WikiLeaks' Quito cables lay US interference bare

Monday, August 25, 2014
Protesters defy tear gas in the uprising that overthrew the corporate-friendly government of Lucio Gutierrez in 2005. The US embassy's 'best efforts' were not enough to save his administration.

Since Ecuador's president Lucio Gutierrez was ousted from power in 2005, relations between Ecuador and the United States have deteriorated with the Andean nation’s increasing rejection of US hegemony.

The government of Rafael Correa, first elected president in 2006, has embraced regional integration, moving closer to its neighbours ― in particular Venezuela and Bolivia ― and further away from the US.

Economically, the Correa administration has pursued policies that break with the neoliberal doctrines Washington had imposed on Latin America.

Correa’s government also challenged US imperialism by closing the US forward operating base on Ecuadorian territory at Manta and granting political asylum to WikiLeaks founder Julian Assange.

In another sign of waning US influence, US Agency for International Development (USAID) announced in May that it was leaving Ecuador.

US diplomatic cables published by WikiLeaks show how the US sought, and ultimately failed, to dictate the direction of Ecuador's post-Gutierrez governments. The cables also illustrate how USAID played a key part in these efforts.

Gutierrez deposed

In April 2005, Gutierrez was forced to resign after reneging on promises to overturn neoliberal policies.

Gutierrez’ policies were unpopular with the Ecuadorian people, but they gained him favour in Washington, as did his support of the US-backed Free Trade Agreement of the Americas (FTAA) and the US’s “war on drugs”.

In May 2005, the then-US ambassador to Ecuador, Kristie Kenney, lamented that the embassy’s “best efforts” had not prevented Gutierrez’s overthrow.

During Gutierrez’s presidency, Kenney wrote, the embassy had “cultivated a wide range of contacts and had excellent access to high government officials, the military high command, and civil society leaders and opinion makers”.

Gutierrez was replaced by caretaker president Alfredo Palacio, who remained in power until presidential elections in 2006.

It was “difficult to imagine an Ecuadorian government in which we enjoyed greater access”, Kenney wrote of the Gutierrez administration in another cable, adding: “It won’t be so easy with Palacio.”

The ambassador commented: “We cannot downplay the damage [Palacio’s] political arrival might inflict on USG [US government] economic and security initiatives in Ecuador.

“Effective ‘damage control’ will require redoubled outreach, this Mission's overriding priority the next three months.”

The war on drugs

A key priority for the US was securing Ecuador’s support for its “counter-narcotics” efforts in the region. Many cables discuss the relationship between Ecuador and Colombia.

Since 2000, the US has spent billions of dollars on Colombian military programs ostensibly aimed at reducing coca cultivation and trafficking to the US, in a strategy known as “Plan Colombia”.

Many Latin American countries objected to this militarisation of drug interdiction efforts, and viewed Plan Colombia as an excuse for the US to project its military power.

Plan Colombia led to an intensification of the conflict between Colombian government forces and FARC rebels in Colombia’s south. The violence spilled over into Ecuador’s northern border region.

It left Ecuador coping with the highest number of refugees in Latin America, causing tensions between Ecuador on one side and the US and Colombia on the other.

Moreover, Colombia’s aerial fumigation of coca crops along the border with the pesticide glyphosate destroyed legal crops in Ecuador. The Ecuadorian government has said it caused health problems in the local population.

Heavy use of the Monsanto pesticide, otherwise known as Roundup, has been linked to fatal kidney disease, as well as Parkinson’s disease and cancer.

The cables show that the US Embassy hoped USAID programs would buy Ecuador’s acquiescence to the effects of Plan Colombia. USAID activities in the northern border region have included basic infrastructure projects, such as the construction of bridges and potable water systems, as well as “democracy promotion” programs.

A May 2005 cable said the US’s “‘warm and fuzzy’ programs will receive top Public Affairs Section [PAS] billing in coming months”.

“Aiming to combat misinformation that USG assistance in the Andes is strictly military, PAS will seek opportunities to publicize our [Medical Readiness Training Exercises], food aid, Peace Corps activities, USAID programs and environmental contributions.”

Tensions between Ecuador and Colombia flared after a Colombian military aircraft entered Ecuadorian territory in pursuit of FARC rebels in January 2006.

A February 2006 cable reported that when Ecuador’s then-foreign minister Francisco Carrion protested against the negative effects of Plan Colombia, the new US ambassador Linda Jewell “reminded Carrion that the U.S. has made substantial investments to offset Plan Colombia's impact on Ecuador, noting USAID's extensive development programs in the region”.

