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ACTION: LA/APUB-4 (556) INFO: NC/E00, ODPD-0, RF, FILE, LADORECORD,QA/FILE, C/FR/RB, DC/FR/RB, FR/EXO, FR/PL-2, C/LA/RB, DC/LA/RB,LA/CATF-10, LA/OPS, NE/ISR-4, Cl/LA, Cl/NC, DCNE/I0, EPO/FD, NC/HRO,

(34/W)

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CITE NC/L: .2:1 21686

TO: PRIORITY NC/HEADQUARTERS, DIRECTOR INFO C:_13

WNINTEL L

SUBJECT: MEETINGS IN WASHINGTON WITH LREF: A. NC/ EL l] 21504

B. NCiLl_ 21540

1. ACTION REOUESTED: SVDISH/HEADQUARTERS APPROVAL FOR C/OTOY TO MIAMI, 21 AND 22 MAY, FOR JOINT

DEBRIEFING OF r- =3 WITH CZ _27 COS DESIGNEEALSO REQUEST APPROVAL TO RtIMBURSE CD

FOR ADDITIONAL EXPEN S ES INCURRED BY CHANGING HER PLANS TO

SO THAT C::7 CAN MAKE PLANS ACCORDINGLY. DEBRIEFING WILL BEACCOMMODATE THE MEETING ON 22 MAY. APPRECIATE A RESPONSE ASAP ...1c ffronefr

IMMEDIATELY FOLLOWING CI .DVISIT TO PARAGUAY 29 APRIL THROUGH20 MAY.

2. C: ;72 AND SVDISH C -2.2 REFERENT LI:7 MET WITH .23 AND AKULE OFFICERS MORNING OF 29 MARCH TO t)

DISCUSS 1 1: vili TO WASHINGTON, HER UPCOMING TRIP TOPARAGUAY, AND POSSIBLE FUTURE OPERATIONAL USE OFEI AKULEREITERATED THEIR OPINION THATE: , -.1WAS CURRENTLY ONE OF THEIRBEST SOURCES ON PARAGUAYAN INIERNAL AFFAIRS AS WELL AS BEING AN"ENCYCLOPEDIA" OF INFORMATION ON PARAGUAY AND PERSONALITIESTHERE OF INTEREST. AKULE STATED THEIR OBJECTIVES IN MEETINGCZ..3IN WASHINGTON WERE TO EXPRESS GRATITUDE FOR HER COOPERATION ANDTHE IMPORTANCE OF THE INFORMATION SHE HAS BEEN PROVIDING,INTRODUCE C TO C-2 AND DISCUSS IN GENERAL TERMS THEOPERATIONAL REALITIES FOR HIM,IN ASUNCION, AND ASKCZ,JIF SHEWOULD BE WILLING TO MAKE REGULAR TRIPS TO PARAGUAY ON BEHALF OFPNVALUE IN ORDER TO OBTAIN CURRENT OPERATIONAL AND POSITIVEINTELLIGENCE INFORMATION. THE JOINT ROLE OF AKULE AND SVDISHWAS DISCUSSED, AND IT WAS AGREED THAT SVDISH SHOULD CONTINUE TOHANDLE ALL Fl REPORTING FROM E. :3 INDICATED HIS DESIRETO PERSONALLY DEBRIEF W/1 FOLLOWING ANY OF HER TRIPS TO PARAGUAYAND IT WAS AGREED THAT SUCH DEBRIEFINGS SHOULD BE HANDLEDJOINTLY WITH SVDISH AND WOULD OCCUR WITHIN CONUS.

3. ARRIVED IN WASHINGTON EVENING OF 31 MARCH AND METWITH C: 1 AND C .73 OVER DINNER. r._ -127DESCRIBED FOR CI_THE NATURE UFITIE -kACCESS IN ASUNCION THROUGH HER FAMILYCONNECTIONS AO DISCUSSED IN GENERAL TERMS TOPICS ANDPERSONALITIES OF INTEREST AS HAVE BEEN PROVIDED IN PREVIOUSTRAFFIC, PARTICULARLY REFS A AND B. FOLLOWING PARAGRAPHS WILLDESCRIBE IN MORE DETAIL THE TOPICS RAISED WITI C. j DURING flER.

