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INSIDE THE COMPANY: CIA DIARY

Part Two

Washington DC July 1960

The training programme has ended at last. We spent the last week of June in Baltimore running .in and out of department stores chasing our instructors on surveillance exercises. It was just like earlier exercises in the cities in Virginia except it went on day and night and included bugging hotel rooms, loading and unloading 'dead drops', writing invisible messages, and several difficult agent meetings. Most of us spent the few free hours at night at the Oasis on East Baltimore Street -- without par in really raunchy, fleshy, sweaty stripping.

My feelings were mixed about leaving Camp Peary. It was an isolated sort of life but the club was fun -- the bar, ping-pong, chess. What I'll miss most is the athletic programme and that nice gym.

After a short vacation I checked back with Ferguson ‡ and he sent me over to the personnel officer in the Western Hemisphere (WH) Division. He didn't seem to have expected me and after waiting a couple of hours he sent me to the Venezuela desk, which, I discovered, consists of the desk officer, a secretary, and now me. We are part of Branch 3 of WH Division which covers the Bolivarian countries: Venezuela, Colombia, Ecuador, Peru and Bolivia - and we also handle matters related to the Dutch islands, Aruba and Curacao, British Guiana and Surinam. Branch 1 has Mexico and Central America, Branch 2 has the Caribbean, Branch 4 has Brazil and Branch 5 has the cono sur: Uruguay, Paraguay, Argentina and Chile. Cuban affairs are centred in a special branch and the paramilitary operation (it looks like a repeat of the Guatemala operation but I can't get many details) has taken over a wing of Quarters Eye. All the rest of the division is in Barton Hall near Ohio Drive and the Potomac.

WH Division Is the only area division of the DDP that isn't over in the buildings along the Reflecting Pool, and more and more I've been getting the impression that this division is looked down upon by the rest of the DDP. It seems that the physical separation of the division from the rest of the DDP has created the concept of WH as a fiefdom of Colonel J. C. King ‡ -- he's been WH Division Chief now for some years. The other reason for disdain towards WH (I hear these stories from JOT's who have been assigned to other divisions) is that most of the division leadership -- the branch chiefs and the station chiefs in the field -- are a fraternity of ex-FBI officers who came into the CIA in 1947 when the CIA took over FBI intelligence work in Latin America.

It's embarrassing because they call us the 'gumshoe division', even though the best communist party penetration operations are in Latin America -- WH in fact was responsible for getting the secret Krushchev speech to the 20th CPSU Congress, which the Agency made public long before the Soviets wanted it to be. And everybody knows about Guatemala. The problem is that the glory for super-spooky achievements is enjoyed mostly by EE officers -- old hands from Berlin and Vienna. We'll see how they treat us after Castro gets thrown out!

I can't say I'm wild about the work I've been given. I inherited a desk full of dispatches and cables that nobody had done anything about and trying to make sense out of all this is frustrating -- I have to keep bothering people to find out what all the office symbols mean on the routing sheets, who takes action on what, and which is more and which is less important. Most of my work is processing name checks and reports.

The name checks are even duller than processing reports. The first one I did was on some Jose Diaz and I didn't realize it was such a common name. When I got the references back from Records Integration Division (RID) there were over a thousand traces on people of that name. Trace requests for RID have to be narrowed down by date and place of birth and other identifying data. The bulk of the name checks are for the Standard Oil subsidiary in Venezuela -- the company security officer is a former FBI man and he checks the names of prospective Venezuelan employees with the CIA before hiring -- trying to keep out the bad guys.

This work routine has to improve -- I can't spend a couple of years on reports and name checks.

Washington DC August 1960

I must be living right -- and I'm almost too afraid to think about it -- but I may just get a field assignment sooner than I could ever imagine. Yesterday morning my desk chief, C. Harlow Duffin, ‡ asked me if I was interested in working overseas as he knows of an operations officer slot opening up next month in Quito, Ecuador, and if I'm interested he'll see what he can do. But he said nobody talks about field personnel assignments before they're approved so I've got to keep it secret until he says I can talk. Next month! But he said I wouldn't go right away. First, I'll have really to learn Spanish, then process into the Department of State -- lots of details to take care of first.

