VIDEO SCANDAL EXPANDS

C O N F I D E N T I A L QUITO 001350 SIPDIS SENSITIVE SIPDIS E.O. 12958: DECL: TEN YEARS TAGS: PGOV PREL EC SUBJECT: VIDEO SCANDAL EXPANDS REF: QUITO 1182 Classified By: PolChief Erik Hall for reasons 1.4 (b&d). ¶1. (C) Summary: Another secretly-taped video involving Economy Minister Ricardo Patino has become public, extending the controversy over an earlier video (reftel). The new video dates to February, and shows President of Congress Jorge Cevallos discussing his efforts toward congressional approval of the referendum over the national constituent assembly. Media and opposition assert the video reveals Correa government manipulation of other branches of government, and claim more damaging videos will follow. While far short of a "smoking gun," the videos convey unseemly back-room dealings that have put the Correa government on the defensive and begun to erode public support. More damaging revelations are promised in coming weeks. End Summary. Video Content ¶2. (U) The video tape contains footage of a meeting between Patino and Cevallos in Patino's hotel room, on the evening of February 12, shortly before Congress approved the government's controversial assembly referendum proposal. (Note: the referendum, strenuously opposed by the opposition, was approved by voters on April 15 by more than 81%.) Christian Democratic Union (UDC) congressman Jaime Estrada (like Cevallos a native of Manabi province) also appears in the meeting, as does Patino's political advisor Quinto Pazmino. ¶3. (U) Most of the conversation consists of Cevallos (a founding member of Noboa's PRIAN) describing that day's session of Congress and how he planned to overcome procedural restrictions (and his own "problems with my own party") to permit a vote once passage of Correa's referendum statute was assured. (Note: Cevallos followed through and the measure was passed in the subsequent session). Cevallos also expressed his concerns about whether Lucio Gutierrez's PSP party could be trusted to hold to its pledge to support the assembly proposal. Patino's participation in the conversation is limited to asking a few questions. At one point Estrada changed topics and lobbied for Patino's support for a $100m infrastructure project in Manabi province. Once the video became public, the PRIAN formally expelled Cevallos and the Democratic Left (ID) has joined the PSC and PRIAN in calling for his resignation. The UDC is reportedly planning to oust Estrada as well. Patino's Defense Lame ¶4. (U) In response to blanket press interest, minister Patino has counter-attacked the press, claiming it is "no coincidence" that the video emerged on TeleAmazonas, the media outlet owned by Bank of Pichincha president Fidel Egas. Egas' decision to broadcast the video is clearly an attempt to thwart the government's proposed banking reform, which he and other banking interests vehemently oppose, according to Patino. President Correa's public support for Patino, meanwhile, remains solid. Correa's sister Pierina, however, has said publicly that Patino has become a distraction to the government's agenda and should step down. Opposition Seeking "Smoking Gun" ¶5. (C) PSC national president Pascual del Cioppo and PSC ex-congressman Luis Fernando Torres told the DCM on June 8 that the second video would soon be released, and that others would follow. The videos would demonstrate damaging collusion between the Correa government and other nominally independent branches (judiciary, embodied by Supreme Electoral Tribunal president Jorge Acosta; and legislative, represented by Cevallos) to clear the path to approving the April 15 referendum over a national constituent assembly. While this particular video falls short of offering any "smoking gun," these opposition members assert that it will compound and extend the controversy over clandestine taping of sensitive meetings, and could further degrade presidential popularity which has dipped recently. ¶6. (C) Another ex-congressman from the PSC, Alfredo Serrano, shed some light on the provenance of the tapes. In a meeting on June 12 Serrano claimed that ex-Patino aide Pazmino possessed multiple tapes from sensitive sessions, and had flogged them with opposition-supporting members of the economic elite. According to Serrano, PRIAN leader Alvaro Noboa paid $200K for a copy of the video (originating with Pazmino),only to be scooped by the release of a different copy by media outlet TeleAmazonas days later. Serrano claimed PSC credit for acquiring and releasing the first video. He said other damaging videos exist and will be released in turn, in the hope of damaging government credibility in the run-up to the assembly election in September. The PSC has urged other opposition leaders to let the press, rather than opposition politicians, lead this attack. Comment ¶7. (C) Opposition members ousted from Congress are reeling from what they perceive to be the Correa government's political persecution (although they continue to garner little sympathy from the public). They see Patino as an increasingly vulnerable surrogate for Correa. Impeachment proceedings against Patino could gather steam from this, the second secret video featuring Patino. But even if successful, impeachment does not automatically remove a minister, and thus far Correa has shown no inclination to jettison one of his most trusted confidants. ¶8. (C) The ousted opposition deputies have little hope that the newly re-constituted Constitutional Court will rule in their favor, and instead plan to appeal to the IACHR (Noboa is reportedly funding the legal bills for that effort). Judging from recent conversations, they are also willing to contemplate any and all means to terminate his government prematurely. They justify undemocratic means with the charge that Correa's game plan for the upcoming constituent assembly is "pre-cooked" and itself undemocratic. These opposition members believe Correa will use his majority to advance the timetable for elections in early 2008, and to purge the constitution of "neo-liberal bias" and consolidate his personal power by extending the presidential period to six years, with re-election permitted. While this video is not particularly damaging in itself, it is certainly the case that were a "smoking gun" video to emerge, popular support for the government's reform agenda could erode. JEWELL