2012-07-17 Condi and Hillary's "Tug of War" with Chávez in Paraguay

By Nikolas Kozloff.

For isolated and impoverished countries, it can sometimes prove difficult to pursue an independent foreign policy which challenges Washington's traditional sphere of influence. Take, for example, tiny Paraguay which has recently been convulsed in political instability. Four years ago, Fernando Lugo was elected president after pledging to take on political and economic elites on behalf of Paraguay's poor. A former Bishop, Lugo promised to tackle pressing social problems like land reform. On the international front too, Lugo was controversial: though he continued to maintain friendly ties to the U.S., he also made overtures toward the populist regime of Hugo Chávez of Venezuela.

Not surprisingly, such policies did not go over well either in Paraguay or Washington. As I explained in another recent column, Lugo was recently impeached under very questionable circumstances, and indeed some have labeled the Bishop President's removal a kind of "quasi-coup." Following a skewed vote in the opposition-controlled Congress, Lugo was impeached for allegedly encouraging land seizures and Vice President Federico Franco assumed the presidency. Needless to say, however, the actual circumstances surrounding the land occupations are subject to debate. According to authorities, peasant squatters opened fire on police as the security forces moved in to eject them. The peasants, however, claim that the police had in fact conducted a massacre.

There's no evidence that the U.S. had a direct hand in Lugo's removal, yet judging from secret correspondence recently released by whistle-blowing outfit WikiLeaks, Washington will be somewhat relieved to have rid itself of Paraguay's pesky Bishop President. Indeed, from the Bush administration to the Obama White House, the American political establishment viewed Lugo's reformist presidency with a fair degree of suspicion. Though hardly what one would call a radical, Lugo nevertheless refused to ostracize Chávez and as a result the U.S. State Department spent a fair amount of time monitoring Paraguay's new leader.

Condi's Paranoid Mindset

Shortly prior to the 2008 election which brought Lugo to power, Secretary of State Condoleezza Rice asked for more information about Paraguay. In particular, Rice wanted to know how Lugo planned to manage relations with the U.S., Venezuela and Cuba. The Secretary of State's inquiries were not altogether surprising in light of the fact that Lugo had already warned the U.S. to keep its distance from South America's leftist tide. "I don't think the United States has any choice but to accept these changes", he remarked at one point.

Though Lugo was no Chávez protégé, the Paraguayan praised the Venezuelan "experiment" for its positive social accomplishments, as well as "the better distribution of wealth for the benefit of the poor majority." Furthermore, Lugo supported Chávez's land reform program and called the Venezuelan leader's 21st-century socialism "interesting", and "very stimulating."

Hardly amused by such talk, Rice requested Lugo's biometric data, including fingerprints, facial images, iris scans and even DNA. Concerned about the regional implications of the election, Rice wanted to know whether Cuba and Venezuela were offering financial support to any of the political candidates. Preoccupied with wider South American political integration along leftist lines, Rice also sought information about Venezuela's desire to join the Mercosur trade bloc, and asked whether Asunción intended to ratify Chávez's pending request.

Now on a tear, Rice also pressed her subordinates for information about Cuban and Venezuelan student exchange programs and philanthropic activities in Paraguay. Not stopping there, the Secretary of State also wanted to know Paraguay's position on Chávez's so called "Bank of the South" initiative, and the status of Venezuelan military assistance. Moreover, Rice requested information on communication practices of Venezuelan and Cuban officials in Paraguay, including telephone and fax numbers, e-mail addresses and even phone call history.

Concerned about a Lugo Victory

Though Paraguay is a small and landlocked nation with little geopolitical influence, Washington nevertheless engaged in a paranoid effort to monitor Hugo Chávez in the Southern Cone. Indeed, even before Lugo came to power, the U.S. Embassy in Asunción warned that Venezuela had established links with several Paraguayan social, political and religious organizations.

Later, in the midst of Lugo's bid for the presidency, U.S. officials sought out local municipal authorities who claimed that Venezuela had provided leadership training to peasant leaders. The U.S. Embassy was concerned about such links, remarking that Venezuelan Embassy officials had met with Bishop Lugo personally. Meanwhile, the Bush administration suspected that Venezuela had offered material support to leftist groups along the Paraguayan-Bolivian border which had in turn raised tensions.

In addition, the Americans were irked about "Misión Milagro", a Venezuelan health program which provided eye surgery operations to the poor. Sounds benign enough, but the Americans were worried as hundreds of poor Paraguayans had already flown to Cuba and Venezuela in what appeared to be an effort at "winning converts at the mass levels." "Many, perhaps a majority, of the program's participants", U.S. diplomats explained, "... are students who do not need eye surgeries but rather travel to Venezuela for long-term training to expand the 'Bolivarian Revolution'".

