with CFK as "a home-run." The meeting was covered

intensively by the media, which characterized the event as a
"Gesture of Detente" and "Improvement in Bilateral Relations"
in leading daily headlines. PDDNI Kerr's meeting was equally
positive. CFK warmly thanked him for his "important" visit,
and repeated several times her commitment to the struggle
against terrorism (saying, for example, that her government
was "strongly committed to fight terrorism at home and
internationally" and that her commitment to counter-terrorism
was "absolute").
Argentina Is In Play
--------------------
¶6. (C) The about-face is striking, because it comes on the

heels of a coordinated GOA effort, with the Kirchners and
other GOA all-stars front and center, to impugn the motives
of the United States in the Miami prosecution of Venezuelan
agents connected to the matter of Guido Alejandro
Antonini-Wilson's cash-filled suitcase. But the rhetorical
course-correction is not surprising. CFK spent much of the
latter half of 2007 telegraphing her intention to pursue
closer relations with the United States, holding three
meetings with Ambassador Wayne and spending a week in New
York City wooing investors and the media, as well as meeting

A/S Shannon. Just days before her inauguration, in a meeting
with the Ambassador, CFK expressed her admiration for the
United States and her desire to improve the bilateral
relationship. Her Cabinet Chief Fernandez and new Ambassador
to the United States Timerman argue forcefully that she wants
to change past GOA practices and maintain good relations with
the USG.
¶7. (C) Clearly, there is still hard work to be done to build

mutual confidence and establish a basis for sustained "good"
relations. To maintain and reinforce the recent positive
momentum, we need more engagement, not less -- by both sides.
The GOA certainly needs to demonstrate its commitment to
this effort. But it is important to remember that we also
have much to gain if things go well.
¶8. (C) The foreign policy orientation of the fledgling CFK

government is very much in play. Moreover, in our view, the
prevailing winds in the region favor our efforts to help
Argentina evolve into a constructive partner. Hugo Chavez
(whom CFK will visit in early March to ink an oil-for-food
deal -- septel) is being portrayed in the local media as
increasingly on the defensive, and Fidel Castro's withdrawal
from the Cuban political scene is being covered here as the
end of a radical era. In contrast, neo-left politicians like
Lula (who just visited Buenos Aires to sign a number of
bilateral agreements) and Chile's Michelle Bachelet are
well-regarded here as pragmatic leaders who are making
progress on social justice while maintaining good relations
with Washington. We read the tea leaves to indicate that CFK
much prefers to follow Lula's path than Chavez's, and wants
to diversify Argentina's good relations in the world.
¶9. (C) At the same time, there are countervailing forces that
could push the new president in another direction.
Influential figures within her government, such as Planning
Minister Julio de Vido, espouse a close embrace of Chavez's
Bolivarian project. Although de Vido's primary motive for
tilting towards Chavez may be pecuniary, a Bolivarian
approach to foreign policy would sit well with CFK's poor and
working class political constituency, and probably appeal at
a certain level to the Peronist/populist instincts of CFK and
her husband. Nestor Kirchner himself was never as
comfortable with the United States as his wife has proven to
be. For example, he never received this Ambassador or
publicized contacts with us, whereas CFK has met the
Ambassador six times and played each meeting positively and
prominently in the media. While Nestor Kirchner is still a
powerful decision-maker, he is by most reports ceding foreign
policy to CFK.
¶10. (C) In our view, the government's left-leaning,

nationalistic heritage does not necessarily lead to chronic
confrontation with the United States. CFK seems more

interested in governance and the longevity of her family's
political prospects than in gratuitous Yankee-bashing.
Without U.S. engagement, however, our opportunity to develop
a more constructive relationship with Argentina could be
squandered. We need to stay on the field to win the game.
Why Visits Help Educate and Show Interest

-----------------------------------------
¶11. (C) Engagement means, among other things, senior-level

visits in both directions. This is true for symbolic and
practical reasons. Like other geographically isolated
countries, Argentines keep track of who visits them and who

doesn't. The GOA's infatuation with the travel plans of
Assistant Secretary Shannon reflects a deep-seated,
society-wide insecurity about Argentina's relative importance
in the world. Argentines obsess over the perceived
indifference of other countries to their interests and
concerns, especially that of the United States. Visits to
the region by senior USG officials that seem to hopscotch
over Argentina are always noted in the press and the
corridors of power.
¶12. (C) CFK clearly shares this fixation. She told the
Ambassador late last year that she faults the USG for not
paying sufficient attention to Latin America (read:
Argentina) over the past few years, and repeated that
analysis to CODEL Engel on February 21 (ref F). This is not
new, or confined to CFK and her constituency. It is a widely
shared perception in Argentina that the United States has
only rarely sustained positive interest in the Southern Cone.
(At a recent lunch with prominent local analysts,
businesspersons, and media figures for PDDNI Kerr, this was a
recurrent theme -- and none of them were government
supporters.) High-level visits can be used to demonstrate
our good intentions and sincere desires for stronger
relations. For example, Secretary Chao's December visit to
CFK's inauguration helped us to rebut accusations of a U.S.
conspiracy against the GOA during the furor over the Miami
court case.
¶13. (C) Just as importantly, visits help GOA officials to

learn. CFK and her husband know little about the way that
our society and political system function. This holds true
for most of their closest advisors and the Argentine
political establishment writ large as well. The recent
bilateral crisis, for example, reminded us how few of them

(including those in the "pro-U.S." camp) really understand
the extent of our justice system's independence. To our
great advantage, Argentina is now headed by a President who
wants to learn more about our country -- evinced, for
instance, by the manner in which she pumps visitors for
information about the U.S. presidential race. (Though she
initially favored another woman candidate, it was clear by
February 21 that she had absorbed much about all three
leading candidates, and in both of her meetings with USG
visitors in recent days she made positive comments about all
three and about the vitality of our electoral process.)
Alberto Fernandez told the Ambassador that he recently
recommended that CFK accept Gordon Brown's invitation to
travel to London for a gathering of international political
party leaders precisely because it would be an excellent
opportunity for her to learn more about the global scene
through direct contact with other world leaders.
The Most Promising Areas of Focus

---------------------------------
¶14. (C) On the practical level, despite this Mission's
renewed access to every level of the Argentine government,
there are a number of concrete policy areas in which
Washington-based agencies and their leaders need to engage,
including via the personal contact that visits make possible:
-- (C) Finance: Achievement of a closer economic

relationship, which CFK has told us she wants, will not
happen without a Paris Club deal to normalize the GOA's debt

to official creditors. That in turn will require Treasury's
engagement with CFK's capable young Economy Minister Martin

Lousteau. A Paris Club deal would be a critical first step
towards an economically resurgent Argentina's broader
reinsertion into global capital markets. This, in turn, will
lessen Argentina's reliance on Venezuela to help place new
Argentine debt, a reliance that comes with Bolivarian
political and ideological strings attached. It could also
help Lousteau, who is engaged in an internal tug-of-war with
less market-friendly forces on many issues critical to the
500 U.S. companies doing business here, establish his primacy
within the GOA on economic policy.
-- (C) Defense Cooperation: The Ministry of Defense is more

friendly to us now than it has been at any time since MOD
Garre took office two years ago. The Army chief, who
previously kept his distance from the United States, has
reached out to us for contact. Argentina's Navy and Air
Force are eager to work with us. To capitalize on this
attitudinal shift, we need high-profile U.S. military leaders
like Southcom Commander Stavridis (scheduled to visit in May)
to come to Argentina. His visit could help us bring the
military relationship to another level, advancing the ball on
issues like Argentine participation in exercises, exchanges,
and regional security cooperation. Such a visit could also
keep U.S. military suppliers in the race for important
contracts like 3-D radars. MOD U/S Forti told the Ambassador
last week that he hopes to get MOD Garre to the United States
in the months ahead.
-- (C) Law Enforcement and Intelligence: Cooperation in this

area was a bright spot in the bilateral relationship, even
during the most difficult periods of the first Kirchner
administration. The worrying freeze in cooperation that took
place during the period of estrangement is over, and our
cooperation is returning to normal. We need senior-level

visits, such as the planned trip by Deputy FBI Director
Pistole in May, to advance U.S. interests in intensified
counter-terrorism work, and to resume our valuable
partnership with the GOA to bring the Iranian-sponsored
perpetrators of the 1994 AMIA bombing to justice. We also
need to get leading GOA law enforcement officials to the
United States for bilateral consultations.
-- (S) Intelligence: Argentine intelligence officials highly

value their relationship with U.S. counterparts, as PDDNI
Kerr's visit amply demonstrated. During a dinner with the
PDDNI February 23, the GOA's Deputy Director of Intelligence
recounted with pride that his service has shared high-value
information with us and worked closely with us in support of
U.S. goals. The PDDNI's visit reinforced our superb working
relationship with Argentina's service (the National
Intelligence Service -- SIDE), and we need to keep developing
it through continued cooperation.
-- (SBU) Science and Technology: CFK has repeatedly cited

this as an area where she hopes to expand contact and
cooperation with the United States.
¶15. (C) Visits by high-level U.S. and GOA officials to each

other's country on these and other areas will advance our
long-term interest in a friendly relationship with a
populous, fast-growing country with considerable talent and
resources. As importantly, such travel advances key U.S.
interests in specific policy areas -- normalization of
financial relationships between developing economies and
creditors, amicable military-to-military ties, and
cooperation on regional counter-terrorism issues -- that
matter to our country's security interests.
¶16. (C) Finally, travel by prominent USG and GOA officials to

each other's countries directly addresses one of the main
causes of anti-Americanism here -- the perception that the
USG does not care enough about Argentina. The positive media
coverage created by such visits makes Argentines at all
levels of society feel relevant in the world and taken into
considerations by our powerful country. This cannot help but
chip away at this society's collective animus towards out

nation, which stems to a large extent from its collective
insecurity about itself.
Let's Make It Work

------------------
¶17. (C) Events over the past two years remind us that
relations with the GOA are not easy. Nonetheless, we have a
real opportunity to reach a more positive equilibrium in the
bilateral relationship. In his January 31 meeting with CFK,
the Ambassador deployed Department-cleared talking points
that featured the proposal that both sides would demonstrate
interest in the relationship by engaging each other,
including via visits in each direction. As reported in ref
A, CFK agreed, and expressed interest in a steady stream of
high-level visits. We therefore have a deal in place with
the GOA on travel in both directions. The Argentines need to
hold up their end of the bargain. Cabinet Chief Fernandez
told the Ambassador February 21 that he had identified March
8-12 for travel to the United States. Foreign Minister
Taiana, MOD Garre, and Economy Minister Lousteau also intend
to travel to the United States soon. We should remain
committed to our part in this effort, especially after
several weeks of positive interaction with the GOA.
KELLY
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E.O. 12958: DECL: 07/15/2029

TAGS: PGOV PREL ECON AR
SUBJECT: NOW WHAT? THE KIRCHNERS' OPTIONS IN POST-ELECTION
ARGENTINA
Classified By: Charge d' Affaires Tom Kelly for reasons 1.4 (B) and (D)
.
¶1. (C) Summary/Introduction. More than two weeks have

passed since Argentina's ruling first couple lost badly in
mid-term congressional elections. It has taken President
Cristina Fernandez de Kirchner (CFK) and her husband Nestor
time to process the meaning of the debacle and respond.
Though the GOA has taken some significant steps over the past
two weeks, including a Cabinet shuffle, the signals that the
Kirchners and their associates have sent have been decidedly

mixed. It may be another month before their new strategy is
fully discernible.
¶2. (S/NF) In the past two weeks, Mission personnel have

talked to dozens of political analysts, economists,
businesspersons, and politicians about the Kirchners' likely
course. Most analyses posit three possible scenarios:
radicalization, reform, or the status quo. While there are
serious, smart people who believe that the government will
lurch simply left or right over the coming months, we, and
most of our contacts, believe that the government will behave
in the future much as it has in the past. We think a tepid
move toward reform is more likely than radicalization because
the country's ascendant forces support the former, not the
latter. At the same time, we doubt that Kirchner-led reform
will be ambitious. The best that can be expected from this
weakened government is a "reform-lite" agenda that seeks to
recapture political space without significant policy
concessions. This cable examines the three scenarios in
depth; identifies evidence in support of each one, as well as
indicators to watch for that might clarify the Kirchners'
future intentions; and evaluates the scenarios' likelihood.
A separate message will critically examine another possible
political outcome - that CFK will fail to reach the end of
her term. End Summary/Introduction.
---------------------------
The Radicalization Scenario
---------------------------
¶3. (C) In the first (and least likely) scenario, the

Kirchners react by turning hard left, attempting to reverse
their fortunes through a radicalization of their regime that
would propel them unambiguously into the Bolivarian camp led

by Hugo Chavez. This approach is referred to locally as
"deepening the model." Key elements of this approach would
include:
-- Economy: Further nationalization of private companies

and/or intensified attempts to manage their behavior; a
partial default on sovereign debt instruments; and a
confirmation of Internal Commerce Secretary Guillermo Moreno
as the executor of NK's dirigiste economic policy; increased
influence by labor unions.
-- Governance: Abandonment of the Peronist party in favor of

