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 You are in: Under Secretary for Public Diplomacy and Public Affairs > Bureau of Public Affairs > Bureau of Public Affairs: Office of the Historian > Foreign Relations of the United States > Johnson Administration > Volume XXXI
Foreign Relations, 1064-1968, Volume XXXI, South and Central America; Mexico
Released by the Office of the Historian
Documents 326-344

Ecuador

 

326.  Editorial Note

 

In telegram 923 from Quito, May 22, 1965, the Embassy assessed the internal threat to the junta in Ecuador. Although a change did not appear imminent, the Embassy recommended emphasizing "the imperative of unity" to all factions of the military, while warning opposition leaders that a revolutionary alliance with the Communists would attract the "deep distrust" of the United States. The Embassy also reported that it was encouraging the junta to form a counter-insurgency group "capable of snuffing out initial revolutionary attempts to establish insurgent forces." (National Archives and Records Administration, RG 59, Central Files 1964–66, POL 23–9 ECUADOR) On July 14 the Department noted that demonstrations had so weakened the junta that plans to hold elections in July 1966 appeared "unrealistic." To avoid a violent overthrow of the government, the Department suggested that the Embassy urge the junta to "shorten substantially scheduled transfer of power, modify composition significantly, or transfer power to provisional civilian government." (Telegram 26 to Quito; ibid., POL 15 ECUADOR) The Embassy replied that such interference would not "expedite the process," since the junta had just announced a new plan to restore constitutional order. Meanwhile, the Embassy reiterated its proposal to support the junta in forming a counter-insurgency group. (Telegram 59 from Quito, July 15; ibid.)

 

[text not declassified] (Department of INR/IL Historical Files, 303 Committee Files, c. 24, August 26, 1965) The Department countered by citing NSAM 177 (see Foreign Relations, 1961–1963, volume IX, Document 150), which assigned overall responsibility for police assistance programs, including counter-insurgency efforts, to the Agency for International Development. The Department argued that an overt program managed by AID and maintained under the Ecuadorean National Police stood a better chance of surviving the junta. (Memorandum from Vaughn to Thompson, August 16; Department of State, INR/IL Historical Files, 303 Committee Files, c. 24, August 26, 1965)

 

On August 26 the 303 Committee approved the proposal to support a counter-insurgency group in Ecuador, subject to further clarification of the organizational details. (Memorandum for the record by Jessup, August 27; ibid., c. 25, September 9, 1965) In telegram 221 from Quito, September 6, Coerr explained that, due to growing opposition within the military, "it would be impossible to establish special unit in DGI." Coerr recommended transferring the unit to the army, although this might pose "a problem in inter-agency relations within USG." (Telegram 221 from Quito, September 6; National Archives and Records Administration, RG 59, Central Files 1964–66, POL 23–3 ECUADOR)

 

On September 9 the 303 Committee decided that the Department of Defense [text not declassified] should "sort out these arrangements and keep the committee informed by phone." (Memorandum from Carter to Vaughn, September 13; Department of State, INR/IL Historical Files, 303 Committee Special Files, July–December 1965). [text not declassified] (Memorandum from Jessup to Vance, September 10; National Security Council, Special Group/303 Committee Files, Subject Files, Ecuador)

 

 

327.  Memorandum From William G. Bowdler of the National Security Council Staff to President Johnson/1/

 

Washington, March 28, 1966, 6:30 p.m.

 

/1/ Source: Johnson Library, National Security File, Country File, Ecuador, Memos, 12/63–11/68. Secret. A copy was sent to Bill Moyers. A notation on the memorandum indicates that the President saw it.

 

SUBJECT
Situation in Ecuador

 

For the past week the Military Junta in Ecuador has been faced with mounting pressures to step down. It began with a commercial strike in Guayaquil last Tuesday and has gradually spread to other cities. The base of the movement has also broadened to include other anti-Junta groups—political parties, chauffeurs federation, students, etc. A deteriorating economic situation has added to the Junta’s woes.

 

Last Friday the Junta, with the firm backing of the Armed Forces, seemed to be gaining the upper hand. Over the weekend, the picture changed as the strike continued and clashes between the Armed Forces and university students and other demonstrators increased.

 

Ambassador Coerr called State this afternoon to report that the Junta had announced that: (1) its members would "reintegrate" themselves into the Armed Forces and (2) there would be drastic changes in the plan for transition to constitutional government. Elections had been set for July 3. He did not know yet to whom the Junta would be turning over the government. The most likely possibility seemed to be a non-partisan civilian acceptable to the military and anti-Junta elements. A Guayaquil business-man—Clemente Yerovi—and former President Galo Plaza are rumored as likely candidates./2/

 

/2/ In a March 29 memorandum for the President, Bowdler reported that Yerovi had been chosen as interim civilian President and was "known to be friendly towards the United States, which should ease our task in dealing with him." (Ibid.)

 

So far the Armed Forces remain united and firmly in control of the security situation. This afternoon’s announcement reflects their decision that the present Junta should step down because it has lost public confidence and can no longer maintain a political climate which will permit meaningful elections in July. For the Armed Forces the way out is to put in a new face and adjust the date for elections to allow tempers to cool and make fresh preparations for elections.

 

Ambassador Coerr is active in this very fluid situation, using his influence to bring about a government of conciliation as rapidly as possible, while continuing to press for a return to constitutional government without delay.

 

There is nothing further at the moment that we can do from here. The Inter-American Interdepartmental Regional Group meets tomorrow to review the situation./3/

 

/3/ The Interdepartmental Regional Group for Inter-American Affairs met on March 29 to consider a draft contingency plan on Ecuador. A record of the meeting is in IRG/ARA Action Memo #4, April 1; National Archives and Records Administration, RG 59, ARA/IG Files, 1966–68: Lot 70 D 122, IRG/ARA Action Memos, 1968.

 

WGB

 

 

328.  Memorandum From William G. Bowdler of the National Security Council Staff to President Johnson/1/

 

Washington, March 30, 1966, 6 p.m.

