INSIDE THE CONSTITUENT ASSEMBLY: AN OPPOSITION VIEW

C O N F I D E N T I A L QUITO 000363 SIPDIS SIPDIS FOR USAID/LAC ASSISTANT ADMINISTRATOR BONICELLI E.O. 12958: DECL: 04/23/2018 TAGS: PGOV EFIN ECON EC SUBJECT: INSIDE THE CONSTITUENT ASSEMBLY: AN OPPOSITION VIEW REF: A. QUITO 324 ¶B. QUITO 55 ¶C. 07 QUITO 1992 ¶D. QUITO 90 ¶E. GUAYAQUIL 88 Classified By: DCM Jefferson Brown for reason 1.4 (D) ¶1. (C) Summary: Opposition member Pablo Lucio Paredes shared his observations on the Constituent Assembly's inner workings and likely outcomes. He reported that President Correa will resign to campaign for a new term under the new constitution, and that a small number of Assembly members will legislate from the conclusion of the Assembly until a new congress is elected. Paredes considers prolonging Correa's presidency the principal reason for the new constitution. He anticipates that the new constitution will not impose significant economic changes, but believes it will give the Correa administration additional flexibility to implement its economic vision. Paredes also commented on the relationship between the Correa administration and the Assembly and on key political provisions of the new constitution. End Summary ¶2. (C) Constituent Assembly member Pablo Lucio Paredes, meeting with Embassy and USAID officers on April 9, provided some of the more objective and comprehensive comments on the Assembly we have heard to date. The sole representative of Future Now (Futuro Ya),one of the few new movements to win seats in the Assembly, Paredes was a well-respected economics professor and analyst based in Quito before entering the Assembly. He told us he does not plan to run for office again. DEGREE OF ASSEMBLY INDEPENDENCE FROM EXECUTIVE ¶3. (C) Paredes said that the Constituent Assembly had a degree of independence as long as the Administration's essential provisions ("linea base") were not altered. He pointed to the limited changes the Assembly made to the law dismantling petroleum funds (Ref A),noting that it was a short law and therefore most of its provisions were essential from the Administration's perspective. He contrasted that with the significant changes the Assembly made in the Administration-proposed tax law last December (Ref B),a much longer law where only 30 percent or so of the provisions were considered essential, giving the Assembly members more flexibility to modify secondary provisions. ¶4. (C) Paredes said the Assembly committees themselves were writing many of the constitutional articles they will send forward to the plenary, although the provisions are then reviewed by the Correa Administration. In the Model of Development Committee where Paredes sits, all members have drafts of at least some of the articles, and the final result will be a mixture of these drafts. Committee members listen to outside groups they meet and may include their proposed provisions with little review. He provided an example of language guaranteeing pensions to all citizens, which an Assembly committee included based on one group's recommendation and later excised as impractical. Paredes confirmed our impression that the Assembly had largely ignored the draft constitution submitted by the National Council of Higher Education, which President Correa had charged with collecting citizen proposals and drafting a proposed constitution in advance of the Assembly (Ref C). PAIS INTERNALLY CONFLICTED, OUTWARDLY UNITED ¶5. (C) Paredes pointed to numerous differences between President Correa and Constituent Assembly president Alberto Acosta. He said Acosta chose not to fight over specific issues if they might undermine the larger political project. He saw both Acosta and Correa as pragmatic, such as on the question of the constitution referring to God. Paredes said Assembly members representing Correa's Proud and Sovereign Fatherland (PAIS) movement had fierce internal debates. Because they are convinced that they are changing the country for the better, they are able to resolve these debates in order to protect their own image in the referendum. ¶6. (C) Paredes thought it was frustrating for Acosta that Correa ended up being called on to resolve many differences among the PAIS membership that Acosta himself was unable to manage. For example, on the question of whether to term the state plurinational, as many indigenous groups urged, Correa would be the one to make the decision. ASSEMBLY THINKING ON KEY POLITICAL QUESTIONS ¶7. (C) In Paredes's view, the fundamental reason for PAIS seeking a new constitution is to allow Correa to consolidate his power and remain in office longer. He outlined his expectations on key political provisions of the constitution: -- Length of the presidential term and re-election. Paredes said PAIS paid attention to polls showing that the public did not want the same president in office too long. His read was that PAIS is now inclined toward a four-year term with re-election allowed only for one additional term. In Correa's case, he could serve two full terms under the new constitution, for a total of more than nine years. (Comment: Assembly president Acosta has publicly stated his firm opposition to this provision, arguing instead for re-election only on a non-consecutive basis. Many believe he has aspirations himself for the presidency. In any case, this is a notable example of a key issue for which there is not yet