US embassy cable - 05QUITO919

C O N F I D E N T I A L SECTION 01 OF 06 QUITO 000919 
 
SIPDIS 
 
DEPT FOR WHA/AND 
 
E.O. 12958: DECL: 04/25/2010 
TAGS: PGOV, ECON, EC 
SUBJECT: WHY DID GUTIERREZ FALL? 
 
Classified By: AMBASSADOR KRISTIE KENNEY, REASONS 1.5 (B,D) 
 
1.  (C) Summary:  Early analyses of the overthrow of 
Gutierrez in Ecuador in the U.S. press and elsewhere have 
relied on facile, but erroneous comparisons between Ecuador 
and Venezuela or Bolivia.  In most, either Gutierrez or 
Palacio is Ecuador's Chavez.  In fact, little can be 
understood about what has happened in Ecuador via such 
comparisons.  Gutierrez' fall was the result of a complex 
interplay of interests and actions, but the crucial factors 
were:  Gutierrez' and his government's own repeated, foolish, 
tactical errors, plotting by traditional political elites, 
especially Leon Febres Cordero's Social Christians and the 
Democratic Left, to bring down the outsider and take back 
control of the government, and, finally, the frustration of 
Quito's middle class with the misdeeds of the political elite 
combined with their fear of the "great unwashed" from the 
coast.  In fact, the fall of Gutierrez is simply the dramatic 
peak of the established Ecuadorian political cycle which has 
come to consist of elections every four years and the 
overthrow of the elected president at the mid-term.  End 
Summary. 
 
2.  (U) We have reported on a day-to-day basis over the past 
six months the ongoing political crisis in Ecuador.  Although 
political crisis is, for all practical purposes, a constant 
in this country, and although this crisis is by no means 
over, the removal of Gutierrez and installation of a new 
president on April 20 ended the latest in Ecuador's sad 
series of political cycles.  It offers an opportunity to 
reflect on a political process which is most certainly 
broken.  We hope to offer some lessons for attempting to 
build democracy in Ecuador and the region. 
 
3.  (C) Ecuador is the banana republic of banana republics. 
Six of the fourteen Latin American governments which have not 
finished their terms since 1989 were in Ecuador.  Each of the 
last three democratically elected presidents of Ecuador has 
been deposed, and each ex-president has been forced into 
exile by the prospect of questionable criminal proceedings 
against him.  President Palacio is the tenth president of 
Ecuador since 1996 (counting a presidential triumvirate which 
lasted three hours, and another president who lasted a day). 
 
Who Lost Ecuador? 
----------------- 
 
4.  (C) With the support of a spectacularly favorable 
external economic climate, responsible economic management, 
and strong support from the USG for democratic stability, 
Gutierrez just scraped by three significant attempts to bring 
down his government in its first two years.  Finally, 
Gutierrez succumbed after two years and three months, mostly 
to his own mistakes.  Following is an initial attempt to look 
at who was responsible for the fall of Gutierrez and who has 
gained and lost from the process. 
 
The Outlaws (Los Forajidos) 
--------------------------- 
 
5.  (C) The final days of the Gutierrez government saw the 
formation of a "new" political force in Quito.  The 
forajidos, or outlaws, taking on as a badge of honor an 
epithet spat at protestors by Gutierrez, were actually made 
up principally of middle and upper-middle class Quito 
residents disgusted by the corruption and petty political 
infighting of the entire political class and fearful of the 
prospect of another Bucaram presidency.  The ranks of the 
forajidos were filled out by radical university students and 
troublemakers, many connected to the Popular Democratic 
Movement (MPD), the quasi-communist party.  Los forajidos 
first came together in response to a call to action launched 
by Radio La Luna the night of Friday, April 16 after 
Gutierrez' announcement of a state of emergency in Quito. 
Ultimately, it was the radical protesters who intimidated the 
military to withdraw its support from Gutierrez, to prevent 
bloodshed.  The government is more willing to credit its 
creation to the more moderate forajidos, and seeks to placate 
them before they turn out again.  The forajidos call, "Todos 
fuera" or "everyone out," now emblazoned on bumper stickers 
around the city, represents a continuing challenge to a 
political establishment which has completely lost credibility 
before a large portion of the population. 
 