 

/1/ Source: Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68. Confidential. A copy was sent to Bill Moyers. A notation on the memorandum indicates that the President saw it.

 

SUBJECT
Ecuadorean Crisis

 

The situation in Ecuador moved back toward normalcy, although there still are a few trouble spots.

 

The commercial strike has been called off. Interim President Clemente Yerovi took over at noon and announced a three-point program: prompt elections, austerity to solve the financial crisis, and protection of the "sucre" against devaluation. He has not named his cabinet, although he indicated that it would be broadly representative, including the political parties.

 

The trouble spots are where communist-led students have seized provincial government buildings in two provinces. Government security forces have cleared them out in one province but have not yet acted in the other. Our Peace Corps volunteers have been threatened by the communists in this province. Ambassador Coerr has personally called the Defense Minister and National Police Chief to request protection of the volunteers.

 

The question of recognition is pending. It is contingent on whether President Yerovi, in a diplomatic note to be delivered soon, presents his government as a continuation of the former regime or a new one. The lawyers in State say we can play it either way./2/

 

/2/ According to circular telegram 1935, April 4, the Embassy received a note in which the new government expressed its firm intention to return to constitutional rule. Although the note failed to address the legal question of continuity, the Department saw "no reason [why] we should not continue relations with Ecuador," pending consultation with other Latin American governments. (National Archives and Records Administration, RG 59, Central Files 1964–66, POL 15 ECUADOR) The Department authorized delivery of a note to the Ecuadorian Foreign Ministry on April 12, expressing the desire of the U.S. Government to continue cordial relations. (Circular telegram 1970, April 8; ibid.)

 

Paradoxically, the change in leadership enhances the chances of having meaningful elections. The military junta had scheduled elections for July, but could not get the political parties to participate. President Yerovi may have to delay elections two or three months beyond July, but he is expected to get full participation.

 

WGB

 

 

329.  Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, June 23, 1966.

 

/1/ Source: Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68. Confidential.

 

SUBJECT
Emergency Budget Support for Ecuador

 

Dave Bell, with the concurrence of Charlie Schultze and Joe Fowler, requests your authorization to negotiate a loan of up to $10 million to Ecuador to help meet its budgetary needs for the balance of this year. Their memoranda are attached./2/

 

/2/ Attached but not printed are memoranda to the President from Schultze, June 14, and Bell, June 7.

 

The background to this request is:

 

1. The two-month old interim civilian government of President Yerovi inherited a serious budget problem from the ousted military junta.

 

2. Despite its belt-tightening efforts, it still confronts a deficit estimated at $15 million. Any further belt-tightening would be at the expense of its badly needed development and reform program. This should be avoided.

 

3. Last month you authorized negotiation of a loan of $4 million. This authorization recognized that $4–6 million more might be necessary. The Yerovi Government declined the $4 million loan, considering the amount inadequate and the self-help conditions proportionately too stiff.

 

4. Since then the Government has taken several self-help measures on its own and worked out assistance arrangements with the IMF ($13 million standby) and some New York banks ($11 million to meet foreign exchange needs).

 

5. Our $10 million loan would be tied to additional self-help measures and released in installments based on performances.

 

I consider this a good loan from an economic and political standpoint. President Yerovi has established a realistic schedule for returning the country to constitutional government by the end of the year. He needs our support for constitutional, as well as economic, recovery.

 

Walt

 

Approve loan/3/
Disapprove loan
Speak to me

 

/3/ This option is checked.

 

 

330.  Telegram From the Department of State to the Embassy in Ecuador/1/

 

Washington, April 22, 1967, 2:55 p.m.

 

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1967–69, POL ECUADOR–US. Confidential; Immediate; Limdis. Drafted by Sayre and approved by Gordon.

 

180672. Ref: Quito 5478./2/

 

/2/ President Otto Arosemena Gomez, who was elected by a constituent assembly on October 16, 1966, publicly criticized the Alliance for Progress at the meeting of American Presidents in Punta del Este April 12–14. An account of his meeting with President Johnson on April 13 is in Document 51. Telegram 5478 from Quito, April 22, reported on a meeting with Defense Minister Febres Cordero, in which Coerr argued that Arosemena’s criticism of the Alliance was jeopardizing "continued USG investment in AID program." (National Archives and Records Administration, RG 59, Central Files 1967–69, POL 15–1 ECUADOR)

 

1. We concur line you took in Quito 5478.

 

2. Arosemena’s activities have effect on three levels which are interrelated (a) hemispheric, (b) US–Ecuador, and (c) international financial agencies.

 

3. At present moment Ecuador in general and Arosemena in particular are regarded as being "off-base". Although Latins share some of underlying concerns of Ecuador, they repudiated his tactics and many of specific complaints. Arosemena misjudged Latin temperament on overall hemispheric problems. This is understandable because politically Ecuador has more in common with Bolivia (which was not present) and Haiti (which played no real part in OAS preparations or Summit meeting) than it has with most LA countries. It is in our interests to maintain general hemispheric view that Arosemena is attacking inter-American system, Alliance, etc. and not United States.

 

4. United States posture must be one of dignity and understanding in response to "shin kicking" by Arosemena. Our line will be that we are following principles of Alliance, that we have taken into account January CIAP review in cooperating with Ecuador and that we are working closely with IBRD and IDB. FYI. If Ecuador desires special CIAP review to deal with its specific complaints we will be glad participate. We are discussing this possibility with Sanz. End FYI.

 

5. If Arosemena carries his irresponsible conduct too far, i.e. he creates financial or other crisis, there is risk forces opposed to him will unite to oust him. It is therefore important that you a) discreetly set or keep record straight by letters to President, Minister of Finance, etc., after meetings in which Ecuadorean complaints are clarified (at opportune times you can find ways to make clarifications public), b) avoid any comments or suggestions that could be taken as implying Arosemena has become obstacle to US-Ecuadorean relations and should be removed, and c) act promptly to discourage any change in constitutional order in Ecuador.