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4. MEETINGS ON 1 APRIL WITH LI-73INCLUDED C: •23 ANDC2 :3 REPRESENTING SVDISH AND AKULE REPORTS OFFICER, BRANCH'CHIEF, DESK OFFICER, AND a -3 THE MEETING BEGAN WITH ANEXPRESSION OF APPRECIATION FOR ;3 VALUABLE ASSISTANCE TOPNVALUE AND THE FACT THATi -tHE1HAu PROVIDED PNVALUE WITH UNIQUEACCESS TO INFORMATION ABOUT PARAGUAY WHICH WAS OF GREAT INTERESTTO BOTH PNVALUE:AND OTHER NVBLAZON ENTITIES. THE ROLE OF ANDINTERRELATIONSHIPS BETWEEN EACH OF THE OFFICERS AT THE MEETINGWAS EXPLAINED TO cL.J THE REMAINDER OF THE MORNING THROUGH THEENO OF THE DISCUSSIONS AT ABOUT 1400 HOURS COVERED A RANGE OFTOPICS. FOLLOWING ARE C -21 „RESPONSES TO THE THESE ISSUES: HERCONTINUED OPERATIONAL USE AND 'POSSIBILITY OF MORE FREQUENT TRIPS.'TO PARAGUAY; POTENTIAL SUPPORT ASSETS FOR . IN ASUNCION;THE SUCCESSION ISSUE; THE RELATIONSHIP BETWEEN PRESIDENT' .((STROESSNER)) AND THE BRAZILIAN AND ARGENTINE GOVERNMENTS; THEPOSSIBILITY THAT STROESSNER WOULD.RESPOND TO AN NVBLAZON REQUESTFOR ASSISTANCE IN NICARAGUA; DRUG.AND ARMS TRAFFICKING IN !PARAGUAY; PUBLIC RESPONSE T0 THE DRUG ISSUE AND THE SEARCH FORMENGELE; OBSERVATIONS OF SEVERAL PERSONALITIES OF INTEREST INPARAGUAY.'

5. C. ,23 AGREED WITHOUT HESITATION TO MAKE MORE FREQUENTTRIPS TO PARAGUAY. SHE STATED THAT SHE WOULD BE WILLING TOTRAVEL WHENEVER PNVALUE FELT IT WAS APPROPRIATE. SHE NOTED THATSHE HAS BUSINESS INTERESTS IN PARAGUAY AND THAT IT WOULD NOT BEUNUSUAL FOR HER TO MAKE ADDITIONAL TRIPS. ALTHOUGH SHE HASFULL-TIME TEACHING COMMITMENTS, SHE IS ABLE TO TRAVEL DURING THESUMMER MONTHS. IN DECEMBER, AND DURING SPRING BREAKS AT THEUNIVERSITY. t =IAGREED TO CHANGE HER SCHEDULE FOR HER RETURNFROM HER APRIL/MAY TRIP TO PARAGUAY SO THAT SHE WOULD HAVE AONE-DAY LAYOVER IN MIAMI ON 21/22 MAY FOR DEBRIFINGS BY CZAND C, L DSAID THAT SHE WAS MOTIVATED TO ASSIST PNVALUEBECAUSE SHE HAS A PERSONAL INTEREST IN SEEING THAT THEPARAGUAYAN 4NTERNAL AND EXTERNAL SITUATION IS WELL UNDERSTOOD BYNVBLAZON, AND ALSO BECAUSE SHE WELCOMES' THE CHANCE TO REPAYNVBLAZON FOR GIVING HER THE OPPORTUNITY TO LIVE AND PROSPERHERE. SHE STATED THAT SHE HAD CONCERNS THAT SOME OF THEINFORMATION ON PARAGUAY WHICH WAS PASSING THROUGH THE EMBASSYWAS NOT FROM THE BEST SOURCES. SHE NOTED THAT HER FAMILY HASACCESS TO MANY GOOD SOURCES DUE TO THE FAMILY'S LACK OFPOLITICAL AFFILIATIONS AND THE FACT THAT THEY WERE GENERALLY NOTIDENTIFIED WITH ANY PARTICULAR GROUP OR FACTION AND THEREFORECONFIDED IN BY MANY FACTIONS.