Old Politicos 
------------- 
 
6.  (C) The big parties, the Democratic Left (ID) and Social 
Christians (PSC), in many ways precipitated the crisis and 
benefited from it, but it is not clear how long-lasting the 
benefits will be.  Led by former President Leon 
Febres-Cordero (LFC), the  PSC flirted with Gutierrez in the 
first half of 2004, but actively sought his overthrow both 
before their short-lived collaboration, and, with more 
vehemence,  since mid-2004.  The ID under ex-president 
Rodrigo Borja has been gunning for Gutierrez since the first 
day of his government.  Though the parties are ideologically, 
geographically (PSC=coast, ID=sierra), and personally opposed 
to one another, they increasingly worked together against 
Gutierrez over the past months.  Their congressional blocks 
formed the core of the majority that removed Gutierrez on 
April 20. 
 
7.  (C) That said, the PSC had little to do with the protests 
which actually brought Congress to the point of removing the 
President, and the ID played only a limited role. 
Nonetheless, it is increasingly clear that the two parties 
had reached agreement with Palacio before he was placed in 
the Presidency.  It seems unlikely that these traditional 
opponents will be able to work together now that their common 
enemy is gone, and the prospect for tearing the new 
government asunder is real.  The ID and PSC are clear winners 
from the fall of Gutierrez. 
 
The Indigenous 
-------------- 
 
8.  (C) The indigenous supported Gutierrez' presidential 
campaign in 2000, but left his government after only six 
months when Gutierrez did not implement the left-leaning 
platform he had run upon.  Gutierrez' political team was 
consistently at the top of its game in dealing with the 
indigenous.  They split the Evangelical indigenous movement 
from the Catholics and the sierra indigenous from the 
lowlanders of both jungle and coast.  The indigenous 
political party, Pachakutik, found no better option by 
mid-2004 than joining with its long-time enemies, the Social 
Christians and the Democratic Left, in a coalition of 
opposition.  The Catholic sierra indigenous, a key force 
behind the destitution of Mahuad in 2000, were practically 
impotent and mostly invisible in the run-up to Gutierrez's 
overthrow.  The Evangelical and coastal indigenous 
participated in protests, but in support of the Gutierrez 
government.  Similarity between the overthrow of Goni in 
Bolivia and that of Gutierrez is almost nonexistent. 
Ecuador's indigenous people have lost every major political 
conflict since they were conquered by the Incas some 500 
years ago.  However, they may have made some short-term gains 
this time.  The indigenous were the first to call for 
Gutierrez' ouster, and they will regain some of the 
institutional benefits Gutierrez took from them over the past 
two years.  They also hope to kill the FTA, and have much 
better prospects for that with the Palacio government. 
 
Bananas and Nuts 
---------------- 
 
9.  (C) Ecuador's two mid-sized populist political parties 
played an important role in bringing the Gutierrez government 
to the brink, and then giving it a little nudge.  The PRE, as 
always, has had only one goal throughout the period, bringing 
back Abdala Bucaram, the self proclaimed "crazy" former 
president of Ecuador, who, it seems, would like nothing more 
than another cameo role as president-for-a-day.  Bucaram's 
return was a fateful mistake by Gutierrez, and lit up the 
opposition.  With Bucaram's disappearance and almost certain 
re-exile on April 21, the PRE has gained nothing and probably 
lost credibility once again.  PRIAN, the personal property of 
banana magnate and serial presidential candidate Alvaro 
Noboa, may win the award for least consistent position.  From 
opponent of the government in the fall, it switched to 
supporting the government and helped with the naming of a new 
Supreme Court in December, 2004 which everyone knew the PRE 
intended to use to bring Bucaram, Noboa's nemesis, back from 
exile.  Only when Bucaram actually arrived did the PRIAN 
finally react, pulling out of the coalition.  PRIAN has 
looked silly, uncertain, and used, throughout the process. 
Now it wants early elections, and is desperate to prevent its 
opponents from regaining control of the electoral tribunal. 
 