a consensus position within the PAIS bloc. End comment). -- Congressional districts. Paredes said the key consideration is a formula that would allow PAIS to gain a majority in the first congress, not what was seen as the long-term best interest of Ecuador. Not happy with the current system of electing members of congress to represent provinces, the Assembly initially considered single-seat districts. However, Paredes said it was now leaning toward two or three members of congress per district to avoid a single, powerful local leader who might have a power base outside of PAIS. -- Appointment to electoral, judicial, and oversight bodies. What might appear to be a rational reform would, in Paredes' view, turn out to concentrate more power in the executive. His rationale was that the commission charged with making appointments on the basis of merit could be largely controlled by the executive despite the other sectors it was supposed to represent. He said that members of the electoral tribunal would include representatives of the administration, congress, judiciary, and public interest groups, but the executive would likely have influence over most of those bodies and therefore have de facto control over the tribunal. (Comment: Acosta has very firmly separated himself from other PAIS members on this issue as well, saying he is firmly opposed to revamping the current Supreme Court. Acosta says it would set a dangerous precedent by which future legislative bodies could overturn the court at will, which must be avoided. End comment) -- Decentralization. Paredes expected decentralization would be included up to a certain point because polls showed people wanted it. He added that while Administration officials want a strong central government, many PAIS Assembly members do not share that centralizing vision. He expected the Assembly would establish an equity fund to address the disparity between the wealthier cities of Quito and Guayaquil, on the one hand, and the rest of the country on the other. -- Regions. Here again, Paredes saw PAIS as making decisions based on the results of polls. Since polls showed the regions that Correa proposed in the speech marking his first year (Ref D) were unpopular, the idea would be dropped. LIMITED ECONOMIC CHANGES IN CONSTITUTION ¶8. (C) Paredes said that he expects limited changes on broad economic parameters in the forthcoming constitution, arguing that the economic changes that Correa would like to implement cannot really be done at the constitutional level. For example, he said that Correa wants to reduce the role of large banks and promote that of banking cooperatives, but those changes cannot be imposed by a provision in the constitution. ¶9. (C) Even so, Paredes anticipates that there will be some changes. For example, he said that the Central Bank will lose the autonomy granted in the current constitution. He also said that the new constitution will expand the concept of public goods, saying sectors like banking will be included under this concept, giving the government the flexibility to increase control over those sectors in the future. Without providing specifics, he said that the Correa government will look to gain control over key institutions and then could implement the economic policies that it wants. ¶10. (C) Using taxes as an example, he said that he expects the constitution to set broad parameters that are universally accepted ) in the case of taxes, that their main purpose is to raise revenues, but they should also accomplish certain general social objectives such as progressive taxation. Detailed tax policy would be established at a lower level. ¶11. (C) When asked if the new constitution would limit the definition of private property, for example by requiring that it serve a social purpose (Ref E),Paredes said no, adding that Acosta is not opposed to private property. TRANSITION TO NEW INSTITUTIONS ¶12. (C) Paredes rejected as unrealistic the April 30 date for committees to get their constitutional articles submitted for plenary consideration. He said a good indicator would be whether Acosta approved his request for a ten-day extension for his Model of Development Committee, where Acosta also sits. Paredes predicted that the Assembly would complete the new constitution in mid-July, rather than June as PAIS planned. He anticipated this would push the referendum on the new constitution to late August or early September and national and local elections to December. ¶13. (C) Paredes informed us that the Assembly leadership, looking ahead, was organizing a small legislative body called a "congresillo" (little congress) to pass laws between the time the Assembly completes it work and January 2009 when the new congress comes into office. The membership of the congresillo will be proportional to the parties/movements' representation in the Assembly. The problem, according to Paredes, was to find Assembly members willing to be part of the congresillo -- most were not available because they planned to be candidates for the new congress. Paredes was offered a position in the congresillo but declined. ¶14. (C) Paredes explained that the Constituent Assembly planned to authorize President Correa to step down so he could run for a new term under the new constitution. The so far unanswered question was who the Assembly would name as Ecuador's chief executive in the interim. Jewell