6. CJ STATED THAT DOMINGO ((LAINO)) WAS NOT A TRUSTWORTHYSOURCE OF INFORMATION. SHE CONSIDERS HIM TO BE A SUBJECTIVESOURCE WHOSE INFORMATION IS TWISTED BY POLITICAL ANTAGONISMS.SHE DESCRIBED HIM AS "FLAKY" AND AN OBNOXIOUS AGITATOR WHO LIKESTO CREATE POLITICAL DISTURBANCES.

7. C IWAS QUERIED REGARDING POSSIBLE CANDIDATES WHO COULDPERFORM AS A PRINCIPAL AGENT FOR C: A STATION. SHE WASSPECIFICALLY ASKED WHETHER HER FATHER MIGHT BE WILLING AND ABLETO FULFILL THAT ROLE. E. .1SAID THAT SHE DID NOT CONSIDER HERFATHER A GOOD CANDIDATE PRINCIPALLY BECAUSE OF HIS ADVANCING AGEAND THE FACT THAT HIS AGE COULD LEAD TO INADVERTENTINDISCRETIONS WITH REGARD TO HIS ROLE. t:_-3 STATED THAT HERPARAGUAYAN BROTHER RICARDO WOULD NOT BE A GOOD CANDIDATE

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BECAUSE HE IS VERY PRO-PARAGUAYAN AND WOULD PROBABLY BEUNWILLING TO WORK WITH PNVALUE. G-2 THOUGHT THAT HER OTHEROTHER BROTHER, DONALD, A U.S. CITIZEN RESIDING IN ASUNCION,COULD BE USEFUL; BUT SHE FELT THAT SHE COULD GAIN MOREINFORMATION FROM HER BROTHER THAN COULD A PNVALUEREPRESENTATIVE. :3 SUGGESTED THAT THERE WERE PROBABLY SOMEGOOD CANDIDATES AMONG THE AMERICAN BUSINESS COMMUNITY INASUNCION, AND SHE AGREED TO ATTEMPT TO SPOT ANY POTENTIALCANDIDATES DURING HER UPCOMING VISIT. C 3 STATED THAT THE U.S.MILITARY MISSION IN ASUNCION SHOULD BE PARTICULARLY VALUABLE TOPNVALUE SINCE U.S. MILITARY OFFICIALS OFTEN DEAL CLOSELY WITHTHEIR PARAGUAYAN COUNTERPARTS AND ARE ABLE TO BUILD CLOSERAPPORT AND GAIN ACCESS WHERE OTHER AMERICANS ARE UNABLE TO.SHE REITERATED HER OPINION THAT THE HONORARY PARAGUAYAN CONSULIN MIAMI, RETIRED U.S. ARMY GENERAL ((CHEGIN)) WHOFORMERLY WAS CHIEF OF THE U.S. MILITARY MISSION IN ASUNCION,WOULD BE A GOOD SOURCE OF INFORMATION ON PARAGUAY AS HE HAS ACLOSE RELATIONSHIP WITH A NUMBER OF PARAGUAYAN MILITARY OFFICERSAND IS ABLE TO SEE PRESIDENT STROESSNER DURING VISITS TOASUNCION. EL 23STATED THAT SHE HAD RECENTLY SPOKEN WITH CHEGINAND THAT HE SAID HE WOULD LIKE TO TRAVEL TO PARAGUAY MORE OFTENBUT THAT IT WAS TOO EXPENSIVE. CHEGIN WAS MOST RECENTLY INPARAGUAY APPROXIMATELY SIX MONTHS AGO AND DID MEET WITHSTROESSNER AT THAT TIME