The Businessmen 
--------------- 
 
10.  (C) The business community of Quito, closely tied to the 
PSC, took an active and early role, with the President of the 
Chamber of Commerce of Quito declaring Gutierrez a dictator 
as early as December and making repeated calls in the last 
days of the government, for his resignation or ouster.  Two 
different, but compatible, concerns motivated the Quito 
business class.  First, the leadership of the Quito Chamber 
of Commerce was closely and personally tied to the PSC and 
LFC, specifically.  Second, the business class of Quito 
feared the class politics which Bucaram brought back to 
Ecuador with his return.  Many of them cannot tolerate the 
idea of another Bucaram presidential term, yet they fear that 
the charismatic Bucaram can win again.  Ultimately, however, 
the business community is likely to be the big loser as the 
new government appears less likely to conclude a FTA, resolve 
commercial disputes, or maintain responsible economic 
policies. 
 
The Press (and, more to the point, the radio) 
--------------------------------------------- 
 
11.  (U) Always irresponsible, both the print press and 
television were totally overshadowed by a tiny player which 
has now taken center stage in Ecuador - Radio La Luna.  For 
background on Radio La Luna, see Quito 875. 
 
The Military 
------------ 
 
12.  (C) "Mixed" best describes Gutierrez, relations with 
Ecuador,s military leadership.  Many saw in him a 
comrade-in-arms, champion pentathlete and first-in-class 
student.  Others saw a mutineer who led a 2000 coup that 
toppled an elected president and irrevocably damaged the 
armed forces, standing with the Ecuadorian populace. 
Practically his first move upon taking office in 2003 was to 
purge the military of those general officers who opposed the 
coup and/or sanctioned him afterward. 
 
13.  (C) Former military pepper the ranks of Gutierrez,s 
Patriotic Society Party (PSP), and he turned to many to fill 
spots in the administration, regardless of their 
qualifications (or lack there of).  The president also placed 
key GoE entities like Customs under direct military control, 
both to placate them and because he trusted and was 
comfortable with that leadership style.  Gutierrez invested 
time, effort, and money in cultivating the armed forces, and 
we don,t consider them the chief element in his downfall. 
It was, however, Joint Forces Chief Admiral Victor Rosero,s 
early-afternoon "withdrawal of military support" for 
President Gutierrez that precipitated his April 21 
abandonment of the presidential palace.  By doing so, Rosero 
returned the military to its traditional role as governmental 
arbiter, weakening its credibility. 
 
The Interloper 
-------------- 
 
14.  (C) Gutierrez beat all the traditional political parties 
in taking the Presidency in 2002.  Clearly the indigenous and 
other traditionally unrepresented classes voted for change in 
voting for Gutierrez.  Most thought they were voting for a 
shift to the left, and Gutierrez' rhetoric was distinctly 
Chavez-like during the campaign.  Lower classes were 
disillusioned with Gutierrez soon after his election when he 
opted to maintain a responsible (if not really tight) fiscal 
policy, negotiate an agreement with the IMF, and then a FTA 
with the U.S.  Traditional political parties, both the old 
parties and the populists, have detested Gutierrez as an 
interloper ever since his election, though most have worked 
with him on different political conspiracies against each 
other at one time or another during his presidency. 
 
15.  (C) For his part, Gutierrez surrounded himself with a 
varied assortment of advisors and listened to all of them in 
turn, resulting in wild swings in policy and political 
strategy, some inspired and others simply stupid.  On 
numerous occasions over the past six months it has seemed as 
though Gutierrez had finally ensured his survival through the 
end of his term.  Each time, he reacted to his success by 
overreaching, and each time he ended up stumbling, creating a 
new crisis.  Responsible fiscal policy, a mini-boom in oil 
production, and high oil prices kept the government's books 
balanced and the population out of the streets, and is one of 
the key reasons the Gutierrez government lasted as long as it 
did.  His counter-offensive against Febres Cordero's 
sinecures in the justice system was a constitutional breach 
which sowed the seeds of Gutierrez' destruction, four months 
later, when an illegitimate court permitted the return of 
Bucaram.  Gutierrez' last-ditch state of emergency was the 
nail in the coffin, energizing the protest movement. 
 
