US embassy cable - 05QUITO2440

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 002440 
 
SIPDIS 
 
SENSITIVE 
 
PASS TO WHA OAS 
 
E.O. 12958: DECL: TEN YEARS 
TAGS: PGOV, PINS, EC 
SUBJECT: CONGRESS OFFERS, AND PALACIO RESISTS, ASSEMBLY 
COMPROMISE 
 
REF: QUITO 2409 
 
Classified By: PolChief Erik Hall for reason 1.4 (b&d). 
 
1. (C) Summary:  President of Congress Wilfredo Lucero met 
with President Alfredo Palacio October 24 to relay lawmakers' 
support for a constitutional assembly, but not a more 
powerful constituent assembly as favored by Palacio.  The 
constituent assembly -- intended for times of complete 
governmental breakdown -- could not only rewrite the 
constitution, but dismiss the Congress.  Palacio has publicly 
resisted the compromise, insisting instead on his preferred 
assembly over Congressional and electoral court opposition. 
This may be a tactic to gain leverage over Congress, or could 
signal more dangerous intentions which could affect stability 
and U.S. interests.  End Summary. 
 
Constituent Assembly:  All or nothing? 
-------------------------------------- 
 
2.  (U) As proposed by Lucero, with the backing of more than 
2/3 of Congress including the PSC, ID, PRE, PRIAN and DP 
parties, A constitutional assembly approved by referendum 
would be limited to drafting amendments to agreed upon parts 
of the constitution.  Congress proposes that the assembly's 
members be selected by universal vote.  Palacio's earlier 
plan, which he submitted directly to the Supreme Electoral 
Tribunal (TSE) in an effort to bypass Congress, called for 
the body to be 50 percent members of civil society and 50 
percent party representatives.   The TSE ruled that Palacio's 
proposal required the approval of Congress (RefTel). 
 
3.  (U)  Since the TSE rejected Palacio's proposed 
referendum, Palacio has appealed for public support and 
courted civil society groups, running TV spots promoting the 
assembly idea.  On October 25 Palacio told a group of 25 
civil society groups that he continued to support a 
constituent, and not a constitutional, assembly.  Civil 
society groups organized pro-assembly rallies in Quito and 
Guayaquil on October 21, attracting several thousand, and are 
expected to take to the streets again shortly.  Most are 
calling for the constituent assembly and the immediate 
resignation of congress members.  Some have threatened to 
remove parliamentarians by force. 
 
Political Class United Against Palacio 
-------------------------------------- 
 
4.  (C) PSC Congressmen (and brothers) Luis Fernando and 
Carlos Torres told PolOffs October 26 that Palacio risked his 
presidency by continuing to challenge Congress over the 
dueling assembly models.  They alleged that Palacio intends 
to bypass Congress by issuing a decree authorizing a 
constituent assembly.  His ultimate goal is to postpone 2006 
national elections and extend his mandate.  Palacio is 
influenced by outsiders, they alleged further, including 
Central American political consultant Julio Ligorria, who has 
been advising Palacio, and "elements loyal to Chavez," 
including former minister of social welfare Patricio Acosta. 
 
5.  (C) According to the Torres brothers, Palacio's assembly 
proposal is a Chavez-like constitutional reform, which must 
be stopped.  Opposition discussions with the military 
leadership have already begun, they alleged, and an 
impeachment attempt was also under discussion between 
political parties, should Palacio refuse to compromise. 
Palacio's whole strategy, they believed, grew out of his need 
to seize the political initiative to distract from the recent 
return of ex-President Gutierrez. 
 
Comment 
------- 
 
6.  (C) The Torres brothers are transparently trying to 
manipulate us by alleging a Chavez influence over Palacio, 
but we see real danger to USG interests should Palacio choose 
to subvert what few constitutional checks still exist here by 
attempting to put his constituent assembly proposal directly 
to the people.  In addition to risking his government's 
stability, an unbounded assembly would put other democratic 
institutions (e.g. Congress and the new Supreme Court, 
assuming it exists) at risk and could be used to block an FTA 
or disavow the Manta accords.  Activating street protests to 
push for an assembly is a very risky tactic, since once begun 
Palacio will likely not be able to control this agitation. 
Indigenous and leftist civil society groups could see the 
assembly as an opportunity to advance their agendas, and may 
be ready to take to the streets. 
 
7.  (C) Palacio still has another, more palatable, 
opportunity to accept a more limited reform agenda by 
negotiating with Congress over its counter-proposal.  We will 
encourage him to take it. 
JEWELL