8. WITH REGARD TO THE SUCCESSION ISSUE, C :3 SAID SHE FEELSTHE NEXT LEADER OF PARAGUAY WILL COME FROM AMONG THE YOUNGERMEMBERS OF THE COLORADO PARTY WHO ARE "CHOMPING AT THE BIT" TOTAKE OVER. SHE INDICATED THAT ELPIDIO ((ACEVEDO)) WAS ONEPOSSIBILITY, BUT THAT SHE FELT LUIS ((ARGANA)) HAD THE GREATESTPOTENTIAL. SHE DESCRIBED ARGANA AS A UNIQUE PHENOMENON INPARAGUAY SINCE HE HAS BEEN ABLE TO TAKE ON A NUMBER OF "SACREDCOWS" IN THE JUSTICE SYSTEM. SHE DESCRIBED HOW ARGANA HAS BEENMAKING SURPRISE VISITS TO PARAGUAYAN JAILS TO CHECK ON THEPRISONERS WHO FREQUENTLY TURNED OUT NOT TO BE IN THEIR CELLS ASTHEY SHOULD BE. ARGANA HAS BEEN CRACKING DOWN AND ORDERING THATALL PRISONERS BE KEPT IN THEIR CELLS AND NOT ALLOWED OUT BYCORRUPT PRISON OFFICIALS. ARGANA HAS OBTAINED THE BLESSING OFSTROESSNER WHO ADMIRES AND PROTECTS HIM. ARGANA IS ALSO POPULARWITH THE ARMY AND HAS OBTAINED THE BACKING OF GENERAL((JOHANNSEN)). CI DBELIEVES THAT THIS IS BECAUSE OF THERELATIVE AWE THAT THE POPULATION HAS FOR ARGANA AND THE FACTTHAT HE IS A VERY CHARISMATIC INDIVIDUAL. C.REITERATED HERPREVIOUSLY REPORTED ASSESSMENTS OF ARGANA AND JOHANNSEN.

9. t.J WAS ASKED ABOUT THE POSSIBILITY OF THE EXILECOMMUNITY PLAYING A ROLE IN THE SUCCESSION. SHE STATED THAT SHEDOES NOT BELIEVE THE EXILE GROUPS ARE UNITED ENOUGH TO PROVIDEANY REAL OPPOSITION TO THE GOVERNMENT. SHE FEELS THAT MOST OFTHE EXILES ARE TOO OLD AND HAVE BEEN OUT OF PARAGUAY TOO LONG TOBE ABLE TO RETURN TO PARAGUAY AND PLAY ANY ROLE IN THESUCCESSION. SHE REITERATED HER OPINION THAT THE OLDERPOLITICIANS IN PARAGUAY WOULD ALSO HAVE LITTLE ROLE IN THESUCCESSION.

10. C.. WAS ASKED ABOUT THE THE INFLUENCE THAT EVENTS INARGENTINA AND BRAZIL MIGHT HAVE ON PARAGUAY AND SPECIFICALLY ONPRESIDENT STROESSNER. SHE SAID THAT WHATEVER TAKES PLACE INARGENTINA AND BRAZIL, PARAGUAY WILL SOON FOLLOW BECAUSE PARAGUAYCAN NOT STAND THE "SQUEEZE" FROM THE TWO COUNTRIES FOR TOOLONG. SHE SAID THAT PARAGUAYANS WERE KEEPING A CLOSE WATCH ON

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THE RESULTS OF ARGENTINA'S INVESTIGATION INTO CORRUPTION OF THEMILITARY AND TO WHAT EXTENT PRESIDENT RAUL ((ALFONSIN)) IS ABLETO PREVAIL. SHE CONSIDERS IT TO BE A TRUE TEST FOR ALFONSIN'SREAL CONTROL IN ARGENTINA AND THEREBY A TEST FOR THE FUTURE OFTHE MILITARY IN PARAGUAY. SHE FEELS THAT IF ALFONSIN WINS ITWILL BE A CLEAR SIGN THAT THE MILITARY CAN BE CONTROLLED AND ITWOULD PROBABLY PROMPT THE NEXT GOVERNMENT IN PARAGUAY TO TAKESTEPS TO BRING THE MILITARY UNDER CONTROL. CJ WAS EMPHATIC INSTATING THAT STROESSNER WOULD TAKE NO SUCH STEPS REGARDLESS OFTHE OUTCOME. SHE POINTED OUT THAT STROESSNER IS AWARE THATMILITARY DICTATORSHIPS ARE ON THE WAY OUT IN SOUTH AMERICA; BUTSINCE HE CONSIDERS PARAGUAY TO HAVE A DEMOCRATIC GOVERNMENT, HEWILL CONTINUE TO WELCOME THE SPREAD OF DEMOCRACY IN THE AREA,SPECIFICALLY TO ARGENTINA AND BRAZIL.