Setting the Stage 
----------------- 
 
16.  (C) The "revolution of the forajidos," as some are 
calling it, was the last stage in a long downward spiral of 
Ecuadorian politics beginning with a failed impeachment 
attempt against Gutierrez by the PSC in November, 2004.  In 
breaking up the impeachment attempt, the GOE managed to forge 
a slim congressional minority in coalition with the PRE, 
PRIAN, MPD, and independents.  The basis for the coalition 
was an agreement to end the impeachment proceedings and 
replace the corrupt and PSC/ID-controlled Supreme Court, 
Supreme Electoral Court, and Constitutional Court, taking 
advantage of a questionable interpretation of the 
constitution.  Congress voted to do so on December 8, 
replacing the justices with others selected by Congress, and, 
specifically, by the PRE, PRIAN, and GOE.  Gutierrez 
announced that the new Supreme Court was temporary, and that 
he would submit a constitutional reform package to create an 
independent supreme court. 
 
17.  (C) The new court was rejected by the opposition 
political parties, judicial workers, who went on strike, and 
many representatives of civil society.  However, over the 
following four months repeated attempts to call the 
population into the streets in protest against what some were 
labeling "dictatorship," failed to be convincing.  While 
middle class protestors did show up for major marches in 
Guayaquil in January and Quito in February, the bulk of the 
population of Ecuador seemed unmoved by what many clearly saw 
as a change in the ownership, but not the nature, of the 
judicial system.  Congress, in the succeeding four months, 
has been unable to come to agreement on any formula for a 
independent court, and it is clear that many, if not all, 
political parties, are only interested in capturing the 
judicial system for themselves. 
 
"Crazier than Ever" 
------------------- 
 
18.  (C) On March 31, the President of the Supreme Court 
annulled the criminal charges outstanding against former 
presidents of Ecuador Abdulla Bucaram and Gustavo Noboa, and 
former vice president Alberto Dajik.  Over the next few days 
the three, all charged with various acts of corruption by the 
PSC-controlled criminal justice system, returned to the 
country.  The returns of Dajik and Noboa raised only muted 
complaints about impunity. (The criminal process against 
Noboa for his role in negotiating a debt restructuring were, 
on their face, blatantly political and unfair; those against 
Dajik were too complex to make a clear determination.) 
However, Bucaram organized a political rally for his return 
at which he anounced that he had come back "crazier than 
ever."  (Bucaram's nickname has long been "El Loco," and 
Congress fittingly, if unconstitutionally, removed him from 
the Presidency in 1997 for mental illness.)  He began 
immediately hinting broadly about his intent to run for the 
presidency again and his class-warfare and nationalist rants, 
in which he explicitly associated himself with Chaves, became 
ubiquitous on TV and radio. 
 
19.  (C) Bucaram's return quickly became the ralling cry for 
the opposition, especially among Quitenos, who have always 
felt particularly threatened by the crazy man from the coast. 
 Still, protests mostly fell flat.  Once again, we and others 
counseled Gutierrez to take advantage of his strengthened 
position and come to a negotiated settlement of the court 
issue.  Once again, and probably the fault lies on both 
sides, no solution could be reached. 
 
Pride Cometh Before a Fall 
-------------------------- 
 
20.  (C) The final act of the Gutierrez administration began 
with April 13's failed national strike.  The Quito 
opposition, disappointed with all its previous attempts to 
force Gutierrez to back down on the court issue and Bucaram 
return, called an "indefinite nationwide strike" to try and 
finally force Gutierrez to relent. 
 
