ATTACK ON JESUITS ANOTHER SELF-INFLICTED FIASCO

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 000418

SIPDIS

E.O. 12958: DECL: 02/17/2015
TAGS: PGOV PREL PHUM EC
SUBJECT: ATTACK ON JESUITS ANOTHER SELF-INFLICTED FIASCO


Classified By: Charge d'Affaires Arnold Chacon, Reasons 1.4 (b)


1. (C) SUMMARY: The GoE's Social Welfare Ministry (MBS)
February 10 ordered "dissolved and liquidated" the Mariana de
Jesus Foundation (FMJ),a Quito-based, Jesuit-operated
charitable organization. Days later, Ministry staff and
police attempted to physically take possession of the FMJ
facility but were repelled by employees and assistance
recipients. Media and Embassy contacts deplored the MBS
maneuver, calling it a power grab and retribution for the
Jesuit's public opposition to President Lucio Gutierrez's
"dictatorial" turn. Responding to the Ambassador's calls,
GoE insiders claimed Gutierrez had no role in the operation;
he would rescind the MBS order immediately. Said rescission
occurred February 18, hours after an alleged assault on the
Foundation's director but days after the administration
absorbed another PR body blow. END SUMMARY.

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Executive Order, Negotiations, Aborted Assault
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2. (U) Social Welfare Minister Antonio Vargas, via MBS
Resolution 4793, mandated the closure of the FMJ, a
Jesuit-run organization formed in 1939 to develop "social
programs of high moral standard for the benefit of Ecuador's
needy." The Foundation helps thousands of families via
health maintenance programs, soup kitchens, and aid to
refugees, among others. USAID supported the FMJ in the
1980s, providing a $630,000 grant to help kick-start the
Solanda low-income housing project, which remains today a
neighborhood of well-kept homes and safe streets.


3. (U) An MBS team February 14 arrived unannounced at FMJ's
headquarters. They presented the ministerial order to
shutter the Foundation and ordered staff to vacate. The
decree claimed the Foundation lacked "legal standing,"
alleging FMJ had not reported to the GoE its director's name,
board of directors membership, and legal representative. MBS
Vice Minister Bolivar Gonzalez later informed media the NGO
had invested monies in foreign entities, without elaborating
why such actions were illegal.


4. (U) Despite apparently successful February 15
negotiations to allow FMJ's continued operations, the
following day an MBS "liquidator" and police escort entered
FMJ premises intending to take control. They were met by
approximately 150 FMJ employees and beneficiaries who
thwarted the attempt. Although no serious violence was
reported, February 16 newspapers showed the liquidation team
retreating at full run.

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Explanations Fall in Two Camps
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5. (U) Temperatures rising, the Embassy canvassed contacts
for background and to ascertain reasons for the MBS takeover.
Most considered it retribution against the Church and/or an
MBS power grab. Father Mark Miles, Number 2 at the Vatican
Embassy, noted February 16 that the FMJ had a stellar
reputation here for professionalism and probity. The Jesuits
had initiated an investigation, and should it show no FMJ
wrongdoing -- Miles's prediction -- the Church would
challenge the MBS decree in court. The Papal Nuncio also had
directed a stern letter of protest to Foreign Minister
Patricio Zuquilanda.


6. (U) The Vatican diplomat surmised that the Church's
opposition to "dictatorial" GoE actions underpinned the MBS
takeover. Another factor was that Quito's Jesuit-run
Catholic University had been "harboring" members of the
Ecuador's old Supreme Court, which Congress, supported by
President Gutierrez, had deposed in December 2004. "Smells
like retribution," Miles wagered.


7. (U) Cesar Duque works at Quito's Human Rights
Documentation Center (CEDHU). Duque February 16 told us that
MBS's shut-down of the FMJ was rife with legal and procedural
errors, a point made also by MFA Legal Advisor Marcos Almeyda
February 18. There were financial factors at play, Duque
believed, as the Foundation ran a large and successful
low-cost housing program. With a successful takeover, MBS
conceivably could commandeer the inventory as well as the
FMJ's large endowment (which media reported at $20 million).
FMJ Financial Director Francisco Guzman informed us February
17 the Ministry already had blocked FMJ bank accounts.


8. (U) Meanwhile, anti-government NGOs tell us a GoE
witchhunt is afoot. Fearing they might "be next,"their
administration and financial staffs are crashing to ensure
their books are in order. None wants MBS at the doorsteps.

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Embassy Gets Involved
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9. (C) Upon learning of FMJ's takeover, the Ambassador
February 16 expressed deep concern to Presidential Secretary
Carlos Polit. No matter the weight of MBS's charges,
ordering camouflage- and bulletproof vest-draped police to
occupy the well-respected NGO was bad politics. Polit swore
Gutierrez had no prior knowledge of MBS's intent, calling the
move an "uncoordinated error." The Foundation would re-open
February 17, although the GoE's investigation into FMJ
finances and activities would continue.


10. (U) The FMJ's Guzman informed the Embassy February 17 he
had received no stay of execution. Worse, Guzman forwarded
word of an assault against FMJ Director Francisco Pena.
Thugs had cornered Pena just outside the Foundation, Guzman
reported, demanding his briefcase and laptop computer.
Meeting resistance, they physically overcame the director,
took his possessions and fled. Media February 18 claimed the
assailants had fired on Pena, a bullet grazing his foot.


11. (C) Concerned over an apparently worsening
confrontation, the Charge contacted Polit February 18. The
adviser revealed that President Gutierrez had conferred with
Foundation principals until early hours of the morning. He
reiterated that Gutierrez had ordered the MBS decree revoked.
Polit believed that Gutierrez's actions had satisfied both
FMJ and Nunciature officials, and pledged to investigate the
assault against the FMJ director. The Embassy later
confirmed the meeting and its results with Guzman. His
organization still lacked notice in writing, however.

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COMMENT:
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12. (C) While Polit is one of few administration officials
enjoying our trust, we are dubious the MBS hatched and
conducted the FMJ takeover solo; other Gutierrez advisers
likely played at least bit parts. The president himself
recently railed against "foreign NGOs" destabilizing his
administration, promising investigations and financial audits
against them. And Citizen Participation, a USAID-sponsored,
pro-democracy NGO, has earned the GoE's ire for helping to
organize the February 16 pro-opposition march -- MFA
officials, summoning the acting AID director February 18,
claimed Gutierrez was disturbed over USG financial support
for a "partisan, anti-government" organization. Rather than
a coordination snafu, a more likely explanation for the
MBS/FMJ fiasco is that administration officials, once again,
did not think through a maneuver that was to paint them as
freedom-of-expression opponents.


13. (C) More than ever, effective dialog between government
and opposition is vital. Via its good offices, the Embassy
will continue to push Gutierrez and his many enemies to the
table for talks.
Chacon