SUPREME COURT ALLOWS FORMER PRESIDENT MAHUAD TO

UNCLAS QUITO 001436 SIPDIS SENSITIVE, SIPDIS E.O. 12958: N/A TAGS: PGOV PREL EC SUBJECT: SUPREME COURT ALLOWS FORMER PRESIDENT MAHUAD TO RETURN TO ECUADOR SUBJECT: SUPREME COURT ALLOWS FORMER PRESIDENT MAHUAD TO RETURN TO ECUADOR ¶1. (U) Summary: The Supreme Court ruled on June 7 that criminal charges against ex-president Jamil Mahuad would be put on hold for lack of evidence, permitting Mahuad to return to Ecuador without facing an arrest warrant. Ex-president Mahuad, widely blamed for the country,s severe financial crisis in 1999, was removed from office after protests in ¶2000. After the decision, he announced that he planned to return to Ecuador in December, but that he had no intention of returning to politics. Given Mahuad,s extreme unpopularity, the ruling again demonstrates the independence of the new court, which will now come under heavy criticism from partisan critics. End Summary. ¶2. (U) On June 7, the Second Criminal Court of the Supreme Court ruled a provisional stay of proceedings in the case of ex-president Jamil Mahuad, who was charged with crimes in connection with the freezing of bank deposits in March 1999. The ruling, which effectively allows Mahuad to return to Ecuador, suspended the July 2000 order for his arrest due to lack of evidence. The ruling will become permanent if no new evidence against him is presented within three years. The Supreme Court also ruled to drop all charges against the Mahuad Administration,s Finance Minister Ana Lucia Armijos. ¶3. (U) Arrest warrants for Mahuad and Armijos were issued by then-Supreme Court President, Galo Pico on July, 13, 2000, following a denunciation by the Civilian Anti-Corruption Commission (CCCC) and charges by various members of Congress. Mahuad,s order to freeze bank accounts, which was executed by Finance Minister Armijos, was viewed by the CCCC and Pico as intended not to save the economy from hyperinflation, but to protect former Progreso Bank owner Fernando Aspiazu who had contributed an unreported three million dollars to Mahuad,s campaign. Pico,s decision came 16 months after the bank account freeze, and several months after both Mahuad and Armijos had left Ecuador. The charges were dismissed out of hand by Mahuad,s former political party, the Popular Democratic Party (DP),as partisan politics, due to Pico,s allegiance to the rival Social Christian Party (PSC). ¶4. (U) After being removed from office after a week of protests capped by a coup led by future president Lucio Gutierrez, Mahuad fled to the United States where he accepted a faculty position at Harvard,s Kennedy School of Government. He currently resides in Washington D.C., is a university lecturer, and has steadfastly refused to participate in EC politics. Through spokesman and longtime lawyer Patricio Vivianco, Mahuad responded to the ruling by announcing that he planned to return to Ecuador in December. He said he had no desire to return to Ecuadorian politics. Since his departure, Mahuad,s political party (DP) has lost credibility, and in an effort to rejuvenate and disassociate themselves from Mahuad,s legacy they recently changed their name to the Christian Democratic Union (UDC). ¶5. (U) The Supreme Court ruling and Mahuad,s announcement were greeted angrily by many Ecuadorians, who still resent Mahuad for ordering bank accounts to be frozen during 1999,s hyperinflation. The Committee on Anticorruption (note: a politicized institution of limited credibility) issued a statement exhorting the Supreme Court to reverse the decision, while spokesmen from the leftist Pachakutik and Popular Democratic Movement (MPD) parties threatened that when Mahaud returned they would give him "the reception he deserved." The PSC, who reacted angrily to the court for its earlier decision freeing another former president, Gustavo Noboa, from house arrest in March, also expressed their disgust with the decision. PSC Congressman and confidant of party boss Leon Febres Cordero, Xavier Sandoval, said the court,s ruling was "inappropriate, illegal, and against universal principles of justice." Comment -------------- ¶6. (SBU) The Supreme Court,s ruling on Mahuad demonstrates its new-found independence and willingness to tackle controversial issues on which it is assured to take flak. The court was selected in December in a transparent process with OAS oversight and USG support. Mahuad,s return would provoke public ire, but not the political reaction caused by fellow ex-Presidents Bucaram and Gutierrez in 2005, both of whom remain important players in Ecuadorian politics. JEWELL