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Viewing cable 06BUENOSAIRES911, TRAVEL NOTES: ARGENTINA'S NEUQUEN PROVINCE

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Reference ID Created Released Classification Origin
06BUENOSAIRES911 2006-04-21 21:37 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Buenos Aires
VZCZCXRO1152
PP RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHQU RUEHTM RUEHVC
DE RUEHBU #0911/01 1112137
ZNR UUUUU ZZH
P 212137Z APR 06
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC PRIORITY 4259
INFO RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/CJCS WASHDC PRIORITY
RUEHNA/DEA WASHDC PRIORITY
RUEAWJA/DEPT OF JUSTICE WASHDC PRIORITY
RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUCNMRC/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
UNCLAS SECTION 01 OF 03 BUENOS AIRES 000911 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL AR
SUBJECT: TRAVEL NOTES: ARGENTINA'S NEUQUEN PROVINCE 
 
REF: BUENOS AIRES 00857 
 
1.  (SBU) SUMMARY: In March, Poloff traveled to the province 
of Neuquen to meet with political and academic leaders and 
has subsequently met with a number of national legislators 
from Neuquen.  Neuquen Governor Jorge Sobisch is currently 
the only declared candidate for the 2007 presidential 
elections, and Neuquen has Argentina's most important 
reserves of petroleum and natural gas.  Governor Sobisch is 
generally praised, both within and outside of his Popular 
Neuquino Movement (MPN), as having been a good governor, 
although the opposition criticizes his use of public funds, 
interference in the judiciary, and alleged lack of respect 
for the freedom of the press.  Governor Sobisch faces an 
uphill battle for the presidency in 2007, with President 
Kirchner riding high in the polls and Sobisch facing low name 
recognition and high negatives in opinion polls.  Despite 
Neuquen's independence from the national government's purse 
strings, President Kirchner is finding other ways to put 
pressure on his potential rival, such as by encouraging labor 
unrest in the province.  Neuquen is a rich province, but many 
worry that the province is not planning for the future when 
the oil and gas reserves are exhausted.  END SUMMARY. 
 
2.  (SBU) In March, Poloff traveled to the province of 
Neuquen to meet with political and academic leaders and has 
subsequently met with a number of national legislators from 
Neuquen in order to get a better understanding of this 
economically, and increasingly politically important 
province.  Neuquen Governor Jorge Sobisch is currently the 
only declared candidate for the 2007 presidential elections, 
and Neuquen has Argentina's most important reserves of 
petroleum and natural gas. 
 
3.  (SBU) Background: Neuquen has been governed for more than 
four decades by the Popular Neuquino Movement (MPN) Party, an 
offshoot of Peronism founded in 1961 when the Peronist Party 
(PJ) was banned by the Argentine military.  Governor Sobisch 
is the current leader of the MPN and is in his third term as 
Governor of Neuquen.  Sobisch is running for President in 
2007 and is aligned with Commitment for Change (CPC) leader 
Mauricio Macri in the center-right Republican Proposal (PRO) 
coalition, although Sobisch has been engaged in a war of 
words with the third leader of PRO, Recrear's Ricardo Lopez 
Murphy.  Governor Sobisch is facing a challenge from within 
his party by his former Vice Governor, Jorge Sapag, who is 
the most prominent member of the family dynasty that founded 
the MPN.  Governor Sobisch has a reputation of being the 
Argentine Governor that is most independent from the national 
government, with Neuquen's sizable oil and gas royalties 
limiting the province's dependence on national 
co-participation funds that the GOA routinely manipulates to 
keep the provincial governors in line. 
 
4.  (SBU) Governor Sobisch is generally praised, both within 
and outside of the MPN, as having been a good governor, 
although the political opposition is quick to point to 
corruption allegations regarding Sobisch's use of public 
funds and interference in the justice system.  Radical Civic 
Union (UCR) provincial legislator Marcelo Inaudi told Poloff, 
"Sobisch has done a lot of good as governor, particularly in 
his first term.  There are some real questions, however, 
about where the public funds have gone.  For example, Neuquen 
received USD $600 million from the YPF privatization in the 
1990s and other than a gymnasium and a highway, there is no 
evidence of what Sobisch did with the money."  Federal Judge 
Dr. Antonio Labate, a member of the PJ, told Poloff that 
Neuquen has one of the best health care systems in Argentina 
and one of the highest levels of spending on education in 
Argentina, but criticized Governor Sobisch for mismanaging 
public works funding and for interfering in the provincial 
judicial system to stop cases that are against the provincial 
government's interests.  However, Graciela Carrion de 
Chrestia, the MPN chief of staff of the provincial 
legislature, told Poloff that Governor Sobisch has a better 
track record of governance than President Kirchner had 
governing the similar province of Santa Cruz. 
 
5.  (SBU) Governor Sobisch generally receives mixed reviews 
regarding his respect for freedom of the press.  Journalist 
Daniel Darrieux of Fundacion Atlas and the local radio 
station FM 104.7 told Poloff that the Sobisch government does 
interfere with the press, but "we can still speak."  He said 
 
BUENOS AIR 00000911  002 OF 003 
 
 
the circulation-leading daily, Rio Negro, is adamantly 
anti-Sobisch, while the second most important daily, La 
Manana, is pro-Sobisch.  Darrieux explained that Sobisch has 
never made a move to prevent Rio Negro from publishing, but 
like the national government, he spends all of the official 
advertising funds on those media outlets that print favorable 
stories.  Fabiana Trinciante, the Press Secretary for the 
Neuquen legislature and staunch MPN member, told Poloff that 
Governor Sobisch's only problem with the press is with the 
Rio Negro newspaper.  Trinciante said that Rio Negro is 
aligned politically with the UCR Mayor of Neuquen city and 
aspirant to become Neuquen's next Governor, Horacio Quiroga. 
Trinciante said that the conflict with Rio Negro began when 
the newspaper "set up" Governor Sobisch by planting a hidden 
camera that "purportedly" caught Governor Sobisch attempting 
to bribe a provincial legislator, Recrear's Jorge Taylor, in 
2002. 
 
