BACKGROUND TO CORREA'S ATTACKS ON U.S. COOPERATION

S E C R E T QUITO 000103

NOFORN
SIPDIS

E.O. 12958: DECL: TWENTY YEARS
TAGS: PREL MARR SMIG SNAR MOPS EC CO
SUBJECT: BACKGROUND TO CORREA'S ATTACKS ON U.S. COOPERATION
WITH GOE POLICE: GOE OFFICIALS LINKED TO FARC

REF: QUITO 100
...


id: 191415
date: 2/10/2009 23:25
refid: 09QUITO103
origin: Embassy Quito
classification: SECRET//NOFORN
destination: 09QUITO100
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RUEHCV/AMEMBASSY CARACAS 3372
RUEHLP/AMEMBASSY LA PAZ FEB LIMA 3015
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S E C R E T QUITO 000103

NOFORN
SIPDIS

E.O. 12958: DECL: TWENTY YEARS
TAGS: PREL MARR SMIG SNAR MOPS EC CO
SUBJECT: BACKGROUND TO CORREA'S ATTACKS ON U.S. COOPERATION
WITH GOE POLICE: GOE OFFICIALS LINKED TO FARC

REF: QUITO 100

Classified By: Ambassador Heather M. Hodges for Reasons 1.4 (b&d)


1. (S/NF) SUMMARY: A PAIS provincial leader and former
Under Secretary of Government under Minister Gustavo Larrea,
Ignacio Chauvin, turned himself in February 4 to face charges
of narco-trafficking. Calling himself a revolutionary,
Chauvin admitted to meeting deceased FARC member Raul Reyes.
As a result, Larrea's political career is at least on hold,
if not torpedoed. Elements within the GOE appear to be
trying to block effective prosecution, with key leaders of
USG-vetted police units instrumental in the case transferred,
the judge removed, and the case likely to be moved away from
an effective prosecutor. After initially reacting critically
towards Chauvin, President Correa softened his comments on
the case during his February 7 radio address. END SUMMARY.

FORMER GOE OFFICIAL IMPLICATED IN TRAFFICKING FARC DRUGS


2. (C) Ignacio Chauvin turned himself in to authorities on
February 4 to face charges of narco-trafficking and misuse of
government funds. He had been the head of President Correa's
Proud and Sovereign Fatherland (PAIS) political movement in
Pichincha province and Under Secretary of Government and
Police while Gustavo Larrea was the Minister of Government.
On January 29, an arrest warrant was issued by a court in
Guayas province alleging that Chauvin negotiated contracts
for the GOE, including petroleum deals, with the brothers
Jefferson, Edison and Miguel Ostaiza, currently under
investigation for trafficking Revolutionary Armed Forces of
Colombia (FARC) drugs to the U.S. and Mexico and for
money-laundering. The Special Police Investigative Unit
(UIES) realized an operation, "Border Hurricane", on
September 18, 2008, resulting in the seizure of 4.8 tons of
cocaine allegedly owned by the Ostaiza brothers. Chauvin was
a fugitive for seven days before he turned himself in,
evading initial arrest, possibly through senior police
collusion.


3. (SBU) Chauvin admitted that he was a personal friend of
the Ostaiza brothers, but claimed he was unaware of their
illicit activity. Chauvin also admitted that he was "a
personal friend of Raul Reyes," the second-ranking FARC
leader, who was killed in the March 2008 Colombian attack
against a FARC camp in Ecuador. Chauvin acknowledged that he
met with Reyes seven times, but only to discuss the release
of FARC-held hostages. At the entrance to the police
station, Chauvin announced to militant spectators that he was
a "revolutionary and friend of various revolutionaries around
the world." In response, President Correa demanded that
Chauvin explain where he met Reyes, that "if the meetings
were held in Angostura..., if he (Chauvin) knew that Raul
Reyes was in the country and did not denounce it, he would be
a traitor to the homeland." Correa also requested that
Chauvin declare whether he met Reyes in an official or
personal capacity.


4. (C) On February 3, the Guayas Antinarcotics Police (DNA)
unit also detained Latin American Association of Human Rights
(ALDHU) attorney Diego Benitez, Operational Support Group
Police Lieutenant Pablo Cordova, and ex-agent of the Money
Laundering Unit Carlos Navarro for alleged collaboration with
Jefferson Ostaiza in narco-trafficking. Specifically, the
Guayas DNA unit is investigating ALDHU's Benitez for his work
at Jooamy Ema, a Ostaiza brothers-owned company. Guayas
district attorney Jorge Solorzano asserted that he has
sufficient evidence to prosecute both Chauvin and Benitez.
He added that, although Benitez' connection to the Correa
government was undeclared, he had photos of Benitez with
former Minister Larrea, Assembly member Cesar Rodriguez, Vice
President Lenin Moreno and President Correa, and that with
the photos, "they will not be able to say that they don't
know him (Benitez),never saw him, or have never been with
him."

