WIKILEAKS DE ECUADOR

id: 83786

date: 10/31/2006 19:13

refid: 06QUITO2631

origin: Embassy Quito

classification: CONFIDENTIAL

destination:

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C O N F I D E N T I A L QUITO 002631

SIPDIS

SIPDIS

E.O. 12958: DECL: TEN YEARS

TAGS: PGOV, PREL, EC

SUBJECT: GUTIERREZ BROTHERS MIFFED AT NOBOA; WARY OF CORREA

 

Classified By: PolChief Erik Hall for reasons 1.4 (b&d)

 

1.  (C) Summary:  On October 30, the Ambassador met with

ex-president Lucio Gutierrez and his brother, third place

presidential candidate Gilmar Gutierrez, to gauge potential

Patriotic Society Party (PSP) support for Alvaro Noboa's

candidacy and hear their political plans as the

second-largest bloc in the new Congress that will take office

in January. 

Lucio did most of the talking for the Gutierrez

side. The PSP had offered to support Noboa's candidacy in

exchange for a commitment to punish coup plotters in the

Palacio administration.  Noboa thus far was not willing to

include Palacio himself in the deal, leaving the PSP leaders

uncertain.  Correa and his team are making overtures for PSP

support, which Lucio characterized as "desperate" and

unconvincing.  End Summary.

2. (SBU)  The private meeting was arranged at our request by

newly-elected PSP Andean Parliamentarian and former trade

minister Ivonne Baki, in her home.  Former Gutierrez chief of

staff Carlos Polit (Baki's alternate at the Parliament) also

attended.  The Ambassador was accompanied by the DCM and

PolChief.

Bittersweet Election Results

----------------------------

3.  (C) The Ambassador congratulated the PSP leaders for the

party's surprisingly strong finish in national election.

Both men were clearly pleased, citing the results as

vindication of the Gutierrez' government's performance.

Lucio highlighted the challenges Gilmar overcame, including

resource constraints and efforts to block his candidacy which

shortened his campaign period to just over one month and

precluded the PSP from registering its congressional

candidates in Manabi, the third most populous province.  "We

did not even have calendar cards to hand out to our

supporters, yet they voted for the PSP and are now asking who

they should vote for," he said.

4.  (C) The PSP could have won 3-4 more seats in Congress,

Lucio asserted, were it not for unfair treatment by

provincial election authorities in Manabi and elsewhere, and

internal problems in the Galapagos, he asserted.  Asked who

the PSP would select as first vice president of Congress

(their prerogative as the second-largest bloc), Gilmar was

coy.  He described the virtues of numerous newly-elected PSP

Congress members, including his wife.  Outside speculation

has focused most on either Lucio's wife Ximena Borhorquez or

former comrade in arms Fausto Cobo.  Lucio remained silent on

the question.

The Offer

---------

5.  (C) The Ambassador noted that a Noboa victory, while

possible, was by no means a certainty.  A Correa victory

would threaten progress made under the Gutierrez government

to put Ecuador's economy on a solid footing.  Gutierrez could

protect this legacy by helping Noboa consolidate his lead in

the polls, and break the cycle of political instability

Gutierrez fell prey to by working together in the new

Congress.  The DCM noted that the Gutierrez brothers could

make an enormous contribution by helping to counter Correa

rhetoric and educate voters about the benefits of

market-based economic principles and the FTA with the U.S.;

PSP interests were clearly more aligned with Noboa.

6.  (C) Lucio responded that (and later repeated several

times) the core PSP agenda consisted of a "programmatic plan

for political stability, which is necessary for economic

stability, which in turn is essential for social tranquility

and progress."  Pressed for more detail, Gutierrez said that

to prevent any vice president from plotting against the next

president, the new government needed to set an example by

applying the law to punish those who plotted Gutierrez'

downfall.  He cited a meeting convoked by then-VP Palacio

weeks before the April 20 legislative coup, in which Palacio

selected his prospective cabinet, and the fact that Palacio

Government Minister Mauricio Gandara prepared his declaration

of assets several days before April 20, in anticipation of

the coup.

