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225181
2009-09-15 13:21:00
09MEXICO2701
Embassy Mexico
CONFIDENTIAL

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C O N F I D E N T I A L SECTION 01 OF 03 MEXICO 002701 
 
SIPDIS 
 
NSC FOR SENIOR DIRECTOR RESTREPO; DEPARTMENT FOR WHA DAS 
JACOBSON, MEX DIRECTOR LEE AND INR HOHMAN. 
 
E.O. 12958: DECL: 09/08/2019 
TAGS: ECIN ECON EINT EPET MX PGOV PINR PREL
SUBJECT: MEXICO: CALDERON MEETS PRI RESISTANCE ON 
CONTROVERSIAL CABINET CHANGES 
 
REF: A. MEXICO CITY 2636 
     ¶B. MEXICO CITY 2556 
     ¶C. MEXICO CITY 2675. 
 
MEXICO 00002701  001.2 OF 003 
 
 
Classified By: Political Minister Counselor Gustavo Delgado. 
Reason: 1.4 (b),(d). 
 
¶1. (c) Summary:  Following up his bold state of the Union 
message ref A), President Calderon announced several expected 
Cabinet changes, eliminated a number of government 
secretariats, and recommended a series of economic measures 
that presaged an imminent tough battle on the budget 
(septel). While much of this appears to have been discussed 
at some level with the opposition, the politically 
strengthened Institutional Revolutionary Party (PRI) has come 
out strongly against a two-percent anti-poverty tax and 
joined a choir of objections against an unexpected nominee to 
replace the attorney general. This cable provides some 
political context on the naming and confirmation process and 
initial bio information on the nominees for attorney general, 
the director of the state oil holding company PEMEX and 
Minister of Agriculture. Additional detailed information on 
the three nominees is provided in septels.  End Summary. 
 
 
Controversial Nominee for Attorney General 
-------------------------------------------- 
 
¶2. (c) In a long-anticipated change, Calderon replaced 
Eduardo Medina Mora in the key attorney general post, naming 
Arturo Chavez Chavez, a dark horse on the list of names that 
had been floated in political circles for some time (ref a). 
While Chavez has the prosecutorial experience -- he served as 
Chihuahua's Attorney General from 1996-1998, and the PAN 
credentials -- he was a loyal deputy of Government Minister 
Carlos Abascal during the Fox years, his choice was totally 
unexpected and politically inexplicable. Chavez has strong 
detractors within the Mexican human rights community because 
of his perceived failings in dealing with the murder of a 
large number of women in Ciudad Juarez, at a time when he was 
ratcheting up the fight against drug cartels. The killings 
gained international attention and leading human rights 
organizations at home and abroad charged Chavez with failing 
to energetically pursue the cases and even claimed that he 
had covered up evidence. Our sources in the EU office in 
Mexico echoed charges of insensitivity, noting that Chavez 
had scant communication with the human rights community when 
the Fox administration pushed through a national human rights 
strategy. On the other hand PAN insiders have characterized 
him as extremely loyal, noting his prosecutorial success 
against the cartels in the difficult environment of Chihuahua 
and his reputation as a "decent" and "loyal" technocrat. 
 
¶3. (c) While Calderon may have floated Chavez Chavez's name 
with the opposition, it is unlikely the President received 
any significant promise of support. The press criticized the 
appointment, human rights groups raised an immediate 
objection, and a variety of political figures and 
commentators, even well-known supporters of the government, 
voiced objections.  Political insiders told us that the PRI 
reportedly rejected Calderon's two top picks (the 
frontrunners were Jose Francisco Blake Mora, Secretary of 
Government for Baja California State, and Juan Miguel 
Alcantara, Medina Mora's deputy) and were offended by the 
brusque way in which they were consulted. Two theories for 
why Chavez had made the cut circulated in PAN circles: one 
was that Calderon, upset with the PRI's rejection of his 
initial choices, had decided to push a loyal and experienced 
PAN foot soldier. Gaining more traction with each passing day 
are reports that Calderon might have put Chavez forward as a 
challenge to the PRI. If the opposition blocks Chavez in the 
Senate, Calderon would withdraw his name and resubmit Blake 
or Alcantara. Proponents of this version argue that the PRI 
would be hard-pressed to block a second nominee for such an 
important post. Until the issue is decided, Alcantara will 
serve as acting Attorney General. 
 
 
 
MEXICO 00002701  002.2 OF 003 
 
 
Changed Power Equation in the Senate 
------------------------------------ 
 
¶4. (c) Whatever the back story, Chavez will likely face a 
tough battle for confirmation in the Senate. While the PAN's 
plurality in the Senate is unaffected by the Congressional 
elections in July, the shift in the power balance resulting 
from the PRI's unexpected sweep and ascendancy in the Chamber 
of Deputies, alters the political terrain in the upper house 
as well. PRI strong man Manlio Fabio Beltrones will be the 
key player in the Senate and will likely use his increased 
room for maneuver to take advantage of Chavez' weak political 
support in the key back room negotiations that will determine 
when or if the nominee gets on the Senate calendar. As of 
yet,there is no indication of when the confirmation 
proceedings might happen or if Chavez has the votes he will 
need to get the simple majority support he needs. PRI and PRD 
representatives have already stated publicly that they will 
not give Chavez a "blank check." While there is no time limit 
for Senate confirmation, PRD Senator Torres noted that the 
process was not open ended and that it would be difficult for 
the opposition to block the appointment of such a key member 
of the security cabinet. PRI Party leader Beatriz Paredes 
told the Ambassador that unless something scandalous is 
uncovered in the hearings, Chavez would be badgered and 
bloodied, but eventually approved. 
 