"transversality," in which the Kirchners consort with any and
all who offer their fealty; use of the government budget and
other means to punish Peronist governors and other
politicians deemed disloyal; pursuit of restrictive media
legislation; increased resort to executive decrees.
-- Foreign Policy: Closer identification with Hugo Chavez

and his Bolivarian allies; increasing criticism of USG
policies.
-------------------------------
Evidence of a Shift to the Left
-------------------------------
¶4. (C) There is a significant group of observers (including

political analyst Rosendo Fraga and Deutsche Bank Managing
Director Marcelo Blanco) who subscribe to this school of
thought. They do not lack evidence. Erstwhile Kirchner
allies in the private sector, including Bank Association
chief Jorge Brito and Argentine Industrialist Association
head Hector Mendez, tell us that they are disgruntled with
the Kirchners and lack influence on them. Their loss seems

to be union boss Hugo Moyano's gain. He flexed his muscles
last week, compelling the GOA to withdraw a subcabinet
nomination in the Health Ministry that threatened his unions'
financial interests and installing the son of his attorney as
head of Aerolineas Argentinas (septel).
¶5. (C) On the political front, Nestor Kirchner resigned his

position as head of the Peronist Party the day after the June
28 election. Since then, rumors have proliferated of a new
"transversal" approach that elevates Kirchner loyalists and
hard-line ideologues like "piquetero" street activists and
BUENOS AIR 00000827 002 OF 005
the "Carta Abierta" intellectual group. Kirchner showed up

last week at an open-air meeting of "Carta Abierta," his
first public appearance since his June 29 resignation as
Peronist-in-chief. Last week's cabinet shuffle only
strengthened the hands of the loyalists, with no new blood
and the replacement of the reform-oriented Sergio Massa with
Kirchnerista Anibal Fernandez as Cabinet Chief.
¶6. (C) Some of the GOA's post-election foreign policy moves

can also be read to support the radicalization thesis. The
most obvious was CFK's spur-of-the-moment trip to Central
America (via the OAS in Washington) in a hastily conceived
effort to restore Manual Zelaya to power in Honduras. Only
Ecuador's Rafael Correa and Paraguay's Fernando Lugo
accompanied CFK and OAS Secretary General Insulza on the
ill-fated Mission. Wittingly or not, she seemed to side with
hasty Bolivarian efforts to force the issue in Honduras
rather than to wait for mediation to take its course. A more
careful leader, Uruguay's Tabare Vazquez, let it be known

that he declined CFK's invitation to join her aboard Tango
One.
¶7. (C) There was one other foreign policy-related event that
may suggest a leftward turn. Kirchner congressional ally
Patricia Vaca Narvaja recently wrote a letter to U.S. Speaker
of the House Nancy Pelosi asking for the USG to declassify
all information at its disposal regarding the Argentine
military dictatorship. The Kirchner government has often
seemed obsessed with refighting the "Dirty War" of the 1970s
and early 80s, and the request could be construed as a
prelude to another rhetorical offensive against the USG for
its "support" of military regimes in the region.
(Alternatively, it could be a routine request consistent with
the government's longstanding interest in settling Dirty
War-related human rights cases.)
--------------------------------
The Verdict: "Red Dawn" Unlikely
--------------------------------
¶8. (C) Despite all of the above, we view the radicalization
scenario as the least likely of the three paths that the
government will take, with a probability of less than five
percent. Even if the Kirchners prefer this approach in their
heart of hearts, circumstances in the wake of the election
give them virtually no margin to implement it. Immediately
after the election, many of the most powerful forces within
the governing coalition began clamoring for more moderate
policies, a more inclusive approach to governance, and
(especially) a larger share of government finances. These
Peronist governors and mayors fared far better than Nestor
did, and they are in no mood to take orders from the
Kirchners. As a source close to Buenos Aires Governor Daniel

Scioli told the CDA, "There are no captive politicians after
these elections." The private sector is similarly
emboldened. As Industrialist Association (UIA) chief Hector
Mendez told us that "deepening the model won't happen. We
just won't allow it." Finally, the anti-Kirchner opposition
is clearly ascendant. These groups will fight GOA efforts to
march Argentina further to the left. Given the current
political climate, they should have the votes to hold the
Kirchners at bay even before the new Congress is seated in
December.
¶9. (C) Nor do we believe that Argentina's foreign policy is

becoming more Bolivarian. The GOA has become much less eager
to criticize the USG directly since Barack Obama became
President. CFK wears her affection for our
Commander-in-Chief on her sleeve. In addition, as mentioned
in the next section (para 16), there is new evidence of
concrete GOA efforts to support U.S. foreign policy
objectives in multilateral fora, at least behind the scenes.
¶10. (C) There is another external factor that makes
Argentina's embrace of Bolivarian politics unlikely -- the
growing influence of Brazil here. The local IDB rep,
Brazilian Daniel Oliveira, told econoff recently that
"Argentina has become as important to Brazil as Mexico is to
the United States." With a US$31 billion trade relationship
and more than US$10 billion in Brazilian investment flowing
into the Argentina economy since 1997, Brazil is strongly
engaged here, and is not shy about defending its interests.
The local press has reported that Lula worked the phones in
July 2008 to prevent the Kirchners from abandoning power in
the wake of their failed attempt to push a tax increase on
agricultural exports through Congress. Lula and his
associates will remain an important moderating influence on

the Kirchners.
¶11. (S/NF) Although we think this scenario's likelihood is
BUENOS AIR 00000827 003 OF 005
limited, it bears mention that it is also the most likely to

lead to political crisis, confrontation, escalating violence,
and CFK's failure to reach the end of her term. We explore
how such a downward spiral might play out, and the likelihood
of this calamitous scenario, in a separate report.
-------------------------------------------
Scenario Two: The Kirchners Embrace Reform
-------------------------------------------
¶12. (C) Some observers expect (and many more hope) that the
Kirchners will reinvent themselves, pursuing a reform-minded
agenda that mollifies Peronist governors, defangs the
opposition, and wins over new foreign friends. A larger
group believes that a rebellious Peronist establishment will
put them on that course, whether they like it or not. Key
policy features of such an approach would include:
-- Economy: Interventionist-in-Chief Guillermo Moreno is

dismissed, clearing the way for a normalization of the state
statistical institute INDEC (and thus a return to
methodological integrity in the national accounts); GOA makes
deals with the Paris Club and private bondholders left out of
the 2005 debt swap deal and normalizes its relationship with
the IMF, starting with an Article IV Consultation; progress
on outstanding ICSID judgments against Argentina.
-- Governance: CFK rules more inclusively, coordinating

policies with governors and looking for common ground with
the opposition in the current and next Congress. Government
rolls back agricultural export taxes as a down-payment on its
new conciliatory approach. NK reduces his public profile.
-- Foreign Policy: Concrete steps benefiting the United

States and non-Bolivarian governments in the hemisphere,
coupled with distancing from Chavez and his allies.
¶13. (C) Proponents of this scenario's likelihood have plenty

of recent evidence to back them up. There is clearly ferment
in the government's approach to economic policy, with a new
Economy Minister on board, powerful (and heretofore
pro-Venezuelan) Planning Minister Julio De Vido now reputed
to be an advocate of pragmatic moderation, and prestigious,
market-oriented advisors (specifically, former Central Banker
and IMF official Mario Blejer) said to be poised to join the
government. The government sacked its statist, corrupt
Transportation Secretary Ricardo Jaime days after the
election, and rumors abound that Moreno, the icon of "market
repression" economics, has become such a political liability
that his days in the government are numbered. Well-placed
sources within the government confirm that change is in the
air. Top Kirchner aide Carlos Zannini indicated that the GOA
would focus almost exclusively on changes on the economic
policy front this month, and influential Buenos Aires
Province Vice-Governor Alberto Balestrini told the CDA last
week that the GOA would roll back agricultural export taxes
on wheat and corn soon.
¶14. (C) Nor is there any doubt that the political center of
gravity has shifted dramatically in Argentina since the
election. Most of the country's 16 Peronist governors have

reportedly expressed their desire for market-oriented
changes, at least privately. Some former allies, like
ambitious Chubut Governor Mario Das Neves, have broken ranks
with the Kirchners and openly criticize them. Even loyalist
governors like Chaco's Jorge Capitanich have publicly called
for straightening out INDEC and other changes. Faced with
this onslaught from ostensible allies, CFK announced on July
9 (as she has before) that she would convoke the country's
main political and private sector leaders to a process of
dialogue. The following week, she modified the proposed
process to accommodate opposition demands.
¶15. (C) The GOA's political position is further weakened by

the prospect that it will suffer defections from its ranks in
the current Congress. Of course, the next Congress that
takes office December 10 will be more independent, with the
government losing majorities in both chambers. This will
make it easier for reform-minded groups to push the Kirchners
into accepting elements of their agendas. As Balestrini told
us, the GOA will need to renegotiate and compromise in order
to rule.
¶16. (C) The GOA has taken a few subtle foreign policy moves
that could be construed as harbingers of a closer
relationship with the United States. After he received a
call on the issue from Secretary Clinton, FM Jorge Taiana
convinced CFK to change the voting instructions of the
Argentine delegation to the International Atomic Energy
Agency, which enabled U.S.-supported candidate Yukiya Amano
BUENOS AIR 00000827 004 OF 005
to win election after a month-long impasse. In a more

prosaic but perhaps symbolically important development, the
CDA received a warm note from CFK expressing regret for her
failure to attend the Mission's Independence Day celebration
and offering best wishes. We had never before received such
a note from either Kirchner.
-------------------------------------
The Verdict: Don't Bet On A New Leaf
-------------------------------------
¶17. (C) While the reform scenario has gained credence over
the past week, driven primarily by economic policy news and
rumors, we remain skeptical that Nestor and Cristina will
turn into a latter-day incarnation of Ozzie and Harriet,
dispensing moderation and good sense wherever they turn.
Neither Kirchner seems inclined to admit error, even tacitly,
by shifting course so abruptly. A senior official at the
Central Bank told us that Nestor will resist reformist
policies because they would be interpreted as a sign of his
weakness and even irrelevance. If changes come, he argues,
they will come at a time of his choosing. A reformist path
may also strike the Kirchners as politically risky,
distancing them from their most fervent supporters in the
working class, poor "villas," and intelligentsia in deference
to sectors that are at best disloyal and at worst openly
hostile to them.
¶18. (C) The "forced reform" variant of this scenario seems

somewhat more likely, but not by much. For it to work, one
of two things must happen. Either the Peronist governors
will need to set aside their rivalries and effectively
advocate for a more robust approach to reform than seems
likely, or the bickering, often inept opposition will need to
get its act together and engage the Kirchners as a united

front. Much depends, for example, on whether dissident
Peronists coalesce behind Senator Carlos Reutemann, who has
emerged as a frontrunner for the Peronist presidential
nomination in 2011, and whether Vice President Julio Cobos
can gain some traction in pulling together support from the
Radicals, Civic Coalition, and Socialists. If either of
these two groups works cooperatively over the coming two
months, it is possible that positive changes can come to
Argentina before CFK leaves office in 2011. We don't think
that will happen, however, and estimate the two reform
scenarios' combined probability at no more than twenty
percent.
---------------------------------
Scenario Three: Muddling Through
---------------------------------
¶19. (C) In the third scenario, the Kirchners do not

definitively opt for reform or radicalization. Maintaining
the short-term focus that has characterized their six years
in power, they muddle through as best they can, trying to
salvage their political futures or at least to reach the end
of CFK's term in 2011. There may be some positive changes in
this scenario -- one analyst dubs it "reform-lite" -- but the
electoral setback does not ultimately result in a dramatic
course correction. In the words of economist Nicolas
Dujovne, the Kirchners will pursue a strategy of "minimum
reforms, but without collapse." Under this scenario, the
following might happen:
-- Economy: Lots of policy zigzagging without a clear

direction; Moreno stays, or leaves and is replaced with
another hard-liner; new, "reform-minded" Economy Minister
Boudou changes little, like the Cabinet's previous reformist

also-rans Martin Lousteau and Sergio Massa.
-- Governance: Cooption of some Peronist governors and

mayors, punishment of others considered to be disloyal.
Stalemate on legislation in Congress. Top-down dialogue
process initiated without intention to compromise.
-- Foreign Policy: Some private gestures to the USG, but

little movement towards resolution of long-term sources of
friction; no palpable distancing from Chavez's camp or
modification of the GOA's "independent" foreign policy.
--------------------------------------------- ---------
For Evidence That Nothing Has Changed, Buy a Newspaper
--------------------------------------------- ---------
¶20. (C) This status-quo scenario is the clear frontrunner

among our contacts. There is fresh evidence to support it in
every day's harvest of newspapers. The two dominant news
stories since the election, CFK's botched trip to Honduras
and the GOA's response to the H1N1 epidemic here, both
BUENOS AIR 00000827 005 OF 005
suggest that the government's improvisational style and

closed decision-making process remain intact. This in turn
will mean that GOA policies are more likely to develop in
response to the first couple's whims than to a coherent
design. It also means that the government bureaucracy is
unlikely to save the Kirchners from the consequences of their
impulses. For example, CFK went ahead with her ill-advised
trip to Washington and Central America earlier this month
against the advice of her Foreign Ministry. She ended up

achieving no more than Nestor did in December 2007 when he
participated in the Chavez-organized "bungle in the jungle"
in Colombia, in which Nestor and others sat helplessly in the
jungle for days in the futile hope that the FARC would
deliver hostages to them.
¶21. (C) The opacity of decision-making at the GOA's apex

means that the government will continue to meander hither and
yon, regardless of whether or not it has definitively chosen
a particular direction. The GOA's performance in dealing
with H1N1 flu is a case in point. Although many public
health officials in the GOA are working around the clock to
contain the challenging problem, the government's lack of
internal communication made it look hapless. For example,
upon alighting on Argentine territory after her Central
American jaunt, CFK denounced "fear-mongering" media reports
of 100,000 flu cases in Argentina -- information that had
come from her own health ministry. (The 100,000 number
referred to all flu cases, not just H1N1 flu.) The poor
coordination continues. Over the past weekend, the Mission
found itself in the middle of an unsightly (non-public)
dispute between the federal Ministry of Health and its
counterpart in the Province of Buenos Aires (governed by
Kirchner ally Daniel Scioli) over the destination of
CDC-donated Tamiflu doses, with each accusing the other of
bad faith and subterfuge.
--------------------------------------------- ------
The Verdict: More of the Same, But Good Can Happen
--------------------------------------------- ------
¶22. (C) Like most of our contacts, we think that this untidy
scenario is the most likely outcome. We don't expect the
Kirchners to change, but given the magnitude of their defeat

in the mid-terms, we don't expect the Peronist establishment
or the opposition to back down, either. The Kirchners may
even be able to prevail if their rivals and opponents fail to
unite. Prolonged stalemate on most of the "big" policy
issues seems the most likely outcome of a collision between a
closed, reform-adverse, and politically weakened regime and
disparate political groups that believe that they have a
mandate for reform.
¶23. (C) This does not mean, however, that no positive change
in this scenario is possible. The Kirchners could take steps
for ulterior motives that turn out to have beneficial
consequences. This has already happened in the post mid-term
era, when Transportation Secretary Ricardo Jaime departed
office soon after the election. One of our contacts
characterized the Kirchners' willingness to cut the
notoriously corrupt official loose as the beginning of a
purge designed to distance them from the shadiest elements of
their regime in an effort to reduce the likelihood that they
themselves could end up in prison. Whatever the reason,
Jaime's removal could lead to policy improvements in the
transportation sector.
¶24. (C) Nor does it mean that the USG should ignore the
Kirchner regime or give up on it as hopeless. CFK may not
have a grand scheme in mind for her remaining two years in
power, but she clearly would like to associate herself with
President Obama's star power. The intensity of this desire
opens all kinds of opportunities for us, as it did in
Argentina's decisive IAEA vote. As the Kirchners struggle
for political relevance or at least survival, they will be
looking for success stories -- and we should be on guard for
opportunities to induce them to do the right thing. Even if
the Kirchner government is unlikely to resolve every single

outstanding bilateral issue to our satisfaction, we think
that cultivation of the GOA -- CFK in particular -- can lead
to beneficial outcomes for U.S. interests bilaterally,
regionally, and multilaterally.
KELLY
VZCZCXRO3809
PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG
RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHBU #0853/01 2031647
ZNY SSSSS ZZH
P 221647Z JUL 09
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUEAIIA/CIA WASHINGTON DC
SIPDIS
E.O. 12958: DECL: 07/22/2039

