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WikiLeaks: LASSOing the U.S. in Ecuador

As the unlikely Julian Assange affair continues to play out in London, the imbroglio stands to have unforeseen political ripple effects in countries near and far. In Ecuador, President Rafael Correa is hoping that the WikiLeaks saga will unfold to his advantage in advance of the country's February, 2013 election. By granting political asylum to Assange, Correa calculates that he may appeal to Ecuadoran nationalism and a wounded sense of pride. Though certainly risky in certain respects, Correa's high stakes gamble could pay off as many Ecuadoran poor rally to his banner. Indeed, it's possible that Correa's foes will veer off the Assange issue and conclude that this wild card is best left untouched.


The subject is particularly touchy for Guillermo Lasso, a veteran politician with perhaps the greatest chance of dislodging Correa from power. Though the President is looking rather solid in the polls, Lasso has been steadily gaining in popularity. A powerful political and economic insider who has served in two separate administrations, Lasso is former head of the Guayaquil Central Bank and briefly served as Governor of the coastal state of Guayas.


Despite this long track record, Lasso carries some unflattering baggage which could taint his future political prospects. According to secret diplomatic cables recently released by WikiLeaks, Lasso was determined to unseat Correa and appealed directly to the U.S. Embassy in Quito. In light of the embarrassing revelations, it's doubtful whether Lasso has a lot of sympathy for Assange and his plight.


Lasso's animosity toward the Quito government was put on display early on in the first Correa administration. Writing to her superiors in Washington, U.S. Ambassor to Ecuador Linda Jewell remarked that the "usually fractious" Ecuadoran private sector had gotten its act together and was beginning to develop "what could become a cohesive response to what it perceives as threats from the Correa administration."


Such efforts were being led by paranoid rightist forces from the commercially important city of Guayaquil, which feared creeping political encroachment by Correa, a politician linked to Hugo Chávez of Venezuela. Scared for the future, business figures urged the U.S. "to do their heavy lifting" and organize against the central government.


LASSOing the U.S. against Correa


Key in such efforts was none other than Guayaquil banker Lasso, who brazenly spoke to the Americans about his desire to rid the country of Correa. According to Jewell, Lasso had organized a "systematic effort" to coordinate the Correa opposition through a group called "Ecuador Libre" or "Ecuador Free" [according to Lasso's own web site, Ecuador Libre is a think tank pledged to coming up with public policy solutions based on the ideas of "liberty and social solidarity"].


Lasso reported that the business community had launched its own public relations effort and produced a breathless radio spot "which featured a Venezuelan voice discussing the situation in Venezuela and an Ecuadorian voice responding that she would not want the same situation to develop in Ecuador."


Determined to halt state control over the economy, Lasso had spoken to other prominent Correa opponents such as former president Lucio Gutiérrez and Guayaquil Mayor Jaime Nebot. During his conversation with the U.S. Embassy, Lasso refrained from requesting "extensive support" though the Guayaquil man did ask the Americans to "echo the private sector's appeal for individual freedoms should the private sector come under fire from the government."


Jewell, however, seemed a bit skeptical of getting too "lassoed" into action. The Ambassador noted that there were "real limits to working with these political leaders." Gutiérrez was willing to work with the business community, "but only on his terms," while Nebot had "chosen to frame his role as defending local Guayaquil interests (e.g., the status of the Guayaquil port), rather than seeking the mantle of leader of the national opposition to the Correa agenda."


By simply participating in the discussion, Jewell was certainly complicit in opposition scheming against Correa. Nevertheless, the diplomat was still wary and remarked to her superiors that "we have emphasized the importance of domestic sectors working toward consensus and offering responsible alternatives as a necessary pre-condition before any international engagement can be truly effective."


Business Friendly Governor


If anything, WikiLeaks cables merely underscore what many Ecuadorans have long suspected about Lasso: namely, that the banker is a consummate political and economic insider who favors the interests of Washington and large financial institutions. Lasso's rise on the national stage can be traced back to the year 1999, when impoverished Ecuador faced crushing and spiraling debt. Hoping to avert a catastrophe, President Jamil Mahuad accepted a loan from the International Monetary Fund (or IMF) which obliged Ecuador to reach a balanced budget for the following year.


At the time, Lasso was serving as Governor of Guayas state, having been previously appointed to the position by Mahuad himself. Lasso was also busily at work on radical renovation plans for the city of Guayaquil, the capital city of Guayas. As Director of the Malecón 2000 Foundation, the banker was associated with the previously mentioned Nebot, a politician who was pushing hard for boardwalk renovations.


In a zealous drive to emulate tough guy Mayor Rudy Giuliani, Nebot contracted former New York City Police Commissioner William Bratton to help shape the city's urban regeneration strategy. The newly constructed boardwalk was praised by many local residents as being "just like Miami." However, indigenous street vendors were removed from cleaned up urban spaces. Indeed within the new Guayaquil, urban "undesirables" found working in gentrified areas faced tough penalties and beggars and itinerant vendors could be imprisoned for up to seven days.

Tour Guide at Bush White House


Back in Quito meanwhile, Mahuad was facing economic troubles and so the President tapped Lasso as Ecuador's new Secretary of the Economy. Leaving aside his local political work, Lasso took up his new responsibilities with gusto. However, when Mahuad announced that Ecuador might default on its bonds, the powerful banker abruptly resigned in protest.


Ecuador continued its downward spiral into economic turbulence and political instability in the next couple of years until, finally, Lasso staged a comeback. In late 2002, the newly elected government of Lucio Gutiérrez included the banker on its transition team, a move which went down very well within financial circles. Though Gutiérrez had formerly been a left-leaning army officer and actually helped to depose the Mahuad government amidst a popular insurrection in 2000, the new president quickly made a political U-turn by courting the IMF and appointing Lasso as Ecuador's Ambassador-at-Large to the U.S. In Washington, D.C. Lasso conducted important liaisons with the IMF and Inter-American Development Bank.