21.  (C) In the event, the strike was neither national nor 
indefinite in duration.  Most of the country, including 
Guayaquil, refused to participate, and even in Quito the 
strike lasted only one day. Although small protests continued 
over the next few days, most significantly, including marches 
to the homes of GOE ministers and high officials, it was 
clear that Gutierrez had won again.  Gutierrez and his 
spokespeople disregarded (again) the advice of many, 
including the Embassy, to refrain from gloating and take the 
opportunity to seek dialogue and compromise.  Instead, once 
again, Gutierrez overreached. 
 
22.  (C) On the advice of his political inner circle, and 
without informing or consulting the cooler heads in his 
cabinet, Gutierrez declared a state of emergency, in part to 
prevent the forajidos from harassing the families of his 
ministers at home, and sought to placate the opposition by 
simultaneously removing the Supreme Court on the evening of 
Friday, April 15.  The reaction was immediate.  Radio La Luna 
began convoking the population to a popular demonstration 
site at a large park, and the middle class turned out by the 
thousands.  The nights of April 15, 16, 17, and 18 all saw 
large crowds gathering at the park, calling for Gutierrez's 
overthrow.  The crowds were mostly middle class, including 
women, old people, and children.  Police sensibly kept their 
presence at these protests minimal, and no violence was 
reported. 
 
23.  (C) On Saturday, April 16, considering opposition from 
his Minister of Economy in Washington, Minister of Trade, 
and, most importantly, from MinDef Herrera and General Aguas, 
Gutierrez reversed course again, ending the state of 
emergency.  At this time he made another attempt to reach 
agreement with the opposition on resolution of the court 
crisis, but the lack of trust between him and his opposition 
made meaningful negotiations impossible. 
 
24.  (C) Radio La Luna, as well as the protestors were 
clearly beginning to taste blood.  The protest convoked for 
Tuesday, April 19 was to be different.  The crowd would meet 
at a park in the center of town and proceed to the 
Presidential Palace to remove Gutierrez, physically, if 
necessary.  The Government ginned up a display of support for 
itself, helping to bus in thousands of evangelical indigenous 
for their own protest in support of Gutierrez, but the 
indigenous sensibly got out of the way before the main event 
began. 
 
25.  (C) Police showed admirable restraint during the April 
19 demonstrations, using large quantities of teargas to keep 
demonstrators from getting to the palace.  Only one death 
resulted, that of a Chilean journalist who died of a heart 
attack, likely brought on by exposure to tear gas. 
Demonstrators failed to reach the palace. 
 
The Bare-Chested Monkeys from the Coast 
--------------------------------------- 
 
26.  (C) Most of our contacts were suggesting on April 20 
that, if that night's assault on the palace did not bring 
down the government a respite would be likely, as 
demonstrators were tired and becoming discouraged. 
Presidential brother-in-law Renan Borbua single-handedly kept 
temperaments from cooling.  He got on TV the night of April 
20 to announce that busloads of Gutierrez supporters would 
arrive in Quito from the coast the next morning to defend the 
constitution.  Rumors spread throughout the city, fueled by 
Radio Luna which reported that the "bare-chested monkeys from 
the coast" were coming up with shotguns and machetes to put 
down the demonstrations.  ID-connected mayor Paco Mancayo 
ordered city busses and heavy machinery to block the roads 
into the city and the forajidos, strongly reinforced by MPD 
and other thugs, began again the demonstrations, including 
attacks on various government buildings.  When police opened 
the roads and traffic was allowed through, La Luna reported 
that the costeno thugs were being "escorted by the police" 
into the city, and that looting was taking place in the lower 
reaches of the city (as far as we know, no looting took 
place). 
 
Police and Military Step Down, and Up 
------------------------------------- 
 
27.  (C) Police Chief Jorge Poveda announced his resignation 
at mid-day on April 21, suggesting that he could no longer 
defend the regime.  Police presence on the streets began to 
thin.  Left with the prospect of facing the crowds 
themselves, the military high command decided the situation 
was no longer tenable and that they would withdraw support 
from Gutierrez.  They considered installing a junta of 
civilians and called the Ambassador to make that proposal. 
She told them absolutely not.  It would be a military coup, 
and suggested they go back to Gutierrez and try one more time 
to find a solution.  At about noon, the military announced 
that it could no longer support Gutierrez.  Congress voted 
shortly afterward to remove Gutierrez on the grounds that he 
had abandoned his position as constitutional president some 
four months previously when he acquiesced in Congress' own 
removal of the Supreme Court, thereby becoming a "dictator." 
All that was left was for Gutierrez to flee the President 
Palace, which he did shortly. 
 