TAGS: PGOV ECON AR
SUBJECT: (S/NF) ARGENTINA: WILL CRISTINA FINISH HER TERM?
REF: BUENOS AIRES 0827
Classified By: CDA Tom Kelly for reasons b, d.
¶1. (S/NF) Summary/Introduction. The devastating setback

dealt by Argentine voters to the government in the June 28
mid-term elections has restored to respectability last year's
fashionable political forecast -- that Cristina Fernandez de
Kirchner (CFK) will not reach the end of her term as
President in 2011. Like last year, some of this conjecture
is little more than wishful thinking by the government's
opponents, but not all of it. The ruling couple's political
weakness, erratic behavior, looming economic challenges, and
Argentina's history of truncated presidential terms lead some
serious observers to worry about the government's staying
power. A larger group of observers, this Mission included,
believe that CFK will probably make it to the end of her
term, if only by muddling through (reftel). In this report,
we evaluate the main arguments behind the proposition that
the Fernandez de Kirchner government will fall and explain
why we and others think that, at present, that scenario
remains unlikely. End Summary/Introduction.
Kirchner Vulnerability: A New Phenomenon

-----------------------------------------
¶2. (C) The Kirchners' political weakness is still a
relatively new phenomenon, dating back to their mishandling
of last year's farm protests. In the run-up to the October
2007 presidential elections, public approval ratings for
outgoing President Nestor Kirchner (NK) went as high as 77%,
as Argentines credited him for the country's remarkable
economic recovery after its 2001-02 economic meltdown.
Buoyed by her husband's popularity, Cristina Fernandez de
Kirchner (CFK) easily won the presidency in the first round
of the 2007 election. With 45% of the vote, she outdistanced
her nearest opponent by more than twenty percentage points
and doubled the vote received in 2003 by NK, who was then the
little-known governor of remote Santa Cruz. The ruling
couple's considerable political capital dissipated last year

as a consequence of their confrontation with the farm sector.
CFK and NK's plummeting poll numbers, their sudden inability
to stay ahead of the curve, and their abandonment by many of
their allies set the stage for a humiliating Senate defeat of
government legislation that would have ratified the export
tax increase at the heart of the controversy one year ago.
¶3. (S/NF) This political rout led to speculation in 2008

that CFK might fail to reach the end of her term -- which
would make her the first elected Peronist president since the
restoration of democracy in 1983 to meet that ignominious
fate. We even spotted the graffitied question "Se Kae?"
(roughly translated, "Kollapsing?") on a few Buenos Aires
walls last year. Much of the speculation was fed by the
government's most bitter opponents. Diego Guelar, a foreign
policy advisor to Buenos Aires Mayor Mauricio Macri, told a
visiting congressional staffer last August that "this
government won't last 60 days" -- just minutes after his boss
had said that it would. But there was concern within
government circles. A former aide to Buenos Aires Province
Governor Daniel Scioli confided to us recently that he and
other colleagues had urged Scioli to break ranks with the
Kirchners last year over the farm controversy. Scioli said
he wouldn't because "If I do, they'll fall, and I'm no coup
monger." During the farm crisis, the MFA even took the
unusual step of registering its concern with the Embassy.
Foreign Minister Taiana's Chief of Staff Alberto D'Alotto
(protect) told a Mission contact in May 2008 that the MFA was
"very concerned" about the government's staying power.
The Prophets of Doom

--------------------
¶4. (S/NF) In the end, the Kirchner government survived the

farm crisis and made it into 2009. With its defeat in the
June 28 mid-term election, the speculation has returned,
though it has not reached last year's fever pitch. (A large
majority of analysts do not/not feel that it is the most
likely scenario.) Those who predict an early exit for the
Kirchners tend to stress to varying degrees the following
factors that, in their view, make a Kirchner collapse more
likely:
-- Political: The Kirchners' opponents smell blood after the

June 28 election and are waiting for the right moment to
remove them, abetted by a public that abhors weak leaders;
-- Psychological: The Kirchner psychodrama is contributing to

a series of bad decisions that will lead to the first
couple's political demise; and
BUENOS AIR 00000853 002 OF 005

-- Economic: The ruling couple's post-election turn to the
left dooms them to botch an increasingly difficult economic
situation, sweeping CFK from office.
Se Kae: Political Arguments and Scenarios

-----------------------------------------
¶5. (C) There are some influential political analysts

(Rosendo Fraga, and with less certainty, Manuel Mora y
Araujo) who believe that this country's political volatility
will cause CFK's fall from power. Mora y Araujo argues that
Argentine society abhors weak political leadership. If
Argentines sense that their ruler is enfeebled, he argues,

they tend to collectively say "that's enough." The
consequent withdrawal of support makes the damaged ruler
vulnerable to overthrow by the scheming political class. The
governor of Tierra del Fuego told the CDA that Argentines
were "absolutists" in how they viewed politicians as either
winners or losers, with no gray areas in between.
¶6. (C) Echoing a commonly heard refrain, pollster Doris

Capurro adds that the Argentine press, particularly the
dominant Clarin media group, often serves as "Coup Central."
Clarin, she said, fomented Fernando de la Rua's departure
from power in 2001, and its owners are fierce critics of the
Kirchners. For their part, most politicians have focused on
jockeying for future position, but a few important ones
sometimes seem to be circling prey. Civic Coalition leader
Elisa Carrio said soon after the GOA's mid-term loss that "if
Cristina doesn't react within a week, she's going to have
problems governing." Along the same lines, Radical leader
Gerardo Morales said a few days ago that "if the (current)
dialogue falls apart, the Government will have so little
margin for error that anything could happen." Over the
weekend, dissident labor leader Luis Barrionuevo said plainly
that "I see Julio Cobos finishing Cristina's term."
¶7. (SBU) Fraga argues that the history of Argentina's

post-dictatorship democracy does not bode well for the
Kirchners. Over that 25-year period, three elected
governments lost mid-terms. The two that were led by
Radicals (Alfonsin in 1987 and de la Rua in 2001) did not
survive; the one headed by a Peronist (Menem in 1997) made it
to the term's end. But Fraga thinks that the Kirchners
should take little comfort from Menem's survival. Unlike the
Kirchners, Menem never lost control of the Congress nor his
hold over the Peronist party. Economist Carlos Melconian

adds that in 1997 "the economy was doing fine, and economic
policy remained on autopilot until the presidential elections
two years later."
¶8. (C) Fraga thinks that the Kirchners will fail to change
course, leading to the gradual deterioration of their already
dire political situation. He pointed out that with Manuel
Zelaya's overthrow in Honduras, CFK (with approval ratings
around 28%) is now the elected Latin American president with
the lowest popularity rating in her country. According to
Fraga, the December 10 seating of the victors of the June 28
election will create a Congress with the power to remove CFK
from office. (Note: Impeachment and removal from
presidential office would actually require two-thirds support
in each chamber of Congress, which the opposition -- even
after December 10 -- will not have.) Fraga believes that
Peronists and forces close to Vice President Julio Cobos will
conspire to remove CFK from office to replace her with Cobos.
Fraga describes the scenario as perfect for Peronists -- it
removes the Kirchners from the scene, follows the
Constitutional line of succession, and saddles Radical Cobos
with the burden of taking the tough political decisions
needed to govern Argentina in an economic downturn. For the
non-Peronist opposition, the scenario seems less attractive
-- a senior Radical politician has described it to us as a
trap -- but Fraga maintains that the ambitious Vice President
has already decided to accept power in such a circumstance.
¶9. (C) As for the Kirchners, Fraga claims that they

(especially Nestor) may see this scenario as their best
long-term bet if their political situation deteriorates
further. They would portray CFK's forced removal from
office, in this view, as an illegitimate usurpation of the
democratic order, enabling them to escape to a sympathetic

foreign country as democratic martyrs. They would then hope
that the situation under Cobos would degenerate into
political and economic chaos, helping to set the stage for
their eventual political comeback. For Fraga, this strategy
explains CFK's deep interest in the coup against Manuel
Zelaya, which took place on the same weekend as her electoral
setback. It also, he says, means that she will not resign,
regardless of how bad the political situation.
BUENOS AIR 00000853 003 OF 005
Psychodrama: Behavioral Arguments

----------------------------------
¶10. (S/NF) Other observers stress psychological factors in

their prediction of an impending democratic crisis. This
school of thought has two variants: that strongman NK is too
set in his uncompromising ways to adapt, or that he (or he
and CFK) are becoming increasingly erratic and incapable of
governing. As a well-connected banker told us, the Kirchners
could recover by altering course and embracing a more
moderate and consensus-driven course, but NK in particular is
incapable of change. Instead, in this view, he will embark
on a disastrous jeremiad against internal "traitors" whom he
blames for the electoral defeat, leading the government off a
cliff. In support of this view, Fraga argues that Nestor's
personality "cannot change," but that Argentine public
opinion has. It no longer wants an obdurate fighter as it
did when NK took office in 2003; these days, Argentines want
consensual leadership that the Kirchners cannot and will not
provide.
¶11. (S/NF) According to the second variant, Nestor has

indeed changed. In fact, he's gone crazy. Jorge Brito, once
known as "Nestor's banker," seems to believe this theory,
confiding to the CDA that NK appears increasingly obsessive
and disinclined to listen to advice. "He used to listen to
me," Brito recalled, "but now he doesn't bother." Another
banker told us that "Nestor has basically had a nervous
breakdown."
Economic Arguments: Surf's Up

-----------------------------
¶12. (SBU) Some economists and financial market participants

stress that economic factors are most likely to lead to the
Kirchners' downfall. In the words of economist Carlos
Melconian (a Macri ally), "whenever Argentine governments
that came out weakened from mid-term elections faced a
deteriorating economic situation, the result was an economic
policy that aimed at 'surfing' the economic waves. However,
the surfing strategy may have to be aborted halfway: the
economy may collapse before the date of the presidential
elections, as was the case in the Alfonsin-Menem transition
between 1987 and 1989." In other words, unless CFK's
government raises its economic policy game, it may face the
same bleak fate as the Alfonsin and de la Rua governments.
¶13. (C/NF) But the prospects for more sensible economic

policies seem slim, prompting some to suggest that the GOA
will be overwhelmed by the economy's many problems. The
GOA's economic policy team is an object of derision among
serious economists here. Miguel Broda complains that
"there's not a single serious macroeconomist on the whole
Economy Ministry staff." Banker Brito described the GOA to
us as "made up of people who can't even add or subtract." He

was particularly scathing about Guillermo Moreno, the
Internal Commerce Secretary who serves as NK's
Interventionist in Chief, whom he called a "psychopath" who
"thinks he's a genius" but "is as dumb as the rest of them."
Mario Blejer, a former Central Bank chief and IMF Officer who
reportedly turned down an offer to take over the Economy
Ministry a few weeks ago, told the CDA that the problem is
Nestor's control over GOA economic policy. According to
Blejer, "Nestor knows nothing about economics, and to make
matters worse, he thinks he does, so he doesn't listen to
advice." This leads to an economic policy framework
described by another former Central Bank president as
"autistic."
¶14. (C/NF) These economy-focused pessimists disagree on what

the precipitating cause of a government collapse might be.
The financial community's leading bear, Deutsche Bank
Argentina's president Marcelo Blanco, focuses on the
possibility of another sovereign default, noting that the GOA
faces several challenging payments in the near-term future,
starting with more than US$ two billion in "Boden 2012"
payments that come due in August. (According to Blejer,
another US$10.5 billion in debt payments awaits the GOA in
2010.) Blanco told econoff that he thought there was a "high
probability" that the economy will spin out of control
post-election and the Kirchners will ultimately be unable to
govern.
¶15. (C/NF) Political analyst Jorge Castro stresses the

government's fiscal situation as the Kirchners' Achilles
heel. The GOA, he argues, is ungovernable without a fiscal
surplus. If the central government's fiscal accounts fall
into deficit, he said, the government could collapse. The
Kirchners, in particular, have relied on their discretionary
BUENOS AIR 00000853 004 OF 005
control of federal revenue sharing to keep governors and

mayors in line. If the GOA starts suffering cash flow
problems, it could encounter political turbulence and have to
contend with rebellious governors. Brito worries that
radicalization of the regime's economic agenda could be the
straw that breaks the camel's back. If NK pursues more
radical economic measures, such as pursuing new
nationalizations, he told us, the GOA's core of support would
shrink from 30 to 15% percent of the population, setting the
stage for its abrupt demise. Another economist, Orlando
Ferreres, suggests that in such a scenario the Peronists
would be the ones who depose CFK, reasoning that "no one is
more conservative than a frightened Peronist."
Why We Think CFK Will Make It to 2011

-------------------------------------
¶16. (C/NF) This recompilation of many arguments making the

rounds about the durability of CFK's regime is not intended
to create the impression that the government is doomed. At
the Mission, we believe that CFK will remain president until
December 2011, and that remains the opinion of most of our
interlocutors here -- a motley crew that includes
anti-Kirchneristas like Eduardo Duhalde and Mauricio Macri,
press moguls like Clarin managing director Jose Aranda, and
former Kirchner Cabinet chief Alberto Fernandez. We recently
wrote a cable (reftel) on the reasons why we thought that a
muddling-through scenario was most likely. Rather than
recapitulating all of those arguments here, we outline the
main political and economic factors supporting the contention

that CFK will remain president until 2011.
¶17. (C/NF) Our best-connected contacts in the political

establishment tell us that the focus is on the 2011
presidential election, not coup plotting. A key Macri aide
tells us that the main contenders for the 2011 election --
his boss, Carlos Reutemann, and Hermes Binner, to name a few
-- have predicated their planning on CFK making it to the end
of her term. None find taking the reins at a time of
economic crisis particularly appealing, and CFK's premature
departure could undermine their respective strategies for
making it to the Casa Rosada in 2011, when the economy should
be stronger. The preferences of these frontrunners are
critical, because in the wake of the June 28 elections, they
influence other political actors.
¶18. (C/NF) To further complicate the lives of would-be coup

plotters, CFK is a Peronist. The fractious Peronist
establishment, though undoubtedly disgruntled with the
Kirchners, is unlikely to end CFK's term if those efforts
could redound to the benefit of non-Peronist politicians.
Political analyst Mora y Araujo notes that, since 1983,
Peronist presidents have proven far harder to dislodge from
office before the end of their term than non-Peronists. We
would also point out that the Kirchners' forte is tactical --
they are generally more nimble and adroit than their rivals
and opponents. That said, NK is also a high-stakes gambler,
often betting heavily on the element of surprise in dealing
with his adversaries. Given his penchant for
unpredictability, he could easily over-play his hand one of
these days, and one of his "surprise" moves may backfire on
him.
¶19. (C/NF) The fear factor also plays in CFK's favor.