Yesterday morning I picked up a book and some briefing material from the Ecuador desk, and I've been reading this instead of doing my work. I can't seem to lay it aside. Talk about banana republics and underdevelopment! Ecuador must be classic: torn apart as it is by internal contradictions and ruled by privileged oligarchies while bigger neighbours gobbled up enormous territories that Ecuador couldn't defend.

The overwhelming international reality for Ecuador is Peru and the 1942 Protocol of Rio de Janeiro whereby Peru made good its claim to over one third of what until then Ecuadoreans had considered national territory. In July and August 1941, after several months of negotiations had failed, Peruvian troops overwhelmed Ecuadorean defences in the south -- and in the eastern Amazonian region. The Rio Protocol was signed after new negotiations and Peru got the disputed territory, mostly Amazonian jungle. There is a Peruvian side to the story, of course, but Ecuador will never forgive having to sign the Rio Protocol under duress. The US was already at war and we needed peace in South America for our own war effort. Although the Peruvian victory in 1941 was only the latest in a series of disputes that go all the way back to pre-hispanic history, for Ecuador, easily defeated and claiming dismemberment by force, the Rio Protocol is a source of national humiliation less than one generation removed. The US government is deeply involved because we promoted negotiation of the Rio Protocol and are still responsible for enforcing it -- along with the other guarantor powers: Brazil, Chile and Argentina.

While Peru is the great international reality for Ecuador, the dominant national reality is the division of the country between sierra and coast. Although the Andes split the country down the middle, the eastern region is mostly tropical jungle divided by Amazonian tributaries. Some years ago exploration was made for petroleum but the cost of a pipeline over the Andes wasn't justified by the discoveries. The oriente, then, with its sparse population (including head-shrinking Indians) counts very little in the national life. The other two regions, the Andes highlands and the Pacific coast, are almost equally divided in area and population, and their interests are traditionally in conflict.

Liberal revolution came to Ecuador in 1895 and the main victim was the Church, as the dominant coastal forces behind the revolution took control of national policy out of the hands of the traditional sierra landowners. Church and State were separated, lay education was established, civil marriage and divorce were instituted, and large Church properties were confiscated.

Following the revolution in 1895 the Liberal Party dominated Ecuadorean politics as liberals joined conservatives in the landowning aristocracy while conditions changed very little for the overwhelming mass of the population completely outside the power structure. Even so, Ecuadorean politics in the twentieth century is not just another history of violent conservative-liberal struggle for spoils of office -- it is indeed that, but much more. Ecuador has one of the most amazing Latin American politicians of the century: Jose Maria Velasco Ibarra -- elected President once again just two months ago. This is the fourth time he's been elected President and none of his terms have been consecutive. And of his three previous times in power, two ended before the constitutional term was over because of military coups against him.

Velasco is the stormy petrel of Ecuadorean politics, a spellbinding orator whose powers of rhetoric are irresistible to the masses. He is also an authoritarian who finds sharing power with the Congress very difficult. His politics are as unpredictable as his fiery temperament and he has taken conflicting positions on many political issues, thereby attracting support from all established political parties, at one time or another. He won the June elections by the largest margin ever attained by an Ecuadorean presidential candidate and he did it in his typically clever fashion. Running as an independent he allied himself with the impoverished masses in violent tirades against the ruling oligarchies who, he claimed, were behind the candidates of the Liberal and Conservative parties. He called for fundamental economic and social change, an end to rule by oligarchies and political bosses, and a fairer distribution of the national income. On this populist appeal Velasco got almost 400,000 votes, a smashing victory, and his denunciations of the Rio Protocol during the campaign made him the champion of Ecuadorean nationalism.

Velasco is due to take office in September but the station in Quito isn't taking any bets on how long he'll last. After three consecutive Ecuadorean presidents have served out their terms, perhaps the instability of the past is ending. Velasco's term is for four years, but taking into account the fact that he is Ecuador's 70th President in 130 years of independence one can't be too sure. I hope I'll be there to see.

