VZCZCXYZ0022
OO RUEHWEB

DE RUEHQT #1436/01 1631827
ZNR UUUUU ZZH
O 121827Z JUN 06
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4579
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 5687
RUEHCV/AMEMBASSY CARACAS PRIORITY 1786
RUEHLP/AMEMBASSY LA PAZ JUN 9870
RUEHPE/AMEMBASSY LIMA PRIORITY 0653
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 0637
RHMFISS/CDR USSOUTHCOM MIAMI FL

UNCLAS QUITO 001436 
 
SIPDIS 
 
SENSITIVE, SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EC
SUBJECT: SUPREME COURT ALLOWS FORMER PRESIDENT MAHUAD TO 
RETURN TO ECUADOR 
 
SUBJECT: SUPREME COURT ALLOWS FORMER PRESIDENT MAHUAD TO 
RETURN TO ECUADOR 
 
¶1.  (U) Summary:  The Supreme Court ruled on June 7 that 
criminal charges against ex-president Jamil Mahuad would be 
put on hold for lack of evidence, permitting Mahuad to return 
to Ecuador without facing an arrest warrant.  Ex-president 
Mahuad, widely blamed for the country,s severe financial 
crisis in 1999, was removed from office after protests in 
¶2000.  After the decision, he announced that he planned to 
return to Ecuador in December, but that he had no intention 
of returning to politics.  Given Mahuad,s extreme 
unpopularity, the ruling again demonstrates the independence 
of the new court, which will now come under heavy criticism 
from partisan critics.  End Summary. 
 
¶2.  (U) On June 7, the Second Criminal Court of the Supreme 
Court ruled a provisional stay of proceedings in the case of 
ex-president Jamil Mahuad, who was charged with crimes in 
connection with the freezing of bank deposits in March 1999. 
The ruling, which effectively allows Mahuad to return to 
Ecuador, suspended the July 2000 order for his arrest due to 
lack of evidence.  The ruling will become permanent if no new 
evidence against him is presented within three years.  The 
Supreme Court also ruled to drop all charges against the 
Mahuad Administration,s Finance Minister Ana Lucia Armijos. 
 
¶3.  (U) Arrest warrants for Mahuad and Armijos were issued by 
then-Supreme Court President, Galo Pico on July, 13, 2000, 
following a denunciation by the Civilian Anti-Corruption 
Commission (CCCC) and charges by various members of Congress. 
 Mahuad,s order to freeze bank accounts, which was executed 
by Finance Minister Armijos, was viewed by the CCCC and Pico 
as intended not to save the economy from hyperinflation, but 
to protect former Progreso Bank owner Fernando Aspiazu who 
had contributed an unreported three million dollars to 
Mahuad,s campaign.  Pico,s decision came 16 months after 
the bank account freeze, and several months after both Mahuad 
and Armijos had left Ecuador.  The charges were dismissed out 
of hand by Mahuad,s former political party, the Popular 
Democratic Party (DP), as partisan politics, due to Pico,s 
allegiance to the rival Social Christian Party (PSC). 
 
¶4.  (U) After being removed from office after a week of 
protests capped by a coup led by future president Lucio 
Gutierrez, Mahuad fled to the United States where he accepted 
a faculty position at Harvard,s Kennedy School of 
Government.  He currently resides in Washington D.C., is a 
university lecturer, and has steadfastly refused to 
participate in EC politics.  Through spokesman and longtime 
lawyer Patricio Vivianco, Mahuad responded to the ruling by 
announcing that he planned to return to Ecuador in December. 
He said he had no desire to return to Ecuadorian politics. 
Since his departure, Mahuad,s political party (DP) has lost 
credibility, and in an effort to rejuvenate and disassociate 
themselves from Mahuad,s legacy they recently changed their 
name to the Christian Democratic Union (UDC). 
 
¶5.  (U) The Supreme Court ruling and Mahuad,s announcement 
were greeted angrily by many Ecuadorians, who still resent 
Mahuad for ordering bank accounts to be frozen during 1999,s 
hyperinflation.  The Committee on Anticorruption (note: a 
politicized institution of limited credibility) issued a 
statement exhorting the Supreme Court to reverse the 
decision, while spokesmen from the leftist Pachakutik and 
Popular Democratic Movement (MPD) parties threatened that 
when Mahaud returned they would give him "the reception he 
deserved."  The PSC, who reacted angrily to the court for its 
earlier decision freeing another former president, Gustavo 
Noboa, from house arrest in March, also expressed their 
disgust with the decision. PSC Congressman and confidant of 
party boss Leon Febres Cordero, Xavier Sandoval, said the 
court,s ruling was "inappropriate, illegal, and against 
universal principles of justice." 
 
Comment 
------- 
 
¶6.  (SBU) The Supreme Court,s ruling on Mahuad demonstrates 
its new-found independence and willingness to tackle 
controversial issues on which it is assured to take flak. 
The court was selected in December in a transparent process 
with OAS oversight and USG support.  Mahuad,s return would 
provoke public ire, but not the political reaction caused by 
fellow ex-Presidents Bucaram and Gutierrez in 2005, both of 
whom remain important players in Ecuadorian politics. 
 
JEWELL