Opposition politicians from both the right (Mauricio Macri)
and center-left (Radical leader Oscar Aguad) tell us that
Argentines remember the chaos that followed Fernando de la
Rua's departure from office in December 2001, and are not
anxious to repeat the experience. Macri told a visiting U.S.
Senate staffer last year that Argentines would be "happy" for
the Kirchners to fall ("if this glass of water was the
Kirchners, everyone would fight to push it over") except for
one thing -- they fear that the government's collapse would
risk a return to bedlam. Argentines also seem impassive or
unmoved by outrageous cases of corruption or other
developments that elsewhere would have caused major scandals
("valijagate" comes to mind), making us wonder what it would
take to get people into the streets.
Most Think that the Economy Won't Push CFK from Office
--------------------------------------------- ---------
¶20. (C) Most of Argentina's best economists think that the

economic situation will not force the Kirchners from office.
Many post contacts believe that the peso exchange rate is a
barometer for popular confidence in the government. The fact
that the GOA has been able to manage a deliberate, controlled
devaluation of the peso for over eight months without a major
run on the dollar, even after the June 28 electoral setback,
argues for a stable outlook. The notion that the economy
BUENOS AIR 00000853 005 OF 005
will bring the Kirchners down ultimately rests on the premise

that the government will lack the funds to meet its internal
and external obligations. For over two years we have been
hearing dire forecasts of an impending, overwhelming fiscal

crunch just around the corner. However, two of our best
contacts -- Javier Alvaredo, General Manager of BICE Bank,
and Juan Carlos Barboza, the Central Bank's foreign exchange
chief -- tell us with some confidence that the GOA will be
able to meet its obligations. On the external debt payments
front, both of them said independently that the GOA will have
enough funds to meet debt payments in 2009 and 2010. They
argue that 2010 will be easier than 2009 because no GDP
warrant payment will come due (there is a big one in December
2009). The market, as measured by country risk ratings and
bond indices, does not seem spooked.
¶21. (SBU) Our contacts also tell us that the GOA is unlikely
to run out of money before CFK's term ends. A contact in the
Economy Ministry's Finance Secretariat insists that the GOA
will meet its 2009 financing needs from public sector
resources (e.g., the recent nationalization of private
pension funds, which gives the GOA a huge pile of money to
work with); inflows from International Financial Institutions
like the World Bank and IDB; and liability management
(buybacks, exchanges, etc.).
¶22. (SBU) There is also room for adjustment on the

expenditure side. Economist Daniel Marx notes that the
government's decision to move the mid-term election to June
28 means that its pre-electoral spending spree was relatively
brief this year, which will make it easier for the new
Economy Minister Amado Boudou to reduce outlays for the
balance of this year and next. Marx thinks that social
spending and subsidies will plummet now that the election is
over, easing fiscal pressure on the government (though he
admits that other pressures, such as transfer payments to the
provinces demanded by increasingly assertive and desperate
governors, will increase).
¶23. (C/NF) Ultimately, popular support for, or tolerance of,

the Kirchners rides on Argentines' relative sense of
well-being. Barring another bout of hyper-inflation or
government confiscation of savings or sudden uptick in
unemployment, many Argentines are disinclined to rock the
boat for now. Argentina is no stranger to nationwide general
strikes that have paralyzed the country; it is a huge boon
for the Kirchners that, for now, the bulk of organized labor
(historically co-dependent on the Peronists) remains in their
pockets.
¶24. (C/NF) Finally, time is probably on the Kirchners' side.

Though the economy is currently in bad shape, Argentina's
impressive human capital and natural resources will drive an
eventual rebound. Argentina's debt levels are manageable,
its return on capital high, and it enjoys several strong
sectors (agriculture, mining, high tech) as well as a
relatively competitive industrial sector and decent market
size. This means that if the Kirchners make it to the middle
of next year, with the external environment improving and
some attractive presidential candidates in the mix for the
2011 race, the proximity of the post-Kirchner era may by
itself reverse capital inflows and jump-start a robust
recovery -- which paradoxically could significantly reduce
the chances that CFK will be removed from office prematurely.
A Word on the Psychological Theory

----------------------------------
¶25. (C/NF) As for the argument that the ruling couple's

precarious psyches will lead to their fall from power,
suffice it to say that this argument is highly speculative

and anecdotal. Few people maintain that the president and
her husband, both well into their fifties, have changed much
over the past two years. As Fraga notes, it is Argentina
that has changed, not them. That seems like a good (partial)
explanation for why the Kirchners fared poorly and misplayed
their hand in the mid-terms, but it does not necessarily mean
that it will prevent CFK from reaching the end of her term.
After all, the Kirchners have been abrasive, impervious to
outside advice, and even paranoid through more than six years
of presidential power, and they're still in the Casa Rosada.
As long as the political establishment remains focused on the
next presidential race and the economy doesn't suffer a
meltdown, we expect that's where the Kirchners will stay
until December 2011.
KELLY
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DE RUEHBU #1017/01 2531523

ZNY SSSSS ZZH (CCY ADAEBDBB MSI7235-695)
P 101523Z SEP 09
INFO RUCNMER/MERCOSUR COLLECTIVE PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
NOFORN
SIPDIS
C O R R E C T E D COPY CAPTION
E.O. 12958: DECL: 09/10/2039

TAGS: PGOV PREL SNAR KCOR ECON AR
SUBJECT: ARGENTINA: CFK'S NEW CABINET CHIEF
REF: A. TDX-315/090481-08 AND TDX-315/042493-09

¶B. TD-314/65216-07
¶C. TD-314/67647-07
¶F. BUENOS AIRES 0980 AND PREVIOUS
¶G. TD-314/046516-08
¶H. 08 BUENOS AIRES 1550 AND PREVIOUS
¶I. 08 BUENOS AIRES 1478
¶J. 08 BUENOS AIRES 0322
¶K. TD-314/08212-07
¶L. TD-314/043023-09
¶M. TD-314/054350-09
Classified By: CDA Thomas P. Kelly for reasons 1.4 (B) and (D).
¶1. (S) Summary: Argentine President Cristina Fernandez de
Kirchner's (CFK) promotion of former Justice Minister Anibal
Fernandez (AF) to Cabinet Chief puts in place someone with
six years of experience working for the First Couple, first
as former president Nestor Kirchner's Interior Minister and
then as CFK's Justice Minister. By dint of his office's
physical proximity to the President's as well as his
portfolio's constitutional responsibilities, AF is in a
position to wield significant power and influence, and is
already playing a key role in shaping Casa Rosada politics,
policy, and message.
¶2. (S) AF has been the most accessible member of CFK's

Cabinet for the Embassy, but, unlike his two immediate
predecessors, he has also not been shy about vociferously

attacking the USG (or any other target) in order to defend
the Kirchners. Like many Argentine politicians, he is dogged
by corruption rumors, including ties to narcotrafficking,
according to unsubstantiated press and intelligence reports
(ref A). Additionally, he is suspected of directing
intelligence teams to clandestinely monitor the emails of the
administration's political opponents, according to separate
intelligence reports (refs B and C), and he has been linked
to reported CFK administration efforts to secure additional
votes illegally in Buenos Aires and Cordoba provinces ahead
of the June midterms. Despite the varied and persistent
accusations of corruption lodged against him, however, there
is no hard evidence. End Summary.
CFK Rewards Fernandez' Loyalty with Cabinet Chief Post

--------------------------------------------- -----
¶3. (C) Former Minister of Justice, Human Rights and Security

Anibal Fernandez (AF) became CFK's third Chief of Cabinet
since she assumed office in December 2007. A longtime
Peronist and a close ally of former President Nestor Kirchner
(NK), AF has worked over six years for the presidential
couple, since the first day of NK's term. He has been one of
the administration's most outspoken public defenders, first
while serving as NK's Interior Minister and later as CFK's
Justice Minister. Many viewed AF's promotion to Cabinet
Chief as a reward for securing in his hometown of Quilmes one
of the few significant Kirchner victories in the June 28
mid-term elections (ref E).
Origins of the Cabinet Chief Post

---------------------------------
¶4. (C) As Cabinet Chief, AF has considerable power and

influence. The authors of the 1994 constitutional reforms
intended the position to be a check on presidential power as
a watered-down prime minister, although in practice the
Cabinet Chief has become a presidential chief of staff,
spokesman, and all-purpose firefighter. The Cabinet Chief is
technically responsible for the collection of national taxes;
submitting the executive's budget request to Congress;
co-signing executive decrees; appointing administration
employees not designated by the President; and overseeing the
Cabinet's ministers. Additionally, the President's Cabinet
Chief is expected to report at least monthly to Congress,
alternating between the Lower House and the Senate. (Note:
The last two cabinet chiefs, Alberto Fernandez and Sergio
Massa, appeared before Congress less than once a year; Anibal
Fernandez will make his first such appearance this week.)
Under the Ks, Cabinet Chief Influence Grew

------------------------------------------
¶5. (C) Under the Kirchner administration, the cabinet chief
position has grown in influence beyond its
constitutionally-proscribed powers. Since 2002, the
Argentine Congress has annually authorized economic
"superpowers" for the executive branch. Originally enacted
to address the 2001 financial crisis, these controversial
superpowers enable the Cabinet Chief to redistribute federal
funds coming from export taxes and tax collections above and
beyond budget estimates, at the President's discretion.
¶6. (C) The Cabinet Chief's influence ultimately depends on

his relationship with the First Couple. AF's immediate
predecessor, the media-friendly Sergio Massa, reportedly had
differences with NK over style and substance. Their tense
relationship soured even further with NK's poor showing in

Massa's hometown in the June 28 midterm elections (ref E).
Alberto Fernandez (not related to AF), who served as CFK's
and NK's first Cabinet Chief, was one of the few capable of
moderating the temperamental First Couple. But even he was
unable to walk the Kirchners back from their
take-no-prisoners approach to an extended conflict with the
farm sector, and he resigned in July 2008 out of frustration
(ref F). Amid a cabinet that does not speak much to the
media, Anibal Fernandez has long been one of the most visible
spokesmen for the Kirchners, and his influence over policy
and political decisions will likely grow in his new post.
Embassy Interaction with Fernandez

----------------------------------
¶7. (C) AF has been for us the most accessible and

forward-leaning member of CFK's Cabinet, welcoming USG law
enforcement training and cooperation (ref G). Again and
again, he has gone out of his way to rearrange his travel
schedule to meet with visiting U.S. officials and greet
Embassy officials at diplomatic events. Although he has
frequently told us that he is the most "pro-American" member
of CFK's Cabinet, we think this reflects his deep-seated
pragmatism rather than any abiding affinity for the United
States. Our positive working relationship with Fernandez,
for example, did not stop him from criticizing the United
States to protect the Kirchners, as he did during the 2007-08
suitcase scandal (ref H). Nonetheless, he was one of the
first Argentine officials to assure Embassy officials that
the suitcase scandal was "water under the bridge."
¶8. (C) More political hack than diplomat, AF is a

fiefdom-builder who loathes giving up control over strategic
resources. When he moved from the Interior Ministry to

Justice, for example, he took the internal security agencies
with him. Many believe that even now, as Cabinet Chief, AF
retains operational control over the law enforcement forces.
¶9. (C) Although AF confided to the Embassy's former LEGAT

that he was not in a position to micromanage the Ministry of
Justice at first, he said he immediately centralized control
once he got the lay of the land. As Chief of the internal
security forces, including the Border Patrol/Paramilitary
Police (Gendarmeria Nacional), Coast Guard, federal police,
and special airport police, AF quickly imposed a strict
vertical hierarchy where he discouraged information sharing
and commanded security chiefs to report directly to him. He
has boasted to Embassy officials that while his predecessor
at Justice, Alberto Iribarne, only signed a few ministerial
decrees, he signed hundreds. Judicial contacts have told us
that as Justice Minister, he even tried to pressure
provincial judges to advise him of any judicial assistance
requests from federal judges, but subsequently backtracked on
that position after judges complained that the directive
interfered with judicial independence. His micro-management
over even routine matters in his portfolio resulted in
bureaucratic backlogs for us. Naming participants to U.S.
training programs, the visits of Transportation Security
Administration teams to conduct airport/air carrier
assessments, and clearance for U.S. Federal Air Marshals all
required his personal approval. Once, when the DCM visited
Fernandez's Chief of Staff at Justice, Fernandez got wind of
the meeting while it was in progress, got into a car, and
stormed into the office, taking over the meeting while the
chief of staff clammed up.
¶10. (C) A pragmatic and politically savvy interlocutor, AF

prefers not to include his staff in meetings with Embassy
officials. Although he is always well-prepared, his speech
and demeanor can sometimes be crass. On more than one
occasion, he has taken obvious notice of an attractive
translator during a meeting with visiting U.S. officials.
Additionally, he has referred to the existence of local
"demand for young genitals" when explaining the challenges
his Ministry faces in fighting human trafficking for the
purposes of sexual exploitation.
AF Denies Drug Problem, Advocates Decriminalization

--------------------------------------------- ------
¶11. (C) Although he has not interfered with USG CN activity

here insofar as we can ascertain, AF has frequently denied
that drug trafficking is a major problem in Argentina,
despite evidence indicating that Colombian and Mexican drug
cartels operate in Argentina, and that Argentina leads Latin
America in cocaine consumption. AF insists that Argentina is
merely a transit point and continues to deny the existence of
drug labs in Argentina. In an October 2008 workshop on
Argentine narcotics policy, AF described press reports
claiming that drug cartels had established production
facilities in Argentina (ref I) as mere fiction. He is also
a long-time advocate for the decriminalization of drug use,
saying he dreams "of the day when drug addicts are sent to
rehab instead of prison." AF argues that the government
should stop focusing on small-time carriers in order to focus
on dismantling large drug trafficking networks (ref J).
¶12. (S/NF) According to late December 2006 intelligence

reporting (ref K), AF advised then Vice-President Scioli that
he should not make counternarcotics his number one campaign
issue when he ran for Governor of Buenos Aires province.
Reasoning that the narcotraffickers are well-organized with

the capacity to frame politicians, AF suggested that Scioli
pay only lip service to counternarcotics efforts. He argued
that Scioli should not assume the risks since drug-related
crimes would never be resolved.
Ties to Drug Trafficking?