Paraguay Espionage

If anything, Washington's suspicions toward Lugo only increased after the latter assumed the Presidency in August, 2008. In something out of a spy novel, U.S. Ambassador James Cason warned Washington about Lugo's leftist ties. So-called "sensitive reporting" indicated that Lugo's inner circle had links to Chávez and supported the latter's "plans for Latin America." Furthermore, one of the parties in Lugo's coalition had supposedly received Venezuelan financial support and the new President himself had "loose ties" with a Marxist Leninist party which had developed an armed wing.

The U.S. Embassy in Asunción was also alarmed about the prospect that Lugo and Chávez would enhance energy collaboration. Since Paraguay was totally dependent on foreign oil, Lugo counted on petroleum giant Venezuela to provide 30% of his country's oil supply. Unfortunately for Paraguay, however, the oil imports caused Paraguay to fall into debt to Chávez. Perhaps, Chávez believed that he could enhance his own position in the Southern Cone by extracting concessions from an economically poor Paraguay. That, at least, was the fear at the U.S. Embassy which remarked in a cable that Paraguayan state oil company Petropar had rejected Chávez's calls for a joint venture with Venezuelan petroleum firm PdVSA. Lugo's conservative Vice President Federico Franco exclaimed for good measure that Chávez should not adopt an "imperialist attitude" toward Paraguay and Petropar's debt to Venezuela.

A Veritable "Tug of War"

Undeterred by the rightist opposition, Lugo ploughed ahead and signed a communications agreement with Chávez to expand South American/Cuban news channel Telesur, the bane of the U.S. right wing establishment. Adding fuel to the fire, the Paraguayan leader signed on to an educational initiative designed to promote the "values of Venezuelan Simón Bolívar", and expanded the Misión Milagro health plan. Setting off the alarm bell yet further amongst the Paraguayan landed elite, Lugo invited Chávez to his country to discuss rural collaboration. Chávez, who had already initiated his own land reform program in Venezuela, declared that he was willing to help Paraguay develop an "agro-industrial center" and provide agricultural and technical assistance.

Needless to say, the conservative Congress and media establishment were hardly pleased about Lugo's cozying up to Chávez. As far as they were concerned, Paraguay was doing just fine under U.S. assistance which included USAID health initiatives and a glorified "democracy program" designed to fight corruption and "give civil society a voice." Having accepted aid from not just Venezuela but also the U.S., Lugo now found himself in a veritable "tug of war" between the two antagonists and faced "continued criticism related to President Chávez's attempts to meddle in domestic politics." In addition, Lugo's increasingly more independent foreign policy was setting him on a collision course with conservative Vice President Federico Franco, who had promised earlier that Paraguay would not develop close ties with Venezuela.

Hillary Takes Charge

On the face of it, one might think that the Obama White House would have a less paranoid view of political developments in the Southern Cone. Yet, WikiLeaks cables belie any such notion, and, if anything, reinforce a sense of continuity between Condoleezza Rice and Hillary Clinton at the State Department. In 2009, in fact, Clinton thanked her subordinates for providing valuable information about Lugo, commending officials for illuminating the new Paraguayan President's daily routine and even his diet.

At times, it almost seemed as if the greenhorn Secretary of State regarded herself as more of a spook than a diplomat. "We value reports that highlight leaders'... strengths and weaknesses", Clinton remarked eagerly. In a follow up cable, Clinton was even more suspicious. What has Lugo said privately to U.S. diplomats about his attendance to the left-leaning ALBA, or Bolivarian Alliance of the Americas, Clinton asked? "Has Lugo expressed an interest in joining ALBA, and if so, what is his timeline for participating?" the Secretary of State pressed.

"Where is He Going?"

In a sense, Clinton's curiosity is hardly surprising. In one communication, the Embassy noted that "some are worried that Lugo and his key advisers are too far to the left for conservative Paraguay." Others, however, openly wondered, "Where is he [Lugo] going?" The new President was "a hard man to read", and while Lugo expressed admiration for conservative Chile he also praised Evo Morales and Fidel Castro. "Is Lugo trying to use (and perhaps stir up) peasant unrest to bring radical socialist-type change to the country or merely trying to address endemic and long-standing problems of inequality, poverty, and corruption?" diplomats wondered.