11. C.1.2 DESCRIBED STROESSNER AS BEING IN TOTAL CONTROL ANDCOMMAND OF EVENTS IN PARAGUAY. SHE FEELS THAT HE HAS THE ANSWERTO MOST, IF NOT ALL, OF THE PARAGUAYAN ISSUES OF CURRENTINTEREST TO NVBLAZON, E.G. DRUG TRAFFICKING AND JOSEF((MENGELE)). C:_3STATED THAT STOESSNER IS EXTREMELY LOYAL ANDPROTECTIVE OF THE PEOPLE AROUND HIM WHO HAVE HELPED HIM IN THEPAST. SHE SAID THAT HE IS NOT UNREALISTIC ABOUT RELATIONSHIPSAND HAS ALWAYS HAD SOME CONFLICT WITH THOSE WHO DISAGREED WITHHIM. HE HAS A PROPHETICAL MYSTIQUE ABOUT HIM IN THAT HEBELIEVES HE HAS ALWAYS BEEN PROVEN RIGHT IN ANY DISAGREEMENT.OTHERS IN GOVERNMENT IN PARAGUAY HAVE A RESPECT FOR HISHISTORICAL PERSPECTIVE AND C:...IPOINTS OUT THAT STROESSNER STOODFIRM IN HIS STANCE WITH ARGENTINA ON THE HYDROELECTRIC PROJECTDESPITE THE ADVICE OF THOSE AROUND HIM. ARGENTINA FINALLY GAVEIN TO STROESSNER'S DEMANDS WHICH HE FELT VINDICATED HISPOSITION. HE FEELS THAT HE WILL BE VINDICATED BY HISTORY ANDRECOGNIZED AS BEING RIGHT WITH REGARD TO HIS LEADERSHIP INPARAGUAY.

12. :)HAD NO ANSWER AS TO WHY STROESSNER SEEMS TO ALLOWTHE .DRUG BUSINESS IN PARAGUAY TO CONTINUE DESPITE HIS APPARENTCONVICTIONS THAT IT IS IMMORAL. SHE NOTED THAT STROESSNER TOOKLITTLE ACTION WHEN HIS DAUGHTER GRACIELLA WAS BEING BEATEN BYHER FORMER HUSBAND MARIO ((ABBDO-BENNETEZ)) , ALTHOUGH GUSTAVO((STROESSNER)) WAS RESPONSIBLE FOR THE ARREST AND CONFINEMENT OFBENNETEZ FOR SOME SIX MONTHS FOLLOWING THE BEATINGS.

13. REGARDING THE POSSIBILITY THAT STROESSNER MAY ALLOWMILITARY OFFICIALS FROM ARGENTINA OR OTHER SOUTH AMERICANCOUNTRIES TO SEEK SANCTUARY IN PARAGUAY TO AVOID PROSECUTION FORHUMAN RIGHTS ABUSES /I j POINTED OUT THAT THERE IS A PRECEDENTFOR SUCH ACTION WITH REGARD TO BOTH PERON AND SOMOZA. SHE ALSONOTED THAT THERE WERE RUMORS AT THE TIME OF SOMOZA'SASSASSINATION THAT STROESSNER HAD ACTUALLY BEEN RESPONSIBLE.STROESSNER ALLEGEDLY CONSIDERED SOMOZA AN EMBARRASSMENT SINCESOMOZA HAD FLED TO PARAGUAY WITH PROMISES OF BRINGING LARGEAMOUNTS OF CAPITAL TO PARAGUAY FROM NICARAGUA. ALSO, STROESSNERBECAME QUITE ANGRY AT SOMOZA'S SON AFTER HE PUBLICLY INSULTED•GRACIELLA AT A NIGHTCLUB IN ASUNCION, AND STROESSNER HAD HIMEXPELLED THE FOLLOWING DAY.

14. 11 3 HAD NO EXPLANATION FOR WHY STROESSNER WOULDCONTINUE TO ALLOW VOCAL FACTIONALISM WITHIN THE COLORADO PARTY.SHE BELIEVES THAT STROESSNER RECOGNIZES THAT HE DOES NOT HAVETOTAL CONTROL OF THE BICKERING WHICH IS A RESULT OF A GENERALSTATE OF RESTLESSNESS WITHIN THE PARTY.

