This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 QUITO 000989 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ASEC EC
SUBJECT: ECUADOR: INDIGENOUS SUPPORT PALACIO, OAS CONTINUES 
OUTREACH 
 
 
¶1.  (U) Summary:  The OAS met with business representatives, 
evangelical indigenous, and international organizations on 
April 29.  Congress removed four board members from the 
Central Bank on April 28.  It will reconvene on May 3 to 
debate the naming of members of the Supreme Electoral 
Tribunal.  The Palacio government reportedly has reservations 
about "inconsistencies" in Congress' approved method to 
select a new Supreme Court, and could apply a partial veto. 
Speculation continues on the possible VP candidates.  In 
public remarks at a military ceremony on April 29, President 
Palacio said April 20 would go down in history as the day he 
"liberated" Ecuador.  Indigenous group CONAIE publicly 
supported the Palacio government as a "transitional" 
government.  The situation in Quito remains calm.  Unions 
will march to celebrate International Workers Day on May 1. 
End Summary. 
 
OAS Meetings, April 28-290 
------------------------- 
 
¶2.  (SBU) Human Rights Groups:  Claimed that Gutierrez had 
been making dictatorial moves and was moving towards 
censorship.  Thugs from the pro-Gutierrez Zero Corruption 
group had attacked Citizen Participation members and had 
instigated street violence.  The "forajidos" (anti-Gutierrez 
protesters) were "holy crusaders" who wanted more direct 
democracy, something the OAS should help Ecuador attain. 
 
¶3.  (SBU) Ex-Presidents:  Former President Osvaldo Hurtado 
said that Ecuador's political problems were cultural, not 
institutional.  Other countries have multiple political 
parties and similar institutions, but the system works.  The 
Palacio administration is leftist and nationalist, similar to 
Gutierrez during his campaign.  The administration should 
finish the term and the Constitutional Assembly is not a good 
idea.  The Ministry of Economy's policies were unworkable if 
oil prices dropped.  Former President Rodrigo Borja thought 
the last ten years had become a vicious circle compounded by 
bad decisions made by voters.  Former VP Leon Roldos thought 
Palacio was a dreamer, and that he would become more 
realistic once he realized how weak his government was. 
 
¶4.  (SBU) PSC Party Leaders:  Gutierrez had turned 
dictatorial and people wanted him out.  He was incapable of 
leadership, holed up as he was.  The military had withdrawn 
its support before Congress deposed Gutierrez, not afterward. 
 Legislators and Palacio feared for their lives at CIESPAL, 
while the military stood outside doing nothing.  The military 
wanted to take over - a planned triumvirate - but they pulled 
back at last minute.  PSC and others had sought OAS 
intervention to no avail. Congress now functioning again, 
would act on the substantive backlog. 
 
¶5.  (SBU) ID Party Leaders:  The people want stronger 
institutions.  Now the country is working again.  Gutierrez 
was corrupt and took campaign monies from the Mexicans and 
Taiwanese, illegally.  Power had been concentrated.  The 
military acted (withdrew support) out of necessity, to 
prevent a bloodbath.  ID leaders also discussed their ideas 
on how to depoliticize the courts. 
 
¶6.  (SBU) Media:  Media owners were uniformly anti-Gutierrez, 
claiming that he had been a corrupt President with 
dictatorial tendencies.  Most were opposed to early 
elections. 
 
¶7.  (SBU) Government Lawyers:  The people had risen up to 
fight Gutierrez' unconstitutional acts.  The OAS should 
ensure Panama and Brazil held Bucaram and Gutierrez 
accountable as asylees. 
 
¶8.  (SBU) Evangelical indigenous:  FEINE leaders denied 
collaborations with Gutierrez, and called for military 
reform. 
 
¶9.  (SBU) Business:  Chamber of Commerce and Industry 
representatives disagreed on whether early elections should 
be held.  Ecuador needed stability and functional courts. 
Guayaquil business representatives called for more autonomy. 
 
Congress 
-------- 
 
¶10.  (U) On April 28, Congress overturned another decision of 
the former pro-Gutierrez majority by removing (by a vote of 
72 in favor) four board members from the Central Bank, named 
by the pro-Gutierrez majority.  In doing so, Congress claimed 
the list of candidates for the board, from which these four 
were chosen, had been rejected by former president of 
Congress Guillermo Landazuri on the day it was presented in 
December 2004.  In order to replace the Central Bank board of 
directors, President Palacio must send a list of candidates 
to Congress. 
 
¶11.  (U) When Congress meets next on May 3, they are expected 
to name the new members of the Supreme Electoral Tribunal. 
Candidates will be chosen from lists provided by the seven 
strongest political parties in the 2002 elections (as 
required by Article 209 of the Constitution). 
 
¶12.  (U) Congress is also expected to convoke members of the 
previous and current military command to investigate a 
possible attempt to form a military dictatorship.  They will 
ask about the five hours on April 20 that the recently named 
President Palacio was left without military protection at the 
CIESPAL building. 
 
Presidency 
---------- 
 
¶13.  (U) According to press reports, the Palacio government 
believes that reforms to the judicial law, approved by 
Congress on April 26, to select a new Supreme Court include 
several inconsistencies which could justify a partial veto. 
One of the inconsistencies found is that the process to 
replace the 31 magistrates is not sufficiently depoliticized. 
 The government has begun judicial and political 
consultations to help inform their decision on the matter. 
 
¶14.  (SBU) At a military ceremony on April 29, President 
Palacio said that April 20 would mark the historic day that 
he "liberated" Ecuador.  Embassy officials present found the 
remark odd and out of sync with other comments made at the 
event.  Embassy will report on Palacio administration 
relations with the military (septel). 
 
Vice Presidential Candidates 
---------------------------- 
 
¶15.  (SBU) A UN source told us that Diego Cordovez, a former 
UN Undersecretary, was at the top of Palacio's list for the 
Vice Presidency.  However, Cordovez has declined the post. 
Other leading candidates, according to the same source, 
include Monsenor Luna Tobar, a retired bishop of Cuenca and 
prominent FTA-opponent, and Alfonso Barrera Valverde, a 
former Foreign Minister.  President Palacio is expected to 
send a list of three VP candidates to Congress during the 
week of May 2. 
 
Indigenous 
---------- 
 
¶16.  (U) Luis Macas, the president of CONAIE, Ecuador's 
largest indigenous group, on April 28 publicly declared that 
CONAIE recognized the Palacio government as a transition 
government that should call for a referendum and popular 
assemblies.  He also asked that CONAIE influence in 
indigenous government organizations be recovered.  Macas 
called for an end to free trade agreement negotiations and 
the Manta agreement, and no Ecuadorian participation in Plan 
Colombia.  Macas also said the Ministry of Social Welfare, 
CODENPE (the government indigenous development agency), and 
ECORAE (Institute for Eco-development in the Amazon Region) 
should be audited.  The CONAIE has submitted to the GOE a 
list of those responsible for damaging these institutions for 
possible prosecution, including ex-Minister of Social Welfare 
Antonio Vargas, ex-CODENPE president Nelson Chimbo, and FEINE 
evangelical indigenous organization president Marco Murillo. 
 
Security 
-------- 
 
¶17.  (U) There were no protests in Quito on April 29, 
however, a pamphlet bomb was reported at 1240.  The pamphlet 
bomb caused no injuries or damage.  Unions and other social 
groups are planning traditional marches in Quito and other 
cities on May 1 to celebrate International Workers Day. 
KENNEY