Washington DC August 1960

I know I'm over-eager and impatient but I thought I'd go mad during the week they were deciding. Duffin finally called me in and said the Branch Chief, Edwin Terrell, ‡ had approved my nomination and that the reaction in Colonel King's office was also favourable. The officer who is in the position now is being transferred to Guayaquil as Base Chief in September and the station is calling for a replacement right away. The WH personnel officer is arranging for me to go into full-time Spanish training with a tutor so that I can get to Quito as soon as possible. Cover for the job is Assistant Attache in the US Embassy political section, which means I'll have diplomatic status and 'integration' with the State Department as a Foreign Service Officer.

Then Duffin let me in on a secret. He said he is scheduled to go to Quito as Chief of Station (COS) next summer which is why he picked me. Meanwhile, he said, I'll be working with one of the best-liked COS's in WH Division: Jim Noland. ‡ Even with the Spanish training and the time needed for State Department integration, Duffin says I'll still be in Quito before Christmas.

Duffin then set up a meeting for me with Rudy Gomez, ‡ the Deputy Division Chief who gives the final approval on all lesser personnel assignments. He's a gruff sort. Without looking up he said that if I didn't have a good reason for not going to Quito, then I'd have to go. I said I wanted to go, played it real straight and got his approval. Apparently I'm one of the first of our JOT class to get a field assignment -- the only one I've heard of so far who will get out before me is Christopher Thoren ‡ who's being assigned this month under State Department. cover in the US mission at the United Nations.

Washington DC August 1960

Getting to know Ecuador is at once stimulating and sobering. The new Congress, elected in June with Velasco, opened on 10 August although Velasco doesn't take office until 1 September. If the tactics of Velasquistas in the Congress are any indication, the new government may dedicate itself more to persecuting the Poncistas of the outgoing regime than to governing the country. The Velasquistas have a wide plurality in Congress but are just short of a majority. At the opening, which consisted of the annual messages of President Ponce and the President of the Supreme Court, Ponce was overwhelmed by the insults and jeers from the screaming Velaquista-packed galleries, unable to be heard during the entire three-and-a-half-hour speech. The President of the Supreme Court, however, followed Ponce and was heard with silence and respect. Congressional sessions since then have been dedicated to efforts by the Velasquistas to discredit the Ponce government, and Ponce's two most important ministers, Government (internal security) and Foreign Relations, have resigned rather than face humiliation in interpellations (political interrogations) by the Congress.

Attacks by Velasquistas against Ponce and his supporters reflect traditional rivalries but are especially acute now because the Velasquistas are beginning to take revenge for government repression against them during the electoral campaign and even earlier. The most notorious incident was at a Velasquista demonstration on 19 March when five Velasquistas were killed and many wounded. The demonstration was to celebrate Velasco's arrival in Quito to begin the political campaign after several years of self-imposed exile in Argentina. The Velasquista campaign that followed was as much a campaign against Ponce and traditional Ecuadorean oligarchies as it was in favour of political policies proposed by Velasco. While reform proposals for a fairer distribution of the national income and more efficient government administration were central to the Velasco campaign, many are sceptical of his personal stability as well as his ability to break the power of the one hundred or so families that have controlled the country for generations.

The people, nevertheless, liked what they heard from Velasco because this country's extreme injustices and poverty are so acute. Not only is Ecuador the next-to-the-poorest country of South America in terms of per capita annual income (220 dollars -- about one third of Argentina's and less than one tenth of ours) but even this low average amount is extremely unevenly divided. The top 1 per cent of the population receives an income comparable to US standards while about two thirds of the population get only on average a monthly family income of about 10 dollars. This lower two thirds, consisting largely of Indians and people of mixed blood, are simply outside the money economy, completely marginalized and without social or economic integration or participation in the national life.

Except among those who would be adversely affected, there is wide agreement that the root of Ecuador's extremes of poverty and wealth is in land tenure. As in other countries the best lands belong to large landowners who employ relatively few rural workers and thereby contribute to the growing urban unemployed. The small plots usually cannot produce more than a subsistence income due to land quality and size. Even .on the coast where the cash crops of bananas, coffee, cacao and rice are raised on small- and medium-sized properties, fluctuating prices, marketing difficulties, scarce credit and low technification combine for low productivity and a precarious existence for salaried workers.