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15. C--:2 STATED THAT STROESSNER WOULD PROBABLY CONSIDER AREQUEST BY NVBLAZON TO INTERVENE IN NICARAGUA. C., NOTED THATTHERE IS PRECEDENT FOR PARAGUAYAN INTERVENTION IN CENTRALAMERICA AND THAT PARAGUAY WAS CONSIDERING SENDING TROOPS INTO ELSALVADOR ON BEHALF OF NVBLAZON BUT BACKED AWAY FROM THE MOVEWHEN NVBLAZON SIDED WITH BRITAIN IN THE DISPUTE WITH ARGENTINAOVER THE MALVINAS/FALKLAND ISLANDS. C:-.3 DESCRIBED STROESSNERAND PARAGUAYANS IN GENERAL AS CONCERNED ABOUT PARAGUAY.NVBLAZON IS PERCEIVED AS HAVING A MORAL OBLIGATION TO INTERVENE,BUT NVBLAZON MUST TAKE THE INITIATIVE IN REQUESTING SUPPORT FROMPARAGUAY. c. STROESSNER WOULD RESPOND POSITIVELY TO AREQUEST FOR ASSISTANCE BECAUSE IT WOULD DIVERT ATTENTION AWAYFROM HIM AS THE "BAD BOY" IN SOUTH AMERICAN POLITICS AND GIVEHIM A CHANCE TO HAVE A PLACE IN HISTORY AS HAVING SOLVED THECENTRAL AMERICAN PROBLEM. E7.3 SUGGESTED THAT THE IDEA OFPARAGUAY INTERVENING IN NICARAGUA COULD BE PLANTED IN APARAGUAYAN NEWSPAPER, PERHAPS THROUGH A SYMPATHETIC EDITOR, IFIT WERE APPROACHED IN TERMS OF STROESSNER BEING AN AVOWEDANTI-COMMUNIST WITH A CHANCE OF BECOMING A HERO IN LATIN AMERICA.

16. or.3 FEELS THAT A SIMILAR APPROACH COULD WORK WITHREGARD TO THE DRUG PROBLEM IN PARAGUAY, BUT NOT WITH REGARD TOTHE QUESTION OF THE WHEREABOUTS OF MENGELE. AS FAR AS DRUGTRAFFICKING IS CONCERNED, J POINTS TO GENERAL ANDRES((RODRIGUEZ)) AS THE MOST LIKELY PERPETRATOR. SHE BELIEVES THATIF NVBLAZON COULD AMASS HARD EVIDENCE AGAINST RODRIGUEZ AND THENPLACE IT IN THE PUBLIC SPOTLIGHT, THE PUBLIC AND POSSIBLYSTROESSNER WOULD WELCOME IT. SHE NOTES THAT STROESSNER'SPROBLEM IN HANDLING THE DRUG SITUATION IS HIS CONTINUING SUPPORTFOR AND FROM THE MILITARY. HOWEVER, IF RODRIGUEZ COULD BE SHOWNTO BE INVOLVED IN THE DRUG TRAFFICKING:\IT COULD ERODERODRIGUEZ'S STRONG SUPPORT BY THE MILITARY AND POSSIBLY GIVESTROESSNER A MECHANISM TO REMOVE RODRIGUEZ AND TAKE CARE OF THEDRUG PROBLEM. C._,D NOTES THAT RODRIGUEZ'S STRENGTH IS DERIVEDFROM HIS CHOICE MILITARY COMMAND, HIS CLOSE PERSONAL AND FAMILYRELATIONSHIP WITH STROESSNER, AND HIS OWN RUTHLESSNESS. SHEREITERATED PERSONALITY INFORMATION ABOUT RODRIGUEZ WHICH HASBEEN PROVIDED IN PREVIOUS TRAFFIC. SHE NOTED THAT RODRIGUEZ ISWELL KNOWN TO HAVE BEEN INVOLVED IN HORSE THEFT ALTHOUGH NO ONEIN PARAGUAY HAS BEEN ABLE TO DO ANYTHING ABOUT IT. SHE ALSONOTED A RECENT RUMOR THAT LAST SUMMER AN UNIDENTIFIED PARAGUAYANGENERAL ACCOMPANIED DRUG TRAFFICKERS TO EUROPE WHERE THEYVISITED THE LOCATION FROM WHICH THE CONTROVERSIAL DRUGPROCESSING CHEMICALS WERE ALLEGEDLY SHIPPED. cl_a POINTED OUTTHAT RODRIGUEZ HAS TWO RANCHES, ONE NEAR ASUNCION AND ANOTHER INA REMOTE REGION OF THE CHACO AREA. SHE DOES NOT BELIEVE THATTHE CHACO RANCH HAS ANY UTILITY FOR RAISING CATTLE OR OTHERCOMMERCIAL ENTERPRISE BUT IS PROBABLY USED BY RODRIGUEZ FORDRUG/CONTRABAND TRAFFIC.

