US embassy cable - 05GUAYAQUIL1151

UNCLAS SECTION 01 OF 02 GUAYAQUIL 001151 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, PINR, EC 
SUBJECT: COASTAL POLITICS DRIFTING IN TIDE OF UNCERTAINTY 
 
 
1.  (SBU) SUMMARY:  Politicians - past, present and aspiring 
- in Guayaquil are searching to make sense of the country's 
current political situation.  In a series of meetings with 
representatives from the major coastal parties, PolOffs took 
stock of the view from down south.  It may be that this city 
is well-represented in President Palacio's administration; 
but across the political spectrum the prevailing sentiment is 
one of frustration with the government's inability to 
effectively implement much needed reforms.  While some look 
with cautious optimism to the 2006 presidential elections as 
a way out of the current loss of faith in  the political 
system, most begrudgingly acknowledge that it is too soon to 
say with confidence that change is on the horizon.  The 
result is a guarded political climate filled with short-term 
speculation and constant jockeying for position.  End 
summary. 
 
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SHIFTING PARTY ALLEGIANCES 
-------------------------- 
 
2.  (SBU) All with whom we spoke agreed that Palacio lost 
most of his valuable political capital when he failed to take 
assertive action within his first few weeks in office.  The 
resulting tenuous hold on power, compounded by a lack of any 
clear majority in Congress, left the  political elite casting 
about for ways to garner support, even in unlikely places. 
The parties have discarded any semblance of a political 
platform or ideology in favor of securing interim benefits, 
according to  a close associate of Guayaquil Mayor Jaime 
Nebot (PSC), Jose Joaquin Franco. 
 
3.  (SBU) According to Fuerza Ciudadana founder and former 
provincial candidate Humberto Mata, the most unholy of 
current alliances is between PSC guru Leon Febres Cordero 
(LFC) and the ID's Rodrigo Borja.  Arch-enemies just 20 years 
ago, Mata believes that  these two political patriarchs are 
considering joining forces in the 2006 national elections. 
Their aim is to bring about the presidential win neither 
party has been able to pull off since either man held the 
presidential sash.  Mata speculated that even if the leaders 
were able to join forces,  any agreement would be strongly 
resisted by the rank and file.  Any such electoral alliance 
would by necessity involve second-tier party leaders, rather 
than the strongest candidates, Guayaquil Mayor Nebot (PSC) 
and Quito Mayor Paco Moncayo (ID). 
 
4.  (SBU) Former Foreign Minister under president Noboa and 
one-time PSC affiliate  Heinz Moeller also acknowledged the 
possibility of an ID-PSC  alliance, but said  its likelihood 
was diminishing since the ID openly supported President 
Palacio's reform agenda.  (Note:  The PSC, in contrast, 
distanced itself publicly from the Palacio government.) 
 
5.  (SBU) There are disconcerting signs that the PSC, the 
coastal region's traditional anchor, is also adrift.  Beyond 
the notorious breach between LFC and Nebot, there continue to 
be signs that LFC's authoritarian style and heavy hand are 
becoming more of a liability.  Long-time supporters and party 
members Franco and Moeller (who had always told us he had 
left the PSC, now describes himself as the third pillar of 
the party, after LFC and Nebot) spoke at length about 
internal disagreements over LFC's recent banking reform law. 
Franco claimed to have personally spoken with PSC congress 
members who stated they would never vote for this law. 
Nonetheless, he went on to say, none of them "has the spine" 
to stand up to LFC, and so rather than vote against the law, 
they will refuse to vote, leaving it to their "suplentes" 
(alternates) to cast the yea ballot. 
 
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REFORM: ENDS JUSTIFY THE MEANS 
------------------------------ 
 
6.  (SBU) As the country's 'consulta popular' snakes its way 
through the administrative process, the promise of reform is 
on the lips of all coastal political wranglers.  However, in 
addition to criticizing Palacio for not calling early 
elections and for making ambiguous statements about the need 
to 'refound' the country, those we spoke to also expressed 
their dissatisfaction with what they perceive as the 
president's indecision on the reform front.  Unsurprisingly, 
they were not in agreement as to what type of reform was 
required or how they should be implemented. 
 
