US embassy cable - 04QUITO2740

UNCLAS SECTION 01 OF 02 QUITO 002740 
 
SIPDIS 
 
DEPARTMENT FOR WHA/AND, WHA/PD 
 
E.O. 12958: N/A 
TAGS: PHUM, PGOV, ECON, EC, Democracy 
SUBJECT:  HOW FREE IS THE PRESS IN ECUADOR? 
 
REF:  03 Quito 3782 
 
1.  Summary.  Continuing a longstanding battle with the 
press (Reftel), President Gutirrez recently called for a 
judicial investigation of a prominent radio director for 
possible seditious remarks in suggesting the president had 
received campaign contributions from Colombia's FARC in the 
2000 presidential campaign.  The media cried foul, and 
charged the president with yet another attempt to stifle 
free speech.  At the same time, a recent battle between two 
national television channels demonstrates the chilling 
impact on freedom of expression of business and private 
interests on the media.  Although the media has covered this 
media controversy in-depth, its consequences have received 
little scrutiny or analysis.  End Summary. 
 
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Gutierrez picks yet another fight with the press 
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2.  During his presidency, President Gutirrez has picked 
several fights with the media.  Last year, exasperated over 
negative coverage, he considered proposing a gag law to 
suppress articles he considered biased against him.  He also 
threatened to sue leading daily "El Comercio" for alleging 
that he had received campaign contributions from a former 
provincial governor under arrest for drug trafficking.  In 
all cases, after riling the press and causing a firestorm 
among media analysts, he has backed down. 
 
3.  Last month, at the presentation to the media of his new 
Secretary of Communications and Spokesperson, Ivan Oa (the 
 
SIPDIS 
fourth person in the 22 months of the Gutierrez 
Administration to hold this position), President Gutirrez 
ez 
singled out a number of media, including leading newspapers 
"El Universo" and "El Comercio", major television channels 
"Ecuavisa" and "Teleamazonas" and the Director of "Radio 
Vision" Diego Oquendo for telling "half-truths".  After a 
predictable outcry from the media, which accused the 
administration of once again attempting to stifle freedom of 
press, Oa appeared on Oquendo's morning interview program, 
denied that the Administration had proposed legal action 
against any media outlet, and said that the only intent was 
to initiate a discussion of ways to eliminate rumors that 
harm the successful governance of the country. 
 
4.  Shortly after Oa's conciliatory appearance with Oquendo 
on "Radio Vision", President Gutirrez sent a letter to the 
Quito provincial prosecutor requesting an investigation of 
Oquendo for what he characterized as possibly criminal 
remarks against national security made in an interview with 
an ex-minister close to Gutirrez.  In the interview, 
ew, 
Oquendo stated he had information from reliable, highly 
placed sources that Colombia's FARC had contributed to 
Gutirrez's 2000 presidential campaign and asked if this 
were true.  (The ex-minister responded in the negative.)  In 
the wake of Gutirrez's request for an investigation, 
Oquendo, a longtime critic of Gutierrez, has used his 
morning radio program as a bully pulpit to lash out against 
the Administration and its  "campaign against the press". 
The media, which, in general, has no great affection for the 
president, has rallied behind Oquendo.  The president, 
through Oa, has unsuccessfully tried to calm the debate by 
claiming he was not accusing Oquendo of a crime, but was 
merely asking the prosecutor to determine the facts. 
 
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Pressures from the private sector 
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5.  In September, Teleamazonas, one of four major national 
channels in Ecuador, began a series of programs on the bank 
nk 
collapse of 1999-2000 and individuals connected with it. 
Teleamazonas is owned by Fidel Egas who is the majority 
stockholder of Banco del Pichincha, the largest Ecuadorian 
bank.  One segment was to have focused on Roberto Isaias, a 
member of a family that owns television stations Gamavision 
and TC in Guayaquil, as well as CN3, a cable news station. 
Isaas is now a fugitive and is residing in the U.S.; he was 
convicted in absentia of fraud in the collapse of Filabanco 
and his case is now before an appellate court. 
 
6.  Officials from Teleamazonas and Banco de Pichincha 
reported to Embassy officials that Roberto Isaas contacted 
the station and threatened retaliation if the segment on him 
aired.  Those involved believed Isaas was concerned that 
negative media coverage could adversely affect the pending 
appellate decision in his case.  Teleamazonas offered to 
send a crew to Florida to allow Isaas to appear on camera 
and give his side of the story, but he declined and the 
the 
station proceeded to run the story.  At the same time, 
Teleamazonas ran a story on Congressional deputy Patricio 
Dvila, former head of the Agency of Security Deposits, 
which implied that he had unjustly profited from Ecuador's 
banking collapse. 
 
7.   TCTV responded with a series of news stories 
questioning the solvency of the Banco del Pichincha (despite 
official government audit reports to the contrary), which 
resulted in significant withdrawals and speculation of 
collapse.  At the same time, Davila accused the Bank of 
accounting irregularities.  Also, Social Christian Party 
leader Leon Febres-Cordero, a congressional deputy, former 
president, and Isaas ally, initiated a legal process to 
withdraw Teleamazonas' license based on a law prohibiting 
banks from owning communication media. 
 
8.  Faced with this onslaught, Teleamazonas and Banco del 
Pichincha sued for peace.  Catholic church leaders brokered 
talks resulting in a "non-aggression pact" whereby 
y 
Teleamazonas agreed to back off coverage of the Isaas 
family connection to the Filibanco banking failure, and TCTV 
agreed to stop its attacks on the Banco del Pichincha. 
Concurrently, Teleamazonas promised to cease coverage of the 
accusations against Dvila, and he in turn agreed to desist 
from making allegations of banking improprieties.  Thus far, 
the truce has held.  Bank officials told Embassy officers 
that the bank is regaining its heretofore-solid credibility 
and depositors are returning.  Teleamazonas believes the 
legal case against it will soon be dropped.  A leading 
Teleamazonas producer told us, however, that this "soap 
opera" has had a chilling effect on Teleamazonas and the 
station will be more careful about whose interests it 
offends in the future. 
 
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Comment 
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9.  During his tenure, Gutirrez has often been at odds with 
the press.  His efforts to reign in the media, however, have 
been unsuccessful, and served only to create an outcry by 
by 
and rally to arms of the media themselves.  Such incidents 
as the Oquendo case have served to provoke discussion of the 
importance of freedom of the press and the need to resist 
governmental intimidation and interference. 
 
10.  More troubling is the chilling effect of private and 
business interests on the media demonstrated by the TCTV- 
Teleamazonas dispute.  It is an example of the economic 
interests which limit freedom of the press by inhibiting the 
press from performing its watchdog function.  In contrast to 
the Oquendo case, there was scant coverage or analysis of 
this dispute.  The fact that the press feels free to 
criticize the government, but not a fugitive banker and his 
family business interests, reveals much about where the 
power lies in Ecuador. 
 
Kenney