Thus land reform and a stable market for export crops are fundamental for the economic development necessary before Ecuador can begin to invest adequately in facilities for education, health-care, housing and other possible benefits. Indicators are typical of poor countries: poor diet; high incidence of debilitating diseases caused by intestinal parasites from bad drinking water; 370,000 children unable to attend school this year because no schools exist for them; a housing deficit of 580,000 units in a country of 4.3 million.

Solutions to this misery are being sought both externally and internally. In the external sector the Ecuadoreans are making efforts to stabilize the falling prices that in recent years have forced them to produce ever greater quantities in order to sustain imports. Also of great importance is foreign aid obtained in part from the International Cooperation Administration (ICA) which has a technical assistance mission in Ecuador. Internally, the Ecuadorean government must embark on a programme of reforms: agrarian reform to raise productivity and increase rural employment; fiscal reform to increase government revenues and redistribute income; administrative reform to improve the government administration and the myriad agencies that currently enjoy autonomy -- and to reduce corruption. Already a movement is underway to abolish the huasipungo, a precarious form of tenure, although government land policy is mainly orientated towards colonization and opening of new lands with limited success. Lowering the population growth, now up to 3.1 per cent annually, is of obvious importance, but is hindered by tradition and Catholic Church policy. Somehow all of these programmes will contribute to raising the rate of economic growth and to increasing the benefits available to the marginalized two thirds of the population. Promises for these reforms and increased benefits won Velasco his sensational victory, and he'll soon have the chance to deliver.

Washington DC September 1960

For several weeks I've been studying Spanish full-time with a tutor in Arlington, and on the tapes in the language lab. I'll probably be in this routine until November when I get integrated to the State Department and take the two-week orientation course at the Foreign Service Institute. Meanwhile I stop in each morning to see Duffin and read more background material at the Ecuadorean desk.

Velasco is now President. He has embarked on two early policies that affect operations of the Quito station and other matters of concern to us. First, he is trying to purge all the supporters of Ponce from government employment, and secondly, he is stirring up the border problem with Peru by declaring the Rio Protocol null and void.

Immediately after taking power Velasco relieved forty-eight military officers from their assigned duties and placed them at the disposition of the Ministry of Defence. Velasco also started a purge in the National Police, starting with the two senior colonels Who were the station's main liaison agents. They were arrested and charged with participating in the 19 March riot.

More serious was the forced departure of our Station Operations Officer under Public Safety Cover with the United States Operations Mission (USOM) of the ICA programme. Our Station Officer, Bob Weatherwax, ‡ had been in the forefront directing the police during the 19 March riot, and he was clearly identified because of his very blond hair and red face - practically an albino colouring. As soon as Velasco was inaugurated Weatherwax and Jim Noland, the COS, were notified by Jorge Acosta Velasco, ‡ the President's nephew and family favourite (he has no children), that Weatherwax should leave the country for a while to avoid being dragged into the prosecutions for the 19 March affair. Acosta, who is a close friend of both Weatherwax and Noland, made the suggestion only to be helpful, not as an official act. Nevertheless, Noland agreed and Weatherwax is now back in Washington killing time until he can return.

The government purge is being run mostly by Manuel Araujo Hidalgo who was elected to the Chamber of Deputies from Pichincha Province (the Quito region) and who is now Minister of Government. He was appointed after Velasco fired his first Minister of Government only a week after taking office. Araujo had to resign the Deputies seat but he is clearly the leader of the Velasquista mobs.

Araujo is an extreme leftist and ardent defender of the Cuban Revolution -- exactly the wrong man for the most important internal security job. He is particularly hostile to the US, and the station is fearful that he may jeopardize the Public Safety Programme because he is also in charge of the National Police. The real danger is that all our efforts to improve the government's security capabilities in preparation for the 11th Inter-American Conference -- now just six months away -- may go down the drain.