7.  (C) The first step the new Congress should take to bring

violators of the constitution to justice would be a

Congressional resolution declaring the Palacio administration

to have been a de facto government.  The Attorney General

should then be charged with investigating all involved in the

overthrow, including members of the rump Congress which

illegally removed him from office, the police and military

generals who may have been suborned to support the coup, and

of course Palacio himself as a participant in the coup

plotting.

Noboa Resisting Deal

--------------------

8.  (C) Asked how Noboa had reacted to this offer, Gutierrez

said his contact with Noboa had been indirect, and that Noboa

was supportive.  He was resisting, however, one key Gutierrez

demand--Noboa wished to exclude Palacio from legal

prosecution.  Baki noted that Noboa had reneged on a

pre-electoral alliance and voted to block Gilmar's candidacy

entirely through the PRIAN representative on the Supreme

Electoral Tribunal (a decision later overturned by the

PSC-dominated Constitutional Court).  Asked why Noboa was

reluctant to pursue Palacio, Gutierrez speculated that

Noboa's interests are personal and economic.  Palacio had

reined in the IRS-equivalent (SRI) and protected Noboa from

millions in tax payments and fines.

Setting an Example

------------------

9.  (C) Lucio asked the Ambassador about the

recently-announced decision to cancel the visa of PSC leader

Javier Niera, on grounds of corruption.  Would the USG also

pursue cases of corruption against the circle surrounding

President Palacio, he asked.  The Ambassador explained the

process, emphasizing that it is targeted at individual

corruption, and not any particular political group or party.

Other cases are under investigation, and would be judged on

the merits under U.S. visa law.  The DCM invited the PSP to

share any information on corruption it has access to,

cautioning that all information is verified using multiple

sources before being sent to Washington for approval.

10.  (C) Lucio suggested the USG also investigate current

Solicitor General Jose Maria Borja for corruption.  Gutierrez

also noted that when the USG withdrew the visa of his

minister of Social Welfare, Patricio Acosta, he immediately

fired Acosta.  Baki said Acosta later moved to Venezuela, and

was later observed paying off military leaders who publicly

withdrew their support from Gutierrez' government, on April

20, 2005.  PolChief noted the importance of Congress

achieving the majorities necessary to select independent and

honest replacements for the acting Attorney and Comptrollers

General.

Some Interest in Political Reform

---------------------------------

11.  (C) Asked his views on Correa's proposed constituent

assembly, Lucio replied that it would be unconstitutional

without the consent of Congress.  The PSP had earlier

supported the idea of an assembly, perhaps even using the

Congress itself as a part-time assembly, to devise reforms

over the course of a year.  This maneuver would permit

absolute majority voting on constitutional reforms, rather

than the 2/3 majority otherwise.

12.  (C) According to Lucio, the PSP now favors putting

proposed reforms to the people in a binding referendum, if it

could not achieve the 2/3 vote necessary to speed

congressional debate (a one year delay is build in between

debates otherwise).  Asked what reforms he supported,

Gutierrez cited his January 2005 proposals to de-politicize

the courts (Supreme, Constitutional and Electoral) and to

select the AG, Solicitor General, and Comptroller General.

He and Gilmar criticized as unconstitutional the

internationally-observed method used to reconstitute the

defunct Supreme Court in 2005.

Comment

-------

13.  (C) We hope to get the PSP focused on a positive agenda

over the coming months, but in the near term they remain

largely consumed with their revenge agenda.  Lucio appeared

very much in charge during the meeting, and in good spirits

and health.  Gilmar, 11 years Lucio's junior, was generally

silent and deferential toward his big brother.  Neither man

evinced any openness toward Correa, but both also appeared

ambivalent about their past and current dealings with Noboa,

with whom there is clearly no basis of trust.  Although

acknowledging it would not be the executive branch but the

independent Attorney General who would enforce the law

against coup participants, Gutierrez appeared to be

confounded by Noboa's resistance to accepting his terms.  He

admitted that the two sides are not talking directly, and we

sensed hesitation on Gutierrez' part to approach Noboa as a

supplicant.  That said, they clearly seem to expect the

PRIAN/PSP majority in the next Congress to work together on

many if not most issues, and we will encourage both sides to

get together.

BROWN