CORREA APOLOGIZES TO CHAUVIN


5. (SBU) Softening his tone in his February 7 radio address,

President Correa read a letter sent by Chauvin's wife and
apologized to Chauvin for his previous comments, saying that
"I think that I was unfair. I think that I reacted based on
the prestige of the government, more so than on whether Jose
Ignacio Chauvin was guilty or innocent." Correa said that in
Ecuador everyone was innocent until proven guilty and praised
Chauvin's bravery in turning himself in. Correa reiterated,
however, that if Chauvin met with Raul Reyes as a
representative of the Ecuadorian government in Angostura, he
would have betrayed the citizen revolution. Chauvin has
since declared that he met Reyes only in Colombia.

ALDHU UNDER INVESTIGATION


6. (SBU) The events have cast general suspicion on ALDHU,
where former Minister Larrea and Chauvin had worked, and its
use of government funds. Acting Minister of Government
Felipe Abril requested that ALDHU provide financial reports
to clarify its spending practices. He warned that "if they
(ALDHU) used State money for ends other than what had been
authorized, it could result in the termination of all written
agreements and the dissolution of the entity." Since 1980,
ALDHU has received funding from and maintained a close
relationship with the central government. In 1996, ALDHU
signed an agreement to provide human rights training for the
police, but the police's Education Directorate reportedly
shows no record of ever receiving training from ALDHU.


7. (C) Our Ecuadorian military contacts have criticized
ALDHU for its work in the northern border region,
particularly its issuance of carnets (identity documents) to
over 5,000 inhabitants, who are mostly Colombian. A report
from the Army's Fourth Division explains that a large
percentage of those living near the border are Colombian
nationals, but have obtained Ecuadorian national
identification documents using the ALDHU carnets, making it
more difficult to control the border and the region. The
Foreign Ministry issued a bulletin regarding the issuance of
credentials clarifying that only the State can recognize
foreign citizens as refugees, and that "there is no
authorization of any kind that ALDHU or any other NGO could
substitute for the authority of the Ecuadorian government,
under any circumstance."

REQUEST FOR PAIS TO OPEN ITS BOOKS


8. (SBU) The Christian Democratic Union (UDC) party
announced that it is preparing a formal request for PAIS to
open its books on the 2006 electoral campaign, alleging that
Chauvin's role as the PAIS leader in Pichincha may have
involved the Ostaiza brothers and narco-trafficking. UDC
President Diego Ordonez called for the National Electoral
Council to investigate PAIS's sources of funding to determine
if there were FARC donations.

LARREA IS OUT


9. (C) Amid the controversy regarding Chauvin and ALDHU,
Gustavo Larrea renounced his candidacy for the National
Assembly on February 2, following a reported request by
President Correa to leave the race. Larrea had resigned as
Coordinating Minister of Internal and External Security on
January 10 to run for the Assembly and was considered by some
within PAIS as one of the front runners to become the
Assembly president. In his announcement that he was
withdrawing his candidacy, Larrea complained that his
friendship with Chauvin had been used to damage the image of
the government. However, Solorzano stated on February 7 that
it was Larrea who "committed his own political suicide by
having a close collaborator and intimate friend who has ties
to the guerrilla (FARC) and saying that he knew nothing about
it."


10. (C) Larrea's falling out with PAIS appears more
complicated than when Correa requested Larrea leave his
position as Minister of Government in November 2007, only to
reappoint him on January 3, 2008 as the Coordinating Minister
of Internal and External Security. Accusations by Colombia
based on documents recovered from FARC computers that Larrea

had ties to the FARC, Larrea's later admission of meetings
with the FARC to discuss the release of hostages, and now the
ties to Chauvin have tarnished Larrea's political viability,
at least for the foreseeable future.