-------------------------
¶13. (S/NF) Unsubstantiated press and intelligence reports

(refs A and M) suggest that AF may be financially profiting
from narcotrafficking. These reports state that AF's ties to
narcotrafficking date back to 1994 when AF was mayor of
Quilmes and allegedly directed a cocaine trafficking network.
The Embassy's DEA section has heard similar allegations from
contacts at the Argentine Counternarcotics Secretariat
(SEDRONAR), which has been at loggerheads with AF. SEDRONAR
contacts told poloff that AF personally called off an ongoing
drug investigation in Salta province near the Bolivian border
when he got wind of the investigation.
¶14. (S/NF) We have no information to corroborate these
allegations, and we are unaware of any formal legal complaint
against him on narcotrafficking charges. However, there are
two formal legal complaints pending against former
subordinates -- including Federal Police officials -- for
protecting or willfully ignoring various illegal brothels in
the Monserrat neighborhood (within a five-block radius of
Federal Police headquarters) in Buenos Aires City where the
sale of drugs is suspected.
Spying on the Opposition

------------------------
¶15. (S/NF) Intelligence reporting suggests that AF has not

hesitated to resort to questionable means to keep tabs on
political opponents. In mid-May 2007, AF, as Interior
Minister, allegedly directed a private intelligence team
composed of retired military and intelligence officers to
clandestinely monitor the emails of provincial and federal
government officials, business executives and journalists
suspected of working against NK's administration (ref B). In
September 2007, he reportedly used a private, unofficial
investigative team to read the emails and collect derogatory
information on then-gubernatorial candidates for Buenos Aires
province, Francisco de Narvaez and Juan Carlos Blumberg, and
Buenos Aires province Minister of Security Leon Arslanian
(ref C). According to intelligence reporting in November
2007, AF used two computer technicians to hack into
high-level email accounts, including Chief Justice
Lorenzetti's email (ref G). San Isidro judge Sandra
Arroyo-Salgado (wife of Alberto Nisman, the Special
Prosecutor investigating the 1994 bombing of the Argentine
Jewish Mutual Association (AMIA)) is investigating AF's
relationship with the two technicians, according to press
reports. (Note: These technicians in the past have been
associated with Argentina's State Secretariat for
Intelligence (SIDE) and sought asylum in Uruguay.)
¶16. (S/NF) AF reportedly may have played a tangential role in

illegally bolstering voter registration ahead of the June 28
midterms, according to a June 2009 intelligence report. He
supported efforts -- led by Interior Minister Florencio
Randazzo and Secretary of Intelligence Hector Icazuriaga --
to illegally procure national registry identification numbers
(DNIs) to register ostensible supporters and secure
additional votes in Buenos Aires and Cordoba provinces (ref
L).
Transparency
------------
¶17. (C) Although AF once bragged to the Embassy's former

LEGAT that he has a "transparent and honest style," he did
little as Justice Minister to fortify his agency's
anti-corruption efforts or enhance governmental transparency.
Admittedly, the MOJ's Anti-Corruption Office (ACO) was a
weak unit to begin with, but it made no headway during AF's
tenure. Contacts who work for the Cabinet Chief's government
accountability and transparency unit have expressed concern
that the GOA will become even less transparent under his
watch. They note that since AF took over as chief of the
internal security forces, criminal statistics are no longer
public information. Indeed, despite public alarm over rising
insecurity, AF refuses to acknowledge a rise in robberies and
kidnappings and instead has argued that insecurity is only "a
sensation fed by the media."
Corruption
----------
¶18. (C) Like many Argentine politicians, AF has been dogged

by rumors of corruption. In recent years, some Embassy
contacts have alleged that AF has a corrupt relationship with
the Japanese computer company, NEC. When AF was mayor of
Quilmes (1991-1995), he was charged with several counts of
corruption, becoming a fugitive for 48 hours. Although he
was later acquitted, he has continued to face accusations of
corruption from the opposition, and the allegations remain
fresh in the minds of some Argentines. When CFK named him
Minister of Justice, one judicial contact told us that many
in the judicial system considered the appointment "ironic"
and called AF the "fugitive from Quilmes."
Bio Data
--------
¶19. (SBU) AF began his political career in 1983, working

first as an advisor to the budget committee of the Buenos
Aires provincial Senate. From 1985 to 1987, he served as the
administrative secretary for the Peronist party (PJ) in the
Buenos Aires provincial Senate. He also simultaneously held
positions in the municipal councils of Quilmes and Florencio
Varela. In 1991, AF was elected mayor of Quilmes. In 1995,
he won a provincial Senate seat where he presided over the
Commission on Public Health and Control over Addictions. He
was named provincial government secretary in 1997, labor
secretary in 1999, and the province,s first labor minister
in 2001. AF served in former President Eduardo Duhalde's
cabinet as secretary general of the presidency in January
2002, and then as production minister in October of the same
year. He switched allegiance to NK in 2004 when the Peronist
party split into two factions - one that supported NK and
another that supported Duhalde. Since then, Duhalde
supporters have called him a traitor and the "first Kirchner
convert." In 2007, CFK tapped him to serve as her Justice
Minister and on July 7 she named him Cabinet Chief.
¶20. (SBU) AF was born in Quilmes, Buenos Aires Province on

January 9, 1957. A public accountant, AF received his law
degree while serving as Interior Minister. Although the
Kirchners stifled AF's ambitions to run for Governor of BA
province in 2007 when they tapped then Vice President Daniel
Scioli for the job, AF's power and influence within the
Kirchner Cabinet has steadily grown. He accompanied CFK to
the United States in July when she went to the OAS to discuss
the political crisis in Honduras. He also accompanied her in

May 2007 when she addressed the American Jewish Committee as
Senator and First Lady. During that visit, he met with the
U.S. Attorney General, FBI officials, and State Department
officers on TIP-related issues. AF lives in the trendy
waterfront Puerto Madero neighborhood in Buenos Aires City
with his wife and one son. A fan of technology, he carries
multiple cell phones and his office has six television sets
permanently tuned in to every local news channel. He speaks
limited English.
Comment: Handle with Care

-------------------------
¶21. (S) For USG officials, Anibal Fernandez has long been the
most readily accessible GOA cabinet member. That has
continued since he became Cabinet Chief, assuming more
importance than ever. Fernandez has far better access to the
ruling first couple than any other member of the Cabinet;
perhaps only reclusive Casa Rosada staffer Carlos Zannini has
more influence with the Kirchners. Given AF's importance,
accessibility, and the absence of hard evidence to
substantiate the allegations described above, we continue to
meet and work with him. At the same time, there are enough
rumors about Fernandez -- even in this rumor-plagued,
conspiratorial society -- to approach interactions with him
with some caution.
KELLY
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ZNY CCCCC ZZH
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INFO MERCOSUR COLLECTIVE
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCQSAB/USSOCOM INTEL MACDILL AFB FL
NOFORN
SIPDIS
E.O. 12958: DECL: 2034/11/20

TAGS: PGOV PINR AR
SUBJECT: (C) ARGENTINA: CFK'S FIRST TWO CABINET CHIEFS SAY KIRCHNERS'
SHELF-LIFE WILL EXPIRE IN 2011
REF: BUENOS AIRES 1026; BUENOS AIRES 301

CLASSIFIED BY: Tom Kelly, DCM, DOS, EXEC; REASON: 1.4(B), (D)
¶1. (C) Summary: Over the past six weeks, we have held several
conversations with President Fernandez de Kirchner's first two
Cabinet Chiefs, Alberto Fernandez and Sergio Massa. Both believe
that the Kirchners, despite their recent political successes,
cannot win re-election in 2011. They disagree on whom is next in
line: Fernandez thinks that the next President will be Vice
President Julio Cobos, while Massa believes that Senator Carlos
Reutemann will prevail. Both ex-Cabinet chiefs are (separately)
plotting their futures in a post-Kirchner political landscape.
Massa expanded on earlier comments to us (ref a) on life with the
Kirchners, describing ex-president Nestor Kirchner as a "monster"
and a "psychopath." End Summary.
¶2. (C) We have had several conversations with the first two
Cabinet Chiefs of Cristina Fernandez de Kirchner (CFK), Alberto
Fernandez and Sergio Massa. The Ambassador had an introductory
meeting with Alberto Fernandez, who served as Cabinet Chief in both
Nestor and CFK's administrations, on October 28, and DCM lunched
with Fernandez on October 2. The Ambassador and DCM also had
dinner with CFK's second cabinet chief Sergio Massa and his wife,
city councilor-elect Malena Galmarini, at the home of Massa's
former Casa Rosada aide, businessman Jorge O'Reilly, on November
¶12. In each of these conversations, the two prominent Peronists,
who during their tenures in the Casa Rosada worked every day with
the Kirchners to run the Argentine government, were quite frank in
expressing their estrangement from the Kirchners and their
pessimism about the first couple's political prospects.
Alberto and Massa Agree: Kirchners Will Lose in 2011
¶3. (C) Massa said that the Kirchners have no chance to capture the
presidency in 2011. When asked to estimate their chances, Massa
replied, "zero." He also discounted the view that the Kirchners
would extend their rule through Chavez-style governance. Massa
said that, for all of its problems, Argentina is not Venezuela.
Its society remained too literate, too middle class, and too
"temperate," and its economy is far more complex and diverse than
Venezuela's oil monoculture. Argentina, he said, would not abide
the Kirchner's attempts to consolidate power through more
autocratic rule. The result of their hardball tactics after the
midterm elections, he argued, was even more negative ratings in the

polls.
¶4. (C) Fernandez predicted that Nestor would be the Kirchners'

presidential candidate in 2011. He claimed that Nestor has a
better reputation for competence than CFK. Fernandez told the DCM
that his soundings on CFK's potential run for re-election
invariably provoked reactions of alarm and exasperation.
¶5. (C) But Nestor cannot possibly win, continued Fernandez,

comparing the former president to Carlos Menem circa 1999. He said
that, like Menem ten years ago, Kirchner could hope for no more
than 20 percent of the votes in the first round of the presidential
election. These voters, he continued, are Kirchner
"fundamentalists" whose votes reflect ideological affinity or
association with the various political machines (controlled by
piqueteros, labor leaders, etc.) that remain loyal to the Kirchner
project. Fernandez said that, because Kirchner at this point in
his political career has zero attraction to independent voters, he
could expect to win no more votes in the second round of elections
than he would in the first. Fernandez predicted that Nestor would
run and CFK would increasingly govern from the Left, as that "is
the only constituency that remains to them." He added, though,
that such a strategy was doomed to fail -- "the Left on its own
can't elect anyone to the Presidency in this country," he said.
Alberto and Massa Disagree on Next President
¶6. (C) Massa identified Santa Fe Senator Carlos Reutemann as the

likely presidential winner in 2011. He said that Reutemann's
strategy of lying low was prudent, not a blunder or sign of
indecision as often portrayed in the press. With Reutemann quiet,
the Kirchner machine was focused on pummeling Vice President Cobos
and Buenos Aires Mayor Mauricio Macri. The onslaught, he argued,
would damage both of those potential opponents to a Reutemann
candidacy. When the race really begins, Reutemann would be
well-placed to obtain the Peronist nomination and steamroll the
rest of the field. Massa said that the Peronist race would not
begin in earnest until May 1, 2010, when he said five large
Peronist rallies would mark May Day for the first time in years.
¶7. (C) Alberto Fernandez identified Vice President Cobos as the

next president of Argentina. Fernandez noted that Cobos continues
to be the most popular politician in the country, and is conserving
his advantage intelligently. He expected that Coalicion Civica
leader Elisa Carrio, the runner-up in the 2007 election and a
bitter rival of Cobos, would run in the first round and win a
maximum of 12 percent of the vote, deflating the Vice President's
first-round numbers, but Cobos would come out on top. "It's his
election to lose," concluded Fernandez. He took issue with Massa's
view that Peronists would prevail once they united behind a
candidate. Fernandez, a long-time Peronist activist who headed the
party apparatus in Buenos Aires city for many years, said that his
party only controls the loyalty of 38 percent of the electorate.
Given the Kirchners' continuing control over the party apparatus,
the Peronist candidate, even if it ends up being someone with a
last name that is not Kirchner, would not appeal to non-Peronist
voters in 2011. The party's presidential prospects in the coming
election were therefore, in Fernandez's view, poor.
Massa: Nestor is a Monster and Psychopath
¶8. (C) Massa was scathing in his criticism of the first couple,
especially Nestor. Though he made light of press reports that he
and Kirchner came to blows at the campaign bunker in the pre-dawn
hours after their mid-term defeat last June, he called Nestor "a
psychopath," "a monster," and "a coward" whose bullying approach to
politics masks a deep sense of insecurity and inferiority.
(Massa's wife registered such alarm at these uninhibited comments
that he asked her to "stop making faces at me.") He disputed the
argument that Nestor deserved credit as a savvy tactician,
describing the ex-president as blunder-prone and so convinced of
his own brilliance that he was certain to keep making mistakes.
(We've heard similar comments from Fernandez on Nestor's faltering
political judgment -- ref b.) He said that Nestor could not
relate to others outside the narrow gauge of his own political
ambitions: "Kirchner's not a perverse genius," Massa concluded.
"He is just perverse."
¶9. (C) Massa described his twelve-month term as Cabinet Chief as

an ordeal, as he struggled to deal with a controlling presidential
spouse and a "submissive, withdrawn" President "who would be much
better without Nestor than she is with him." He said that, during
his tenure at the Casa Rosada, he decided to do the Oprah-like
daytime TV show hosted by grand dame Mirtha Legrand. On the set
minutes before the show's taping began, he received a call from
Nestor instructing him to walk off the set because the apolitical
Legrand "was an opposition figure." Massa told him he would do the

show unless his official boss CFK, who was travelling abroad,
instructed him otherwise. He then received three successive calls
from Cabinet members pleading with him not to do the show. Massa
did not follow their advice.
Both Focusing on Post-Kirchner Future
¶10. (C) As for his own plans, Massa confirmed that he plans to run
in 2011 for governor of Buenos Aires province, which could pit him
against midterm winner Francisco de Narvaez, incumbent Daniel
Scioli and labor strongman Hugo Moyano. Massa said that he will
announce his candidacy on the third week of January, the week when
(largely vacationing) Argentines buy the most newspapers.
Fernandez also commented on the Buenos Aires race, opining that
Scioli's political moment had passed. Calling the governor "a nice
guy," he observed that Nestor had used him (by grabbing him as his
slate-mate in the province during the midterms) and then cast him
aside. "Scioli is trapped, and he knows it," Fernandez said.
¶11. (C) Fernandez remains politically active as well. He told

the DCM that he is talking to many political figures within and
outside Peronism, including Cobos and the fellow would-be Peronist
kingmaker, ex-President Eduardo Duhalde. Within the party, he
expressed particular interest in the 40-year-old governor of Salta
province Juan Manuel Urtubey. He said that, despite his belief
that Cobos is likely to win the presidency, he is counseling

Urtubey to throw his hat in the ring. He says that the campaign
strategy would be to nudge Nestor out in the first round for second
place, and then emerge as the Peronist candidate in the run-off
against Cobos. (Comment: It appears that Urtubey, once regarded
as a reliable Kirchner ally, is listening. He agreed to host
Fernandez in a much-photographed visit to Salta on November 14,
fueling speculation that the two were plotting a presidential run.)
Comment: Common Views, Divergent Paths
¶12. (C) Massa and Fernandez have much in common, from their
unique experience in CFK's cabinet to their active roles in the
burgeoning anti-Kirchner movement within Peronism. They are both
generally pro-American in orientation. They do not, however, work
together very closely, and their futures seem quite different.
Fernandez, 50, is low-key and content to operate in the background
while others take the spotlight. The most that he seems to aspire
to is success in behind-the-scenes political kingmaking, which
could restore him to his former status as the country's most
influential political consigliore. Massa, 37, the younger man by
more than a decade, has more ambitious plans. He hopes to win the
Buenos Aires governorship and, eventually, the Argentine
presidency.
MARTINEZ
VZCZCXYZ0000
OO RUEHWEB
DE RUEHBU #1257/01 3351640

ZNY SSSSS ZZH
O R 011639Z DEC 09
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFISS/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFISS/DEPT OF JUSTICE WASHINGTON DC
RHMFISS/FBI WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RUEHBU/AMEMBASSY BUENOS AIRES
SIPDIS
NOFORN
E.O. 12958: DECL: 2019/12/01

