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Cablegate: Congress Votes "No Confidence" in Finance Minister

VZCZCXYZ0001
OO RUEHWEB

DE RUEHQT #1607 1982135
ZNY CCCCC ZZH
O 172135Z JUL 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7406
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 6763
RUEHCV/AMEMBASSY CARACAS PRIORITY 2610
RUEHLP/AMEMBASSY LA PAZ JUL 0654
RUEHPE/AMEMBASSY LIMA PRIORITY 1780

C O N F I D E N T I A L QUITO 001607

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: DECL: TEN YEARS
TAGS: PGOV PREL EC
SUBJECT: CONGRESS VOTES "NO CONFIDENCE" IN FINANCE MINISTER

REF: QUITO 1182

Classified By: PolOff James Cohen for reasons 1.4 (b) and (d)

1. (SBU) Summary: Continuing the standoff between
Congress and the Correa administration, Congress passed a
vote of no confidence July 13 against Minister of Finance
Ricardo Patino. Citing allegations of embezzlement, illicit
association, collusion and treason, Congress passed the
measure after Patino failed to appear before a Congressional
hearing into the allegations, declaring the Minister "in
rebellion" (in contempt of Congress). Since the vote of no
confidence is non-binding, and President Correa has
reiterated his confidence in Patino, the vote will have no
immediate practical effect. But President of the Congress
Jorge Cevallos announced his intention to transfer the
charges to the Office of the Attorney General for
investigation, keeping the matter in the spotlight. End
Summary.

NO SHOW, NO CONFIDENCE
----------------------

2. (SBU) By a margin of 66 to 34, Congress passed a vote of
no confidence against Minister of Finance Ricardo Patino July
13. The proceedings began with a vote to declare Patino in
"rebellion," since he did not appear before Congress as
requested. With that procedure out of the way, the no
confidence debate was led by Luis Almeida (PSP - Partido
Sociedad Patriotica) and Diego Ordonez (UDC - Union of
Christian Democrats). Both deputies highlighted Patino's
perceived complicity in the recent scandal involving possible
manipulation of the international bond market (reftel).
Additionally, they accused Patino of mishandling foreign
debt, misappropriating public funds, violating two articles
of the Law on Fiscal Transparency and lying about his
economic expertise and qualifications. They produced
documents to suggest that he did not graduate with an
economics degree as cited on his curriculum vitae. Most
center-right deputies voted in favor of the no confidence
measure. While Pachakutik, small leftist parties and some
members of the National Dignity Bloc voted against the
measure, no deputies came to Patino's defense rhetorically.

EXECUTIVE BRANCH STANDS FIRM AS FIGHT CONTINUES
--------------------------------------------- --

3. (SBU) Patino refused to appear before Congress to defend
himself, telling supporters outside the Congress building
that Congress was corrupt and out for blood, then retreating
to his office. President Correa vowed to stand by his
Finance Minister and expressed total confidence in him.
Speaking from Italy, Correa noted in his weekly radio address
in regards to the Patino matter, "Today, more than ever,
Congress is corrupt and has no credibility."

4. (SBU) Under the 1998 Constitution, the no confidence vote
is non-binding and has no force of law. In order to continue
the case against Patino, President of Congress Cevallos
announced July 14 that he intends to request that the charges
against Patino be investigated by the Attorney General. Many
deputies in the Congress, led by John Argudo (ID), support
the notion of criminal proceedings against Patino, not only
because a conviction would force him from office, but also
because, in their view, Patino committed felonies.

COMMENT
-------

5. (C) As the Constituent Assembly election campaign
approaches, Correa's opponents will not let go of the Patino
issue. Knowing that Congress has the lowest approval rating
of any government institution, Cevallos is banking on an
independent investigation to keep the issue alive in the
media. Embassy contacts at the Supreme Electoral Tribunal
have privately told us that they fear there is more dirt on
Patino and that his opponents will dole it out piecemeal to
embarrass Correa closer to the September 30 Constituent
Assembly election. The fact that deputies included in their
attack accusations that Patino lied on his resume indicates
that they will dig up whatever they can to turn this into a
political advantage.

JEWELL

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