17. CI3DOES NOT FEEL THAT THE PARAGUAYAN PUBLIC WILL HAVETHE SAME REACTION TO THE CURRENT SEARCH FOR MENGELE. MENGELEHAS USED PARAGUAY ONLY AS A HAVEN, AND HE HAS HAD NO IMPACT ONINTERNAL AFFAIRS IN PARAGUAY AND HAS NOT BEEN CONSIDERED ATHREAT BY THE PUBLIC. SHE BELIEVES THAT THE MENGELE PUZZLE WILLBE DIFFICULT TO SOLVE SINCE IT HAS BECOME A "POLITICAL FOOTBALL"CAUSING MANY POTENTIAL SOURCES OF INFORMATION TO DRY UP. SHEPOINTED OUT THAT THE RECENT NEW YORK TIMES ARTICLE ON PARAGUAYDID LITTLE TO HELP NVBLAZON/PARAGUAYAN RELATIONS AND WILL WORKAGAINST NVBLAZON EFFORTS TO ASCERTAIN THE WHEREABOUTS OF

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MENGELE. SHE NOTED THAT STROESSNER FEELS THAT NVBLAZON SHIFTSITS ALLIANCES TOO EASILY AND THAT HE CANNOT UNDERSTAND'WHYNVEILAZON Pp),LICY SHIFTS WITH EVERY CHANGE IN THE POLITICAL PARTYIN POWER. )SHCDESCRIBED STROESSNER AS GENUINELY PUZZLED IN THISREGARD, ALTHOUGHLSICNOTED THAT THE CURRENT NVBLAZONADMINISTRATION IS, WELL THOUGHT OF AMONG THE PARAGUAYAN PUBLIC.

18. C7 WAS ASKED ABOUT THE POSSIBILITY THAT MONEYGENERATED BY NARCOTICS TRAFFICKING WAS BEING LAUNDERED INPARAGUAY. SHE HAD NO SPECIFIC INFORMATION BUT NOTED THAT THREEEXCHANGE HOUSES IN PARAGUAY WERE THRIVING: CAMBIOS MENNOTOUR,CAMBIOS IGUASU, AND CAMBIOS GUAXANI. SHE SAID THAT GENERALBENITO ((GUANES)) EXCHANGES MONEY THROUGH HER BROTHER RICARDOAND THAT THE GENERALS ARE MAKING MONEY BY PURCHASING DOLLARS ATTHE OFFICIAL RATE AND SELLING THEM AT THE EXCHANGE HOUSES FORTHE TRADING RATE.

19. ON THE QUESTION OF ILLEGAL ARMS SHIPMENTS OR OTHERCONTRABAND TRANSITING THROUGH PARAGUAY, C...L.7 POINTED OUT THATPARAGUAY HAS ACCESS TO THE PORT OF PARAGUANA IN BRAZIL WHICH ISA FREE PORT FOR PARAGUAYAN GOODS. IF ARMS OR OTHER CONTRABANDWERE SHIPPED TO PARAGUAY THROUGH THE PORT THEY COULD THEN GOOVERLAND TO PORTO STROESSNER WITHOUT BEING SEARCHED. SHE ALSOSPECULATED THAT ARMS COULD GO OVERLAND FROM BRAZIL TO PARAGUAYAND THEN TO THE PORT WHERE THEY WOULD BE RELABELLED FOR SHIPMENTTO THE MID-EAST WITHOUT INVESTIGATION. SHE REITERATEDPREVIOUSLY PROVIDED INFORMATION CONCERNING THE POSSIBLE USE OFTHE PARAGUAYAN NATIONAL AIRLINES TO SHIP ARMS BETWEEN WESTGERMANY AND ISRAEL.