In a briefing to US General Bantz Craddock ahead of a February visit to Ecuador, Jewell wrote: “Your meeting with [Minister of Defence] Jarrin offers the best opportunity to express USG concern over the escalating tone of confrontation with Bogota ...”

Economic interests

In the economic sphere, US priorities were protecting US business interests in Ecuador and encouraging economic policies that favoured transnational corporations.

At the time, the Ecuadorian government was involved in commercial disputes with three US companies: Noble Energy, Chevron Texaco and Occidental Petroleum (Oxy).

Oxy was at risk of having its assets in Ecuador appropriated due to contract violations alleged by the Ecuadorian government. Kenney wrote that the embassy’s economics officer would “engage early and forcefully in attempts to head off this potential disaster”.

In April 2005, Kenney wrote that she had told the American Chamber of Commerce in Ecuador: “We are starting over with this government and all must begin to engage and educate the new players.”

As far as Ecuador’s economic policies were concerned, the embassy was worried about Palacio’s “brash young Economy Minister Rafael Correa”.

Correa was a “determined enemy of the FTA” and, in contrast to Gutierrez’s austerity, promised to raise government spending to “stimulate economic growth and job creation”.

After meeting the finance minister in May 2005, Kenney wrote that Correa intended to “implement a policy far removed from the responsible fiscal management of his two most-recent predecessors”.

The embassy recommended that Washington “use its influence” with international financial institutions to ensure that loans to Ecuador would be withheld until “Correa and the [government of Ecuador] commit themselves to minimally responsible policies”.

Subsequently, disbursements from the World Bank and Inter-American Development Bank (IDB) were put on hold pending an evaluation from the International Monetary Fund.

The embassy was alarmed by Correa’s statements that the government was considering a moratorium on Ecuador’s debt.

At the time, about 47% of the Ecuadorian government’s income was being spent on servicing foreign debt, most of which had been accumulated under the military dictatorships of the 1970s. Only 12% of Ecuador’s income was going towards education and 7% to healthcare.

In a cable entitled “Ecuadorian Fiscal Policy: Living on the edge”, US charge d'affaires Arnold Chacon warned that Ecuador could enter “la la land” and default on its foreign debt. Chacon wrote: “Palacio, and the rest of Ecuadorian society, need an education on the likely results of default for Ecuador.”

However, the embassy was aware that open opposition to default would be seen as meddling in Ecuador’s internal affairs. Chacon wrote: “USG officials are not the best messengers to deliver this message … but we have many contacts and friends who can help to spread the alarm.”

Venezuela deal

In July 2005, reports emerged that Correa was brokering a US$500 million debt financing deal with Venezuela, in part to make up for the loss of World Bank and IDB funds. In private meetings, the embassy sought to stymie the deal by exploiting divisions within the Ecuadorian government.

A July 20 cable described Correa as “an ideologue, with no political or government experience”.

“Worse still,” the cable said, “Correa identifies more with Chavez' statist policies than with IFI positions and current generally accepted economic policies.”

“More rational members of the Palacio administration”, on the other hand, were “looking for viable alternatives to Chavez”.

The cable cautioned against public comment on the prospect of Ecuador developing closer ties to Venezuela because of “local sensitivities to USG pressure”.

Instead, the embassy promised to “work quietly with the anti-Chavez forces to blunt the effect of Correa, until Palacio decides to jettison him”.

The cable reported that in a meeting with Palacio’s advisor, Luis Herreria, US diplomats had expressed concern that the Ecuadorian government’s actions “made it appear that Ecuador was drawing itself closer to Venezuela”.

Herreria told them that Correa was acting without Palacio’s authority and promised that Palacio would publicly distance Ecuador from Venezuela.

In meetings with the US Embassy, Palacio himself complained that Correa and some other members of the government had formed a “friends of Venezuela society”. Palacio also told the US ambassador that, with US help, he could become “a counterweight to Venezuela's Chavez” in Latin America.

Correa resigned in August 2005 after only three months in office. His letter of resignation said Palacio had accused Correa of negotiating the Venezuela debt financing deal without his authority, which Correa denied.

Correa wrote: “I am afraid that the real problem is the strong pressure seeking to block any relationship with a brother country like Venezuela and resulting from this the lack of credibility on my work as Minister of Economy and Finance.”

Correa had been the most popular member of Palacio’s government, but Jewell was pleased by the departure of one of the “most problematic ministers for us”.

[This is the first part of a seven part series on WikiLeaks cables on Ecuador. They are based on research of around 1000 WikiLeaks cables from the end of the Gutierrez administration onward, most of which have not been reported on in the English-speaking press before.]

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From GLW issue 1022