Araujo's purge is running not only into the military services and the police. The civilian government employees are also being purged of Ponce supporters -- helped especially by the Congress's repeal of the Civil Service Career Law passed during the Ponce administration. Velasco obviously wants to pack the government with his own people.

Velasco's declaration in his inaugural speech that the Rio Protocol is void has been followed by rising tension and fears that the dispute may jeopardize the Inter-American Conference. Ecuadoreans are without doubt behind Velasco on the matter, but Velasco is using the issue to denounce any opposition to his policies as anti-patriotic and prejudicial to a favourable solution of the boundary problem. So far the Conservative Party and the Social Christians, while defending the Ponce administration, have not declared open opposition to Velasco.

Washington DC October 1960

Headquarters files on the operations of the Quito station and its subordinate base in Guayaquil reflect the very careful analysis of the operational environment that is always the framework within which operations are undertaken. Although the analysis includes assessments of such factors as security and cover, the most important part deals with the enemy.

The Communist Party of Ecuador (PCE)

Although the PCE has been a legal party since World War II, it has never been able to obtain the 5000 signatures necessary for inscribing candidates in national elections. However, Pedro Saad, the PCE Secretary-General, held the seat as Functional Senator for Labour from the coast from 1947 until last June when he was defeated through a Guayaquil base political-action operation. (The Ecuadorean Senate has a number of 'functional senators' from coast and sierra representing special interest groups, e.g. labour, commerce, education, agriculture, the military services.) Membership in the PCE is estimated by the station at around 1000 with perhaps another 1000 members in the Communist Youth of Ecuador (JCE). Almost all of the members of the PCE National Executive Committee reside in Guayaquil. With respect to the emerging Sino-Soviet differences the PCE national leadership supports the Soviets although some PCE leaders in the sierra, particularly in Quito, are beginning to lean towards the more militant Chinese position.

In the elections this year the PCE joined with the left wing of the Socialist Party and the Concentration of Popular Forces (CFP) to back a leftist candidate for President, the Rector of Guayaquil University, who received only about 46,000 votes -- just 6 per cent of the total. PCE strength, however, is not measured in voter appeal but in the strength of labour, student and youth organizations in which its influence is strong.

The Socialist Party of Ecuador (PSE)

Although much larger than the PCE, the Socialist Party has cooperated for many years with the Communists in the leadership of the labour movement. Recently the Socialists have split into a right wing which formed an alliance with the Liberal Party in the unsuccessful presidential campaign of Galo Plaza this year, and a left wing which voted with the PCE and the CFP.

Because of its support for the Cuban Revolution and of violent revolutionary principles, the left-wing Socialists are dangerous and inimical to US interests. Their successes, however, are concentrated in the labour movement and intellectual circles. The President of the Ecuadorean Workers' Confederation is a leftwing Socialist as is the Functional Senator for Labour from the sierra.

The Ecuadorean Workers Confederation (CTE)

Founded by the Communists and the Socialists in 1944, the CTE is by far the most dominant labour confederation in Ecuador and a member of the World Federation of Trade Unions (WFTU). Although the Secretary-General of the PCE, Pedro Saad, headed the CTE at the beginning, a Socialist took over in the late 1940s and this party is still in nominal control. However, the Communists retained the number two position and are now considered to exercise dominant if not complete control in the CTE. CTE membership is estimated at 60,000 -- less than 10 per cent of the poorly organized labour force, but enough to cause serious trouble.

The Ecuadorean Federation of University Students (FEUE)

Consistent with the traditional leftist-activist student movement in Latin America, the FEUE -- the principal Ecuadorean national student union -- has been under frequent, if not continuous, control by PCE, JCE and left-wing Socialists. Its loud campaigns are directed against the US presence in Ecuador and Latin America, mainly US business, and strongly in support of the Cuban Revolution. When appropriate issues are presented the FEUE is capable of mobilizing the students, secondary students included, for strikes and street manifestations as well as propaganda campaigns. It is supported by leftist professors and administrators in the five state universities in Quito, Guayaquil, Portoviejo, Cuenca and Loja.

