US embassy cable - 05QUITO2409

C O N F I D E N T I A L QUITO 002409 
 
SIPDIS 
 
E.O. 12958: DECL: TEN YEARS 
TAGS: PGOV, PINS, EC 
SUBJECT: PALACIO'S ASSEMBLY PROPOSAL BLOCKED BY TRIBUNAL 
 
REF: QUITO 2359 
 
Classified By: PolChief Erik Hall for reasons 1.4 (b&d). 
 
1. (C) Summary:  The rejection of President Palacio's 
referendum proposal to convoke a national constituent 
assembly by the electoral tribunal was swift and has forced 
the GOE to reevaluate its options to promote reform.  Signals 
from Congress are mixed, with some calling for new talks with 
the Palacio government about consensus reforms by referendum, 
and others calling on Congress to act on its own.  Rumors 
that the two largest parties are planning to oust Palacio 
with military help were denied by the Defense Minister. 
Social groups favoring reform have rallied to Palacio's 
support, and polls indicate widespread popular support for an 
assembly.  While further confrontation between executive and 
legislative branches could be averted, we are uncertain 
whether Palacio will seek to lower tensions.  End Summary 
 
TSE Rejects Legality of Presidential Move 
 
SIPDIS 
----------------------------------------- 
 
2.  (U) The Supreme Electoral Tribunal (TSE) , composed of 
seven political party representatives, declared by a 5-2 vote 
on October 20 that Palacio's one-question referendum proposal 
(reftel) was unconstitutional.  The indigenous Pachakutik 
party and the New Country Movement voted in favor.  According 
to the majority, President Palacio had overstepped his 
constitutional authority by proposing a constituent assembly, 
which is not authorized by the constitution.  Instead, he 
must submit the proposal to Congress, the TSE ruled. 
 
Plan B? 
------- 
 
3.  (C) After the negative decision of the TSE, defenders of 
the president's tactics were thin on the ground. 
Presidential secretary Luis Herreria claimed he had opposed 
the assembly proposal from the start, blaming it on a 
competing presidential advisor, Jose Apolo, and the 
president's legal advisor.  For his part, presidential legal 
advisor Roberto Gonzalez told PolChief on October 20 that he 
agreed with the TSE's constitutional interpretation, and had 
offered his resignation to Palacio over the issue (it was 
refused).  He claimed to be unaware of the government's 
rumored "Plan B" and speculated that the TSE decision had 
come swiftly to prevent popular support for the assembly from 
growing in the interim. 
 
4.  (SBU) Pachakutik leaders and civil society leaders 
publicly alleged efforts by the two major parties to 
encourage the military to cooperate with a plan to oust 
Palacio from office.  Defense Minister Jarrin publicly denied 
the charge, and threatened to sue one indigenous leader for 
slander. 
 
5.  (SBU) Indigenous and civil society groups have rallied to 
Palacio's side on the assembly proposal, seeing an 
opportunity to insert favored causes in an assembly to 
redraft the constitution.  Indigenous and human rights groups 
want to include debate over an FTA with the U.S. in this 
forum, which by Palacio's request would coincide with the 
2006 election campaign.  Proponents of an assembly are citing 
polls showing overwhelming public support for an assembly, 
and have begun to organize street marches to show support. 
 
6.  (SBU) Former anti-Gutierrez protesters, labeled "bandits" 
("forajidos") by Gutierrez, have reactivated to rally in 
support of the constituent assembly proposal.  Infamous Radio 
Luna is calling for a noise-making demonstration in support 
starting at 20:00 tonight (October 21), in the tradition of 
the anti-Gutierrez protests. 
 
Comment 
------- 
 
7. (C) The ball is clearly now back in Palacio's court, and 
his intentions are not yet clear.  In a conversation with the 
Ambassador on the subject on October 19, Palacio appeared 
serenely resigned to a negative TSE decision, but would not 
elaborate on how he would react.  Emboldened by favorable 
poll data and growing support from social groups, Palacio may 
well spurn dialogue with political party leaders and continue 
to press his case with the public.  Rumored talks between the 
opposition and the military are always possible here, but 
there is an equal opportunity for compromise with Congress 
should Palacio choose to pursue it. 
JEWELL