 

6. We should adhere guidelines of Alliance and CIAP. We should close ranks with other lending institutions and make certain we are in step. If there are programs or projects that are not working, we should correct them or terminate them. Watchword should be "patience."

 

7. We recognize that you have trying situation in Ecuador. Impact Arosemena’s conduct now limited to Ecuador with rest of Hemisphere lined up with US. It is important that we avoid doing anything here or in Ecuador that would change this favorable situation.

 

Rusk

 

 

331.  Telegram From the Embassy in Ecuador to the Department of State/1/

 

Quito, May 13, 1967, 2220Z.

 

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1967–69, POL ECUADOR–US. Secret; Limdis.

 

5824. 1. I called yesterday at my initiative on President Arosemena for review of Ecuadorean–U.S. relations prior to my departure on home leave (mentioning that this leave coordinated with children’s vacation and had been long planned).

 

2. After congratulating him on political gains he had made as result his performance Punta del Este,/2/ I pointed out that these gains had been made largely at expense of aid program’s reputation. I pointed out that the program’s degree of success depends largely on its political support by the government and political acceptability to the people, both of which had suffered significantly through the attacks which he had been making, especially since his return from Punta del Este. I said I thought his public statements about the aid program were unbalanced, in that they mentioned nothing good about it, and in some cases erroneous, in that they disregarded pertinent facts.

 

/2/ According to an April 20 INR report Arosemena received an enthusiastic reception after Punta del Este as "the only Latin American president with the ‘courage to put the US in its place’." Arosemena’s performance "fed Ecuador’s pride which—apart from Ecuador’s coming in second in a basketball competition in Scranton, Pennsylvania—has had little sustenance in recent years." (Ibid., ARA/EP/E Files: Lot 70 D 247, POL 15 Arosemena Government)

 

3. During our discussion Arosemena stuck to his guns, reasserting his declarations about the aid program and giving ground, by tacitly accepting my point of view, in only two respects. When I told him I had been disappointed that he had publicly declared the U.S. was requiring "inadmissible" conditions on the malaria loan, despite the fact that I previously assured him I would take no position on requests until sub-ministerial negotiations had reached either agreement or clear disagreement, he obviously got the point but avoided comment. When I pointed out that he had urgently requested my assistance in signing the primary education loan and then expressed recognition only by publicly disputing whether his or the Yerovi government should get the credit for having eliminated from the loan twenty "humiliating" conditions, he laughed in hearty agreement.

 

4. He declared he would never accept conditions that we are negotiating in the proposed malaria loan designed to insure that the National Malaria Eradication Service (SNEM) be independent and employ an outside administrator, and he asked why we tried to impose these conditions on him when we had not imposed them on the military junta. He was surprised and interested to learn that these conditions had characterized the successful program that had been started before the military junta assumed power and terminated in 1965.

 

5. I assured him and he recognized that we are interested in carrying forward the program on Alliance for Progress criteria and with no thought of any period of coldness or retaliation in reaction to his criticisms. He commented that we had authorized two grant projects since his return from Punta del Este and called my attention to the very favorable publicity he had given to the signing of the public safety project agreement.

 

6. He continued to rant about the performance of the TAMS engineering company under the road construction agreement. When I called his attention to my previous suggestion that he meet personally with TAMS representatives in order to get from them information with which to form a balanced picture of the value of their operations, he said he would meet with them only to kick them physically out of his office.

 

7. Our conversation being interrupted by his need to meet with his cabinet and chiefs of staff in order to consider the Duran strike situation which had produced some dead and wounded, he suggested that we continue our talk early next week./3/

 

/3/ Arosemena and Coerr held "two strenuous hour-long negotiating sessions" on May 16 and 17, reaching agreement on the wording of the proposed Malaria loan. (Telegram 5909 from Quito, May 17; ibid., Central Files 1967–69, AID(US) 8–5 ECUADOR)

 

Coerr

 

 

332.  Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, August 29, 1967.

 

/1/ Source: Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68. Confidential.

 

Mr. President:

 

Herewith a recommendation from Agriculture and AID, concurred in by State, Treasury and BoB, that you authorize a $2.2 million P. L. 480 sale to Ecuador for small quantities of wheat and tobacco./2/

 

/2/ Attached but not printed are memoranda to the President from Schultze, August 24, and Gaud and Freeman, August 21.

 

Despite Arosemena’s unhelpful performance at Punta del Este and doubts regarding the economic justification for P. L. 480 help, I favor this modest assistance:

 

—Arosemena has pulled back a considerable way from his Summit obstreperousness, joining with our Ambassador on August 17 in a public celebration of the 6th anniversary of the Alliance for Progress.

 

—The local currency proceeds will be used to encourage much needed improvements in agriculture—a key Summit objective.

 

—Arosemena has made considerable progress during 1967 in getting Ecuador’s budgetary and balance of payments situation straightened out.

 

—We have a stake in continued political stability in Ecuador which Arosemena has achieved while returning the country to constitutionality via elections scheduled for next June.

 

Walt

 

Approve
Disapprove/3/
See me

 

/3/ The last two options are checked. Rostow apparently did not raise the issue again until September 6, when he returned the memorandum to the President with a request for additional guidance. (Memorandum from Rostow to the President, September 6; Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68) Johnson’s response is recorded in a note dictated later that day aboard Air Force One: "I don’t want to agree to that Ecuador thing. Hold up on it. They can argue with me about it, but I am not going to force this. I haven’t forgotten Punta del Este." The note indicates that Jones informed Rostow of the President’s decision on September 7. (Ibid.)

 

 

333.  Telegram From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, September 8, 1967.

 

/1/ Source: Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68. Secret. A notation on the telegram indicates that the President saw it. Oliver’s original memorandum to the President, September 7, is ibid., Memos to the President, Walt W. Rostow, Vol. 40.

 

CAP 67779. Ecuadorean PL–480 Loan: Special Factors Involved.

 

When we informed Covey Oliver of your decision on the PL 480 loan to Ecuador, he expressed deep concern.

