PALACIO ANNOUNCES POLITICAL REFORM, RAISING HACKLES

UNCLAS SECTION 01 OF 02 QUITO 001747

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV KDEM EC
SUBJECT: PALACIO ANNOUNCES POLITICAL REFORM, RAISING HACKLES

REF: QUITO 1734


1. (SBU) Summary: In a nationally televised address,
President Alfredo Palacio has called for Congress to return
from summer recess to hold an extraordinary session on July
26, to discuss political reforms he proposes be put to a
popular referendum. Palacio made the reform proposal while
also announcing a partial veto of popular social security
rebate legislation (reftel),perhaps to blunt the bad news.
By acting impulsively to promote specific political reforms,
Palacio may have done himself more harm than good, raising
the ire of Congress, leadership and supporters of the
national dialogue process run by his Vice President. End
Summary.

Palacio Takes Charge of Reform
--------------


2. (U) Invoking Article 133 of the constitution, Palacio on
July 21 called on Congress to reconvene on July 26 to vote on
his partial veto of the social security rebate law (reftel)
and to rule on the national urgency of Palacio,s proposed
reforms. Under the constitution, the president has the right
to propose constitutional reforms, but Congress must declare
them to be of national urgency to avoid a mandatory one-year
analysis period.


3. (U) Palacio's move came as a surprise to most people
here, and apparently also to Vice President Alejandro
Serrano, who has been directing a process of "national
consultation" soliciting and collating suggestions for
reforms to be put to a national referendum December 11.
Serrano has remained silent since Palacio made the surprise
announcement, but politicians and civil society
representatives were quick to criticize it. Media sources
speculate that the impetus for Palacio's impulsive gesture
was to prove to the public that political reform is his
priority.

Seven Reforms
--------------


4. (U) Palacio outlines seven key issues to be submitted
for popular consideration in the national referendum,
including:
-- election of Congressional deputies by district;
-- creation of a Senate of 22 (one per province),House of
Representatives of 53 members;
-- selection of a new Supreme Court (ratifying the existing
law currently being implemented);
-- selection of a new constitutional court;
-- selection of an apolitical electoral tribunal;
-- new grounds for impeachment of the president and Congress
for corruption or incompletion of their election platform;
-- a constitutional clarification of regional and provincial
autonomy.

Reaction: Congress Peeved, Public Confused
--------------


5. (U) Congress President Wilfredo Lucero, clearly taken by
surprise by the president's proposal, objected strenuously,
calling it an act of "disrespect" towards the Congress.
Lucero had earlier called his own special session to discuss
other issues, for July 27. After the president's
announcement, Lucero threatened to call the special session,
and then immediately close it and move on to his own agenda,
as planned. Other civil society leaders and Democratic Left
leader Guillermo Landazuri, questioned Palacio's decision to
short-circuit the consultative process underway under the
leadership of his vice president. Doing so would seem to be
a move to ignore the will of the people, they said. Only the
Social Christian party supported the president's request for
a special session, although it differed with the specifics of
his proposals.

Comment
--------------


6. (SBU) Palacio's announcement took most by surprise here,
and the reaction was generally negative as a result. It is
widely perceived as intended to blunt the impact of the
partial veto and answer criticisms of foot-dragging on
reform. But by revealing his reform agenda before the
national consultation process was complete, Palacio appears
to have forsaken additional legitimacy that could process
could have bestowed, and put the fate of the referendum in
doubt.

7. (SBU) Congress' generally prickly reaction has thus far
overshadowed the actual content of the proposals. That
content is somewhat controversial, but not unreasonable.
Resistance in Congress to creating electoral districts
crosses the aisles, and others have rejected bicameralism as
impractical. Promises of increased autonomy, in contrast,
are always popular here, especially on the coast. Likewise,
creating new grounds for removal of the president and
congress members is an obvious effort to appease public
demands for greater government accountability.

MEMMOTT
MEMMOTT