251,287 cables indexed
Reference ID: 06QUITO2714
Origin: Embassy Quito, Ecuador Classification: CONFIDENTIAL
Created:08 Nov 2006 Released:30 Aug 2011

This is the cable as released by WikiLeaks. This cable is not redacted.

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C O N F I D E N T I A L QUITO 002714




E.O. 12958: DECL: 11/07/2016

REF: A. QUITO 1261
B. QUITO 2352

Classified By: Deputy Chief of Mission Jefferson T. Brown for Reasons 1
.4(b) and (d)

1. (C) Summary: Substantial media attention given to the
Department's approval of a 212(f) visa revocation for
corruption of a prominent Ecuadorian politician, Xavier
Neira, has elicited broad approval from opinion makers and
the general populace. The impetus for the revocations,
Neira,s corrupt practices in an IPR-related legal case
against U.S.-based Pfizer Corporation, became public when
Neira announced his (correct) assumption that his visa was
withdrawn because of his involvement in the case. Members of
the political and economic elite have reacted either by
praising the USG, or by quietly moving ill-gotten gains out
of U.S. accounts, or both. The impact of the visa revocation
highlights both the seriousness of the corruption problem
here and the effectiveness of applying U.S. visa law in
fighting corruption. End summary.

-- -- -- -- -- -- -- --

2. (C) In May of this year, Post submitted a request to the
Department for a Security Advisory Opinion and finding of
212(f) visa ineligibilities for corruption for eight
Ecuadorian subjects, six of whom were found to be ineligible
by the Department. Post submitted the request on the basis
of information about bribery and judicial manipulation in the
context of an IPR enforcement case involving US
pharmaceutical company Pfizer (reftel a). The subjects to
whom the ineligibility was eventually applied included two
Ecuadorian judges, three attorneys in a well-known Ecuadorian
law firm, and a top former official with Ecuador's IPR
oversight authority.

3. (C) The highest-profile subject to be found ineligible was
Xavier Neira, a co-partner in the Neira Law Firm and a former
presidential candidate for the Social Christian Party (PSC).
Neira is a well-known political fixer and power-broker in
Guayaquil, Ecuador's commercial capital. Widely hated and
feared, we could have picked no more notoriously emblematic a
figure of Ecuador's corrupt crony capitalism as practiced by
a narrow band of entrenched elites.

-- -- -- -- -- -- -- -- -- --

4. (C) Department approval of Post's 212(f) request coincided
perfectly with two important events: Ecuador's election
season, and an impending decision in the Pfizer legal case,
in which copycat company Acromax is claiming that IPR
enforcement amounts to an unfair competitive practice. If
the courts find against Pfizer, Ecuador,s generally good IPR
law, and its already shaky enforcement of the law, could be
seriously undermined.

5. (C) Following Washington's approval to revoke the visas,
Post's strategy therefore was to notify the subjects of the
revocations in a staggered fashion, starting first with the
judges and regulatory official, who were not known to have
any high-profile political affiliations. Post anticipated
that should word of these revocations leak out, the news
might have a salutary effect on the fairness of the imminent
Pfizer court decision. Embassy contacts had informed Post
that one of the three judges in the ongoing Pfizer case had
been threatened by Neira with unspecified consequences if he
found in favor of Pfizer. Pfizer lawyers had provided Post
with background information to build the case, but we had not
advised them of internal USG deliberations or of our decision
to revoke the visas. However, when the story broke in the
media, we understand that the Pfizer lawyers discerned the
connection to their case, and communicated to the judges
reviewing the case that the visa revocations should be seen
as a strong signal that the judges should issue a decision
based solely on the law, and that the U.S. Embassy is
supportive of the fight against judicial tampering.

6. (C) Because marquee 212(f) subject Xavier Neira is
strongly associated with the PSC, a contesting party in the

elections, Post exercised utmost caution in proceeding with
the Neira visa revocations and notifications. Post did not
want to appear to be meddling in Ecuadorian electoral
politics. The visas for the three members of the Neira Law
Firm were revoked only after the first round of the
presidential elections (which eliminated the PSC presidential
candidate Cynthia Viteri and decided all congressional seats)
was completed. Viteri thanked Guayaquil CG for waiting until
after the first round. If the announcement had been made
earlier, Viteri said that it would have "killed" the PSC. She
added that she hoped other parties would be implicated in the
next round of revocations -- and indeed, we are committed to
making sure that will be the case.