20. C=-- PROVIDED COMMENTS ON A NUMBER OF PERSONALITIES.SHE DESCRIBED MINISTER OF INDUSTRY AND COMMERCE DUARTE((CENTURION)) AS THE MOST CORRUPT MAN IN PARAGUAYAN GOVERNMENT.CENTURION, WHO IS POPULARLY REFERRED TO AS "EL TIBURON" (THESHARK), HAS SAID IN THE PAST THAT HIS DAY WAS NOT WORTHWHILEUNLESS HE MADE ONE MILLION GUARANIES THAT DAY. CENTURION USESHIS PRIVATE SECRETARY ((CABALLERO)) AS HIS DEBTCOLLECTOR. STROESSNER HAS GREAT RESPECT FOR CENTURION ANDCENTURION ENJOYS ACCESS TO THE PRESIDENT.

21. c DESCRIBED FORMER MINISTER OF THE INTERIOR((ENSFRAN)) AS A "HAS BEEN" WHO ENJOYS NO SUPPORT WITHIN THEGOVERNMENT. HE WAS REMOVED FROM HIS JOB BY STROESSNER AND ISCONSIDERED TO BE A PARIAH BY THE COLORADO PARTY. HE HAD AREPUTATION FOR BEING INVOLVED IN QUESTIONABLE ACTIVITIES WHILEIN OFFICE. HE DOES CONTINUE TO MAKE HIS PRESENCE KNOWN INASUNCION BUT c2 BELIEVES THAT HIS TIME HAS PASSED. SHE NOTEDALSO THAT TRAuliIONALLY THE MINISTER OF THE INTERIOR HAS BEENUSED AS A SCAPEGOAT FOR PROBLEMS IN PARAGUAY AND ALTHOUGH THEREST OF THE CABINET HAS BEEN VERY STABLE, THERE HAVE BEENNUMEROUS INTERIOR MINISTERS IN THE PAST.

22. t. DESCRIBED FORMER PARAGUAYAN AMBASSADOR TO THEU.S. ((MARIO-LOPEZ)) AS THE ONLY WELL EDUCATEDAMBASSADOR PARAGUAY HAS HAD. HE IS NOW A NATIONAL LEGISLATOR INPARAGUAY AND HAS BEEN CRITICAL OF THE GOVERNMENT. C:23 DOES NOTBELIEVE THAT HE IS A CORRUPT POLITICIAN AND POINTS OUT THAT HELEFT THE AMBASSADORSHIP BECAUSE HE WAS BEARING TOO MUCH OF THEFINANCIAL COSTS HIMSELF. 2 BELIEVES THAT HE ATTENDS THEASUNCION YACHT CLUB WHERE, AS PREVIOUSLY REPORTED, MANY OF THEPARAGUAYAN GENERALS AND POLITICAL PERSONALITIES INCLUDING

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STROESSNER REGULARLY ATTEND. SHE NOTED THAT A CLUB MEMBERSHIPCOSTS BETWEEN US$7,000 AND US$10,000 ALTHOUGH THERE ARE NO NEWMEMBERSHIPS AVAILABLE EXCEPT FOR INDIVIDUALS WHO PURCHASE LOTSIN THE NEW DEVELOPMENT AROUND THE CLUB. THERE ARE CURRENTLYSEVERAL THOUSAND MEMBERS OF THE YACHT CLUB.

23. C. SAID THAT JOSE "PEPE" ((SUBECERETA)) IS 'A PARTNERWITH HER BROTHER RICARDO IN THE YACHT CLUB. SUBECERETA IS AMEMBER OF THE COLORADO PARTY ALTHOUGH HE COMES FROM A LONGFAMILY TRADITION OF LIBERALES PARTY MEMBERS. SUBECERETA IS ARESPECTED INDIVIDUAL AND WELL LIKED BY STROESSNER.

24.cr WILL REMAIN ALERT TO THESE AND OTHER PREVIOUSLYDISCUSSED TOPICS DURING HER UPCOMING TRIP TO PARAGUAY. WEWELCOME ANY ADDITIONAL COMMENTS ON THE MEETING WITH c FROM ANYOF THE PARTICIPANTS. PLEASE CONTINUE TO PROVIDE CURRENTREQUIREMENTS WHICH CAN BE USED FOR BRIEFING PRIOR TO HERTRIP. APPRECIATE YOUR CONTINUING FEEDBACK ON THIS CASE AND LOOKFORWARD TO FUTURE SUCCESS IN WORKING WITH AKULE ANC C

25. FILE: 7BC-806-012/02, NC i CIC: DECL OADR DRV HUM 4-82.END OF MESSAGE SECRET