 

I told him to prepare a memorandum to you giving his reasons why he considers it important to make the loan. This is his message to you:

 

I am working very hard on trying to turn the Ecuadorean President’s attitude toward the Alliance for Progress around. I cannot promise success, but I have fair hopes. Your Ambassador there has been active and helpful, and I have spent about three hours with the AID Director there/2/ on this topic while he was here.

 

/2/ L. Paul Oechsli.

 

The Ambassador, the Director and I believe that there is a reasonably good chance that if handled as a good teacher would handle a lagging and defensive pupil, we might bring President Arosemena up from the bottom of the Alliance class to the median level. (The Ambassador has written me (eyes only)/3/ that if allowed to drift and sour even more, this man might do something foolish, such as declaring a prominent Embassy official persona non grata. This latter should not be taken as a threat but as an indication of the President’s basic psychological problem: he was a late starter on what the Alliance is all about, and he has yet to catch up with the other presidents in understanding.)

 

/3/ Not found.

 

Another factor, very important in Latin ways of looking at things, is that my able predecessor pretty well made what the Ecuadoreans consider a commitment about this PL–480 loan—at least it seems that he did not spell out to the Ecuadoreans all the steps involved in getting final approval.

 

A new Ecuadorean Ambassador will be presenting credentials to you on September 12. The denial of the loan will make it hard for me to carry on my special course for Ecuadoreans with him, as I had expected./4/

 

/4/ According to the President’s Daily Diary, the new Ambassador, Carlos Mantilla Ortega, presented his credentials to the President in a brief meeting (12:23–12:28 p.m.) at the White House on September 12. (Johnson Library) Johnson met Oliver immediately following the reception (12:28–1:04 p.m.). No substantive record of either conversation has been found.

 

 

334.  Telegram From the Department of State to the Embassy in Ecuador/1/

 

Washington, September 18, 1967, 2024Z.

 

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1967–69, AID(US) 15–8 ECUADOR. Confidential; Immediate; Limdis. Drafted by J.F. Smith; cleared by Berlin, Sayre, and Fowler; and approved by Oliver.

 

39022. Subject: PL–480 Sales Agreement. Ref: State’s 33719./2/ Joint State/AID Message. For Coerr from Oliver.

 

/2/ In telegram 33719 to Quito, September 7, Oliver reported: "Final decision on PL–480 sales agreement highly unlikely this week. I am working on matter but could not assure you response will be favorable." (Ibid.)

 

1. PL–480 memorandum covering 15,000 MT wheat and 582 MT tobacco and tobacco products has been approved in principle but not yet formally. Delay in obtaining approval reflects continuing concern at highest level over GOE’s criticisms of U.S. trade and AID policies expressed during Punta del Este Conference./3/

 

/3/ According to Robert M. Phillips, chief of the Embassy’s political section, Johnson was so displeased at the thought of rewarding Arosemena with the PL–480 loan that "it was only on the fourth try that the President relented and then solely on condition that Covey Oliver would call in Carlos Mantilla and let him know that we were getting tired of Ecuadorean griping about the conditions of aid." (Letter from Phillips to Coerr, September 26; ibid., ARA/EP/E Files: Lot 70 D 247, POL 15 Arosemena Government)

 

2. Accordingly, I am requesting Ecuadorean Ambassador to call upon me afternoon September 19, for purpose not only disclose high level approval but also indicate to Ambassador difficulties posed for USG by irresponsible statements of government receiving assistance from USG.

 

3. I recognize this may eliminate some of impact which you hoped to gain by announcement there. However, I consider it essential disabuse Arosemena of assumption that he has special relationship with high level USG officials.

 

4. Negotiating authorization re PL–480 Agreement will be forthcoming ASAP following September 19 meeting.

 

5. Would appreciate any comments or suggestions you may have prior to September 19 meeting./4/

 

/4/ Coerr’s comments are in telegrams 1033 and 1034 from Quito, September 19. (Ibid., Central Files 1967–69, AID(US) 15–8 ECUADOR) After receiving a written report on the meeting with Mantilla, Johnson approved Oliver’s recommendation "to inform Ambassador Coerr that he may proceed with negotiations." (Memorandum from Rostow to the President, September 19; Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68)

 

Rusk

 

 

335.  Memorandum From William G. Bowdler of the National Security Council Staff to the President’s Special Assistant (Rostow)/1/

 

Washington, September 28, 1967.

 

/1/ Source: Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68. Confidential.

 

Walt—

 

As Covey puts it: "Arosemena flunked his course".

 

From the attached cable you will see that last Tuesday he picked up where he left off at Punta del Este in attacking the Alliance for Progress./2/

 

/2/ Reference is to telegram 1154 from Quito, September 27; not attached. At a reception for Latin American journalists on September 26, Arosemena called the Alliance for Progress "a frustrated hope," a criticism that was widely reported in newspaper accounts the following day. (National Archives and Records Administration, RG 59, Central Files 1967–69, AID(AFP))

 

Covey has taken these actions:

 

—instructed Wym Coerr to go play golf and negotiate no aid agreements.
—delayed action on two pending loans in the IDB.
—asked Jim Fowler to background Ben Welles (NY Times) on the speech and refute each charge made.

 

Arosemena seems to be in the final stages of negotiating a $30 million loan with a consortium of European banks—at 81⁄2% interest with "no strings attached"—and therefore thinks he can thumb his nose at us again.

 

I want to wait until next Monday/3/ to see how this business shakes down before reporting to the President./4/

 

/3/ October 2.