6.  (SBU) Governor Sobisch faces an uphill battle for the 
presidency in 2007, with President Kirchner riding high in 
the polls and Sobisch facing low name recognition and high 
negatives in opinion polls.  Leading Argentine pollsters have 
told Poloff that a majority of Argentines have never heard of 
Sobisch, and a majority of those who have heard of him, have 
a negative opinion of him.  Sobisch lacks a national 
structure to facilitate a presidential run, although he has 
tried to build a network in Buenos Aires province through his 
Movimiento de Las Provincias Unidas headed by Mauricio Silva. 
 Silva told Pol Couns and Poloff that they are developing a 
structure that he said will be able to propel Governor 
Sobisch into the presidency next year.  However, Sobisch 
faces conflict from within PRO, both with Lopez Murphy 
stemming from the earlier bribery scandal and potentially 
from Mauricio Macri, should Macri also decide to run for 
President in 2007.  National congressman for MPN and Sobisch 
ally, Jorge Brillo, told Poloff that they have good 
cooperation with Recrear's national congressmen, despite the 
conflict with Lopez Murphy, and predicted the alliance would 
hold together.  However, Lopez Murphy recently told the DCM 
and Poloff that he would never support a presidential ticket 
that included Sobisch (Reftel). 
 
7.  (SBU) Despite Neuquen's independence from the national 
government's purse strings, President Kirchner is finding 
other ways to put pressure on his potential rival.  Several 
contacts in Neuquen pointed out to Poloff that the provincial 
government receives roughly USD $1 billion in annual revenue 
from the oil and gas royalties.  The energy windfall allows 
Governor Sobisch a measure of independence from the national 
government, much as was the case for Nestor Kirchner when he 
was Governor of oil-rich Santa Cruz province.  Neuquen 
suffered a serious teacher strike February through March that 
included the blocking of the main provincial roads to the oil 
and gas fields, as well as major tourist centers.  Many in 
Neuquen argued that Jorge Sapag and President Kirchner were 
behind the strike as a means of putting pressure on Governor 
Sobisch and damaging his reputation as a good manager of the 
province.  Comahue University Director Dr. Maria Colantuono 
told Poloff that the main motivation for the teachers strike 
was political.  "It started out as a salary dispute, but 
really has become political.  The Neuquen teachers are 
already some of the highest paid in the country.  The oil 
workers union boss, Guillermo Pereyra, is a aligned with 
Jorge Sapag and President Kirchner and him are supporting the 
teacher's strike."  MPN provincial legislator Christina 
Storioni told Poloff that she was working day and night 
trying to solve the dispute, but that the teachers would not 
agree to lift the roadblocks despite Governor Sobisch's offer 
of a 40 percent increase in pay.  NOTE: The strike was 
finally settled at the beginning of April when Governor 
Sobisch acceded to the teacher's union demand that the 40 
percent pay raise would entirely apply to their base pay, and 
thus also to their retirement.  Sobisch's previous offer only 
had part of the pay raise applying to base pay.  With the pay 
raise, Neuquen's teachers are now the highest paid in the 
Argentina.  END NOTE. 
 
8.  (SBU)  Neuquen is a rich province, but many worry that 
the province is not planning for the future when the oil and 
gas reserves will be exhausted.  Daniel Darrieux told Poloff 
that Neuquen produces 45 percent of Argentina's natural gas 
and 28 percent of its petroleum.  Despite this, he argued, 
Neuquen still has 38 percent of the population living in 
 
BUENOS AIR 00000911  003 OF 003 
 
 
poverty.  "We only have 12 to 15 years of proven reserves and 
we should be using this money to invest in alternative 
industries.  After the oil and gas are gone, then what?" 
Neuquen is also an important producer of fruit, particularly 
pears and apples.  Dr. Labate complained to Poloff that a 
large percentage of the fruit crop is wasted every year 
because poor infrastructure makes it expensive to export 
fruit that is not consumed by the local market. 
 
9.  (SBU) COMMENT: Governor Sobisch is currently the only 
declared presidential candidate and likely will be the 
standard bearer of the center-right in the presidential 
contest next year if Mauricio Macri decides not to run for 
president.  Despite the similar backgrounds of Sobisch and 
Kirchner, Sobisch faces a much more difficult path to the 
presidency than Kirchner, who benefited from President 
Duhalde's support and a good portion of the PJ political 
machine behind him.  Governor Sobisch is the one Governor 
President Kirchner has not been able to co-opt and has 
instead developed into an adversary.  Ironically, Sobisch and 
Kirchner were strong allies in the mid-to-late 1990s as they 
both struggled with then President Carlos Menem for more 
coparticipation funds and greater independence. 
 
10.  (SBU) COMMENT CONTINUED: Sobisch has been much 
criticized for his authoritarian tendencies, but Neuquen's 
recent reform of the provincial constitution that included 
prohibiting the reelection of the Governor stands in contrast 
to constitutional reforms elsewhere in Argentina that were 
instigated by sitting Governors primarily as a means to 
enable their reelection, such as the recent constitutional 
reform in Tucuman.  Governor Sobisch touts his pro-business 
credentials and his allies have repeatedly told Emboffs that 
Sobisch is pro-U.S.  Unfortunately for Governor Sobisch, 
polling shows that the traditional center-right, pro-business 
message lacks widespread Argentine public support and will 
make Sobisch's political platform a tough sell in 2007.  END 
COMMENT. 
 
GUTIERREZ