US embassy cable - 05QUITO2241

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 002241 
 
SIPDIS 
 
E.O. 12958: DECL: TEN YEARS 
TAGS: PGOV, PREL, PINR, EC 
SUBJECT: NEW GOVERNMENT MINISTER AN IMPROVEMENT 
 
REF: QUITO 2223 
 
Classified By: PolChief Erik Hall, for reason 1.4 (b&d). 
 
1.  (C)  Summary:  On September 26, the Ambassador discussed 
pending political reforms with new Minister of Government 
Oswaldo Molestina.  She also enlisted Molestina's continued 
support for the successful conclusion of an FTA and new 
leadership combating trafficking in persons (TIP).  President 
Palacio moved Molestina from the Commerce Ministry to replace 
controversial minister Mauricio Gandara in the Cabinet's 
highest seat on September 8, signaling his government's 
commitment to political dialogue.  Molestina's party, the 
Democratic Left (ID), subsequently affirmed its public 
support for Palacio's political reform agenda, set to 
culminate in a referendum on constitutional changes on 
December 11.  Molestina indicated that, in contrast to his 
predecessor, he will favor dialogue over confrontation, 
improving chances for reform and FTA ratification by 
Congress.  End Summary. 
 
Reforms: Committed to Dialogue with Congress 
--------------------------------------------- 
 
2.  (SBU) After accepting the Ambassador's congratulations 
for his new post with humor, Molestina declared his 
qualifications for the post.  First and foremost, he has the 
advantage of having served in all three branches of 
government, and as a result has many friends in Congress. 
President of Congress Wilfredo Lucero is an old friend.  All 
the members of the congressional Constitutional Affairs 
Commission are also old friends, making the job of reaching 
consensus on reform much easier.  (Comment:  This is in 
marked contrast to his predecessor, who disdained contact 
with Congress and left under threat of congressional 
impeachment.) 
 
3.  (C) Molestina said he had already entered into open and 
respectful dialogue with Congress and political leaders over 
issues to include in a popular referendum scheduled for 
December 11.  His proposal would come in the form of a letter 
to Congress President Lucero, and would signal the 
Executive's openness to alternatives proposed by Congress. 
Where Congress disagrees with a government proposal, he said, 
President Palacio is willing to "let the voters decide" 
between two options.  He doubted that many voters would 
support anything suggested by Congress.  (Note:  Molestina's 
17 suggested referendum questions were made public on 
September 27, and were reported RefTel). 
 
4.  (SBU) Molestina said that while the overall size of 
Congress would remain around 100, its period of operation 
would be reduced to 90 days per year.  The creation of a 
Senate would reduce the size of the other House.  He also 
revealed that if the voters approved, he would become the 
Chief of Government, and Palacio would serve as Chief of 
State.  Molestina did not specify what effect that 
distinction would have, except that he would run the 
government while Palacio was abroad. 
 
FTA - Keeping a Hand In 
----------------------- 
 
5.  (C) The Ambassador asked whether Molestina would remain 
involved in FTA negotiations from his new post.  Molestina 
replied he "would have to."  The Ambassador raised the need 
for labor reform and further progress toward resolution of 
commercial disputes, citing specifically the cases of 
Occidental Petroleum, Interagua, and Machala Power. 
Molestina said he had offered to help his successor as 
Minister of Commerce, Jorge Illingworth, on these issues.  He 
expressed hope that the Occidential case would be resolved 
"in coming days." 
 
6.  (C) Asked if Ecuador would be able to finish negotiations 
by mid-November, Molestina was unequivocal.  Colombia and 
Peru had been pressing the GOE to be ready to finish in 
October, which the GOE had resisted, asking for support in 
negotiations from its neighbors in recognition of its lower 
level of development.  The GOE believes the three countries 
must stick together, he said, and could certainly come to 
closure in negotiations by mid-November.  Asked how hard it 
would be to get any agreement through Congress, Molestina was 
sanguine.  It would not be very hard to get Congressional 
approval, he said.  Of course some will always be against for 
ideological reasons, he said, citing specifically the 
Pachakutik and Socialist parties. 
 
Police 
------ 
7.  (C) The Ambassador congratulated the Government Ministry 
on recent progress combating narco-trafficking and successful 
enforcement actions against the FARC.  Molestina noted that 
two FARC leaders were deported to Colombia by the GOE on 
immigration charges, to avoid legal tangles.  He praised the 
capabilities of Chief of National Police Jose Vinueza, noting 
that President Palacio thought so highly of him he had 
invited Vinueza to accompany him to Miami for meetings there 
on September 28. 
 
TIP 
--- 
 
8.  (SBU) The Ambassador enlisted Molestina's leadership to 
combat trafficking in persons (TIP), citing the importance of 
the issue to the USG.  Ecuador is on Tier III because it 
needs to give the problem greater attention.  It would be 
hard to convince the U.S. Congress to support an FTA with any 
country that neglects this important human rights issue.  The 
minister of government is charged with coordinating GOE 
efforts to combat TIP and help TIP victims.  Evincing little 
familiarity with the nature of the TIP problem, Molestina 
said he would have no difficulty coordinating among 
government institutions to combat TIP.  "After you leave I 
will meet with seven other ministers to prevent provincial 
strikes," he said. 
 
Galapagos 
--------- 
 
9.  (SBU) Molestina invited the Ambassador to visit him at 
his home in the Galapagos, prompting a discussion about 
conservation efforts there.  Molestina agreed that the 
current director of the Galapagos National Park is 
technically qualified and doing a good job.  It is essential 
to create alternatives for local fisherman, he said, and 
prevent further illegal immigration by Ecuadorians to the 
islands.  The Environment Ministry has a list of 6,000 
violators of Ecuador's internal restrictions on immigration 
there.  It had been a mistake to make the Galapagos a 
province with its own Congressional representation, he said. 
Electoral contests tend to prompt local politicians to court 
the fishing sector vote with populist proposals, complicating 
the task of conservation. 
 
Decentralization 
---------------- 
 
10.  (SBU) Molestina said that preventing provincial protests 
and strikes was occupying the bulk of his time as Government 
Minister.  He would be meeting with seven other ministers who 
had made different promises to different provinces.  Without 
his own intervention, Molestina said, none of those promises 
would be met, generating future protests.  "If I do not go to 
Esmeraldas province on Wednesday," he said, "they will strike 
on Thursday."  Sucumbios province was next on his travel 
list.  The GOE hoped to make progress giving provinces the 
support they needed to take over additional responsibilities 
from the central government, as Guayaquil had done. 
 
Comment 
------- 
 
11.  (C) Molestina clearly has a high opinion of his own 
abilities, which is shared by many.  To us, Molestina's 
appointment as first among ministers is encouraging on a 
number of fronts.  He represents a distinct improvement over 
his predecessor, whose attitude toward Congress prevented 
dialogue and whose bias against USG interests was well known. 
 Molestina's appointment bolstered the Palacio Government's 
stability by bringing the ID into open alliance with the 
government. 
 
12.  (C) Also encouraging is the fact that, as former chief 
of the GOE's FTA negotiation team, Molestina has a personal 
stake in seeing the agreement concluded and ratified.  While 
he enjoys personal and technical credibility with Congress on 
the issue, we are less sanguine about prospects for 
congressional approval and believe Molestina's excellent 
relations with Congress will be sorely tested when the FTA 
goes to a vote, if not before that on the political reform 
package.  We are hopeful Molestina can energize GOE efforts 
to combat TIP, if he can free himself long enough from 
putting out provincial fires. 
JEWELL