The Revolutionary Union of Ecuadorean Youth (URJE)

In 1959 the youth organizations of the Communists, the Socialists and the Concentration of Popular Forces formed URJE which has become the most important leftist-activist youth movement. It engages in street demonstrations, wall-painting, circulation of f1ysheets, intimidation -- agitation of many kinds for revolutionary causes. Although URJE denies that it is a communist front, the station considers it under PCE control and the most immediate and dangerous threat for terrorism and armed insurgency. It is stronger in Guayaquil than in Quito, and its membership in both places totals about 1000. URJE gives unqualified support to the Cuban Revolution and several URJE leaders have travelled to Cuba, probably for revolutionary training.

Hostile Elements in the Ecuadorean Government

The Velasquista movement, as a heterogeneous populist movement contains political colourings from extreme right to extreme left. The Minister of Government, Manuel Araujo Hidalgo, is our most important enemy in the government, but others, such as the Minister of Education and various appointees to lesser posts, are also dangerous. The station has a continuing programme for monitoring leftist penetration in the government, and the results are regularly reported to headquarters and to the Ambassador and the State Department. Aside from the National Government, the mayors of the provincial capitals of Ambato and Esmeraldas are Revolutionary Socialists.

The Cuban Mission

The Cuban Embassy consists of the Ambassador and four officials. The station lacks concrete information on support by the Cuban Embassy to Ecuadorean revolutionary organizations, but their overt contacts with extreme leftists leave little doubt. Araujo is their angel in the government and of course they are supported by leftists throughout the country. While the station is making efforts to penetrate the Embassy -- and the Guayaquil base is doing the same against the one-man Cuban Consulate -- the main CIA drive is to promote a break in diplomatic relations through propaganda and political-action operations.

The Czech Mission

Ecuador broke diplomatic relations with Czechoslovakia in 1957 but during his last week in the presidency, Ponce received the Czech Minister to Brazil and relations were again established. The station expects that within a few weeks or a little longer the Czechs will try to establish a diplomatic mission in Quito which undoubtedly will include intelligence officers.

Operations of the Quito station and the Guayaquil base are directed against these targets and are laid down in the Related Missions Directive (RMD) for Ecuador, which is a general statement of priorities and objectives.

PRIORITY A

Collect and report intelligence on the strength and intentions of communist and other political organizations hostile to the US, including their international sources of support and guidance and their influence in the Ecuadorean government.

Objective 1: Effect agent and/or technical penetrations at the highest possible level of the Communist Party of Ecuador (PCE), the Socialist Party of Ecuador (PSE-revolutionary), the Communist Youth of Ecuador (JCE), the Revolutionary Union of Ecuadorean Youth (URJE) and related organizations.

Objective 2: Effect agent and/or technical penetration of the Cuban missions in Ecuador.

PRIORITY B

Collect and report intelligence on the stability of the Ecuadorean government and on the strength and intentions of dissident political groups.

Objective 1: Maintain agents and other sources at the highest levels of the government, the security services and the ruling political organization.

Objective 2: Maintain agents and other sources in opposition political parties, especially among military leaders favourable to opposition parties.

PRIORITY C

Through propaganda and psychological warfare operations: (1) disseminate information and opinion designed to counteract anti-US or pro-communist propaganda; (2) neutralize communist or extreme-leftist influence in principal mass organizations or assist in establishing or maintaining alternative organizations under non-communist leadership.

Objective 1: Place appropriate propaganda in the most effective local media.

Objective 2: Support democratic leaders of political, labour, student and youth organizations, particularly in areas where communist influence is strongest (Ecuadorean Federation of University Students (FEUE); Ecuadorean Workers Confederation (CTE)), and where democratic leaders may be encouraged to combat communist subversion.

That is a sizeable order for such a small station and base -- although the CIA budget for Ecuador is a little over 500,000 dollars for this fiscal year. The Quito station consists of the Chief, James B. Noland; ‡ Deputy Chief (this job is vacant and will not be filled until early next year); one operations officer which is the job I'm being sent to; a reports officer, John Bacon, ‡ who also handles several of the most important operations; a communications officer; an administrative assistant (she handles the money and property and doubles as Noland's secretary); and a secretary-typist. The entire station is under cover in the political section of the Embassy with the exception of Bob Weatherwax, ‡ the operations officer under Public Safety cover in USOM.