 

/4/ Rostow relayed a brief report to the President on September 30. (Telegram CAP 67847 to the LBJ Ranch; Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68)

 

WGB

 

 

336.  Editorial Note

 

On October 3, 1967, Ambassador Coerr reported his view that economic assistance to Ecuador could no longer be justified in the wake of President Arosemena’s renewed criticism of the Alliance for Progress. In response Coerr recommended: a) delivering a diplomatic note stating that, until "the two governments hold a full and frank exchange of views," all loans would be temporarily suspended; b) withdrawing authorization to negotiate the PL–480 agreement; c) offering an official reply in his speech at the American School in Guayaquil on October 6. (Telegram 1226 from Quito; National Archives and Records Administration, RG 59, Central Files 1967–69, AID (US) 9 Ecuador) The Department indicated "general agreement" with Coerr’s analysis, stating that, to continue economic assistance after Arosemena’s attack, would only encourage the view that the "U.S. cow, when kicked, gives more milk." Negotiations for the PL–480 agreement, as well as development loans, were therefore suspended, in accordance with the Ambassador’s recommendations. The Department declined, however, to authorize a written response, fearing the "effect of note would be to make matter bilateral issue between U.S. and Ecuador." (Telegram 50611 to Quito, October 7; ibid.) As an alternative, the Department approved Coerr’s suggestion to respond orally "to correct the record" in the American School speech doing so "in non-personal and non-polemic terms, and in context of positive description of U.S. assistance." (Telegram 49689 to Quito, October 6; ibid., AID(AFP))

 

 

337.  Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, October 7, 1967, 7:43 p.m.

 

/1/ Source: Johnson Library, National Security File, Memos to the President, Walt W. Rostow, Vol. 44. No classification marking.

 

Our ambassador in Ecuador gave what is described as a factual speech on the history of our aid relations with Ecuador. As a result of this speech they have asked for his withdrawal within forty-eight hours. We do not have the text yet of what he said but will have it tomorrow./2/

 

/2/ The text of Coerr’s speech was transmitted in telegram 1299 from Quito, October 8. (National Archives and Records Administration, RG 59, Central Files 1967–69, POL 17 US–ECUADOR)

 

I am told by Bob Sayre that Secretary Rusk thinks that we probably should not ask for the withdrawal of the Ecuadorean ambassador to Washington. I believe we should decide that tomorrow.

 

During the night Bob Sayre and Bill Bowdler will be studying the precedents and getting us more information from Ecuador.

 

I shall be in touch with Secretary Rusk tomorrow and will forward to you his recommendations plus all the materials we have bearing on the problem.

 

WWR/3/

 

/3/ Printed from a copy that bears these typed initials.

 

 

338.  Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, October 8, 1967, 1:40 p.m.

 

/1/ Source: Johnson Library, National Security File, Country File, Ecuador, 12/63–11/68. Confidential. Another copy indicates that the memorandum was drafted by Bowdler. (Ibid., Memos to the President, Walt W. Rostow, Vol. 44)

 

SUBJECT
Recall of our Ambassador to Ecuador

 

Supplementing my note of 12:10 p.m. today,/2/ these are the steps which Covey Oliver is recommending to Sec. Rusk:

 

/2/ In an October 8 memorandum to the President, Rostow reported Rusk’s decision that "we, as a great power, should not over-react to Arosemena’s childishness," presumably in reference to a proposal to retaliate by requesting Mantilla’s recall. In forwarding the text of Coerr’s speech, Rostow also commented: "Although I can understand a government being annoyed with an Ambassador that takes up, point by point, arguments made by its President—and even making fun of one—his speech hardly justified being taken as a federal case." (Ibid., Country File, Ecuador, Vol. I, 12/63–11/68)

 

1. Instruct Ambassador Coerr to leave Quito by 5:35 p.m., October 9, when the 48 hour period expires.

 

2. Call in the Ecuadorean Ambassador this afternoon to give him a note saying we will honor the request but expressing regret that Arosemena has taken offense at the free discussion of the successes and failures of the Alliance. (Tab A)/3/

 

/3/ The note, Tab A, is attached but not printed. The exchange of notes is in Department of State Bulletin, November 6, 1967, p. 621. A brief account of the Oliver–Mantilla meeting is in telegram 50652 to Quito, October 8. (National Archives and Records Administration, RG 59, Central Files 1967–69, POL 17 US–ECUADOR)

 

3. Release the two notes to the press, together with Coerr’s speech.

 

4. Also tell the press that we had planned, before we were aware of the Ecuadorean note, to ask Coerr to come to Washington to work on a study of our long-range relations with Latin America. (This is in fact true. The study is to cover our military relations.)/4/

 

/4/ As instructed in telegram 50568 to Buenos Aires, October 7. (Ibid., AID(AFP))

 

5. Not retaliate against Arosemena by asking for the recall of Ambassador Mantilla.

 

6. If asked about continued economic assistance to Ecuador, respond that Ecuador is a member of the Alliance for Progress and loans to Ecuador will continue to be judged by Alliance criteria. (From a practical standpoint this means no assistance because of Ecuadorean non-performance, unless we decide otherwise.)

 

I understand that Covey is also recommending to Sec. Rusk that he call you to get your approval on these steps./5/

 

/5/ Rusk approved these recommendations "on his own responsibility," asking only that Rostow so inform the President. (Memorandum from Rostow to the President, October 8; Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68)

 

By way of precedents, on two previous occasions Latin American governments have asked our Ambassadors to leave:

 

—by Brazil during the Eisenhower administration, for public criticism of Brazilian coffee policy;/6/
—by Haiti during the Kennedy administration, for alleged plotting against Duvalier./7/

 

/6/ On December 3, 1954, the White House announced the resignation of James S. Kemper, U.S. Ambassador to Brazil; Kemper became the source of controversy by predicting an imminent fall in the price of coffee.

 

/7/ On June 14, 1963, the Government of Haiti requested the recall of U.S. Ambassador Raymond L. Thurston.

 

The text of the Ecuadorean note is at Tab B./8/

 

/8/ Attached but not printed.

 

Walt

 

 

339.  Action Memorandum From the Assistant Secretary of State for Inter-American Affairs (Oliver) to the Under Secretary of State (Katzenbach)/1/

 

Washington, October 12, 1967.

 

/1/ Source: National Archives and Records Administration, RG 59, ARA Files, 1967–69: Lot 72 D 33, Ecuador. Secret. Drafted by Sayre and cleared in draft by Gaud and Idar Rimestad, Deputy Under Secretary of State for Management. The memorandum was originally addressed to the Secretary; the word "Under" was subsequently inserted by hand.

