US embassy cable - 05QUITO2442

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 002442 
 
SIPDIS 
 
E.O. 12958: DECL: TEN YEARS 
TAGS: PGOV, PINS, KDEM, 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 offered by Lucero, 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. 
 
Discrediting Palacio's Motives 
------------------------------ 
 
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 Gutierrez minister, 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 among 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 comes into being) 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) We don't think Palacio has Chavez-like pretensions or 
sympathies, but his bull-headed resistance to compromise 
risks dragging the country down a dangerous road. Palacio 
still has another, more palatable, opportunity to accept a 
more limited reform agenda by negotiating with Congress over 
its counter-proposal,  but we are not optimistic he will take 
that opportunity. 
JEWELL