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

UNCLAS SECTION 01 OF 04 QUITO 002235 
 
SIPDIS 
 
SENSITIVE 
 
DEPARTMENT FOR G, DRL, S/P, WHA/PPC AND WHA/AND 
 
E.O. 12958: N/A 
TAGS: PHUM PREL KDEM EC
SUBJECT: DEMOCRACY PROMOTION STRATEGIES FOR ECUADOR 
 
REF: SECSTATE 169581 
 
¶1.  (SBU) Summary:  With serious democratic deficiencies 
fueling political and economic instability in Ecuador, we 
welcome the Department's enhanced emphasis on democracy 
promotion and its decision to include Ecuador among countries 
to receive priority attention.  After engaging all elements 
of the country team, as well as key contacts in the donor and 
IFI community, the Ecuadorian political class and civil 
society, in discussion of the causes and effects of 
democratic instability here, we have developed a plan to 
augment and focus our democracy support.  As Secretary Rice 
has stated, building a stable functioning democracy in 
Ecuador will take "sustained effort over many years, even 
decades, to address successfully."  This cable reports on the 
shorter-term aspects of our strategy.  SepTel will outline 
medium and longer-term strategies.  Meanwhile, the Ecuadorian 
people and government themselves continue to debate possible 
democratic reforms, which will affect the parameters for 
potential change.  End Summary. 
 
------------------------ 
Democracy is Broken Here 
------------------------ 
 
¶2.  (SBU) Not one of the last three democratically elected 
presidents of Ecuador successfully served out his term, and 
Ecuador has had seven presidents during the past nine years. 
The institutional disarray of the executive branch is 
replicated in the judicial and legislative sectors.  The 
country remains without a Supreme Court or Constitutional 
Court since April, and permanent replacements for the 
Attorney and Controller Generals have not been selected.  The 
lack of strong nationally based political parties makes for 
an Ecuadorian Congress more responsive to regional and 
personal interests than any national agenda. 
 
¶3.  (SBU) While the causes of popular discontent and the 
composition of the popular forces that provoked the fall of 
the last three elected presidents have varied, the result has 
been the same:  an irregular change of government caused by 
popular protests in the capital and a return to the status 
quo ante.  The danger of democratic backsliding is very real, 
whether in the form of a tradition of strongman military or 
civilian solution or a more populist "Bolivarian" movement. 
 
¶4.  (SBU) Almost all Latin American countries have achieved 
good macroeconomic performances in recent years; however, 
some have suffered from acute political fragility, with 
elected leaders being forced to resign in several Andean 
nations due to protests and unrest.  The divergence between 
favorable economic development and worrisome political trends 
in some parts of Latin America raises the importance of 
political stability as a key element of creditworthiness.  As 
Ecuador's rating declines, its prospects for attracting the 
investments necessary for income and employment growth will 
also decline, feeding popular discontent. 
 
------------------------------- 
Key Areas of Democratic Deficit 
------------------------------- 
 
¶5.  (SBU) Ecuador's judiciary suffers from corruption at the 
highest levels, undermining the integrity and image of the 
whole system.  Moreover, Ecuador has been without its top 
courts since Congress dissolved the Supreme and 
Constitutional Courts on April 27, after the fall of the 
Gutierrez government.  Fortunately, in the absence of a 
Supreme Court and Constitutional Court, the Superior Courts, 
Provincial Tribunals, and lower courts have continued to 
operate, albeit also subject to corruption.  Slow progress is 
being made on implementation of an oral accusatorial system 
and on adoption of a justice of the peace system, local level 
mediators, and public defenders, reforms that would bring 
more transparency to the justice process as well as making it 
more efficient and accessible at the local level. 
 