7.  (SBU) Echoing sentiments we have heard often before, 
several politicians we spoke with commented that if an 
authoritarian approach is what is needed to get the country 
back on track, then so be it.  These views are often heard 
from Guayaquilenos frustrated by the inability of any elected 
government to stay in office long enough to reform the 
country.  To enhance political stability, Moeller said he 
supported introducing legislation to allow each president to 
dissolve Congress for six months and rule by executive decree 
once during their tenure.  Mata lamented that Palacio didn't 
convoke early elections after taking office.  In contrast, 
PRIAN congressional bench leader Sylka Sanchez told PolChief 
that Alvaro Noboa wants the size of Congress to be reduced 
overall, but will not favor measures to bolster the majority. 
All agree that the Ecuadorian people are fed up with the 
antics of traditional political parties. 
 
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PRESIDENTIAL HOPES 
------------------ 
 
8.  (SBU) Coastal political leaders are also calculating the 
pros and cons of strategic alliances to generate momentum for 
next year's presidential elections, and to prevent the 
possibility of outsiders being able to make it to the second 
round of elections, as did ex-president Gutierrez in 2002. 
 
9.  (SBU) Though Guayaquileno Leon Roldos currently leads 
some presidential polls, he has yet to emerge as a clear 
front-runner.  Roldos' ally Mata noted that Roldos' lack of a 
political party structure may impede his ability to navigate 
Ecuador's electoral system, and criticized Roldos' lack of 
interest in building a party with long-term prospects.  Mata 
was also critical of Roldos' overconfidence in his status at 
the head of the polls, which has prompted him to adopt a 
relatively conservative public strategy to date.  Alvaro 
Noboa, in contrast, can rely heavily on his millions and  on 
the PRIAN political structure he has painstakingly built over 
the past decade.  For the moment old-school political parties 
like the PSC and PRE are groping for electable candidates, 
according to Mata.  They are feeling the effects of years of 
domination by party patriarchs like LFC and former president 
Bucaram, whose popular appeal has been waning and whose 
dictatorial policies within the party have hindered the 
emergence of new party leaders. 
 
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OUTSIDERS AND STRANGE BREWS 
--------------------------- 
 
10.  (SBU) The potential for another outsider candidate with 
national appeal was also on everyone's mind.  While skeptical 
of a repeat of Lucio Gutierrez' surprise appeal in 2002, few 
were quick to dismiss the potential appeal of former Economy 
Minister Rafael Correa.  The exception was Nicolas Febres 
Cordero, LFC's brother, who told PolChief that if Correa were 
to make the second round of presidential voting, the PSC 
"would crush that upstart, even if it means supporting 
Noboa." 
 
11.  (SBU) PRIAN party organizer Dino Herrera - who first met 
Correa when they were Boy Scouts at Guayaquil's prestigious 
Cristobal Colon High School - told PolOff that Correa's 
biggest strength is that he fills the "none of the above" 
option.  Public disillusionment with traditional political 
parties and institutions means that a charismatic alternative 
like Correa may be very appealing to voters.  At present 
Correa does not have the ratings he did as minister because 
he is no longer in the  media spotlight every day.  Herrera 
believes that it would not take long to reverse that trend 
when people begin to review the field of candidates and look 
to a new face, a new savior for the country.  Correa, a 
former finance minister who "dared stand up to the gringos" 
may just fit the bill. 
 
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COMMENT 
------- 
 
12.  (SBU) Speculation about Palacio's likely future, the 
possibility of reform, and the slate of presidential 
candidates fuels the political chatter in Guayaquil these 
days.  No coastal-based party seeks to throw Palacio out of 
office, but neither are they rushing to prop him up. 
 
HERBERT