The Guayaquil base forms the entire small political section of the Consulate, consisting of a base chief, Richard Wheeler, ‡ (my predecessor in Quito); one operations officer; an administrative assistant who also handles communications; and a secretary-typist.

The general directives of the RMD are put into practice through a number of operations, making use of agents we have recruited, and which are summarized now in some detail, first so far as the main station at Quito is concerned, then for the Guayaquil base.

Quito Foreign Intelligence and Counter-Intelligence Operations (FI-CI)

ECSIGIL. This is our most important penetration operation against the Communist Party of Ecuador and consists of two agents who are members of the PCE and close associates of Rafael Echeverria Flores, principal PCE leader in the sierra. The agents are Mario Cardenas, ‡ whose cryptonym is ECSIGIL-1, and Luis Vargas, ‡ who is ECSIGIL-2. They have been reporting for about four years since their recruitment as 'walk-ins' after their disillusionment with the PCE. Although the agents are close friends and originally came to the station together, they have since been discouraged from associating too closely, so that if one is ever blown, the other will not be contaminated. The separation is also designed to prevent their collaborating over what they report.

Cardenas is directed through a cutout, Mario Cabeza de Vaca ‡ a Quito milk producer who became a US citizen through military service in World War II but returned to Ecuador afterwards. He is married to an American who runs the food and liquor commissary of the US Embassy. Vargas is directed through another cutout, Miguel Burbano de Lara, ‡ who is the Quito airport manager of Pan American-Grace Airways. The cutouts are not supposed to know each other's identity, although each knows that Vargas and Cardenas are reporting, and they meet separately with the station Reports Officer, John Bacon, who handles this operation.

Although neither of these agents holds important PCE elective positions, they are extremely close to Echeverria and the decision-making process in Quito. They receive information on practically all matters of importance, and the ECSIGIL project accounts for an average of about five or six disseminated intelligence reports in Washington each week.

ECFONE. This operation consists of an agent penetration of the PCE and his cutout who also reports on the policy and plans of the Velasco government. The recruitment of the PCE agent, Atahualpa Basantes Larrea, ‡ ECFONE-3, is one of the more interesting recent station accomplishments. Early in 1960 when the leaders of Velasco's political movement began to organize for Velasco's return from Buenos Aires and the presidential campaign, Oswaldo Chiriboga, ‡ ECFONE, was a Velasquista leader reporting to the station on Velasco's political campaign. Chiriboga advised one day that he had recently seen his old friend, Basantes, who had been active in Ecuadorean communism but had drifted away and was now in dire financial straits. Noland, the COS, directed Chiriboga to suggest to Basantes that he become more active in the PCE and at the same time become an adviser to Chiriboga on PCE reaction to the Velasco campaign. Care was taken from the beginning to establish a secure, discreet relationship between Chiriboga and Basantes, and Noland provided Chiriboga with modest sums for Basantes's 'expenses' as adviser -- the classic technique for establishing a developmental agent's dependence on a station salary. Basantes had no trouble expanding his activities in the PCE and soon he was reporting valuable information. Chiriboga, of course, moved carefully from innocuous matters to more sensitive information while easing Basantes into an agent's dependency. Although the original rational for Basantes's reporting ended with the elections in J~ne, Chiriboga has since been able to convince Basantes of the continuing need for his' advice'.

ECOLIVE. An agent penetration of the Revolutionary Union of Ecuadorean Youth (URJE), ECOLIVE-l, ‡ is a recent walk-in who is considered to have long-range potential for penetrating the PCE or other revolutionary organizations into which he may later be guided. For the moment he is reporting on the activities and plans of URJE for street demonstrations in support of Velasco's attempt to nullify the Rio Protocol.