 
New PEMEX Director a Sign of Changes to Come? 
--------------------------------------------- 
 
¶5. (c) Calderon tapped Juan Suarez Coppel to be PEMEX's new 
chief executive, replacing Jesus Reyes-Heroles. Suarez has 
been roundly criticized for his missteps during an earlier 
tenure as head of PEMEX's finances, with some critics 
accusing him of having left the company in disarray. More 
recently, he has come under the gun for similar mismanagement 
of a private investment fund. Although a member of the PRI 
like the outgoing Director, Suarez does not have the same 
ties to the conservative and nationalistic wing of the PRI, 
which some interpret as boding well for reform and a future 
opening of the energy sector. Like Secretary of Energy 
(SENER) Kessel, Suarez has a background in economics, as well 
as a Master's degree from the University of Chicago. The 
relationship between SENER and PEMEX could also improve due 
to this change in leadership, given the fact that Secretary 
Kessel and Reyes-Heroles disliked each other personally and 
did not see eye to eye on the reform agenda. Suarez is 
reportedly a long-standing business opponent of Mexican 
billionaire and oligarch Carlos Slim, owner of the telecoms 
monopolies Telmex and Telcel. Suarez does not need Senate 
confirmation, but must be approved by the Council of 
Administration, a cabinet-level body comprised of the 
Secretary of Energy, Secretaries of the Economic-Related 
Ministries, the Secretary of Social Development, and 
representatives of the energy sector and the PEMEX union. 
 
 
 
Back to the Future at Agriculture 
--------------------------------- 
 
¶6. (c) Calderon named Franciso Javier Mayorga to replace 
Agriculture Secretary Alberto Cardenas. During his tenure, 
Cardenas had come under much criticism from small farmers and 
was reportedly unpopular with his own staff (ref c). 
Mayorga, a former Agricultural Secretary from 2005-2006 under 
President Fox, is a welcome change. He is a strong supporter 
of NAFTA, has broad experience in the field apart from his 
former Ministry position, and previously worked well with the 
Embassy. (See ref b for a more detailed description of 
Mayorga's priorities.) 
 
 
Streamlining Government? 
------------------------ 
 
¶7. (c) In a bid to respond to charges, particularly from the 
 
MEXICO 00002701  003.2 OF 003 
 
 
PRI, that his administration has bloated the government 
bureaucracy, President Calderon also proposed dissolving 
three existing government Secretariats: Agrarian Reform, 
Tourism, and Public Function (tasked with "reinventing 
government"). Calderon has announced he will transfer the 
Tourism Secretariat to the Secretariat of Economy, the 
Secretariat of Agrarian Reform to the Secretariat of Social 
Development, and will replace the Secretariat of Internal 
Affairs with a Federal Comptrollers' Office, directly under 
the supervision of the Office of the Presidency. By 
eliminating these Secretariats and taking further austerity 
measures Calderon hopes to cut approximately USD 13.9 billion 
in expenditures (septel on details and analysis).  Calderon 
intends to put these savings towards housing projects, food 
assistance, public health care, and day care centers for 
impoverished Mexicans. Members of the opposition have voiced 
skepticism, calling into question the projected savings and 
warning of objections by rural sectors to the proposed shift 
of the Agrarian Reform program. 
 
More Changes to Come... 
----------------------- 
 
¶8. (c) Calderon is likely not finished with making changes to 
his cabinet. His Secretary of the Economy,Ruiz Mateos, has 
come in for much criticism by the business sector, but has 
survived up to now because of his close personal friendship 
with President Calderon.  At the very least, Calderon will, 
by the end of the year, need to identify replacements for the 
President of the Bank of Mexico and two Supreme Court judges, 
all of whose terms end in the coming months. In each 
instance, he will need Senate approval for his nominations. 
Separately, the President of the National Human Rights 
Commission's (CNDH) term ends in October. The Senate's Human 
Rights Commission will present a list of three candidates for 
the Senate to consider. Pundits have long speculated Calderon 
could look to tap Finance Minister Carstens to take over as 
the Bank of Mexico President.  In the end Calderon will need 
to negotiate these important appointments with an opposition 
sure to have competing priorities. 
 
Comment 
------- 
 
¶9. (c) Calderon's cabinet changes and proposed cuts in the 
government bureaucracy have scored mixed reviews both within 
political circles and the general public.  His new 
Agricultural Minister enters the job with valuable experience 
and benefits from his predecessor's relative unpopularity. 
The new PEMEX director will have to overcome charges of past 
financial mismanagement if he is to realize potential hopes 
that he could help bridge PRI and PAN differences in tackling 
Mexico's energy challenges. Calderon's nominee for Attorney 
General will have an even tougher time gaining the consensus 
support common for a high level Presidential appointment; he 
faces a bruising confirmation battle if he even makes it onto 
the Senate calendar. Chavez finds himself politically 
isolated and fending off sharp criticism of his human rights 
record. Political negotiations between the ruling party and 
an emboldened opposition will ultimately determine how the 
nominees fare and what they will be able to accomplish if or 
when they assume their duties. 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
 
PASCUAL