U.S. officials were quick to remark upon Lugo's media initiatives which stood to upset the established order, noting how Venezuela oversaw a panel titled "Telesur: a Latin American proposal" at a local communications forum. The channel had already been available in Paraguay for two years via satellite transmission, and needless to say the conservative media establishment was none too pleased. Speaking confidentially to the Americans, some believed that the forum was "the first shot fired by Lugo in the war to implement Chávez's Bolivarian revolution in Paraguay."

Lugo then stepped into another political minefield by accepting Venezuelan and Bolivian assistance to implement a Cuban literacy program. The move elicited a "sharp public reaction" from the rightist Paraguayan press, which asserted that the President was trying to introduce Bolivarian socialism into local schools. In a sign of just how vulnerable and isolated Lugo had become, the Paraguayan sought out the Americans personally and assured the U.S. Chargé d'Affaires that the program "would not push Cuban or any other ideology, but emphasize Paraguayan military heroes and history."

"Drowning Man Grasping a Lifeline"

By April, 2009, less than a year into his administration, the former Bishop's position had become untenable. Desperate for help, Lugo met personally with the U.S. Ambassador to discuss his own cabinet's messaging problem. Somewhat brazenly, the Americans seemed to believe that they could somehow "co-opt" the Lugo administration by taking over the government's own communication operations no less.

Writing to her superiors, the Ambassador recommended that "we provide [messaging and communication] assistance, starting with a diagnostic/scoping mission through USAID's Office of Transition Initiatives (OTI) [which in turn provides]... the kind of quick-hit, relatively inexpensive help that could make a difference in the public perceptions of this government." In a cryptic aside, the Ambassador added, "Post recommends we provide it, and in a timely manner, before someone else does."

Later, in a rather breathtaking display of government outsourcing, Lugo sent his own Communications Minister to meet with the USAID Director. The Ambassador wrote that the Paraguayan "responded to our offer of assistance as a drowning man would to an offer of a lifeline." The U.S. Embassy had secured the support of Lugo officials, but the Americans were still nervous about some members of the cabinet. In particular, Clinton was leery of Foreign Minister Héctor Lacognata and wanted to know whether the official had helped organize any activities on behalf of Venezuela.

The Secretary of State need not have worried. During a meeting with the Americans, Lacognata declared that he had personally advised Lugo not to support the return of ousted Honduran leader Manuel Zelaya. Lacognata said that in dealing with Honduras, countries should heed caution and not pay any attention to "vanguard nations" such as Venezuela and Ecuador which were pressing for Zelaya's speedy return. Such utterances went over well with the Americans, who remarked that Lacognata "continues to impress us with his methodical, decisive approach to getting things done."

Conflict over Mercosur

Despite all these many pressures and difficulties, the impudent Lugo continued to demonstrate independence, for example by supporting Venezuela's bid to join South American trade bloc Mercosur. As I explain in my second book, Chávez had long coveted membership in the grouping and hoped to inject his own progressive politics in what was otherwise a simple economic bloc. Not surprisingly, Lugo's support for Chávez led to opposition from the rightist Colorado Party in Congress and leading newspaper ABC Color, not to mention his own Vice President who remarked that he would not vote for Venezuela "even for all the gold in the world."

Faced with such odds, Lugo was obliged to shelve his support for Venezuela's bid so as to avoid "imminent rejection." However, the Americans believed that Chávez was still intent on pursuing the Mercosur matter and "Venezuela is rumored to be increasing its lobbying efforts to sway- or buy - votes one-by-one." Pouring cold water on the Mercosur bid, however, Foreign Minister Lacognata remarked in a sarcastic aside to U.S. diplomats that Venezuelan admission "won't happen here even if Chávez dresses up like Santa Claus."

Political Fallout of the WikiLeaks Scandal

If tensions were not acute enough already, the WikiLeaks scandal itself soon heightened the political crisis in Paraguay yet further. In a huge breakthrough in 2010, Julian Assange published reams of State Department correspondence in what came to be known as the "Cablegate" scandal. In the Asunción media, certain cables received widespread play, particularly those dealing with U.S. spying on Paraguay and Lugo's alledged links to Chávez. If the Paraguayan President had any doubts about U.S. intentions toward his country, leaked cables probably served to reinforce his own sense of paranoia.

If anything, however, the cables must have served as an acute embarrassment to the Lugo administration which was revealed as totally inept and exceedingly subservient to the U.S. Placed in a very uncomfortable position, Lugo declared that his government would seriously analyze the leaks with particular regard to American interference in Paraguay's internal affairs. Lugo added that Foreign Minister Lacognata - whose own reputation was tarnished from the WikiLeaks scandal - would hold private talks with the Americans about the diplomatic fallout.

