ECUADOR: POLITICAL SITUATION UPDATE

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 000895

SIPDIS

E.O. 12958: DECL: 04/22/2015
TAGS: PGOV PREL ASEC EC
SUBJECT: ECUADOR: POLITICAL SITUATION UPDATE

REF: A. QUITO 885


B. QUITO 879

C. QUITO 872

D. QUITO 871

E. QUITO 870


1. (C) Summary: On April 22, the new Minister of Defense
Anibal Solon Espinosa named a new military high command. The
Embassy has begun outreach to the new government's Cabinet,
though not at the Ambassadorial level. Congress is expected
to reconvene on April 26, possibly in Guayaquil. There was a
small protest at the palace the evening of April 21, as well
as protests on April 22 at the Brazilian Ambassador's
residence, but no violence. End Summary.

Security
--------------


2. (U) There was a protest against the Congress (of
approximately 100 demonstrators) at the Presidential palace
the evening of April 21. Though vocal, the protest against
Congress was peaceful and ended without incident. There is a
group of protesters (approximately 70) at the Brazilian
Ambassador's residence blocking the road. Radicals are
rumored to be waiting for Congress to reconvene to resume
protests. Country clearances will be reviewed on a case by
case basis. Peace Corps has ceased its stand-fast;
approximately 20 PCVs are scheduled to travel to Quito
beginning April 25.

Ex-Government
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3. (U) While trying to leave the country on a flight to
Miami from the Quito airport, former Presidential Secretary
Carlos Polit was prevented from flying by an angry group,
which included ex-VP Blasco Penaherrera who was departing to
defend the new GOE before the OAS. Former Minister of Trade
Ivonne Baki has not been allowed to re-enter her former
offices to retrieve her passports. Other officials
associated with the former government have requested visas,
which we are reviewing case by case.

Congress
--------------


4. (C) Congress plans to reconvene on April 26, possibly in
Guayaquil to prevent security concerns in Quito. We are
hearing from PRIAN contacts that they will try to call for
new elections. The government hopes to pass judicial reforms
with the support of the majority which dismissed Gutierrez.

Military/Police Actions
--------------


5. (C) After requesting a list of all active duty flag
officers, new Minister of Defense General Anibal Solon
Espinosa replaced the military's high command on April 22.
The new Commander's for the Ecuadorian High Command as of
April 22 are: Vice Admiral Manuel Elias Zapater Ramos, CHOD;
Lieutenant General Cesar Ubillus Verga, Army Commander; Rear
Admiral Hector Germanico Holguin Darquea, Navy Commander;
Brigadier General Edmundo Baquero Madera, Air Force Commander.


6. (SBU) A good Embassy contact, General Jose Antonio
Vinueza Jarrin, was named the new police commander on April

22. He is a former chief of anti-narcotic affairs and
personnel.

Embassy Actions
--------------


7. (C) Foreign Minister Antonio Parra briefed OAS member
diplomatic missions (including DCM) late April 22 on the
official GOE explanation for Gutierrez' removal. Blame
rested with Gutierrez, he said, who triggered destabilizing
events by revamping the Supreme Court last December. In
defending GOE actions, Parra repeatedly made references to
Bolivia, implying that Bolivia set the precedent. Parra said
that a group of distinguished jurists from Ecuador would make
Ecuador's case on April 22 before the OAS Permanent Council.
They are: constitutional expert Gil Barragan Romero; former
FMs Edgar Teran and Mario Aleman; and former Vice President
Blasco Penaherrera.


8. (C) In a meeting with PolChief on April 21, new Minister
of Government Mauricio Gandara expressed his concern that the
OAS and USG recognize the legitimacy of the new government to
ensure stability. Subsecretary of Government Juan Carlos
Guzman was also present at the meeting. PolChief also met
with Presidential Administration Secretary Luis Herreria and
Presidential Secretary General Carlos Munoz on April 22.
(Septel)


9. (C) EconChief spoke with Central Bank President Mauricio
Pareja on April 22. Pareja expressed his deep concern over
statements made by the new Minister of Finance Rafael Correa.
Correa made public statements on April 21 that foreign debt
needed to be renegotiated, that Ecuador's oil revenue needed
to be spent on social programs, that Ecuador would be
completely sovereign in its relations with the IMF, and that
any free trade agreement would be submitted to a referendum
(where it would most likely be voted down.) Pareja said he
already noted some capital flight on April 21, and there
would be more. Pareja said if Correa continued making
similar public statements, there could be serious financial
damage over the next week.

Third Party Opinions
--------------


10. (SBU) AID spoke with NGO representatives Simon Jaramillo
of Citizen Participation and Cornelio Marchan of Esquel
Foundation on April 21 who were pleased with recent events,
but differed on early elections.


11. (SBU) Guadalupe Mantilla, owner of Quito's daily of
record, El Comercio newspaper, expressed to the PAO concerns
about the constitutionality of Gutierrez' departure and the
impact on the country's image abroad. If Ecuador wants
foreign investment, she said, people cannot continue to
manipulate the Constitution. Mantilla believed Palacio was
weak and would not be able to govern. In her opinion,
Congress should find a way to dissolve itself and hold new
elections. Those attacking the Congress and Ministry of
Social Welfare were not the same people who filled the
marches, she said; they were thugs led by the left-wing MPD
party and radical student groups. She approved of the
Embassy's concerned, but cautious public profile.

Business Community
--------------


12. (SBU) FCS called AmCham leaders on April 21 who did not
view the new Cabinet members favorably. They concurred that
the new government was very nationalist and center left.
They believed that this grouping could target USG interests
in retribution for past USG support for Gutierrez.

Next Steps
--------------


13. (C) The Embassy will be taking the following next steps:

--AMB will hold a town hall meeting on April 25.

--DAO will reach out to the new military command.

--POL will continue to meet with members of the new Cabinet.
POL will report further bio info on new Ministers.

--AID will continue outreach to NGOs and contractors.

--AID will lead a Mission effort to plan future programs to
strengthen Ecuador's broken democracy.

--FCS will continue outreach to the US and Ecuadorian
business communities.

--RSO continues to review security measures.
KENNEY