US embassy cable - 05QUITO418

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 000418 
 
SIPDIS 
 
E.O. 12958: DECL: 02/17/2015 
TAGS: PGOV, PREL, PHUM, EC 
SUBJECT: ATTACK ON JESUITS ANOTHER SELF-INFLICTED FIASCO 
 
 
Classified By: Charge d'Affaires Arnold Chacon, Reasons 1.4 (b) 
 
1.  (C) SUMMARY:  The GoE's Social Welfare Ministry (MBS) 
February 10 ordered "dissolved and liquidated" the Mariana de 
Jesus Foundation (FMJ), a Quito-based, Jesuit-operated 
charitable organization.  Days later, Ministry staff and 
police attempted to physically take possession of the FMJ 
facility but were repelled by employees and assistance 
recipients.  Media and Embassy contacts deplored the MBS 
maneuver, calling it a power grab and retribution for the 
Jesuit's public opposition to President Lucio Gutierrez's 
"dictatorial" turn.  Responding to the Ambassador's calls, 
GoE insiders claimed Gutierrez had no role in the operation; 
he would rescind the MBS order immediately.  Said rescission 
occurred February 18, hours after an alleged assault on the 
Foundation's director but days after the administration 
absorbed another PR body blow.  END SUMMARY. 
 
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Executive Order, Negotiations, Aborted Assault 
--------------------------------------------- - 
 
2.  (U)  Social Welfare Minister Antonio Vargas, via MBS 
Resolution 4793, mandated the closure of the FMJ, a 
Jesuit-run organization formed in 1939 to develop "social 
programs of high moral standard for the benefit of Ecuador's 
needy."  The Foundation helps thousands of families via 
health maintenance programs, soup kitchens, and aid to 
refugees, among others.  USAID supported the FMJ in the 
1980s, providing a $630,000 grant to help kick-start the 
Solanda low-income housing project, which remains today a 
neighborhood of well-kept homes and safe streets. 
 
3.  (U) An MBS team February 14 arrived unannounced at FMJ's 
headquarters.  They presented the ministerial order to 
shutter the Foundation and ordered staff to vacate.  The 
decree claimed the Foundation lacked "legal standing," 
alleging FMJ had not reported to the GoE its director's name, 
board of directors membership, and legal representative.  MBS 
Vice Minister Bolivar Gonzalez later informed media the NGO 
had invested monies in foreign entities, without elaborating 
why such actions were illegal. 
 
4.  (U) Despite apparently successful February 15 
negotiations to allow FMJ's continued operations, the 
following day an MBS "liquidator" and police escort entered 
FMJ premises intending to take control.  They were met by 
approximately 150 FMJ employees and beneficiaries who 
thwarted the attempt.  Although no serious violence was 
reported, February 16 newspapers showed the liquidation team 
retreating at full run. 
 
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Explanations Fall in Two Camps 
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5.  (U) Temperatures rising, the Embassy canvassed contacts 
for background and to ascertain reasons for the MBS takeover. 
 Most considered it retribution against the Church and/or an 
MBS power grab.  Father Mark Miles, Number 2 at the Vatican 
Embassy, noted February 16 that the FMJ had a stellar 
reputation here for professionalism and probity.  The Jesuits 
had initiated an investigation, and should it show no FMJ 
wrongdoing -- Miles's prediction -- the Church would 
challenge the MBS decree in court.  The Papal Nuncio also had 
directed a stern letter of protest to Foreign Minister 
Patricio Zuquilanda. 
 
6.  (U) The Vatican diplomat surmised that the Church's 
opposition to "dictatorial" GoE actions underpinned the MBS 
takeover.  Another factor was that Quito's Jesuit-run 
Catholic University had been "harboring" members of the 
Ecuador's old Supreme Court, which Congress, supported by 
President Gutierrez, had deposed in December 2004.  "Smells 
like retribution," Miles wagered. 
 
7.  (U) Cesar Duque works at Quito's Human Rights 
Documentation Center (CEDHU).  Duque February 16 told us that 
MBS's shut-down of the FMJ was rife with legal and procedural 
errors, a point made also by MFA Legal Advisor Marcos Almeyda 
February 18.  There were financial factors at play, Duque 
believed, as the Foundation ran a large and successful 
low-cost housing program.  With a successful takeover, MBS 
conceivably could commandeer the inventory as well as the 
FMJ's large endowment (which media reported at $20 million). 
FMJ Financial Director Francisco Guzman informed us February 
17 the Ministry already had blocked FMJ bank accounts. 
 
8.  (U) Meanwhile, anti-government NGOs tell us a GoE 
witchhunt is afoot.  Fearing they might "be next,"their 
administration and financial staffs are crashing to ensure 
their books are in order.  None wants MBS at the doorsteps. 
 
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Embassy Gets Involved 
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9.  (C) Upon learning of FMJ's takeover, the Ambassador 
February 16 expressed deep concern to Presidential Secretary 
Carlos Polit.  No matter the weight of MBS's charges, 
ordering camouflage- and bulletproof vest-draped police to 
occupy the well-respected NGO was bad politics.  Polit swore 
Gutierrez had no prior knowledge of MBS's intent, calling the 
move an "uncoordinated error."  The Foundation would re-open 
February 17, although the GoE's investigation into FMJ 
finances and activities would continue. 
 
10.  (U) The FMJ's Guzman informed the Embassy February 17 he 
had received no stay of execution.  Worse, Guzman forwarded 
word of an assault against FMJ Director Francisco Pena. 
Thugs had cornered Pena just outside the Foundation, Guzman 
reported, demanding his briefcase and laptop computer. 
Meeting resistance, they physically overcame the director, 
took his possessions and fled.  Media February 18 claimed the 
assailants had fired on Pena, a bullet grazing his foot. 
 
11.  (C) Concerned over an apparently worsening 
confrontation, the Charge contacted Polit February 18.  The 
adviser revealed that President Gutierrez had conferred with 
Foundation principals until early hours of the morning.  He 
reiterated that Gutierrez had ordered the MBS decree revoked. 
 Polit believed that Gutierrez's actions had satisfied both 
FMJ and Nunciature officials, and pledged to investigate the 
assault against the FMJ director.  The Embassy later 
confirmed the meeting and its results with Guzman.  His 
organization still lacked notice in writing, however. 
 
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COMMENT: 
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12.  (C) While Polit is one of few administration officials 
enjoying our trust, we are dubious the MBS hatched and 
conducted the FMJ takeover solo; other Gutierrez advisers 
likely played at least bit parts.  The president himself 
recently railed against "foreign NGOs" destabilizing his 
administration, promising investigations and financial audits 
against them.  And Citizen Participation, a USAID-sponsored, 
pro-democracy NGO, has earned the GoE's ire for helping to 
organize the February 16 pro-opposition march -- MFA 
officials, summoning the acting AID director February 18, 
claimed Gutierrez was disturbed over USG financial support 
for a "partisan, anti-government" organization.  Rather than 
a coordination snafu, a more likely explanation for the 
MBS/FMJ fiasco is that administration officials, once again, 
did not think through a maneuver that was to paint them as 
freedom-of-expression opponents. 
 
13.  (C) More than ever, effective dialog between government 
and opposition is vital.  Via its good offices, the Embassy 
will continue to push Gutierrez and his many enemies to the 
table for talks. 
Chacon