 

SUBJECT
U.S. Representation in Ecuador

 

Discussion:

 

The recall of Ambassador Coerr and the policy you approved on economic assistance will require some adjustments in our representation in Quito. I propose to proceed as follows:

 

1. Our Embassy will be headed by the Chargé, probably until the end of President Arosemena’s term in September 1968.

 

2. We will consider assigning an additional officer to the Embassy if a definite need is established.

 

3. After the AID Mission Director completes the review of existing loans with the Ecuadorean Government, he will be transferred and not replaced, unless and until a situation develops in which we would foresee the need to develop a new and active aid strategy toward Ecuador. We expect the review would be completed within the next six to eight weeks and that the transfers would take place as soon as possible thereafter. We expect that there will be other AID personnel changes and reductions but these cannot be identified immediately.

 

Recommendation:

 

That you approve the foregoing line of action./2/

 

/2/ Katzenbach approved this recommendation on October 16.

 

 

340.  Telegram From the Embassy in Ecuador to the Department of State/1/

 

Quito, October 17, 1967, 0430Z.

 

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1967–69, AID(US) 9 Ecuador. Confidential; Immediate. Repeated to Guayaquil and USCINCSO for POLAD.

 

1422. To be delivered 8:00 a.m. October 17, 1967. Subject: Meeting with FonMin Prado. Ref: State 51806./2/

 

/2/ In telegram 51806 to Quito, October 10, the Department forwarded instructions for the meeting with Prado. If Prado raised the issue of AID in Ecuador, the Embassy should propose a joint review to determine whether any loans required termination. In this event, the Embassy should also "make clear that we are suggesting this action as a result of President Arosemena’s statements of September 26 and that it is not in retaliation for Ambassador Coerr’s recall." (Ibid.)

 

1. Chargé called on FonMin Prado at latter’s request evening of Oct. 16. During hour-long interview variety of subjects discussed. This message covers recall Ambassador Coerr, GOE–USG relations, and U.S. assistance policy to Ecuador. Other topics (LA armaments developments, Plaza OAS candidacy, Ecuador–Peru relations) will be treated in septels./3/

 

/3/ Telegram 1444 from Quito, October 17, reported discussion on the candidacy of former President Galo Plaza as OAS Secretary General. (Ibid., OAS 8–3) No telegram has been found reporting discussion of "LA armaments developments" or "Ecuador–Peru relations."

 

2. ForMin asserted GOE request for Ambassador Coerr’s recall based on "undeniable fact" that he had become "obstacle" to continued friendly relations between GOE and USG. FonMin said President Arosemena could not be expected sit down and talk in frank and cooperative spirit with Ambassador who had ridiculed him in public speech (FonMin referred to humorous anecdote about $350 allowance and to analogies to football contained in speech as particularly offensive to President). In view this situation, FonMin said, President and he decided best way to put GOE–USG relations back on right track was to request "removal of obstacle as soon as possible". FonMin then stated at length that the GOE had always sought and would continue to seek only the closest and most cordial relations with USG./4/ (He then shifted to other matters treated in septels.)

 

/4/ Phillips later contradicted Prado’s account: "While we had some indications of a lack of personal rapport between Wym and Otto Arosemena, it seems likely that the evil genius behind the demand for Wym’s recall was Foreign Minister Prado, who apparently took full advantage of Otto’s vanity and his impetuousness." (Letter from Phillips to Lubensky, December 21; ibid., ARA/EP/E Files: Lot 70 D 247, POL 17 Persona Non Grata)

 

3. Chargé responded that USG position re recall Ambassador Coerr had been made amply clear in Department’s note of October 8 to Ecuadorean Embassy, and that there was nothing further to add except to reiterate as stated in note, USG also desired maintain traditionally friendly relations with GOE.

 

4. Stating that USG sincerely wished USAID loan agreements with GOE to constitute basis for fruitful cooperation rather than discord, Chargé then proposed bilateral review of existing loans, and suggested that GOE designate reps to meet with USG reps to consider each loan in detail. Purpose of review would be to determine specific GOE objections to terms of any loans. After GOE objections specified, USG would attempt satisfy these objections, or, failing this, would propose that loan or loans be terminated by mutual accord.

 

5. Re new loan applications to AID, Chargé stated that in interest clarifying situation, USG believed review of existing loans should be completed prior to any consideration new applications. Chargé emphasized that new loans would then be examined from standpoint AFP criteria, but that none would be approved unless GOE gave prior assurances re their acceptability.

 

6. FonMin replied that in principle review seemed sound method to arrive at differences and to attempt solve them. He asked Chargé put proposal in writing, after which he would consult with President Arosemena, who he thought would agree with idea (Embassy recommendation on how to put proposal in writing to follow)./5/ FonMin did not show concern about postponement new loan applications. He added that if review existing loans proved successful, same method could be applied to new loan applications thus ensuring beforehand their acceptability to GOE. Re meeting AFP criteria, FonMin said that GOE largely endorsed these, and recalled that President Arosemena had refused to sign Presidents’ declaration at Punta del Este not because he disagreed with contents (which FonMin said GOE supports completely), but because declaration did not go far enough.

 

/5/ In telegram 1443 to Quito, October 18, the Embassy forwarded its recommendations. (National Archives and Records Administration, RG 59, Central Files 1967–69, POL 17 US–Ecuador) The Department instructed the Embassy to submit for approval any written communications to the Ecuadorian government regarding economic assistance. (Telegram 56494 to Quito, October 19; ibid., AID(US) 9 Ecuador)

 

7. Chargé said Embassy understood GOE performance vis-à-vis AFP criteria would be subject of Oct 20 CIAP meeting. FonMin said he aware of meeting, but confessed he did not know who GOE rep would be since Intriago had resigned as FinMin. Chargé stressed importance of meeting and of GOE attendance. FonMin said he intended check to make sure GOE competently represented.