Did Lugo Get the Note?

With the gloves now off, one would have thought that Lugo would deepen ties to Chávez and South America's left bloc, but if anything the President's reaction to Cablegate was remarkably muted. Indeed, Lugo even declared that the cables would not undermine or harm U.S.-Paraguayan relations. Since the WikiLeaks cache ends in late 2010, it's difficult to assess the more recent diplomatic fallout between Washington and Asunción. On the face of it, however, Lugo seems to have thought - perhaps naively - that he could somehow muddle through and preserve ties to U.S. while still cultivating links with Chávez.

Courting more controversy, Lugo traveled to Caracas in July, 2011 on a surprise visit. There, he met with Chávez to discuss a wide range of issues including Petropar's debt to PdVSA. Later, Lugo hailed the consolidation of the so-called Community of Latin American and Caribbean Nations, also known as Celac, a bloc which stood as an alternative to the Organization of American States but excluding the United States. And tenaciously, Lugo refused to give up on Venezuela's bid to join Mercosur, declaring that he would support a modification of the trade bloc's rules which would allow him to bypass the Paraguayan Congress altogether, thereby fast tracking Chávez's request.

Lingering Questions

Fast forward a year to Lugo's ouster and the question on many people's minds is whether the U.S. may have played a hidden role in the President's removal from power. Recently, a host of individuals and organizations throughout Latin America called attention to the tumultuous politics in Paraguay by signing a letter of protest. "Paraguay and its people are victims of their enormous natural wealth, and the fact that they are situated in an area of strategic importance for the accumulation of capital through continental megaprojects", the letter reads. The U.S. and the Pentagon's Southern Command, the letter signers charge, carried out the Paraguayan coup by allying to local elites and transnational corporations.

The allegations are certainly inflammatory, but how much evidence can be marshaled to support such claims? Without sounding too conspiratorial, there's certainly evidence that the U.S. was unhappy about Lugo's distancing from the Pentagon and the Southern Command [for more on this, see my earlier al-Jazeera column here]. Over at the State Department meanwhile, both Rice and Clinton sounded the alarm bell on Lugo or alternatively hoped to "co-opt" the Paraguayan in the hopes that he would not fall under Chávez's dreaded influence. Some WikiLeaks cables, meanwhile, indicate that U.S. diplomats knew the Paraguayan right was conspiring against Lugo, though it's unclear if they had any particular foreknowledge of the most recent crisis.


Despite these many gaps, some reports suggest that there was a lot more going on beneath the surface during Lugo's ouster. In an unbelievably suspicious development, Weekly News Update on the Americas reports that even as Congress was moving to impeach Lugo, a group of U.S. generals met with legislators to discuss the possibility of building a military base in the Paraguayan Chaco region. Meanwhile, the Obama administration has failed to back Lugo's reinstatement, preferring instead to issue a couple of tepid and noncommittal responses to the political crisis.

No sooner had Paraguayan legislators convened with the Americans than they leveled serious charges against Venezuela. According to the new Franco government, the Venezuelan Foreign Minister met with high level Paraguayan military officials shortly prior to Lugo's impeachment and encouraged the army to defend Lugo during the political crisis. In retaliation for the alled\ged interference, Paraguay expelled the Venezuelan Ambassador, prompting Chávez to cut off oil shipments in an escalating tit-for-tat. Chávez's left-leaning Bolivarian Alliance of the Americas, meanwhile, has condemned Lugo's ouster and member nations recently expelled USAID for supposed interference in their own internal political affairs.

Coups 2.0?

Chávez himself has likened the events in Paraguay to the forcible removal of Manuel Zelaya in Honduras. It's an interesting comparison since Zelaya, like Lugo, lost his position under similarly mysterious circumstances in 2009. Though Honduran conservatives were certainly aligned with the interests of the U.S. right and defense establishment, it's difficult to prove any close or orchestrated collaboration between the two during the Zelaya coup, and we may never know whether Obama himself may have given the green light.

Perhaps, like Honduras, we shall have a difficult time getting at the ultimate truth in Paraguay. In light of the Obama administration's relentless crackdown on whistle-blowing, it seems unlikely that we will ever gain any insight into what the Pentagon or other intelligence gathering operations [including the FBI, which has played a role in the Southern Cone] have been doing in Paraguay. For a president who once promised great transparency, it certainly comes as a grave disappointment.

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