In Febuary, 2003 Gutiérrez's betrayal of the Ecuadoran left went into high gear. Flying to Washington, the new Ecuadoran President met with George W. Bush at the White House. Lasso meticulously conducted every detail of Gutiérrez's tour, and the banker "moved like a fish out of water" in his new home. Reportedly, however, Lasso's presence proved disconcerting to Ecuador's career diplomats, who resented the banker's outsized influence.

Hoping to make a good impression on the Bush team, Lasso steered Gutiérrez in his meeting with the U.S. Republican President. Emerging later from the Oval Office, the new Ecuadoran leader announced that he wanted his country to "become the best ally of the U.S." in the fight against terror and drug smuggling. As Gutiérrez veered to the right, Lasso's profile continued to soar, and the banker was put in charge of free trade negotiations with the U.S.


Lasso's Paranoia


Yet again, however, Lasso was foiled in his effort to ram through his business-friendly agenda. Though progressive social forces originally supported Gutiérrez, they turned against the President once it became clear that he was more interested in pursuing Lasso's corporate-style politics. In 2005, protests forced the President from power and a new caretaker government under Alfredo Palacio took over.


Hoping to appease the left, Palacio appointed the aspiring and ambitious Rafael Correa as Economy Minister. Palacio was critical of many of his predecessors' policies, but the caretaker president was no radical. Indeed, according to WikiLeaks cables, Palacio requested U.S. assistance with international financial institutions and declared that he could be an effective "counterweight" to Hugo Chávez of Venezuela. Perversely, he even asked Washington and the World Bank to provide security on Amazonian oil fields.


Despite these conservative leanings, Lasso was still dissatisfied. According to one WikiLeaks cable, the Guayaquil businessman approached the Americans and griped about Palacio. According to Lasso, Palacio "had lifted his political philosophy from his communist father. Lasso did not think Palacio had drifted far from his father's views."


Candidate's Far Right Connections


Given that even the Palacio regime was far too leftist for Lasso, it is understandable that the Guayaquil banker will now stop at nothing in his effort to unseat the more nationalist/populist Correa, who first came to power in 2006. On the campaign trail, Lasso likes to strike a moderate tone, remarking that he would do a better and more efficient job at social investment than Ecuador's current President. In an effort to counteract Correa's populism, Lasso has even inveighed against his own country's political class and business leaders, who he claims are out of touch with the day-to-day life of most working people.


Lasso's personal connections, however, seem to belie any such democratic talk. The Guayaquil businessman is a great admirer of former Spanish President José María Aznar, a conservative politician whose government was allegedly involved in an attempted coup d'etat against Hugo Chávez. What is more, Lasso is a member of Opus Dei, a Catholic organization which reportedly enjoyed significant influence under the Augusto Pinochet military dictatorship in Chile. In addition, Lasso is a member of Georgetown University's Latin America Board, an entity which "seeks to promote leaders who will make a disproportionate difference in the world." The Board is linked to the school's Walsh School of Foreign Service and Security Studies Program, which is a haven for spooks and intelligence folk.


The 2013 Election


As history has shown time and again, Ecuadoran social movements have little patience with the pro-U.S. and pro-corporate agenda, and all leaders from Mahuad to Gutiérrez to Palacio to even Correa have been acutely aware of this fact. Lasso, a more recent candidate espousing rightist views, must tread carefully lest he incur the wrath of Ecuador's poor majority.

Yet, according to the Guardian, the Guayaquil man is now polling at 17% of the vote and "election observers, including the Correa campaign, view Guillermo Lasso as the candidate most capable of forcing a runoff and, indeed, possibly winning the election." Meanwhile, though the candidate is somewhat unknown to most voters, the campaign has "launched aggressive efforts to promote him in television and print media."


Though Correa is still favored to win the election, Assange now represents a wild card in the political mix. The Guardian comments that "essentially [by providing diplomatic asylum to Assange], Correa has wrapped himself in the flag – in such a way that his conservative opponents are not able to criticize him effectively, lest they seem unpatriotic." Indeed, though Lasso must dislike Assange for disclosing sensitive diplomatic U.S. cables which cast him in an unfavorable light, the Guayaquil banker has been tight lipped about the whole affair now unfolding at the Ecuadoran Embassy in London. That is not too surprising, given that the issue seems to be playing to Correa's advantage and indigenous peoples have voiced their support for Assange.


According to the Guardian, political speech in the media and campaign advertising in Ecuador is severely restricted in the 90 days leading up to Election Day. That means that the next few months are going to be critical, with Lasso having only until November to make a dent in Correa's armor. "The longer and more dramatic the Assange case is," notes the Guardian, "and the longer Ecuador's diplomatic dispute with the UK and Sweden continues, the more the Ecuadorian election campaign will dwell on international affairs – a sphere the incumbent Correa dominates in relation to his opponents. With far fewer risks than the major electoral benefits it delivers, the diplomatic spat is clearly in Correa's political favor."


Assange, then, is now an unknown variable in larger geopolitical chess and even domestic politics within Ecuador. For better or worse, Correa has thrown in his lot with Assange, though to be sure the outcome of this imbroglio is hardly predictable at this point. Assange meanwhile undoubtedly hopes that Correa wins the election, lest his asylum bid be placed in jeopardy by a hostile Lasso administration smarting from earlier WikiLeaks revelations. Stay tuned for more ironic twists and turns.

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