 

8. Re recent negotiations between GOE and European commercial lenders, Chargé mentioned dangers inherent such borrowings on short-term, high interest-rate conditions, and pointed out obvious contrast with concessional terms offered by AFP lending agencies. FonMin replied he first to admit AFP agency terms much more favorable, but asserted that urgency Ecuador’s needs might oblige GOE to seek loans on harder terms. He said country could not always wait the "months and years" required to negotiate loans from AFP agencies. In reply to Chargé’s question if GOE had projected its future debt-servicing burdens if it indulged in long-scale borrowing on hard terms, FonMin asserted that if proceeds wisely invested, loans could pay for themselves in increased productivity. Alluding to domestic political factors, FonMin said "government which expects some day to return must show results when first in office." He referred to President Arosemena’s promise to build one school a day for rest of his term, and implied that promise had to be kept no matter where funds came from.

 

9. Status PL 480 authorization was not raised during meeting.

 

10. Comment follows./6/

 

/6/ No further comment from the Embassy has been found.

 

Crowley

 

 

341.  Information Memorandum From the Assistant Secretary of State for Inter-American Affairs (Oliver) to Secretary of State Rusk/1/

 

Washington, December 22, 1967.

 

/1/ Source: National Archives and Records Administration, RG 59, Central Files 1967–69, POL 15–1 Ecuador. Confidential. Drafted by Kilday on December 21. A notation on the memorandum indicates that Rusk saw it.

 

SUBJECT
President of Ecuador Hopes U.S. Will Appoint New Ambassador

 

On December 20, Ecuadorean Ambassador Carlos Mantilla told me that President Otto Arosemena is most anxious that a new U.S. Ambassador be appointed soon. According to Mantilla, Arosemena fears that extreme leftists and other political antagonists will seek to build pre-electoral confusion into a situation of disorder, hoping thereby to disrupt or prevent the elections. He believes that during this critical period the presence of a U.S. Ambassador would be a major stabilizing factor as it would signify the restoration of close U.S.-Ecuadorean relations as well as President Johnson’s personal interest in the re-establishment of full constitutional government in Ecuador.

 

I told Ambassador Mantilla that President Johnson genuinely regards our Ambassadors as his personal representatives, and that he personally decides questions relating to ambassadorial appointments. I opined that Ambassador Coerr probably would have been replaced by now if President Arosemena had not chosen to express his dissatisfaction by formally and publicly requesting the Ambassador’s recall. I said that I was not aware of President Johnson’s plans regarding a successor to Ambassador Coerr nor would it be possible for me to make unsolicited recommendations to the President on this question. I did promise the Ambassador that I would inform you of President Arosemena’s feelings in the matter.

 

It is clear that the absence of a U.S. Ambassador in Quito is the cause of considerable discomfort to President Arosemena and his political faction. However, there is no convincing evidence that the extreme left has the capability or even the intention of preventing elections, or that the absence of an Ambassador in any way favors the ambitions of this political grouping. The Bureau is watching this situation closely, but at this moment I am not persuaded that our over-all interests would be served by the early replacement of Ambassador Coerr. To the contrary, in view of the insulting manner in which Ambassador Coerr was ejected, I feel that the naming of his replacement in the near future would have a most undesirable effect on the U.S. image in Ecuador and elsewhere in Latin America.

 

 

342.  Action Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, January 25, 1968.

 

/1/ Source: Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68. Confidential.

 

SUBJECT
IDB Loan to Ecuador

 

Since Punta del Este no new AID loans have been given to the Arosemena Government in Ecuador. Disbursements on existing loans have been held up pending a review of which ones Ecuador wants badly enough to meet the self-help criteria. This process will be strung out for the remainder of Arosemena’s tenure (until September 1, 1968).

 

The Inter-American Development Bank (IDB) will shortly have to decide on a $3 million loan to resettle small farmers under the agrarian reform program. The loan will be on concessional terms from the Fund for Special Operations to which we are the principal contributor and where our vote is decisive.

 

The question arises whether your injunction against lending to Arosemena applies to the IDB as well as AID.

 

I recommend that you not carry the freeze to the IDB where our opposition to a small loan to improve agriculture which meets all IBD criteria will be taken as vindictive on our part.

 

Walt

 

OK to approve IDB loan/2/
Freeze also applies to him
Call me

 

/2/ This option is checked.

 

 

343.  Information Memorandum From the President’s Special Assistant (Rostow) to President Johnson/1/

 

Washington, March 6, 1968.

 

/1/ Source: Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68. Confidential. A notation on the memorandum indicates that the President saw it.

 

SUBJECT
Ecuador

 

Last Saturday President Arosemena reshuffled his cabinet. He dropped Foreign Minister Julio Prado, the architect of his Punta del Este posture and the ouster of Ambassador Coerr. In his place he appointed Gustavo Larrea, until recently Ambassador in Washington.

 

Because Larrea is such a good friend of the United States, this is obviously intended as a conciliatory gesture toward us. In return, Arosemena hopes you will respond by appointing a new Ambassador. This was made clear when Larrea flew to Venezuela two weeks ago to talk to Covey Oliver about the impending cabinet changes.

 

Other indications of Arosemena’s desire to kiss-and-make-up prior to elections (June 2) and transfer of power (September 1) are:

 

1. his reasonably cooperative and conciliatory attitude on the joint review of their complaints about the AID program;

 

2. no attacks on the Alliance since September 1967;

 

3. the prompt release without publicity of a US tuna boat seized by an Ecuadorean frigate last week.

 

Our Chargé in Quito recommends that we respond favorably to these conciliatory actions, short of sending a new Ambassador until after the June elections. Among the things he suggests are:

 

1. let it be known publicly around April 1 that appointment of a new Ambassador is under active consideration;

 

2. resume low-level technical talks on pending loan applications (in the understanding that negotiations would not be completed until termination of Arosemena’s mandate)./2/

 

/2/ In telegram 3295 from Quito, March 5. (National Archives and Records Administration, RG 59, Central Files 1967–69, POL 17 US–ECUADOR)

 

Covey Oliver will be sending you his recommendation on how we might proceed./3/ I will withhold judgment until I see what Covey advises. In any event, we should say nothing about consideration of a new Ambassador to Ecuador until you fill the vacancies at Buenos Aires and Montevideo. There are indications that the Argentines and Uruguayans are a little restive on this score. They would take amiss any indication that Ecuador is receiving prior attention

 

/3/ Not further identified.