TAGS: PTER SNAR ECON EFIN PGOV PREL KCOR AR
SUBJECT: ARGENTINA FACES CHALLENGING AML/CFT REVIEW
REF: BUENOS AIRES 313; BUENOS AIRES 1017; BUENOS AIRES 1212
CLASSIFIED BY: Martinez, Vilma, Ambassador, DOS, EXEC; REASON:

1.4(B), (D)
----------
Summary
----------
¶1. (S/NF) The Financial Action Task Force (FATF)

held a two week peer review of the Argentine anti-money laundering
and counter terror finance (AML/CFT) regime. Although hoping to
see some positive moves by Argentina, the FATF operational team

leader is skeptical of the GoA's intentions to combat money
laundering and terror finance. While most money laundering in
Argentina conceals tax evasion and corruption, narcotics-derived
funds are a growing problem. The Argentine statutory framework is
relatively strong, but the bureaucracy working the issues is poorly
led and starved of resources. Consequently, the FATF team leader
views Argentine AML/CFT enforcement as largely ineffectual, with no
meaningful prosecutions in recent memory. Some Embassy contacts
argue that the current GoA leadership, including the President,
stands to lose from honest and vigorous pursuit of money
laundering. While the final FATF report is likely to embarrass the
GoA, potentially provoking a harsh response, it is not likely to
spur meaningful reform. Until now, terror financing and narcotics
money have comprised just a small fraction of the illicit funds
transiting Argentina. The near complete absence of enforcement
coupled with a culture of impunity and corruption make Argentina
ripe for exploitation by narco-traffickers and terrorist cells.
For now, the most promising way to engage the GoA on the issue
seems to be through the new Justice Minister, with whom we have
developed a positive working relationship. We will encourage him
to engage on this set of issues. End Summary.
---------------
FATF Review
---------------
¶2. (C) The FATF peer review of Argentina's AML/CFT laws,

regulations and enforcement, and general compliance with FATF best
practices and recommendations began on November 16 and continued
for two weeks. FATF had originally scheduled the review for last
year but delayed it at Argentina's request. In the interim, the
GoA implemented a tax amnesty law to encourage the repatriation of
funds held overseas and in the process lost most of the AML/CFT
focus and momentum it had built up after the last FATF review in
October 2003. Econoff met with numerous AML/CFT contacts over
several weeks before the review began to assess the strengths and
weaknesses of Argentina's laws and enforcement efforts and to
evaluate perceptions of how it will fare in the review.
---------------------------------
FATF Team Leader is a Skeptic
---------------------------------
¶3. (C) Fabio Contini, the Italian national who heads the
operational review team, has spent over a year in Argentina as the
Economic and Financial AttachC) at the Italian Embassy and is
married to an Argentine. He has a sober view of the GoA's AML/CFT
efforts, which he deems little more than a fig-leaf. The measures
taken, he said, are calculated for minimal compliance with
international standards and evince little real enthusiasm for
cleaning up the financial system. In addition, he said that
Argentina should take control of the informal economy as a first
step toward a serious AML/CFT effort. Contini summarized his views
by noting that a substantial percentage of the Argentine economy is
underground, with pure cash transactions comprising a
disproportionate percentage of economic activity. Such an economic
system, he observed, is inherently vulnerable to money laundering
and other financial crimes. Contini said that Argentina will have
to bring this black economy into the light of day before even the
most robust AML/CFT regulations can be effective.
¶4. (C) While his views will be influential, Contini noted that he
does not have the last word on Argentina's FATF peer assessment.
Once his team makes its report, Argentina will have an opportunity
to respond to the findings. A debate at next year's plenary will
precede the issuance of the final report and any warnings. Contini
said that FATF warned Argentina after the last review that a second
warning could have a negative effect on Argentina's desire to

rejoin the international financial system.
--------------------------------
Money Laundering in Argentina
--------------------------------
¶5. (C) Embassy contacts agree that most money laundering in

Argentina is the product of tax evasion and political corruption.
For the most part, they insist that terror financing is seldom, if
ever, transacted in Argentina. Most maintain, however, that
narcotics trafficking is becoming a real problem and that,
increasingly, the dirty money sloshing through the financial system
originates in the drug trade.
-------------------
AML/CFT System
-------------------
¶6. (C) Embassy contacts, including Contini, have noted numerous
weaknesses in Argentina's AML/CFT regime. Most tellingly, there
have been only two convictions since the criminalization of money
laundering in 1989, and there have been no convictions under the
currently applicable statute enacted in 2000. While the
substantive law is generally considered adequate, there are
numerous loopholes to close and important areas that require
clarification.
¶7. (C) Local AML/CFT experts agree that, with the exceptions noted
below, Argentina has a solid legal and regulatory foundation for
combating money laundering and terror finance. The failures of the
system arise when it comes to applying the law. Inspections are
superficial and do not examine actual accounts and transactions.
According to Pablo San Martin, the head of SMS Latinoamerica, a
local accounting firm, inspectors are often content in their

interviews with banking executives to accept the predictable
anodyne responses to their inquiries without further follow-up.
Several contacts point to the Financial Information Unit (UIF) as
the weakest player on the financial crimes enforcement team, but
the consensus is that a failure of political will cripples the
whole AML/CFT project.
---------------
Self-laundering
---------------
¶8. (C) Several experts have highlighted the money laundering

loophole for criminals who do their own banking as a probable focus
of the FATF review. Argentine law defines money laundering as an
accessory offense so that, for example, a narcotics trafficker
cannot be charged for merely laundering the profits from his drug
deals. Only a third party who aids and abets in hiding the origins
of the money is subject to prosecution.
¶9. (C) According to Raul Plee, the state's attorney who heads the
unit charged with investigating financial crimes, this exemption
for self-laundering explains the lack of convictions. Plee noted
that a bill in draft form would allow him to pursue much of the
currently protected laundering activity, and he believes that FATF
will recommend enactment of the legislation. Plee observed that
some of Argentina's most embarrassing prosecutorial failures, e.g.,
when a judge dismissed charges against Pablo Escobar's widow who
bought two properties under an assumed name, originate in the
self-laundering exemption.
¶10. (C) In contrast, other contacts believe that if the FATF

review fixates on the self-laundering issue it will be a failure.
Marcelo Casanovas, a compliance officer with the Bank of Buenos
Aires Province and a board member of a leading anti-money

laundering association, said that self-laundering is a problem, but
to focus exclusively on that one shortcoming is to miss the whole
forest for one tree. The real problems, he insisted, are systemic.
Contini himself observed that the central failure is an absence of
political will to pursue laundering as a serious crime.
----------------------
Repatriation of Funds
----------------------
¶11. (C) One substantive legal issue that now seems unlikely to
trouble FATF reviewers is the tax amnesty law (Ref A) designed to
encourage repatriation of funds held outside Argentina. According
to commonly cited estimates, Argentines hide about $150 billion in
assets offshore. In an effort to lure back the billions held
outside the formal financial system, the GoA passed legislation in
December 2008 declaring an amnesty on repatriated funds that ran
from March through August of 2009. Local experts and opposition
political figures alleged that because it prohibited Argentine tax
authorities from inquiring into the source of the repatriated
funds, the law facilitated money laundering. FATF also expressed
misgivings but was at least partially placated when then-Justice
Minister Anibal Fernandez defended the law before the plenary in
Paris. In May (after the amnesty had already been in effect for
two months), the UIF issued rules requiring reports of suspicious
transactions (STRs) arising from the capital regularization
program.
¶12. (C) According to figures released by the GoA at the conclusion

of the amnesty, Argentines declared only $4.7 billion. Of that,
only 4.3 percent had been held abroad. The press reported that the
program failed to achieve its goal of capital repatriation.

According to Plee, requiring submission of STRs was a key factor in
this failure and was at least one reason that very little money
returned under this law. Plee and other contacts noted that the
funds declared under the amnesty were not generally the product of
criminal activity other than simple tax evasion. The Regional
Advisor from the International Monetary Fund's Financial Integrity
Group, Mariano Federici, observed that the repatriation was doomed
from the outset because Argentines do not view the local economy as
a stable place to invest, and they mistrust the government because
of its history of economic mismanagement and capricious seizure of
assets.
¶13. (C) Based on the requirement to file STRs and the

insignificant scale of the funds repatriated, many contacts
predicted that the tax amnesty issue will not draw much attention
under the FATF review.
------------------------
Prosecutors and Judges
------------------------
¶14. (C) Another weakness that experts highlighted was the lack of
judicial and prosecutorial understanding of AML/CFT issues.
According to Federici, the prosecutors and judges who should take
the lead in AML/CFT cases lack the financial sophistication
necessary to direct investigations and mount successful
prosecutions. Federici also noted that judges appear uninterested
in acquiring the skills necessary to manage money laundering cases.
When the IMF staged a training seminar, over 70 prosecutors
participated, but of the dozens invited, only one judge chose to
attend. Because judges directly manage investigations under the
Argentine legal system, no money laundering case can proceed
without active judicial engagement. Federici observed that, in the
short term, judicial indifference limits the opportunities for

money laundering convictions.
¶15. (C) Casanovas agreed that the judicial system suffers

deficiencies, but he maintained that prosecutors and investigators
bear more of the blame than judges. Failure to develop solid
evidence is the root of the problem, he said. He observed that
judges want to pursue concrete cases with predictable outcomes, not
squander their limited resources on prosecutions doomed to failure.
----------------------------------
FATF/GAFISUD Representative
----------------------------------
¶16. (C) The FATF Representative's Office, headed by Alejandro

Strega, who has a master's in law from the University of Illinois,
is responsible for coordination of AML/CFT policy and for
developing national strategy and legislation. Under the leadership
of Strega's predecessor, Juan Felix Marteau, the office earned a
reputation for foresight and action. Marteau drafted significant
legislation and developed a national AML/CFT strategy that was
endorsed by then- President Nestor Kirchner. In contrast, Strega's
performance has been lackluster, and, with his weak background in
AML/CFT and lack of resources, he has been largely ineffective.
Strega is a congenial interlocutor, speaks English well, and is
eager to engage with the Embassy, but he has little access to
Minister of Justice Julio Alak, few staff, and almost no money.
¶17. (C) Marteau has insinuated that he lost the job to Strega as a
reprisal for looking too closely into the casino business, where
important Kirchneristas allegedly have interests. Federici
conceded that casinos may be part of the story, but said the real
explanation lies in a personality clash and bureaucratic feud with

Alak's predecessor and current Chief of Cabinet, Anibal Fernandez.
According to Federici, when Marteau drafted his national strategy,
he consulted all high government officials with an interest in
money laundering except for Fernandez, who was Minister of Interior
at that time. As Justice Minister, Fernandez became Marteau's boss
and quickly dismissed him and brought in Strega. Federici also
noted that suspicions of connections to drug trafficking and money
laundering have sometimes wafted around Fernandez (Ref B), and
Marteau may have distrusted him based on those rumors. Strega is
the son of a labor lawyer who is a close Fernandez confederate from
his time as Mayor of Quilmes. His father, Enrique Strega, has been
an attorney for the bank workers' union headed by Juan Jose Zanola,
a Kirchner ally who was also close to former President Menem.
Zanola is now under indictment in a politically radioactive case
involving adulterated medicine, illegal campaign contributions, and
a triple homicide.
-------------------------
UIF: a Broken Institution
-------------------------
¶18. (S/NF) Numerous Embassy contacts and press reports have

fingered the UIF as the main agent of Argentina's AML/CFT failures.
The UIF is an inept and politically compromised institution,
according to Federici. It is led by Rosa Falduto, who won her
position based on the patronage of the judge who oversees the
electoral process, Maria Romilda Servini de Cubria. She has since
quarreled with Servini. Her other benefactor, Anibal Fernandez,
has also reportedly been keeping his distance. Federici said that
according to a highly placed contact in the UIF, Falduto holds on
to her position because she is useful to President Cristina
Fernandez de Kirchner and to her husband, the former President,
Nestor Kirchner. Federici told Econoff that Falduto is personally
holding back STRs on the Kirchner inner circle and has refused to
respond to requests for STRs on the Kirchners themselves from
Switzerland, Lichtenstein, and Luxembourg. In July, according to
Federici and consistent with information from other sources,
Falduto also personally leaked information that the UIF had
requested from FinCEN on Francisco de Narvaez, a Kirchner rival.
According to Federici, Falduto did this by design to harm the
reputation of this important opposition figure.
¶19. (C) The defects of the UIF, however, transcend mere

politicization. According to Federici and confirmed by several
other sources, Falduto's organization passes on raw intelligence
that is useless for building criminal cases. Contini said that
information is routinely forwarded to prosecutors so long after the
fact that it is legally and technically impossible to accumulate
evidence on suspicious transactions. In the UIF's defense,
however, San Martin noted that the AML/CFT regulators have
insufficient resources. The UIF and the Argentine Central Bank pay
poorly, he said, and cannot afford to hire sufficient investigative
staff. San Martin agreed, however, that the UIF is likely to come
in for pointed criticism in the FATF review.
--------------
Political Will
--------------
¶20. (C) Several contacts, including Strega himself, have asserted

that the Argentine AML/CFT regime was never designed to catch or
punish money launderers and that the absence of convictions is by
design. According to Federici, Plee's office does not get the
political support that it needs to do its job and the Ministry of
Justice under Fernandez made it plain that it did not want him to
be too aggressive. When the MOJ switched Plee's assistant Federico
di Pasquale from a long-term to a short-term job contract, it was
seen as a message that the office was on a short leash.
¶21. (C) According to Roberto Bulit Goni, an attorney in a private

practice dealing with money laundering issues, too many people
stand to profit from lax enforcement of money laundering statutes.
Casanovas and San Martin agree that the changes that there have
been in the AML/CFT system are mainly cosmetic. The GoA has
enacted the recommended laws and regulations, but the problem, they
noted, is hostility to even token enforcement. Congress, which
will pass to a divided opposition's control in December, has not
played a consistent role in pressing for enforcement or
investigations, but there is some prospect that the Congress and
specific committees will give it increasing attention in 2010.
¶22. (C) The Embassy sources noted above maintain that the MOJ,
under former Minister of Justice Anibal Fernandez (now Chief of
Cabinet), systematically frustrated progress on AML/CFT issues.
The current Minister of Justice, Julio Alak, has brought energy and
a fresh perspective to the job and has shown considerable
enthusiasm for collaborating with the United States on a wide range
of law enforcement issues. While he has not yet focused on money
laundering, the upcoming FATF report and the Argentine response and
debate at next year's plenary give us an opportunity to engage him
to focus more on AML/CFT issues. While a negative report will
likely provoke a hostile response from some quarters of the GoA, it
could well provide an opportunity and political cover for Alak to
push for greater resources and for consequential changes in the law
and enforcement. Alak appears to be serious about tackling
Argentina's law enforcement problems (Ref C) and all Mission
elements will continue to provide him with the information and,
where possible, the resources to move forward with a positive
agenda.
----------------
FATF Outcome
-----------------
¶23. (C) There are two views of the likely conclusions in the final
FATF report. One view is that the FATF review will be so
superficial that Argentina will pass with just a few areas for
improvement noted. Casanovas and San Martin, for example, believe
that the FATF review will be perfunctory. Reviewers will arrive
with a checklist and conclude after talking to regulators that all
the elements are in place. FATF will recommend some changes, but
the review will be generally neutral. The other view is that the
flaws are so glaring, i.e., no convictions and the problems within
the UIF, that even a superficial review will come down hard on the
GoA. Contini, as head of the operational team, seems inclined to
issue a report highlighting a lack of political will to
meaningfully combat money laundering and terror financing.
----------
Comment
----------
¶24. (S/NF) Argentina will likely suffer some sharp criticism in

the FATF review, blackening its eye when it is seeking to reenter
the mainstream of the global financial system. The GOA would
probably lash out publicly at a critical FATF review, with the
government blaming the criticisms on external conspirators
(including perhaps the USG). No matter the criticisms, and despite
the apparent good faith of new players like Justice Minister Alak,
it is probably unrealistic to expect that the GoA will funnel
resources to prosecutors or make a concerted effort to pursue money
launderers. The Kirchners and their circle simply have too much to
gain themselves from continued lax enforcement. Although tax
cheats and compromised politicians may still be the chief source of
dirty money, continued GoA indifference to AML/CFT could offer an
attractive local staging ground to narco-traffickers and

international terrorists. If the GoA does not move to close
loopholes and enhance enforcement, it may soon find its financial
system contaminated by drug money and terror funds.
MARTINEZ
VZCZCXYZ0010
RR RUEHWEB
DE RUEHC #2349 3651459