Conclusions 
----------- 
 
28.  (U) This story obviously doesn't end here.  In fact, it 
hasn't ended yet.  But the story to date does allow one to 
draw certain conclusions about what happened and what did not 
happen in Ecuador.  Among the most prominent are the 
following: 
 
Ecuador Is Not Bolivia 
---------------------- 
 
29.  (C) The indigenous played only a bit part in the fall of 
Gutierrez.  Rather than a force to be reckoned with, the 
indigenous appear to have peaked in their political power and 
influence with the election of Gutierrez.  They may well 
recover with time and again play an important role, but for 
the time being, they are a politically marginal force. 
 
Ecuador Is Not Venezuela, 
Though Chavez Will Seek to Exploit the Chaos 
-------------------------------------------- 
 
30.  (C) Some analysts have attempted to draw parallels with 
Chavez, both for Gutierrez and for Palacio.  Any similarities 
are superficial.  With some success with the lower classes, 
Gutierrez portrayed his survival as a class struggle, with 
the corrupt political and economic elites fighting to regain 
absolute control.  In fact, the change in government was very 
Ecuadorian in nature, and neither Gutierrez nor Palacio is in 
any real sense a Chavez figure.  Although Radio La Luna, the 
indigenous, and the radicals such as the MPD have Venezuela 
connections, the overthrow of Gutierrez was mostly the making 
of the Quito middle class and business class, the ID and the 
PSC.  In fact, the makeup of the demonstrations and the way 
in which the overthrow was carried out were both quite 
similar to the overthrow of Abdala Bucaram eight years ago. 
In the end, this was the middle class of Quito acting on its 
fear of the coastal rabble.  Bucaram represented that coastal 
rabble in both overthrows, this time with his return, and the 
busloads of costenos may have been the most important trigger 
for immediate action. 
 
The Old Politicos: Back in the Saddle Again 
------------------------------------------- 
 
31.  (C) Many of our contacts, life-long top notch conspiracy 
theorists, are concluding that the overthrow of Gutierrez 
was, in effect, orchestrated by the two major political 
parties, the ID and PSC, and especially by LFC and the Social 
Christians.  While we do not see LFC pulling the strings 
behind Radio La Luna and the MPD trouble makers like some of 
them do, it is clear that the old politicos have been 
scheming, and Palacio with them, on and off throughout 
Gutierrez' presidency and constantly since mid-2004.  It is 
also clear that they are the big winners, with Palacio 
appointing numerous ID and PSC-connected  politicos to 
positions already (though some effort is being made to find 
people who do not have formal affiliations to any political 
party).  That said, the gain may be temporary.  The disgust 
felt by the forajidos, and their new-found sense of power, 
may manifest itself again if they feel they have ousted 
Gutierrez only to bring the old politicos back to power. 
 
The Sad, Sad Story of Ecuador 
----------------------------- 
 
32.  (C) In the final analysis, the overthrow of Gutierrez is 
nothing more than the end of one more political cycle in 
Ecuador.  Presidents of Ecuador are elected to be overthrown, 
and the great majority of them meet that fate.  Since 
government officials enter office knowing that they will be 
there for a very short time, and then might well be forced 
into exile, it should surprise no one (and certainly no 
Ecuadorian is ever surprised by this) that most of them steal 
everything they can get their hands on while they are in 
power.  Most political parties in Ecuador have no 
recognizable or consistent political philosophy, and those 
which do, are consistently leftist.  Parties, rather, exist 
to distribute patronage.  Ecuador, a country rich in natural 
resources, will remain desperately poor until and unless it 
can break out of its self destructive cycles of political 
cannibalism. 
KENNEY