 

Walt

 

 

344.  Discussion Memorandum From the Deputy Director of the Office of Ecuadorean-Peruvian Affairs (Berlin) to the Assistant Secretary of State for Inter-American Affairs (Oliver)/1/

 

Washington, August 6, 1968.

 

/1/ Source: National Archives and Records Administration, RG 59, ARA/EP/E Files, 1968: Lot 70 D 478, Personal Mail. Confidential. A handwritten note reads: "For Your 3:30 pm Meeting Today." No substantive record of this meeting has been found.

 

SUBJECT
Timing of the Arrival in Quito of Ambassador Sessions

 

Discussion:

 

You will recall that Embassy Quito recommended in June that the new Ambassador not present credentials to President Arosemena, but that he arrive in Quito and present his credentials at the time of or immediately following the inauguration./2/ This office disagreed with that recommendation and argued that the best interests of the United States would be served by the Ambassador’s arrival in Quito before the end of the Arosemena administration.

 

/2/ In telegram 4823 from Quito, June 10. (Ibid., Central Files 1967–69, POL 17 Ecuador) José María Velasco Ibarra was elected on June 2 to serve a fifth term as President.

 

These opposing recommendations originated in differing judgements over the political future of Arosemena and the relationship to that future of the arrival of a new U.S. Ambassador. Briefly, the Embassy argued that the reelection of Arosemena in 1972 would not be in the interests of the United States and, accordingly, the United States should take no action that would tend to improve Arosemena’s chances for re-election. To send an Ambassador now would amount to reconciliation with Arosemena and, in the judgement of the Embassy, would rehabilitate his image and increase his potential for re-election in 1972 or later. Thus, the United States should not send an Ambassador to present credentials to Arosemena.

 

We agreed that the arrival of an Ambassador during the Arosemena administration would amount to a reconciliation with Arosemena and we maintained that this is precisely what the U.S. should seek. We judged that Arosemena stands a better than even chance of returning to the Presidency at some point in the future, and we doubted that these odds would be altered substantially by the refusal of the U.S. to effect a reconciliation with him. (Certainly the repeated election of Velasco indicates that the Ecuadorean electorate is not greatly influenced by a candidate’s past relationship with the U.S. or by fears that the U.S. might not find him acceptable.) Thus, in the possibility that Arosemena may well return to the Presidency anyway, we thought it would be wise to effect a reconciliation with him now and thereby to maximize chances of developing a better relationship with him the next time around.

 

The arguments pro and con that were fairly clear in June have become somewhat obscured with the passage of time and with new developments. Favoring presentation of credentials to President Arosemena are the following new considerations:

 

a) President Arosemena’s cooperation with the U.S. on the IBRD fisheries loan question;

 

b) Our current efforts to persuade Foreign Minister Larrea to obtain agreement from Velasco Ibarra to meet with the U.S. in a fisheries conference. Our Chargé in Quito believes that Larrea would undertake this mission with greater enthusiasm if he knew the Ambassador were to present his credentials before September 1.

 

New considerations which tend to argue against presentation of credentials include the following:

 

a) The nomination and confirmation of Ambassador Sessions/3/ already constitute something of a rapprochement with Arosemena and have been cited by Arosemena as evidence that U.S.-Ecuadorean relations are as good as ever.

 

/3/ According to the President’s Daily Diary, the issue of an ambassadorship for Edson O. Sessions, a Chicago businessman and former Ambassador to Finland, was raised in a June 19 telephone conversation between the President and Senate Minority Leader Everett Dirksen (R–Illinois). (Johnson Library) Dirksen called the President to discuss a possible Latin American post for Sessions on July 3, the same day Crowley requested verbal agreement for Sessions as U.S. Ambassador to Ecuador. (Telegram 5222 from Quito, July 4; National Archives and Records Administration, RG 59, Central Files 1967–69, POL 17–1 US–ECUADOR) On July 26 the White House announced the nomination, which was confirmed by the Senate 3 days later.

 

b) The arrival of the Ambassador just before the inauguration, rather than a month or six weeks before the inauguration, would be so obviously designed to put the U.S. blessing on Arosemena that it could displease Velasco and add a minor but unnecessary irritation to the U.S. relationship with him. Our Chargé in Quito thinks it possible that the arrival of the Ambassador now could make Velasco less willing to commit himself to a fisheries conference before he takes office.

 

c) The arrival of the Ambassador after the inauguration might be taken by Velasco as a highly complimentary U.S. effort to make a qualitative distinction between him and Arosemena.

 

Conclusion:

 

The arguments for and against the arrival of Ambassador Sessions are relatively equal in weight and strength. His arrival would put us on an excellent footing with President Arosemena in the event Arosemena returns to the Presidency, but his nomination and confirmation already have taken the sting out of our previous posture of no Ambassador for Arosemena. His arrival before September 1 might well be an irritant in the relationship with Velasco but this is likely to become insignificant as time passes. Arrival before September 1 might well induce Arosemena to try harder to please us on the fisheries issue, but it might also lead Velasco to a less accommodating position on the same problem.

 

Recommendation:

 

Although we no longer see a clear and strong advantage to the U.S. on either side of the issue, we incline to accommodation of President Arosemena and Foreign Minister Larrea. Therefore, we recommend that Ambassador Sessions proceed to Quito to present his credentials to President Arosemena and to attend the inauguration ceremony and that he then return to Washington to arrange his business and personal affairs before departing to take up his post on a permanent basis./4/

 

/4/ Sessions presented his credentials to President Velasco in a formal ceremony on September 26. (Telegram 6625 from Quito, September 30; ibid.)

 


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