-- -- -- -- -- -- -- -- -- --

7. (C) The subjects' varied responses to notification that
their visas had been revoked are telling and demonstrate the
pervasiveness of the corruption problem in Ecuador. None of
the subjects seemed surprised when they were notified by
EmbOffs that their visas were being revoked. Certainly none
proclaimed their innocence:

-- Judge Armando Cervantes demanded to know who in the
Ecuadorian government had issued a "denuncia" (denunciation)
against him, in other words who had spilled the beans about
one or more of his corrupt activities.

-- Judge Angel Rubio was notified while he was in the Quito
airport getting ready to board a plane to Miami with his
family. He asked: "so they are not going to let me in?", and
then thanked the Consul for the just-in-time notification.

-- Dr. Luis Vera, former head of IEPI, Ecuador,s IPR
enforcement body, called Embassy Consul and demanded to know
the information the Embassy possessed against him and claimed
we "had no right to call him corrupt". This was before
Embassy Consul informed him that corruption was the basis for
the revocation. He then said that he was going to "complain
to the World Court" that his "human rights had been violated."

-- Without prompting, Xavier Neira asked "this must be about
the Pfizer case, right?" After his initial notification, he
called the Embassy several times to ask whether the visas for
his family members have also been pulled. Brother Jorge has
placed similar calls. The Embassy suspects that the subjects
may have intended to send their family members to the US to
attend to ill-gotten gains that may be stashed there. Visas
for Neira's immediate family members were revoked 214(b) (for
flight risk), and visa lookouts have been placed for those
family members not currently holding visas.

-- -- -- -- -- -- -- -- -- -- --

8. (C) Embassy PAS anticipated the media onslaught that these
high-profile revocations would provoke, and prepared by
working with media contacts to gauge public reaction to
another revocation case, for former Supreme Court Judge
Alfonso Zambrano, whose son had recently been caught on film
taking a bribe (reftel b). Although the technical basis for
that revocation was for flight-risk and not for corruption,
Embassy PAS allowed the media to connect the case to
corruption by citing the general reasons for which the US
Embassy might revoke a visa. One Ecuadorian television
station then polled Ecuadorian public on whether or not they
agreed with the Embassy's action: the approval percentage was
in the high nineties.

9. (C) These earlier poll results have informed the way
Embassy PAS is managing communications after the story of the
"Pfizer revocations" broke in the Ecuadorian press on October
28. Calls from the media have been fast and frequent, and
early polling by Ecuadorian station Teleamazonas showed
support among Ecuadorians for the Embassy action in the high
eighties and nineties.

10. (C) Xavier Neira himself initiated the media frenzy. His
public response to the revocation -- that he was being
targeted for his work on behalf of Pfizer copycat Acromax --
did succeed in temporarily changing the tenor of media
coverage. The Embassy neither confirmed nor denied Neira,s

claims, only emphasized that the revocation was not
undertaken lightly and was based on months of serious Embassy
investigation and a clearance process in Washington at the
highest levels. On November 6, Acromax, an Argentine-owned
company, entered the fray by taking out a full page
advertisement in Ecuadorian daily El Comercio, claiming that
the visa revocation and media coverage were an attempt to
prejudice the outcome of the Pfizer-Acromax case and
constituted an unjust interference into Ecuador's judicial

11. (C) The revocations have fueled wild media and private
speculation on who "might be next". Rumors circulate of an
"Embassy list" and the press has been fishing for information
in conversation with Embassy officers and with the putative
subjects themselves.

