ECUADOR: INDIGENOUS SUPPORT PALACIO, OAS CONTINUES

UNCLAS SECTION 01 OF 02 QUITO 000989

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL ASEC EC
SUBJECT: ECUADOR: INDIGENOUS SUPPORT PALACIO, OAS CONTINUES
OUTREACH



1. (U) Summary: The OAS met with business representatives,
evangelical indigenous, and international organizations on
April 29. Congress removed four board members from the
Central Bank on April 28. It will reconvene on May 3 to
debate the naming of members of the Supreme Electoral
Tribunal. The Palacio government reportedly has reservations
about "inconsistencies" in Congress' approved method to
select a new Supreme Court, and could apply a partial veto.
Speculation continues on the possible VP candidates. In
public remarks at a military ceremony on April 29, President
Palacio said April 20 would go down in history as the day he
"liberated" Ecuador. Indigenous group CONAIE publicly
supported the Palacio government as a "transitional"
government. The situation in Quito remains calm. Unions
will march to celebrate International Workers Day on May 1.
End Summary.

OAS Meetings, April 28-290
--------------


2. (SBU) Human Rights Groups: Claimed that Gutierrez had
been making dictatorial moves and was moving towards
censorship. Thugs from the pro-Gutierrez Zero Corruption
group had attacked Citizen Participation members and had
instigated street violence. The "forajidos" (anti-Gutierrez
protesters) were "holy crusaders" who wanted more direct
democracy, something the OAS should help Ecuador attain.


3. (SBU) Ex-Presidents: Former President Osvaldo Hurtado
said that Ecuador's political problems were cultural, not
institutional. Other countries have multiple political
parties and similar institutions, but the system works. The
Palacio administration is leftist and nationalist, similar to
Gutierrez during his campaign. The administration should
finish the term and the Constitutional Assembly is not a good
idea. The Ministry of Economy's policies were unworkable if
oil prices dropped. Former President Rodrigo Borja thought
the last ten years had become a vicious circle compounded by
bad decisions made by voters. Former VP Leon Roldos thought
Palacio was a dreamer, and that he would become more
realistic once he realized how weak his government was.


4. (SBU) PSC Party Leaders: Gutierrez had turned
dictatorial and people wanted him out. He was incapable of
leadership, holed up as he was. The military had withdrawn
its support before Congress deposed Gutierrez, not afterward.
Legislators and Palacio feared for their lives at CIESPAL,
while the military stood outside doing nothing. The military
wanted to take over - a planned triumvirate - but they pulled
back at last minute. PSC and others had sought OAS
intervention to no avail. Congress now functioning again,
would act on the substantive backlog.


5. (SBU) ID Party Leaders: The people want stronger
institutions. Now the country is working again. Gutierrez
was corrupt and took campaign monies from the Mexicans and
Taiwanese, illegally. Power had been concentrated. The
military acted (withdrew support) out of necessity, to
prevent a bloodbath. ID leaders also discussed their ideas
on how to depoliticize the courts.


6. (SBU) Media: Media owners were uniformly anti-Gutierrez,
claiming that he had been a corrupt President with
dictatorial tendencies. Most were opposed to early
elections.


7. (SBU) Government Lawyers: The people had risen up to
fight Gutierrez' unconstitutional acts. The OAS should
ensure Panama and Brazil held Bucaram and Gutierrez
accountable as asylees.


8. (SBU) Evangelical indigenous: FEINE leaders denied
collaborations with Gutierrez, and called for military
reform.


9. (SBU) Business: Chamber of Commerce and Industry
representatives disagreed on whether early elections should
be held. Ecuador needed stability and functional courts.
Guayaquil business representatives called for more autonomy.

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


10. (U) On April 28, Congress overturned another decision of
the former pro-Gutierrez majority by removing (by a vote of
72 in favor) four board members from the Central Bank, named
by the pro-Gutierrez majority. In doing so, Congress claimed
the list of candidates for the board, from which these four
were chosen, had been rejected by former president of
Congress Guillermo Landazuri on the day it was presented in
December 2004. In order to replace the Central Bank board of
directors, President Palacio must send a list of candidates
to Congress.


11. (U) When Congress meets next on May 3, they are expected
to name the new members of the Supreme Electoral Tribunal.
Candidates will be chosen from lists provided by the seven
strongest political parties in the 2002 elections (as
required by Article 209 of the Constitution).


12. (U) Congress is also expected to convoke members of the
previous and current military command to investigate a
possible attempt to form a military dictatorship. They will
ask about the five hours on April 20 that the recently named
President Palacio was left without military protection at the
CIESPAL building.

Presidency
--------------


13. (U) According to press reports, the Palacio government
believes that reforms to the judicial law, approved by
Congress on April 26, to select a new Supreme Court include
several inconsistencies which could justify a partial veto.
One of the inconsistencies found is that the process to
replace the 31 magistrates is not sufficiently depoliticized.
The government has begun judicial and political
consultations to help inform their decision on the matter.


14. (SBU) At a military ceremony on April 29, President
Palacio said that April 20 would mark the historic day that
he "liberated" Ecuador. Embassy officials present found the
remark odd and out of sync with other comments made at the
event. Embassy will report on Palacio administration
relations with the military (septel).

Vice Presidential Candidates
--------------


15. (SBU) A UN source told us that Diego Cordovez, a former
UN Undersecretary, was at the top of Palacio's list for the
Vice Presidency. However, Cordovez has declined the post.
Other leading candidates, according to the same source,
include Monsenor Luna Tobar, a retired bishop of Cuenca and
prominent FTA-opponent, and Alfonso Barrera Valverde, a
former Foreign Minister. President Palacio is expected to
send a list of three VP candidates to Congress during the
week of May 2.

Indigenous
--------------


16. (U) Luis Macas, the president of CONAIE, Ecuador's
largest indigenous group, on April 28 publicly declared that
CONAIE recognized the Palacio government as a transition
government that should call for a referendum and popular
assemblies. He also asked that CONAIE influence in
indigenous government organizations be recovered. Macas
called for an end to free trade agreement negotiations and
the Manta agreement, and no Ecuadorian participation in Plan
Colombia. Macas also said the Ministry of Social Welfare,
CODENPE (the government indigenous development agency),and
ECORAE (Institute for Eco-development in the Amazon Region)
should be audited. The CONAIE has submitted to the GOE a
list of those responsible for damaging these institutions for
possible prosecution, including ex-Minister of Social Welfare
Antonio Vargas, ex-CODENPE president Nelson Chimbo, and FEINE
evangelical indigenous organization president Marco Murillo.

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


17. (U) There were no protests in Quito on April 29,
however, a pamphlet bomb was reported at 1240. The pamphlet
bomb caused no injuries or damage. Unions and other social
groups are planning traditional marches in Quito and other
cities on May 1 to celebrate International Workers Day.
KENNEY