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Cablegate: Election Wrap-Up: Correa Compliments Bush;

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UNCLAS QUITO 002937

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PLEASE PASS ALSO TO USOAS AND USAID/LAC

E.O. 12958: N/A
TAGS: PGOV KDEM EC
SUBJECT: ELECTION WRAP-UP: CORREA COMPLIMENTS BUSH;
CABINET CHOICES; POLITICAL REFORM DEBATE

REF: A. QUITO 2904

B. QUITO 2455
C. QUITO 2699

1. (SBU) Summary: Final certified results of the election
are now expected by December 4, confirming a 57-43%
presidential victory by Rafael Correa over Alvaro Noboa.
Presumptive president-elect Correa received a congratulatory
phone call from President Bush on November 30. Correa
subsequently publicly praised President Bush for his "class"
in making the call. Noboa has refused to comment publicly on
the results until final. Meanwhile, speculation is rampant
over Correa's possible Cabinet picks, and public debate of
his controversial Constituent Assembly proposal has already
begun. Signaling openness to dialogue, Correa has pledged
not to dissolve the incoming Congress. End Summary.

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Pres. Bush Call Very Well Received
----------------------------------

2. (U) Immediately following President Bush's phone call to
Rafael Correa on November 30, the Correa team put out a press
release reporting that it took place. Correa subsequently
commented publicly that said President Bush had demonstrated
his "classiness" in making the call despite Correa having
made a well-publicized disparaging joke about the President
during the campaign. The call was reported prominently by
national media, and was generally characterized as a very
positive signal from the USG, building on earlier positive
signals from the Department and the Ambassador's
congratulatory call.

Results Almost Final
--------------------

3. (SBU) With 99.81 percent of the votes counted, Supreme
Electoral Tribunal (TSE) President Xavier Cazar is now saying
the final results will be announced on December 4. Results
have been stuck at 99% since November 29, with the overseas
vote count delaying the process. Once the TSE finally
finishes the count, candidates will have two days to register
appeals or complaints about the process and the TSE has up to
seven days to resolve them. The votes remaining to be
counted will not change the outcome of 56.67% for Rafael
Correa, 43.33% for Alvaro Noboa. Noboa won only the three
coastal provinces of Guayas, Manabi and Esmeraldas.


Noboa Silent
------------

4. (U) Noboa has still not spoken publicly about the
election results since November 27, when he hinted at
"conditions of fraud" (Ref A) and said he would not
acknowledge any election result until the TSE finished its
official vote count. Noboa met with all 28 newly-elected
PRIAN congressional deputies on November 30, but no decisions
were announced after the meeting about the elections, or
PRIAN choices for President of Congress and congressional
delegation chief, and a position on the presidential
elections.

Correa Re-Affirms Cabinet Choices
---------------------------------

5. (SBU) The night of the election, Correa reaffirmed
several of his earlier-announced Cabinet choices, including
Ricardo Patino as Economy and Finance Minister; Alberto
Acosta as Energy and Mines Minister; Janeth Sanchez as
Secretary for Social Welfare; Gustavo Larrea as Minister of

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Government; and Carlos Pareja as President of Petroecuador.
The following biographic information supplements that
reported in Ref B.

--Originally from Guayaquil, Ricardo Patino met his wife
while they both worked with labor and women's groups. His
wife, Miriam Alcivar, is the executive director of the
Ecuadorian Center for the Promotion and Action of Women in
Guayaquil. Patino enlisted support for Correa's candidacy
from ex-members of "Alfaro Vive y Carajo." He is also one of
the so-called "forajidos" who demonstrated to overthrow the
Gutierrez government. Patino is expected to take the lead in
debt repayment restructuring, and created "Jubilee 2000," a

Guayaquil-based group promoting forgiveness of Ecuador's
foreign debt. He was formerly a Socialist Party member.

--Alberto Acosta, 58, was born in Quito to a well-off banking
family. In the 1980's he worked at Petroecuador's
predecessor, the Ecuadorian State Petroleum Corporation. In
1995, he was sentenced to two years in prison after accusing
financial entities of illegalities, later receiving a
suspended sentence. He has worked as an independent
consultant and in recent years became known as a political
activist and authored several books on economic issues and
published articles critical of neo-liberalism. He currently
works at the Latin-American Institute of Social
Investigation.

--Gustavo Larrea is a leftist intellectual and human rights
activist. In contrast to his Marxist past, he has recently
talked about the need for Ecuador to join the global economy.
He was at the forefront of demonstrations to remove from
power former president Lucio Gutierrez. During the campaign,
Larrea served as campaign manager and head of Correa's
political committee, charged with setting campaign policy.
He has been charged by president-elect Correa to conduct a
dialogue on political reform with political parties.

Other Possible Correa Cabinet Choices
-------------------------------------

6. (SBU) In the wake of the election, speculation is rampant
about other possible Correa Cabinet choices. Left-leaning
academic Beatriz Sanchez, a specialist in security affairs
teaching at FLACSO university in Quito, appears to be the
front-runner for Defense Minister. Homero Rendon, Correa's
personal secretary, is likely to continue in that capacity.
Maria Sol Corral and Juan Carlos Toledo, who managed Correa's
image and communications during the campaign, are reported to
be the favorites for the Spokesperson and Communication
Secretary portfolios, respectively. Correa advisor Fander

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Falconi is rumored to be named Minister of Environment.
Correa has reaffirmed a campaign promise to form a new
Ministry of Transportation, but has not named anyone
preferred to lead the new ministry. Biographic information
on three other rumored cabinet choices follows.