-- -- -- -- -- --

12. (C) One eventuality Post did not anticipate was a
possible GOE request for the evidence we used against Neira
and the others, either to enable local prosecution against
them or to mount a defamation case against unknown subjects
presumed by many Ecuadorians to have provided Post with the
evidence against Neira. Although source documents used in
the 212(f) case are protected, as are all consular documents,
by diplomatic privilege, Post routinely requests the
Department waive this privilege to aid Ecuadorian law
enforcement agencies in prosecuting other criminal cases.
Therefore an official request for evidence in the 212(f) case
presents a communication challenge for the Embassy. Recent
media polling results released on November 6 indicate that
87% of respondents believe that Ecuadorian prosecutors should
investigate the alleged corruption by the 212(f) subjects,
and 68% believe that the Embassy should hand over the
information we used to justify the visa revocations. That
gap indicates a deficit of trust among the Ecuadorian public
about the way Ecuadorian prosecutors might choose to use or
not use such information, but still puts us in a potential
delicate position. To date, no such formal request from
Ecuadorian prosecutors has arrived at the Embassy.

13. (C) We nearly went off-message when initial reaction to
the revocations was linked entirely to the Pfizer case. Had
the public understood our action to be simply about
protecting the interests of U.S. multinational companies, we
would have sacrificed much of the moral force and impact of
our action. We worked hard privately to plant seeds of doubt
about whether that was the true basis of our action, and the
discussion broadened back as we wanted to one of a
generalized campaign against corruption.

14. (C) Discussion in the media has also underlined a
perceived contradiction in our "tough stance" on these cases
and a lack of progress on unrelated, high-profile extradition
cases for Ecuadorians now living in the U.S. who are alleged
to have stolen millions. This has presented Post an
opportunity to educate our interlocutors about the
extradition process and highlight delays that have occurred
on the Ecuadorian side of the extradition equation.

-- -- -- -- -- --

15. (C) EmbOffs report that the response of political and
commercial elites to the Neira revocation has been a mixture
of glee and fear. Neira is widely loathed in Ecuadorian
political circles, including within rival factions of the
PSC. Rival PSC politico and current Guayaquil Mayor Jaime
Nebot was reportedly overjoyed by the revocation, and EmbOffs
report that even longtime PSC boss Leon Febres Cordero was
"resigned" to his former protege's public fall from grace.
(Comment: On November 5th, Ecuadorian media reported that
Febres Cordero was pushing back on the PSC Ethics Committee's
decision to expel Neira from the party,s ranks. End
comment.) Several reformist politicians have told EmbOffs
that what the Embassy is doing with visa revocations is "very
important" and that the country "needs a push" to combat

16. (C) EmbOffs also report that the Neira revocation is the
main topic of conversation in Ecuadorian social circles, and

that for elite Ecuadorians the US visa is "as important as a
driver,s license." Embassy contacts who also know Neira
have told EmbOffs that Neira has been seriously depressed
about the turn of events, and has said that "this is one of
the most difficult things he has ever had to face."

17. (C) According to EmbOffs, Ecuadorian contacts believe
that the Neira revocation signifies a major new initiative in
US visa policy. It was widely assumed that the Embassy
"looked the other way" on corruption, tolerating the presence
of Ecuadorians with ill-gotten wealth in the U.S. for
economic benefit. This perception has fueled palpable fear
among elites, stirred by press speculation on future cases.
Some Ecuadorian subjects have called the Embassy to ask if
they were "on the list", while others are reportedly moving
money out of US bank accounts.

18. (C) The fear has reached the highest echelons of
Ecuadorian politics. On October 31, Ecuadorian Ambassador to
the U.S. Luis Gallego requested a meeting with Andean Affairs
Office Director Phil French to discuss, among other things,
the Neira revocation. Gallegos also asked about the
purported "blacklist". Post suspects this meeting might
reflect concerns on the part of President Palacio that he may
be a target for a future 212(f) ineligibility (reftel c).

-- -- --

19. (C) We anticipated the intense response that the
application of the 212(f) visa ineligibility to such
high-profile subjects would generate. We are developing a
response that balances our long-term objective of combating
corruption, protecting US commercial interests, cooperating
with Ecuadorian legal authorities, assuaging the fears of
important Embassy contacts, maintaining political neutrality
and retaining the broad support for Embassy actions among the
Ecuadorian public, all in conformance with US visa law. We
hope to build on the media momentum, fear and public interest
in the case by pursuing other 212(f) cases in short order
and, recognizing the burden of responsible review at the
Washington level for hundreds of cases worldwide, encourage
the Department to devote more staff resources to speedy
processing of this essential new tool of U.S. foreign policy.