¶6.  (SBU) At critical moments of political instability, 
politicians and military demonstrate little respect for the 
constitution, undermining faith in all democratic 
institutions.  The standard response here has been to debate 
reforms or changes to the constitution (Ecuador has had 18 
since independence in 1821), rather than to change the 
incentives for undemocratic behavior.  President Palacio is 
following that tradition by proposing a constitutional 
referendum for December 11, 2005.  The contents of the 
referendum will be determined through negotiation with 
Congress, which presents some risk to USG interests. 
Fundamental electoral reforms could seriously challenge 
election authorities preparing for the 2006 national 
election. 
 
¶7.  (SBU) Intense political fragmentation is another 
democratic challenge, preventing consensus on the appointment 
of key independent authorities (the outgoing Attorney and 
Controller Generals have yet to be permanently replaced), and 
denying the central government needed security against 
capricious impeachment attempts. 
 
------------------------------------- 
Desired Outcomes Over Next 6-8 Months 
------------------------------------- 
 
¶8.  (SBU) To strengthen Ecuadorian confidence in democracy 
and promote more responsible democratic behavior, the GOE 
must make several key reforms in compliance with its 
constitution and the Inter-American Democratic Charter. 
 
Over the next six to eight months, we hope to see: 
-- Independent Supreme and Constitutional courts selected and 
properly functioning, after effective international and 
national oversight of the selection process; 
 
-- The costs for corrupt behavior by public officials 
increase, either by prosecution or resignation in response to 
negative public opinion; 
 
-- USG interests in an FTA, the Forward Operating Location at 
Manta, and security cooperation protected from inclusion in 
any popular referendum; 
 
-- Congress overcome internal differences to appoint new 
Attorney and Comptroller Generals, currently only filled on 
an interim basis; 
 
-- The Palacio administration not subject to any 
unconstitutional challenge; 
 
-- Electoral reforms fully implemented prior to the opening 
of the 2006 elections, with a focus on voter education and 
campaign financing transparency. 
 
--------------------------------------------- --- 
Mission Strategy to Achieve 6-8 Month Objectives 
--------------------------------------------- --- 
 
¶9.  (SBU) To encourage these outcomes, we have established 
mission-wide democracy promotion and elections working groups 
to monitor democratic progress and the elections process. 
The democracy promotion group will: 
 
-- Leverage OAS technical assistance to the court selection 
committee to ensure selection of a qualified Supreme Court, 
which will in turn set procedures to select a new 
Constitutional Court; 
 
-- Help the GOE design a strategy to lower the risk of 
rejection of the new Supreme Court by referendum or other 
challenge; 
 
-- Encourage informed debate on electoral and political 
reforms being considered for inclusion in the referendum, 
while shielding USG security and trade interests from 
inclusion; 
 
-- Encourage political party dialogue to reach consensus on 
selection of Attorney and Controller Generals; 
 
-- Enhance national political stability by strengthening 
local government transparency through USG-funded citizen 
oversight efforts and infrastructure development at the 
municipal and village level; 
 
-- Apply USG visa ineligibility for corruption against 
selected high and mid-level government officials; 
 
-* Promote military respect for civilian authority using all 
available resources. 
 
¶10. (SBU) With major electoral reforms under discussion, some 
of which could make implementation of elections more 
difficult, and despite legal constraints (Nethercutt 
amendment) against support for GOE institutions, the election 
working group will: 
 
-- Support free, fair, transparent and inclusive elections 
that will be accepted by all sectors of Ecuadorian society. 
 
-- Identify ways the USG can support implementation of key 
electoral reforms approved by referendum, possibly including 
election by congressional district, institution of political 
party primaries, and new campaign financing rules; 
 
-- Increase participation in the 2006 elections by minorities 
(indigenous and Afro-Ecuadorians); 
 
-- Support voter education and public awareness campaigns, 
including debates, domestic election observation efforts and 
a quick count. 
 
-- Support citizen oversight of campaign finance disclosure 
requirements; 
 
-- Support OAS technical assistance to the Supreme Electoral 
Tribunal (TSE); 
 
-- Redouble our public diplomacy efforts, working with the 
public sector, civil society and the media, particularly at 
the provincial and municipal levels, to engage the Ecuadorian 
people during this time of democratic rebuilding. 
 