--Enrique Ayala Mora is rumored to be Correa's choice for
Foreign Minster, among others. Hailing from Imbabura
province, Ayala Mora is the leader of the Socialist Party and
rector of Universidad Andina Simon Bolivar. In contacts with
the Embassy he has come across as moderate and knowledgeable
about the U.S., and has advocated more study of the U.S. in
local university curricula. In addition to Ayala Mora,
Javier Ponce Leiva, the architect of Ecuador's foreign policy
whitepaper (Ref C), told the DCM on November 29 that he
expected to be named to the same post. There was also some
speculation that FM Francisco Carrion would stay on in his
position under Correa.

--Carlos Vallejo Lopez is rumored to have Correa's support
for the post of Minister of Agriculture. Vallejo served as
Minister of Agriculture under President Hurtado ('81-83). As
a member of the ruling Popular Democracy party he served as
President of Congress in 1992. He served in the 2002-2006
Congress as a member of Congress for Noboa's PRIAN, before
resigning from office in the wake of the Gutierrez overthrow
and later joining the Correa campaign. Vallejo, 67, is a
native of Riobamba, Chimborazo province.

--Mauricio Davalos is rumored to be Correa's choice for Trade
Minister. Davalos, 52, is an economist and attorney, and
like Vallejo, originally hails from Riobamba. He was served
as Agriculture Minister under president Gustavo Noboa. A
member of and vice president of the centrist Popular
Democracy (DP, now UDC) party, Davalos served as a member of
the National Constitutional Assembly from 1997-98. He also
served as Minister of Natural Resources and Energy in 1979,
under President Roldos; as General Manager of Ecuador's
Central Bank (1979-81); as Governor of the IMF; and as
President of the Ecuadorian Flower Exporter Federation
(1990-94). Davalos is a longtime member of the CORDES think
tank, headed by ex-president Oswaldo Hurtado, since 1986.
Davalos holds an economics degree from Catholic University in
Quito and a Master's degree from Vanderbilt University in
Nashville, Tennessee. He has taught economics at Catholic
University in Quito and at New Mexico University.

Political Reform Debate Begins
------------------------------

7. (SBU) Since taking office Correa has signaled some
openness to dialogue, if not compromise, on his controversial
political reform proposal. He has directed Gustavo Larrea to
initiate dialogue with political parties on the new
government's proposed referendum on whether to hold an
unbounded Constituent Assembly. Correa has also affirmed
that creation of a Constituent Assembly would not
automatically dissolve Congress; both institutions would
function simultaneously, with the Assembly rewriting the
constitution while the Congress limited itself to its
"oversight" role.

8. (SBU) Correa asserts authority under article 104 (2) of
the constitution, which permits the President to convoke a
referendum when "in his opinion, it deals with issues of
transcendental importance for the country, different from
those in the previous clause." (Note: the previous clause,
104 (1) mandates that any referendum containing changes to
the constitution be previously approved by Congress, leading
opponents to conclude that a referendum to authorize an
Assembly to rewrite the constitution must first be approved
by Congress, which Correa refutes. End Note.)

9. (SBU) Correa maintains that on taking office he would
order electoral authorities by decree to organize the
referendum consisting of a single question, along the lines
of "do you approve a constituent assembly to be constituted
under the following rules." The Assembly would not have a
time limit to complete its work, would be composed of 130
directly-elected representatives, including 24 national
representatives, six representatives of Ecuadorian migrants
overseas, and 100 representatives elected under existing
election rules for Congress, by province. To run for the
Assembly, individuals would be required to gather signatures
from 0.5% of the national electorate. All Assembly members
would receive government funding for publicity, and would be
individually elected; no voting by party list or
proportional representation schemes would be employed,
leading, according to Correa, to election of "the most
capable, not those with the most resources, or through party
lists...totally different from the Congress."

10. (SBU) Thus far, Pachakutik, the far-left Movement for
Popular Democracy (MPD), and the Socialist Party have openly
supported Correa's referendum/Assembly proposal. Other
parties are more equivocal, but apparently leaning toward
support, including the Democratic Left Party, Leon Roldos'
RED movement, and Abdala Bucaram's PRE. Together, these
parties hold 38 of 100 seats in Congress. Lucio Gutierrez'
Patriotic Society Party has signaled an openness to dialog on
the idea, and will probably be the key swing element. Noboa's
PRIAN bloc and the PSC are expected to oppose the proposal.

Comment
-------

11. (SBU) President Bush's congratulatory call was clearly
welcomed by Correa as a signal of USG respect for the
democratic process here. The Ambassador explored with Correa
areas of cooperative bilateral relations in further detail in
a meeting late on December 1 (SepTel). Once the TSE
announces final election results, Noboa may lodge procedural
challenges, which are unlikely to change results in the face
of Correa's large margin of victory. The debate over
Correa's Constituent Assembly proposal will continue up to
and past inauguration day on January 15, 2007. While
Correa's openness to dialogue is positive, he is showing few
signs thus far of willingness to compromise to the extent
necessary to attract majority support and prevent a conflict
with the new Congress.
JEWELL

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