IMPACT ON USG VETTED UNITS


11. (C) On February 4, Ecuadorian Police Commander General
Jaime Hurtado ordered the transfer of three heads and 20
members of police units critical to the success of Ecuador's
fight against narco-terrorism. He justified the move as
"normal transfer of personnel to allow for the ascension of
new generals and colonels," but it appeared to be retribution
against those who pursued a case that reflected poorly on the
GOE. Hurtado sent the Deputy Director of Antinarcotics,
Colonel Juan Carlos Barragan, to lead the provincial police
district in El Oro, and the Chief of the Special Police
Investigative Unit (UIES),Colonel Manolo Silva, to lead the
judicial police in Tungurahua, far from their areas of
specialty. Silva and Barragan have led a long-running
investigation by the UIES of narco-trafficking rings in
Ecuador, including potential ties to the GOE. The unit was
vetted by and has maintained excellent operational
cooperation with the Embassy in counter-insurgency and
counter-drug operations. The UIES was instrumental in the
seizures of Simon Trinidad, FARC secretariat member, and
Nelson Yaguara, alias Commander Uriel, responsible for the
attack on Colombian military base Teteye. The UIES
reportedly has been responsible for 70% of the drug seizures
in Ecuador since 1989.


12. (C) Hurtado also reassigned General Juan Francisco Sosa,
Chief of the Judicial Police (similar to the FBI),to a
lower-level posting as district police chief in Quito,
blaming him for not capturing Chauvin immediately. Sosa has
worked closely with various offices in the Embassy - DEA,
DHS/ICE and NAS - to strengthen crime scene evidence
gathering and investigations. General Rafael Yepez has been
named to replace Sosa, but it is unclear how well he will
cooperate with the Embassy and USG initiatives.


13. (C) Upon receiving news of the latest reassignments, the
Ambassador canceled her meeting with Coordinating Minister of
Internal and External Security Miguel Carvajal on February 5,
originally scheduled as part of Andean Affairs Director Kevin
Whitaker's visit, until events were clarified internally.
Carvajal called the Ambassador on February 6 to ask about the
suspended assistance to the UIES. The Ambassador explained
that the replacement of the vetted leaders of the unit had
resulted in suspension of support. Carvajal, who knew the
agreement was only verbal, suggested to the Ambassador that
these agreements should be formalized in writing, but did not
indicate any other immediate concerns. They agreed to meet
the week of February 9 to discuss.


14. (S/NF) COMMENT: Someone (perhaps Carvajal) is using the
Astorga and the DHS/ICE vetted unit issue (reftel) to
aggravate Correa, or to distract from the Chauvin/PAIS case.
The DHS/ICE vetted unit is now being confused with issues
surrounding the UIES vetted unit, who have similarly
suspended assistance and requested return of equipment. It
is unclear if Carvajal or Correa have a true understanding of
which unit is which, or that banning "vetted" units in
Ecuador could interrupt Correa's favorite program, a DEA-led
judicial communications intercept program. There is strong
suspicion in the U.S. Mission that Carvajal and others in the
GOE see this as a wedge issue to drive out USG influence from
the government. END COMMENT.

WHERE IS THE CHAUVIN CASE?


15. (SBU) In addition to the police reassignments, the judge
for Chauvin and the Border Hurricane case, Zoila Alvarado,
was accused by the attorney of one of the defendants of
delaying the case. Another judge in the Guayas judicial
district, Oswaldo Sierra, reviewed the complaint and
announced on February 9 that Judge Alvarado would no longer
hear the case. Meanwhile, Chauvin's attorney filed a request
to change the jurisdiction of the case to Esmeraldas, with

the justification that the drugs were seized in Esmeraldas,
not Guayas. If Oswaldo determines that the case is to be
moved, then prosecutor Solorzano will also be taken off the
case, further reducing prospects for the involvement of any
competent and clean judicial officials.

COMMENT


16. (S/NF) The events surrounding the Ostaiza brothers and
Operation Hurricane have hit a sensitive nerve for the GOE,
suggesting once again that the Correa administration has ties
to the FARC. The GOE has been insistent that Colombia
recognize that the GOE has no ties to the FARC -- harder to
do when an Under Secretary admits to FARC meetings and
declares himself as a revolutionary. If the Chauvin and
Border Hurricane investigations are allowed to proceed, it is
likely additional information will continue to surface and
damage the image of the Correa administration. However, the
suspicious timing of transferring key leaders of USG-vetted
police units, instrumental in counter-narcotics efforts, not
only damages our bilateral cooperation, it also lessens the
likelihood that narco-traffickers will be brought to justice
and convicted. Leftist elements within the GOE may continue
to shift the focus or blame on the USG's influence in the
security sector, further complicating USG efforts here, or
driving out cooperation altogether.
HODGES

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