Author Topic: US embassy cable - 08QUITO616 GOE SEIZES ISAIAS GROUP PROPERTY  (Read 2973 times)

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Offline mayya

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US embassy cable - 08QUITO616


GOE SEIZES ISAIAS GROUP PROPERTY

Identifier:
08QUITO616

Wikileaks:
View 08QUITO616 at Wikileaks.org


Origin:
Embassy Quito


Created:
2008-07-08 19:03:00


Classification:
CONFIDENTIAL


Tags:
PGOV EC



Redacted:
This cable was not redacted by Wikileaks.


VZCZCXYZ0016
OO RUEHWEB

DE RUEHQT #0616/01 1901903
ZNY CCCCC ZZH
O 081903Z JUL 08
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9103
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 7642
RUEHCV/AMEMBASSY CARACAS PRIORITY 3100
RUEHLP/AMEMBASSY LA PAZ JUL 1127
RUEHPE/AMEMBASSY LIMA PRIORITY 2690
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 3670

C O N F I D E N T I A L QUITO 000616
 
SIPDIS
 
E.O. 12958: DECL: 07/07/2018
TAGS: PGOV, EC
SUBJECT: GOE SEIZES ISAIAS GROUP PROPERTY
 
Classified By: DCM Jefferson T. Brown for reasons 1.4 (b) and (d)
 
 1. (SBU) Summary: GOE financial regulatory authorities
seized two major television stations and other properties
owned by the Isaias Group on July 8. While some business
leaders and members of the political opposition are accusing
the government of attempting to suppress freedom of speech,
the GOE, supported publicly by many independent and
opposition voices, claims that it is simply carrying out the
law. To add fat to the fire, Minister of Economy Fausto
Ortiz resigned July 7, protesting the action. The seizures
took place hours after the Constituent Assembly passed
constitutional language limiting government control of the
media. End Summary.
 
LATE NIGHT ACTION
-----------------
 
2. (SBU) In the wee hours of July 8, agents of the Deposit
Guarantee Agency (AGD) seized several commercial properties
including two major television stations (Gamavision and TC)
owned by the Isaias Group. The seizures took place following
the conclusion of an AGD audit which concludes that
depositors in the Isaias-owned Filanbanco Bank have lost
$661 million since 1998, while the Isaias family has profited
substantially. President Correa's office issued a statement
shortly after the seizures were carried out, citing article
29 of the Law of Reorganization for Economic and Tax Issues
as the rationale behind the action. Enrique Arosemena, who
has been appointed Interim Administrator for both television
stations, said that the action was simply "a seizure of debt
and not a government intervention into mass-media."
 
3. (C) Members of the business community were quick to cry
foul, suggesting that the GOE was acting to suppress freedom
of speech and silence media outlets critical of the Correa
administration. Isaias family member and businessman
Estefano Isaias told Guayaquil Consul General on July 8 that
the government's "real intention is to control the media."
He said that the audit was "invalid" and suggested that the
U.S. accountants who participated in the audit agree with
him. Quito Chamber of Commerce President Blasco Penaherrera
told a radio interviewer July 8 that the government's actions
constituted "the beginning of the end of freedom the press."
Paula Poggi, Marketing Director for the La Hora newspaper in
Manabi, told Guayaquil poloff that the timing of the seizures
was designed "to take attention away from the Constituent
Assembly." However, opposition reaction to the seizures was
mixed. While Guayaquil Mayor Jaime Nebot was critical,
opposition Constituent Assembly Member and respected
economist Pablo Lucio Paredes (Future Yes) applauded the
action, declaring that that it was done within "a legal
framework." He cautioned, however, that the government
should liquidate the assets as quickly as possible to avoid
any appearance of impropriety. Andean Parliament President
and former Ecuadorian Ambassador to the United States Ivonne
Baki did not challenge the decision per se, but questioned
why the action needed to be taken under the cloak of darkness.
 
4. (SBU) Minister of Finance Fausto Ortiz resigned late in
the evening July 7 after refusing to sign the authorization
to conduct the seizures. Media reports suggest that Ortiz
stormed out of a cabinet meeting after a disagreement with
President Correa on the subject. Wilma Salgado, a former AGD
Manager and current Andean Parliamentarian, will succeed
Ortiz. (Additional information to be supplied septel.)
 
5. (SBU) In what the government claims to be an unrelated
move, Guayaquil-based Radio Sucre (not linked to the Isaias
Group) was closed down late on July 7 by order of the
Superintendent of Communications. Superintendent Fatima
Campos cited the station's "unlawful use of its frequency" as
the cause of the shut-down. Radio Sucre's attorney told
the media on July 8 that Radio Sucre disagreed with this
interpretation and intended to fight the decision. Guayaquil
Mayor Jaime Nebot reacted strongly to the decision, claiming
that the goal was to "silence many middle-class and poor
people who do not agree with President Correa."
 
CARLOS VERA DEFENDS ACTION
--------------------------
 
6. (SBU) During an unusual and lengthy on-air commentary,
celebrated journalist Carlos Vera praised the government's
actions. He reminded his large audience that the owners of
 Filanbanco had "damaged" the state. Vera said that "what
the government did today should have been done before and
other governments should have done too ... Well done, Mr.
President and let it be the beginning of equivalent future
action." But he cautioned that the government needed to
proceed quickly with auctioning the property to a
non-governmental buyer not affiliated with any rival private
media concerns.
 
ASSEMBLY PASSES LANGUAGE ON PRESS
---------------------------------
 
7. (SBU) Hours before the government moved against the
Isaias-owned media outlets and Radio Sucre, the Constituent
Assembly approved six constitutional articles on
communication. The language guarantees "free, intercultural,
diverse, participatory and inclusive communication and
universal access to information technology without
discrimination." Monopolies and media control by oligarchies
are prohibited. Additionally, the articles guarantee the
principle of confidentiality for media sources, and the
public's right to information. Of equal importance is the
absence of language proposed by PAIS Assembly member Pilar
Nunez, who called for more government control of the media
and language which would have made government reallocation of
television and radio frequencies easier.
 
 
COMMENT: A TEST FOR THE CORREA ADMINISTRATION
--------------------------------------------- -
 
8. (C) On the surface, the AGD's actions against the
Isaias-owned media outlets were entirely lawful. Major
opposition leaders have not criticized the government's move
because the Isaias family, considered responsible for the
loss of funds by many small depositors, remains very
unpopular and politicians have little to gain by appearing
sympathetic towards them. It is probably not a coincidence
that the moves come the day after GOE officials delivered the
updated extradition package against the Isaias brothers to
the State Department in Washington. That said, many of our
contacts consider the timing politically motivated to build
support for the GOE and the new constitution. Members of the
business elite and media observers are on pins and needles to
see what the government does next. If the government sells
the television stations quickly and makes no other moves in
this arena, its claims to be carrying out the law will be
proven true and Correa will be remembered for taking on one
of the country's most powerful and corrupt economic players
who many others have feared to cross. If further actions
call the government's motives into question, or if they
retain long-term control of the media outlets, the outcry
will be loud and wide-spread. The Correa administration's
handling of this issue will in all likelihood serve as a test
of their intentions vis-a-vis the future of the media in
Ecuador.
 
 
Jewell


http://cables.mrkva.eu/cable.php?id=161221