ZNY SSSSS ZZH
R 311455Z DEC 09
FM SECSTATE WASHDC
TO AMEMBASSY BUENOS AIRES 0374
S E C R E T STATE 132349
NOFORN
SIPDIS
EO 12958 DECL: 12/31/2034

TAGS PINR, PGOV, AR
SUBJECT: (C/NF) ARGENTINA: KIRCHNER INTERPERSONAL
DYNAMICS (C-AL9-02612)
Classified By: ELISSA G. PITTERLE, DIRECTOR, INR/OPS. REASON:
1.4(C).
¶1. (S/NF) WASHINGTON ANALYSTS ARE INTERESTED IN ARGENTINE LEADERSHIP

DYNAMICS, PARTICULARLY WITH REGARDS TO CRISTINA FERNANDEZ DE KIRCHNER AND
NESTOR KIRCHNER. DRAWING ON PREVIOUS REPORTING, AND BUILDING UPON OUR OWN
ANALYTIC ASSESSMENTS, WE ARE CURRENTLY PREPARING A WRITTEN PRODUCT
EXAMINING THE INTERPERSONAL DYNAMICS BETWEEN THE GOVERNING TANDEM. WE
HAVE A MUCH MORE SOLID UNDERSTANDING OF NESTOR KIRCHNER’S STYLE AND
PERSONALITY THAN WE DO OF CRISTINA FERNANDEZ DE KIRCHNER AND WE WOULD
LIKE TO DEVELOP A MORE WELL-ROUNDED VIEW OF CRISTINA FERNANDEZ DE
KIRCHNER’S PERSONALITY. AS POST,S TIME AND RESOURCES ALLOW AND TO THE
EXTENT POST HAS ACCESS TO THIS TYPE OF INFORMATION, WE WOULD WELCOME ANY
INSIGHT INTO THE FOLLOWING QUESTIONS. MANY THANKS, AND REGARDS FROM
WASHINGTON.
¶A. (U) MENTAL STATE AND HEALTH:
1) (S/NF) HOW IS CRISTINA FERNANDEZ DE KIRCHNER MANAGING HER NERVES AND

ANXIETY? HOW DOES STRESS AFFECT HER BEHAVIOR TOWARD ADVISORS AND/OR HER
DECISIONMAKING? WHAT STEPS DOES CRISTINA FERNANDEZ DE KIRCHNER OR HER
ADVISERS/HANDLERS, TAKE IN HELPING HER DEAL WITH STRESS? IS SHE TAKING
ANY MEDICATIONS? UNDER WHAT CIRCUMSTANCES IS SHE BEST ABLE TO HANDLE
STRESSES? HOW DO CRISTINA FERNANDEZ DE KIRCHNER,S EMOTIONS AFFECT HER
DECISIONMAKING AND HOW DOES SHE CALM DOWN WHEN DISTRESSED?
2) (S/NF) WHAT IS THE STATUS OF NESTOR KIRCHNER’S GASTROINTESTINAL

ILLNESS? DOES IT CONTINUE TO BOTHER HIM? IS HE TAKING ANY MEDICATIONS?
LONG KNOWN FOR HIS TEMPER, HAS NESTOR KIRCHNER DEMONSTRATED A GREATER
TENDENCY TO SHIFT BETWEEN EMOTIONAL EXTREMES? WHAT ARE MOST COMMON
TRIGGERS TO NESTOR KIRCHNER’S ANGER?
¶B. (U) POLITICAL VIEWS:
1) (S/NF) WHEN DEALING WITH PROBLEMS, DOES CRISTINA FERNANDEZ DE KIRCHNER

TAKE A STRATEGIC, BIG PICTURE OUTLOOK, OR DOES SHE PREFER TO TAKE A
TACTICAL VIEW? DOES SHE VIEW CIRCUMSTANCES IN BLACK AND WHITE OR IN
NUANCED TERMS? DOES SHE SHARE NESTOR KIRCHNER’S ADVERSARIAL VIEW OF
POLITICS OR DOES SHE ATTEMPT TO MODERATE HIS HEAVY-HANDED POLITICAL
STYLE?
¶C. (U) ON THE JOB:
1) (S/NF) HOW DO CRISTINA FERNANDEZ DE KIRCHNER AND NESTOR KIRCHNER

DIVIDE UP THEIR DAY? ON WHICH ISSUES DOES CRISTINA FERNANDEZ DE KIRCHNER
TAKE THE LEAD AND WHICH ISSUES DOES SHE LEAVE TO NESTOR KIRCHNER?
¶2. (U) PLEASE CITE C-AL9-02612 IN THE SUBJECT LINE OF REPORTING IN

RESPONSE TO THE ABOVE QUESTIONS. CLINTON
P R 281848Z DEC 66
TO SECSTATE WASHDC PRIORITY

INFO USCINCSO
CINCLANT
AMEMBASSY RIO DE JANEIRO
AMEMBASSY SANTIAGO
AMEMBASSY MONTEVIDEO
AMEMBASSY QUITO
AMEMBASSY LIMA
AMEMBASSY MEXICO
AMEMBASSY OTTAWA
AMEMBASSY LONDON
STATE GRNC
UNCLASSIFIED BUENOS AIRES 2481
Original Telegram was Confidential but has since been

de-classified
--------------------------------------------- ----
Copy from the National Archives
RG 59: General Records of the Department of state
1964-66 Central Foreign Policy File
File: POL 33-4 ARG
--------------------------------------------- ----
E.O. 12958: DECL: DECLASSIFIED BY NARA 09/02/2009

TAGS: EFIS PBTS AR
SUBJECT: EXTENDED NATIONAL JURISDICTIONS OVER HIGH SEAS
REF: STATE 106206 CIRCULAR; STATE CA-3400 NOV 2, 1966
¶1. PRESS REPORTS AND VARIETY EMBASSY SOURCES CONFIRM

NEW ARGENTINE LEGISLATION UNILATERALLY CHANGING SEAS JURIS-
DICTION NOW UNDER ADVANCED REVIEW. REPORTEDLY LAW WOULD
ESTABLISH SIX MILE TERRITORIAL SEA, PLUS ANOTHER SIX MILES

OF EXCLUSIVE FISHING JURISDICTION, PLUS ANOTHER EXTENDED ZONE
OF "PREFERENTIAL JURISDICTION" FOR FISHING PURPOSES. DRAFT-
LAW UNDER CONSIDERATION IN ARGENTINE SENATE BEFORE JUNE 28
COUP WOULD HAVE DEFINED ZONE OF PREFERENTIAL JURISDICTION
AS "EPICONTINENTAL SEA OUT TO 200 METER ISOBAR". IN SOUTHERN
ARGENTINA THIS ZONE SEVERAL HUNDRED MILES WIDE AND BLANKETS
FALKLAND ISLANDS.
¶2. NAVATT STATES ARGENTINE NAVY THINKING OF PREFERENTIAL

JURISDICTION OUT TO 200 MILES (AS IN PERU, ECUADOR, CHILE)
RATHER THAN EPICONTINENTAL SEA. 200 MILE LIMIT DOES NOT
RPT NOT REACH FALKLANDS. ARGENTINE NAVY OFF TOLD NAVATT
"200 MILE LIMIT SOON WILL BE STANDARD THROUGH HEMISPHERE".
¶3. FONOFF OFFICIALS REFERRING TO RECENT BRAZILIAN AND US

LEGISLATION HAVE INFORMALLY INDICATED DECISION ALREADY
FINAL RE SIX MILE TERRITORIAL SEA PLUS SIX MILE EXCLUSIVE
FISHING JURISDICTION, BUT THAT "PREFERENTIAL JURISDICTION"
STILL UNDER STUDY. TWO FONOFF MEN VOLUNTARILY AND INFORMALLY
SOUGHT EMBASSY REACTION TO POSSIBLE EXTENDED PREFERENTIAL
JURISDICTION BY SUGGESTING THAT US IN FACT HAS ACCEPTED
UNILATERALLY CREATED ECUADORIAN, PERUVIAN AND CHILEAN 200 MILE
LIMITS. EMBOFF REJECTED IDEA US ACCEPTS THESE LIMITS IN ANY
WAY AND POINTED OUT 1965 AMENDMENTS TO AID LEGISLATION AIMED
AT FURTHER PROTECTING US FISHING RIGHTS.
¶4. FONOFF LEGAL ADVISOR CONCEDES DISTINCTION BETWEEN

"EXCLUSIVE" AND "PREFERENTIAL" FISHING JURISDICTION A SEMANTIC
NICETY. HE UNDERSTANDS THAT IN ZONE OF "PREFERENTIAL" JURIS-
DICTION ARGENTINA WOULD CLAIM RIGHT TO TAX, LICENSE AND OTHER-
WISE CONTROL ALL ACTIVITIES RELATED TO EXPLOITATION OF
RESOURCES OF SEA.
¶5. DRAFT LEGISLATION ON SEAS JURISDICTION LAY DORMANT UNTIL

SUDDEN AND SUBSTANTIAL IN FISHIN ARGENTINE EPICONTINENTAL SEAS
BY CUBAN AND EAST EUROPEAN (ESPECIALLY SOVIET) VESSELS PAST
SIX MONTHS ALARMED ARGENTINE ARMED FORCES. (SEE NAVATT IR
5-804-0-140-66 OF NOV 18) NOT RPT NOT ALL SOVIET VESSELS WERE
FISHING OR FACTORY TYPES. FONOFF SOURCES INFORMALLY STATE
ARMED FORCES PRESSURE MAKES EMISSION NEW LAW IMPERATIVE, QUITE
POSSIBLY APPEARING WITHIN NEXT FEW WEEKS. WHEN ASKED BY FONOFF
MEN ABOUT "SECURITY PROBLEMS CREATED BY SOVIET TRAWLERS OFF US
COAST", EMBASSY OFF REPLIED US DID NOT RPT NOT SEE THAT
UNILATERAL ATTEMPT TO EXTEND SEAS JURISDICTION OFFERED ANY
REALISTIC SOLUTION FOR POSSIBLE SECURITY PROBLEMS, WHILE SUCH
ACTION COULD CREATE NEW SOURCES POSSIBLE MISUNDERSTANDING AND
CONFLICT.
¶6. RE PAR 3 STATE 106206 BELIEVE OUTLINED PROPOSAL MIGHT

FORESTALL UNILATERAL ARGENTINE ATTEMPT TO SUBSTANTIALLY EXTEND
"PREFERENTIAL" FISHING JURISDICTION ONLY IF EMBASSY CAN BE
AUTHORIZED DISCUSS IDEA WITH ARGENTINES IMMEDIATELY. EVEN THEN
CHANCES SUCCESS LIMITED BY (A) ADVANCED STAGE PROPOSED ARGENTINE
LAW AND (B) PRIMACY SECURITY CONSIDERATIONS ARGENTINE THINKING.
WE WOULD BENEFIT SOME FROM FONOFF LEGAL ADVISORS' QUALMS ABOUT
UNILATERAL ACTION, AND FROM RESTRAINT OF RECENT BRAZILIAN
LEGISLATION WHICH DID NOT RPT NOT GO BEYOND 12-MILE LIMIT.
¶7. FOR DISCUSSION WITH ARGENTINES WOULD MODIFY TEXT IN STATE

10942 CIRCULAR TO: (A) MAKE ALL REFERENCES TO ARGENTINA, VICE
CANADA; (B) REFER TO PROPOSED ARGENTINE CLAIMS OF PREFERENTIAL
JURISDICTION OVER WATERS WE REGARD AS HIGH SEAS; (C) ELIMINATE
REFERENCES TO "TRADITIONAL DISTANT WATER FISHERIES", SINCE
ARGENTINE COAST NOT RPT NOT TRADITIONAL FISHING ZONE (WHEREAS
NO. 3); (D) ADD NOTATION THERE NO TRADITIONAL FISHING AND
CONFINE OPERATIVE AGREEMENT TO PROVISIONS FOR NON-TRADITIONAL
FISHING; (E) ELIMINATE LAST THREE PARS OF AIDE-MEMOIRE HANDED
TO CANADIAN AMB.
¶8. IF AUTHORIZED, ENVISAGE TWO-STEP APPROACH TO FONOFF.