------------------------ 
Major Needs From the USG 
------------------------ 
 
¶11. (SBU) High-level dialogue between the GOE and top USG 
officials would advance our democracy agenda here.  Many 
Ecuadorians have internalized their recent record of 
democratic shortfalls, and seem resigned to continued 
failure.  USG motives are deeply suspect in many sectors, yet 
most Ecuadorians still look to us to help them solve their 
problems.  Building on the Secretary's successful UNGA 
meeting with President Palacio, visits by other high level 
USG officials would highlight our diplomatic and public 
diplomacy outreach efforts in support of Ecuadorian 
democracy. 
 
¶12.  (SBU) We also recommend increased election support to 
the OAS.  To signal USG support for rule of law, we request 
Department action with interagency players to deport wanted 
Ecuadorian criminals from the United States.  We strongly 
support efforts to seek a waiver to permit IMET programs to 
continue despite Article 98 sanctions.  Without it, the costs 
of losing access to a generation of Ecuadorian military could 
be catastrophic for our long-term democracy promotion 
efforts.  Finally, additional funding for our democracy 
promotion efforts is essential.  Current AID funding levels 
of $7,316,800 in FY 05 for democracy and governance are 
inadequate to the dimensions of the problems we face here. 
 
----------------- 
Major Impediments 
----------------- 
 
¶13.  (SBU) Nethercutt/Article 98 restrictions that prohibit 
support to the GOE greatly hinder USG ability to effect 
change.  These restrictions have already undercut USG 
civilian-military educational exchange programs, putting at 
risk our influence over an entire generation of officers. 
Nethercutt restrictions also undermine USG democracy building 
efforts with local governments and hamper policy reform 
efforts with a wide array of Central Government institutions, 
including the Electoral Tribunal, other courts, and the Trade 
and Environment Ministries.  Other important impediments 
include lack of consensus here on which reforms will enhance 
democracy, and time constraints that reduce GOE ability to 
achieve that consensus. 
 
------------------------ 
Countries With Influence 
------------------------ 
 
¶14.  (SBU) Spain is already working to support the political 
reform process.  Chile is highly regarded as an ally by most 
Ecuadorians.  Venezuela and Cuba seek to increase their 
influence in Ecuador through financial assistance and social 
exchanges, respectively.  Colombia is a neighboring country 
viewed skeptically due to fear of negative consequences from 
its civil conflict.  We intend to work with Chileans and 
Spanish counterparts to leverage our efforts. 
 
------------------------------- 
GOE Democracy Promotion Efforts 
------------------------------- 
 
¶15.  (SBU) The GOE supports ongoing USG-funded judicial 
reform, and is promoting dialogue on a variety of possible 
constitutional reforms that would be carried out via public 
referendum (tentatively scheduled for December 11, 2005) 
including, possibly, ratifying the selection procedures for a 
new Supreme Court and creation of a new electoral court, 
election by district, creation of a Senate, presidential 
impeachment by recall vote, reduction in the period Congress 
meets, de-politicization of the electoral tribunal, and 
reduction of the one-year delay in consideration of 
constitutional changes not deemed by Congress to be of 
national urgency. 
 
------------------------------- 
Consequences of Pursuing Reform 
------------------------------- 
 
¶16.  (SBU) A more aggressive USG reform agenda in the context 
of the Inter-American Democratic Charter and orchestrated 
with Chile, Spain and the IFIs (CAF, WB, and IDB) would help 
limit possible backlash against higher USG visibility. 
Working through other like-minded nations and institutions 
would help avoid unhelpful skepticism, and potential 
political attacks against USG interests during a 
pre-electoral year.  So far the reception to our efforts to 
coordinate with international donors on democracy promotion 
has been open and constructive.  By speaking from the same 
page with other donors and supporting legitimate 
pro-democracy civil society organizations, we may be able to 
help Ecuador through this transition period toward more 
responsible and effective rule of law, governance, and 
citizen participation to the benefit of all. 
JEWELL