US embassy cable - 05QUITO898

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 000898 
 
SIPDIS 
 
E.O. 12958: DECL: 04/22/2015 
TAGS: PGOV, PREL, ASEC, EC 
SUBJECT: ECUADOR: GUTIERREZ GONE, NEXT STEPS 
 
REF: QUITO 894 
 
Classified By: Amb. Kristie A. Kenney for reasons 1.4 (b) and (d) 
 
1.  (C) Summary:  Ex-president Lucio Gutierrez departed 
Ecuador for Brazil early on April 24, after being granted 
safe passage by the GOE.  Reaction has been muted thus far, 
with no demonstrations reported on a sunny Sunday when most 
Quitenos were more occupied by soccer rather than politics. 
Gutierrez' departure is positive, and removes a potential 
complicating factor for the impending OAS delegation visit. 
We have begun coordination with the local OAS mission to 
ensure a successful visit.  As the GOE continues to 
consolidate itself and signal differences with us on key 
issues, we seek to use early calls on President Palacio and 
his Cabinet to prevent any rash moves.  End Summary. 
 
Gutierrez in Brazil 
------------------- 
 
2.  (C) At 0300 local time on April 24, several official cars 
entered the Brazilian Embassy as a diversion; ex-President 
Gutierrez, his wife and younger daughter was spirited out the 
back of the residence to other vehicles.  The former first 
family was taken to a nearby military base (Los Chillos) and 
then flown by helicopter to Latacunga, an hour south of 
Quito.  There they boarded a waiting Brazilian AF plane, and 
took off for Brasilia at approximately 0600.  It is still 
unclear whether Gutierrez formally resigned before leaving 
the country.  More details may emerge out of Brazil in coming 
days. 
 
Reaction Muted 
-------------- 
 
3.  (U) Word of Gutierrez' departure did not seep out until 
late-morning, and caused little reaction in the streets.  No 
protests or demonstrations were reported, as most Quito 
residents took a day off from politics in favor of other 
pursuits.  Foreign Minister Antonio Parra confirmed that the 
GOE had granted safe passage, citing its international 
obligations and denying ceding to any outside pressure. 
 
OAS Visit Coordination 
---------------------- 
 
4.  (C) Gutierrez' departure should help reduce uncertainty 
here, and help the GOE to consolidate its claim to power. 
The Ambassador spoke with OAS mission director Carlos Maria 
Ocampos on April 24 to offer Embassy support for the upcoming 
delegation visit.  Ocampos said he expected the OAS 
delegation to arrive on April 27.  The Ambassador will meet 
with Ocampos on April 25 to begin detailed planning for the 
visit. 
 
Cabinet Moves 
------------- 
 
5.  (C) Apart from initial press opportunities, President 
Palacio has not formally addressed the nation to lay out his 
government's plans.  Initial Cabinet appointees, however, 
have been signaling significant shifts on some key issues of 
USG interest.  Minister of Economy and Finance Rafael Correa 
has signaled the government's intention to divert some oil 
income from buying back government debt towards social 
spending.  On April 24, he denied any plan to declare a 
moratorium on foreign debt payments.  Thus far, there are few 
signs of capital flight, although many in the business sector 
are expressing concern privately.  Government Minister 
Mauricio Gandara has publicly signaled that the GOE will not 
to sign an Article 98 agreement with us, and has publicly 
expressed his intention to review the existing CSL Manta 
agreement.  He also stated that no decision has been taken on 
the issue. 
 
6.  (C) In an April 22 meeting with PolChief, Presidential 
Secretary Carlos Munoz Rosado welcomed a potential OAS visit. 
 
SIPDIS 
 The GOE was waiting for the situation to calm down a bit 
before granting safe passage to Gutierrez.  The first order 
of business had just been accomplished--the military and 
police leadership had been replaced, building internal GOE 
confidence.  Munoz strenuously emphasized that the Palacio 
government is not against free trade or the United States. 
On trade, the GOE would seek to negotiate to "better protect 
Ecuador" from any negative effects.  Early Cabinet selections 
(nine men, no women, with seven of nine hailing from 
Guayaquil, like Palacio) consist of the President's inner 
circle, and were largely apolitical "technicos," he said. 
The rest of the cabinet would be similarly apolitical, but 
more representative of the entire country.  Key issues such 
as budgetary priorities and any free trade agreement would be 
put to the people by referendum. 
7.  (C) At a meeting on April 21 (reported RefTel), Minister 
of Government Gandara claimed that few Cabinet members were 
connected to political parties.  There had been and would be 
no deals with political parties, he said; instead, the 
government would use citizen pressure to get Congress to act 
on its initiatives, rather than swapping posts or bribes as 
in the past. 
 
Comment and Next Steps 
---------------------- 
 
8.  (C) Excellent Embassy relations with the new national 
police chief and close contact with the Brazilian embassy 
helped keep us informed about the situation in the run-up to 
Gutierrez' departure.  Though muted today, public reaction to 
Gutierrez' departure could simply be delayed by good weather 
and political exhaustion.  Regardless, it helped to reduce 
tensions and a quandary for the OAS delegation.  Throughout 
the unsettled situation in the wake of Gutierrez' dismissal, 
the Brazilian Government has played a helpful role by 
providing asylum and lobbying the GOE for safe passage.  We 
recommend the Secretary consider thanking the GOB privately 
for its assistance in her upcoming visit to Brasilia. 
 
9.  (C) The OAS visit will inevitably be viewed skeptically 
by the GOE and its more nationalist backers, and by the 
protest movement which brought them to power.  We will 
coordinate closely with the OAS mission here to ensure 
security and a good round of meetings.  To blunt local 
resistance to foriegn oversight of the internal political 
situation, we recommend the OAS mission be encouraged to 
strike forward-looking themes, and deflect attention from 
recognition or judgment of the change in government per se. 
One possibility would include offering OAS technical 
assistance on the lingering issue of how to reconstruct 
Ecuador's defunct judiciary. 
 
10.  (C) In her initial meeting with President Palacio on 
April 25, the Ambassador will encourage him to use the OAS 
visit as an opportunity to show GOE receptiveness to the 
concerns of friendly nations.  She will also use pending 
calls on the Foreign Minister and his cabinet colleagues 
(MinDef, MinGov, and the Economy and Trade ministers) to 
discourage rash actions. 
KENNEY