FIRST, INFORMAL AND ORAL, STRESSING OUR INTEREST IN FREEDOM OF
HIGH SEAS, NOTING EARLIER FONOFF CONFIRMATION NEW LAW UNDER
STUDY, OUTLINING OUR PROPOSAL IN GENERAL TERMS. ON BASIS
FONOFF REACTION, WE WOULD THEN COUCH AIDE-MEMOIRE IN TERMS
WHICH WOULD APPEAR MOST LIKELY TO SUCCEED.
GP-3
SACCIO
VZCZCXYZ0000
RR RUEHWEB
DE RUEHBU #1311/01 3651344

ZNY CCCCC ZZH
R 311344Z DEC 09
TO RUEHC/SECSTATE WASHDC 0292
INFO MERCOSUR COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
SIPDIS
EO 12958 DECL: 2019/12/31

TAGS PREL, OVIP, ECON, KPAO
SUBJECT: (C) ARGENTINE GOVERNMENT TAKES UMBRAGE AT WHA A/S
VALENZUELA’S REMARK REGARDING BUSINESS COMMUNITY’S CONCERNS
DERIVED FROM: DSCG 05-1 B, D
¶1. (C) Summary: The GOA responded with heavy artillery to a remark WHA
A/S Valenzuela made during a December 16 press roundtable. Immediately
after the press roundtable, Argentine media started focusing almost
exclusively on A/S Valenzuela’s remark that the American business
community in Argentina had conveyed to him concern about rule of law and
management of the economy in Argentina. The press reported that
Valenzuela contrasted these concerns “with the enthusiasm and investment
intentions” of the American business community in 1996. GOA officials
also expressed their dissatisfaction with the remarks. The Ambassador and
other Country Team members used a December 17 reception for journalists
to stress our desire to work constructively with Argentina, and the
Ambassador has reached out to GOA officials to urge a prompt end to their
criticisms. Government press is beginning to report a softening tone, but
we think that it is too early to tell. End Summary.
¶2. (C) Immediately prior to departure from Buenos Aires on December 16,
WHA A/S Valenzuela met at the Embassy with about a dozen Argentine print
journalists. He followed 20 minutes of remarks by taking questions for
another 20 minutes, explaining his desire to introduce himself to his
regional counterparts and undertake a dialogue with them on regional
developments.
Media Zero In on Perceived Criticism

--------------------------------------------
¶3. (C) Despite the broad range of issues addressed by A/S Valenzuela,
Argentine media started focusing immediately after the roundtable almost
exclusively on A/S Valenzuela’s remark that the American business
community in Argentina had conveyed to him concern about rule of law and
management of the economy in Argentina. The press also reported that
Valenzuela contrasted these concerns “with the enthusiasm and investment
intentions” of the American business community in 1996. (A/S Valenzuela’s
first official meeting in Buenos Aires was with the Executive Board of
the AmCham.) As an example of the sensationalist nature of much of the
reporting, La Nacion’s banner front-page headlines on December 17 read,
“Clash with the U.S. over Rule of Law in Argentina” and on December 18,
“Protest to U.S. over Obama Envoy’s Criticism.”
Kirchner Allies Take Umbrage

------------------------------------
¶4. (C) The GOA response came swiftly. That same night, three GOA
ministries publicly commented (in a clearly coordinated fashion) on the
Valenzuela remarks. Interior Minister Florencio Randazzo said “Argentina
is enjoying a phase of complete institutional and legal guarantees. The
country has left behind the times when a foreign official could come and
say what needed to be done. There is no lack of rule of law. The
difference now is that the Government protects the people, and in the
1990s it protected the companies’ interests that took millions out.”
¶5. (C) Following the Randazzo statement, the Foreign Ministry issued a
four-point communiquC) saying that: (1) the generalized nature of the
Assistant Secretary’s remarks about supposed concerns in the American
business community made it impossible for the GOA to address the alleged
concerns; (2) the MFA had already written Ambassador Martinez to clarify
similar remarks that she had made the previous week in Cordoba but had
received no reply; (3) Argentine authorities had received no complaints
from American companies operating in Argentina; and (4) the GOA
reiterates its disposition to analyze “all aspects that allow us to
promote reciprocal relations, especially economic, between the two
countries. Open and consolidated channels are available to both
governments for this dialogue.”
¶6. (C) The GOA’s third statement on December 16 came from Justice
Minister Julio Alak, who called Valenzuela’s statements “unusual
and unjustified.” Alak claimed that “rule of law is a fundamental asset
in the country that has been protected and rescued from the more adverse
conditions coming from the institutional and economic crisis in 2001 and
2002.”
¶7. (C) After the initial salvos, the GOA officials who met with
Valenzuela chimed in. Vice Foreign Minister Victorio Taccetti (who
received Valenzuela December 15 at the MFA and hosted him for lunch)
said, “Valenzuela is free to think as he wishes, but the truth is that
1996 is the prelude of the most important crisis Argentina faced. It is
possible that he felt glad in 1996, but that ended in the 2001 crisis
that impacted many companies, including some American ones. Argentina
doesn’t want to set off sparks (“sacarse chispas”) with the United
States; it is Valenzuela who opines without basing his statements on
reality.”
¶8. (C) Cabinet Chief AnC-bal FernC!ndez said, “We are not talking about
a statement that comes from American businessmen, but of (Valenzuela’s)
prejudices, and that is much more sensitive and what worries me most. I
was concerned to find out that he was critical of many Latin American
democracies, and one of the supporters of the Washington Consensus.”
¶9. (C) Argentine Ambassador to the United States HC)ctor Timerman

appeared on television and in the press to claim that he had urged A/S
Valenzuela to meet with CGT labor leader Hugo Moyano and the opposition
Radical Party (UCR), but that “he met only with the political right: De
NarvC!ez, Macri and Cobos. He is sending a message on who are, in his
views, the people with whom he needs to have dialogue.”
¶10. (C) Argentine press reported that FM Jorge Taiana, who was in
Copenhagen for the COP-15 meetings, used a brief pull-aside with
Secretary Clinton to complain about Valenzuela’s remarks. Taiana told the
press that Valenzuela’s words “were unfortunate and show his ignorance of
the Argentine reality. His reference to the administration of Menem as a
time of great growth, when it was precisely the time when Argentina was
hurling headlong toward its worst crisis in history, like a train with no
brakes, was even more unfortunate.”
¶11. (C) Former president Nestor Kirchner said “the statements by someone
who should come with a different policy for Latin America are deplorable.
Valenzuela belongs to the groups that participated in the Washington
Consensus; the neo-liberal model that caused so much damage to the whole
region.” Kirchner ally Deputy AgustC-n Rossi (leader of the FpV bloc in
the Chamber) said “Valenzuela’s visit was not encouraging. We thought the
time when foreign officials came to lecture us was over.” Regarding
Valenzuela’s comparison of the current reality with the one in the 1990s,
he said: “it is a fallacy to say we were better with Menem’s
administration; the cracks of the convertibility plan were evident and
led Argentina to bankruptcy.” The leader of the FpV bloc in the Senate,
Miguel Pichetto, said “Valenzuela keeps adding mistakes to the U.S.
relation to Latin America, because a diplomat visiting a country should
be much more cautious when commenting on our domestic politics and the
economic recovery our government achieved.” A couple of days later, at a
December 20 political rally, Nestor Kirchner said “disrespectful
viceroys” should first criticize what was happening in the United States.
He blamed Argentina’s loss of rule of law on the U.S. crisis that “left
millions of Americans without their jobs, homes or savings.”
Opposition is Divided
-------------------------
¶12. (C) Reaction among the opposition was divided. Some, such as Santa
Fe governor Hermes Binner, a highly regarded moderate Socialist and
possible presidential candidate, said that Valenzuela’s remarks tracked
very closely with complaints that, they, too had heard from the business
community. Others, such as
Socialist Senator Ruben Giustiniani, who usually coincides with Binner,
objected to any foreign official relaying any criticism of Argentina,
while Radical congressional deputy Ricardo AlfonsC-n took issue with what
he interpreted as Valenzuela’s praise for Menem policies in the 1990s:
“We, the Argentines, know that during those years there was a looting of
national assets. For us, it was a disaster.” However, the head of the
Radical Party (UCR), Senator Ernesto Sanz (who joined Valenzuela’s
December 16 lunch with Vice President Cobos) said “it seems it was
necessary that a foreigner come to say this. We have been denouncing the
lack of rule of law from Congress for four or five years. With each law
the Kirchnerists passed, (the country) moved one step towards a lack of
rule of law.” Another prominent opposition leader, Deputy Margarita
Stolbizer (GEN), said, “Unfortunately, Valenzuela is right. This
government condemned us to isolation because of lack of rule of law, and
Valenzuela only relayed how the world sees us.” Leftist congressional
deputy and film director Pino Solanas (Proyecto Sur Bloc Leader) said, “I
strongly repudiate Arturo Valenzuela’s statements. He is the envoy of the
empire whose government has legitimized the coup in Honduras. Mr.
Valenzuela represents the government that keeps thinking the disastrous
and tragic 1990s for Argentina are a model to follow.”
Embassy Works to Smooth Feathers

------------------------------------------
¶13. (C) The Ambassador and other Country Team members used a December 17
reception for journalists to stress our desire to work constructively
with Argentina, stressing our common interests and extensive cooperation.
The Ambassador’s conciliatory remarks received broad press play. The
Ambassador called VFM Taccetti, who offered her a long explanation of why
the GOA in the wake of the 2001-02 crisis had been forced to “pesify”
contracts that had been denominated in dollars at a new exchange rate
that was disadvantageous to foreign businesses. (Note: “Pesification” has
been a common theme of many of the complaints that U.S. investors took to
the World Bank’s International Court for the Settlement of Investment
Disputes.) Those pesified contracts nonetheless continued to be
profitable, Taccetti claimed. He said Argentina’s current challenge,
however, was to maintain employment levels, which explained the GOA
position regarding Kraft and other labor disputes. Taccetti asked if
Washington could issue a conciliatory statement. The Ambassador also
requested a meeting with Cabinet Chief Anibal Fernandez to urge a prompt
end to GOA public complaining about A/S Valenzuela’s remarks. Press
reported widely A/S Valenzuela’s clarification (delivered at his next
stop, Montevideo) that he was merely relaying some concerns expressed to
him by American businesses operating in Argentina.
GOA Tones Down Its Commentary

--------------------------------------------
¶14. (C) The GOA’s Telam news service sent December 18 a story that led
with “Cabinet Chief Anibal Fernandez sought today to lower the tone on
the controversy generated by (Valenzuela’s) remarks.” The wire story
quoted Fernandez saying he had “a very good conversation with Valenzuela
on important topics, and Valenzuela never mentioned concerns about rule
of law.” Fernandez claimed that Valenzuela had several years ago made
similar claims about Argentine rule of law, suggesting a predisposition
to judge Argentina. “But this man is not the United States, no matter how
important he is. The United States is the United States.” Another wire
service reported that VFM Taccetti said “This topic has already passed.
Maybe (Valenzuela) knows why he said it. We think it’s absurd. We are
looking straight ahead... I think the points of agreement between United
States and Argentina were aired in the meetings we had. No one else in
the region has been more firm on Iran. We are working in Haiti... The
agreements are notable. In general, U.S. policies and ours on
international matters are in agreement.”
AmCham Pleased with Press Coverage

---------------------------------------------
¶15. (C) AmCham told post’s Commercial Counselor that it was taking a
positive response to press inquiries, talking up the positive
contributions their members make to Argentina’s economy and their desire
for dialogue with the GOA on the business and investment climate.
Subsequently, some AmCham members told us privately that they were
pleased a high-ranking U.S. diplomat publicly relayed their concerns. The
AmCham President said he intended to take advantage of the opening
offered by the MFA’s request for specific concerns about the business
climate by sending the MFA letter requesting a meeting to review concerns
in detail.
Comment
----------
¶16. (C) Once again, the Kirchner government has shown itself to be
extremely thin-skinned and intolerant of perceived criticism. Concerns
about the weakness of Argentina’s institutions, and the rule of law in
particular, are a dime a dozen in the Argentine press, voiced by
academics, business leaders, judges, opposition politicians, pundits, and
NGOs. Argentines are well aware that Argentina is not attracting as much
investment as are Brazil, Chile, and others in the region. The business
community’s anxiety about arbitrary and capricious rule changes is well
known to the Argentine public and the government. Only die-hard
kirchneristas will agree with Randazzo’s assertion that Argentina enjoys
“full institutional and juridical guarantees,” or the MFA’s contention
that it is unaware of any dissatisfaction on the part of any American
company. For most Argentines, those are laugh lines or cynically
disingenuous statements. That said, we hope that this contretemps will
soon peter out, as has happened in similar such episodes in the past.
¶17. (U) This cable was cleared by WHA A/S Valenquela.

MARTINEZ

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CABLES CONFIDENCIALES Y SECRETOS SOBRE ARGENTINA

E.O. 12958: DECL: 06/28/2016

REF: A. BUENOS AIRES 01090

¶1. (C) This cable is designed to examine President Nestor

¶2. (C) President Nestor Kirchner's personalistic, often

subservient to domestic political considerations. President

¶3. (C) President Nestor Kirchner's personalistic, often

discount speculation that Kirchner will step aside in 2007

¶4. (C) Kirchner's domestic political style leaves no room

BUENOS AIR 00001462 002 OF 005

the political opposition. Kirchner is quick to silence any

arena, attacking the press, the Catholic Church and business

¶5. (C) While utilizing leftist, populist rhetoric at times,

left him in control of the Peronist Party (PJ) and banished

¶7. (C) According to recent studies, Kirchner's psychological

BUENOS AIR 00001462 003 OF 005

respective areas of responsibility. According to Central

¶8. (C) When confronted with a problem, Kirchner's first

Kirchner's rhetoric encouraged the residents of the affected

¶9. (C) Kirchner has a reputation for taking slights or any

¶10. (C) Kirchner's health condition exacerbates, and perhaps

Kirchner has reportedly suffered from irritable bowel

BUENOS AIR 00001462 004 OF 005

tendencies." Kirchner also reportedly works himself to

¶11. (C) Foreign policy in the Kirchner government is always

base (See Reftel E). Kirchner's hardball tactics during

¶12. (C) President Kirchner is not skilled at international

receives poor advice on international issues, such as when

¶14. (C) Kirchner's peculiar operating and decision-making

BUENOS AIR 00001462 005 OF 005

as the lone true defender of Argentina in the world

¶15. (C) Kirchner has a history of using international

at their lowest point in 15 years because Kirchner has chosen

RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

E.O. 12958: DECL: 07/19/2016

REF: A. 05 BUENOS AIRES 02728

¶B. 05 BUENOS AIRES 03056

¶1. (C) Coming to power after one of the worst economic,

¶2. (C) Coming to power after one of the worst economic,

¶3. (C) He is seen as a strong and decisive leader and is

BUENOS AIR 00001594 002 OF 005

¶5. (C) Despite these major successes, Kirchner continues to

¶6. (C) On the economic front, sustained growth requires

crisis, particularly in the tradable goods and services

BUENOS AIR 00001594 003 OF 005

increase, it is doubtful that Argentina will see major new

¶7. (C) Although Kirchner began his presidency by

record since then on institutional-democracy building has

decrees when Fernando de la Rua of the Radical Civic Union

¶9. (C) Kirchner and his supporters' manipulation of the

BUENOS AIR 00001594 004 OF 005

election, the PJ circumvented a constitutional provision

cannot agree on a unified electoral list hold primary

¶11. (C) Kirchner has achieved an unprecedented

Argentina's system of checks and balances in the process. In

¶12. (S) Kirchner campaigned in 2003 on a strong

BUENOS AIR 00001594 005 OF 005

also have been credible allegations that Planning Minister

¶13. (C) President Kirchner's lack of attention and

¶14. (C) The Kirchner administration's most important foreign

¶16. (C) President Kirchner has numerous successes to show

DE RUEHBU #0376/01 0582141

RUEHSG/AMEMBASSY SANTIAGO IMMEDIATE 0214