CONGRESS OFFERS, AND PALACIO RESISTS, ASSEMBLY

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 002442

SIPDIS

E.O. 12958: DECL: TEN YEARS
TAGS: PGOV PINS KDEM EC
SUBJECT: CONGRESS OFFERS, AND PALACIO RESISTS, ASSEMBLY
COMPROMISE

REF: QUITO 2409

Classified By: PolChief Erik Hall for reason 1.4 (b&d).


1. (C) Summary: President of Congress Wilfredo Lucero met
with President Alfredo Palacio October 24 to relay lawmakers'
support for a constitutional assembly, but not a more
powerful constituent assembly as favored by Palacio. The
constituent assembly -- intended for times of complete
governmental breakdown -- could not only rewrite the
constitution, but dismiss the Congress. Palacio has publicly
resisted the compromise offered by Lucero, insisting instead
on his preferred assembly over Congressional and electoral
court opposition. This may be a tactic to gain leverage over
Congress, or could signal more dangerous intentions which
could affect stability and U.S. interests. End Summary.

Constituent Assembly: All or nothing?
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2. (U) As proposed by Lucero, with the backing of more than
2/3 of Congress including the PSC, ID, PRE, PRIAN and DP
parties, a constitutional assembly approved by referendum
would be limited to drafting amendments to agreed upon parts
of the constitution. Congress proposes that the assembly's
members be selected by universal vote. Palacio's earlier
plan, which he submitted directly to the Supreme Electoral
Tribunal (TSE) in an effort to bypass Congress, called for
the body to be 50 percent members of civil society and 50
percent party representatives. The TSE ruled that Palacio's
proposal required the approval of Congress (RefTel).


3. (U) Since the TSE rejected Palacio's proposed referendum,
Palacio has appealed for public support and courted civil
society groups, running TV spots promoting the assembly idea.
On October 25 Palacio told a group of 25 civil society
groups that he continued to support a constituent, and not a
constitutional, assembly. Civil society groups organized
pro-assembly rallies in Quito and Guayaquil on October 21,
attracting several thousand, and are expected to take to the
streets again shortly. Most are calling for the constituent
assembly and the immediate resignation of Congress members.
Some have threatened to remove parliamentarians by force.

Discrediting Palacio's Motives
--------------


4. (C) PSC Congressmen (and brothers) Luis Fernando and
Carlos Torres told PolOffs October 26 that Palacio risked his
presidency by continuing to challenge Congress over the
dueling assembly models. They alleged that Palacio intends
to bypass Congress by issuing a decree authorizing a
constituent assembly. His ultimate goal is to postpone 2006
national elections and extend his mandate. Palacio is
influenced by outsiders, they alleged further, including
Central American political consultant Julio Ligorria, who
has been advising Palacio, and "elements loyal to Chavez,"
including former Gutierrez minister, Patricio Acosta.


5. (C) According to the Torres brothers, Palacio's assembly
proposal is a Chavez-like constitutional reform, which must
be stopped. Opposition discussions with the military
leadership have already begun, they alleged, and an
impeachment attempt was also under discussion among political
parties, should Palacio refuse to compromise. Palacio's
whole strategy, they believed, grew out of his need to seize
the political initiative to distract from the recent return
of ex-President Gutierrez.

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


6. (C) The Torres brothers are transparently trying to
manipulate us by alleging a Chavez influence over Palacio,
but we see real danger to USG interests should Palacio choose
to subvert what few constitutional checks still exist here by
attempting to put his constituent assembly proposal directly
to the people. In addition to risking his government's
stability, an unbounded assembly would put other democratic
institutions (e.g. Congress and the new Supreme Court,
assuming it comes into being) at risk and could be used to
block an FTA or disavow the Manta accords. Activating street
protests to push for an assembly is a very risky tactic,
since once begun Palacio will likely not be able to control
this agitation. Indigenous and leftist civil society groups
could see the assembly as an opportunity to advance their
agendas, and may be ready to take to the streets.


7. (C) We don't think Palacio has Chavez-like pretensions or
sympathies, but his bull-headed resistance to compromise
risks dragging the country down a dangerous road. Palacio
still has another, more palatable, opportunity to accept a
more limited reform agenda by negotiating with Congress over
its counter-proposal, but we are not optimistic he will take
that opportunity.
JEWELL