ECCENTRIC. This agent is a physician, Dr. Felipe Ovalle, ‡ with a history of collaboration with the US government that goes back to FBI days during World War II. Although he is a Colombian he has lived in Ecuador for many years where he has a modest medical practice, most of which comes from his inclusion on the US Embassy list of approved medical examiners for Ecuadorean applicants for visas. Ovalle's 201 agent file reveals that verification of his medical degree, supposedly obtained at a Colombian university, has proved impossible. Through the years he has developed a close relationship with President Velasco, whom he now serves as personal physician. Ovalle reports the results of his weekly meetings with Velasco to the station. Occasionally the information from this operation is interesting enough to disseminate in Washington, but usually the information is inferior to that of other agents.

ECAMOROUS. The main station activity in security preparations for the Inter-American Conference is the training and equipping of the intelligence department of the Ecuadorean National Police. The intelligence department is called the Department of Special Services of the National Police Headquarters, and its chief is Police Captain Jose Vargas, ‡ ECAMOROUS-2, who has been given special training here and in headquarters. Weatherwax, our case officer under Public Safety cover, works almost exclusively with Vargas, who has been in trouble recently for being the leader of a secret society of pro-Velasco young police officers. Secret societies in the police, as in the military, are forbidden.

In spite of all our efforts, Vargas seems incapable of doing very much to help us, but he has managed to develop three or four marginal reporting agents on extreme leftist activities in his home town of Riobamba, a sierra provincial capital, and in Esmeraldas, a coastal provincial capital. Reports from these sources come ' directly to Vargas, and from him to the station, because there is little interest in this type of information further up the line in the Ecuadorean government. On the contrary, with Araujo as the minister in charge of the National Police, intelligence collection by a police officer is a risky activity.

Intelligence needs during the Inter-American Conference will have to be satisfied largely by the station directly through unilateral operations but before information of this kind is passed to Vargas it will have to be disguised to protect the source. Although strictly speaking ECAMOROUS is a liaison operation, the police intelligence unit is completely run by the station. Vargas is paid a salary by Noland with additional money for his sub-agents and expenses. Some technical equipment such as photo gear and non-sensitive audio equipment has been given to Vargas by the station, and we have trained his chief technician, Lieutenant Luis Sandoval. ‡

Vargas is young and rather reckless but very friendly, well-disposed and intelligent. Although he is considered to be excellent as a long-term penetration of the National Police, he could be worked into other operations in the future. His first loyalty is undoubtedly to the station, and when asked he is glad to use his police position as cover for action requested by the station.

ECOLE. This is the station's main penetration operation against the Ecuadorean National Police other than the intelligence side, and it also produces information about the Ecuadorean Workers Confederation (CTE). The principal agent, Colonel Wilfredo Oswaldo Lugo, ‡ ECOLE, has been working with the US government since hunting Nazis with the FBI during World War II. Since 1947 he has been working with the Quito station, and in the police shuffle and purge during Velasco's first weeks in office, Lugo was appointed Chief of the Department of Personnel of the National Police Headquarters.

In contrast with the fairly open contact between Noland and Weatherwax and Captain Vargas, the intelligence chief, contact between Noland and Lugo is very discreet. The agent is considered to be a penetration of the security service and in times of crisis his reporting is invaluable, since he is in a position to give situation reports on government plans and reactions to events as reflected in orders to police and military units.

Over the years Colonel Lugo has developed several agents who report on communist and related activities. Two of these agents are currently active and are targeted against the CTE. Their reporting is far inferior to PCE penetration agents such as Cardenas, Luis Vargas and Basantes, but they are kept on the payroll as insurance in case anything ever happens to the better agents. Noland also pays a regular monthly salary to Colonel Lugo.

ECJACK. About two years ago the Army established the Ecuadorean Military Intelligence Service (SIME) under Lieutenant- Colonel Roger Paredes, ‡ ECJACK, who then made contact with Noland. Paredes had been trained by the US Army at Fort Leavenworth some years earlier. In 1959, however, discouraged by the lack of support from his government for SIME, Paredes suggested to Noland that he might be more effective if he retired from the Army and worked full time with the station. At this point SIME was only a paper organization, and even today is still useless.

Paredes's suggestion to Noland came just at the time the station investigations and surveillance team was discovered to be falsifying reports and expenses. The old ECSERUM team was fired and Paredes retired from the Army to form a new team. He now runs a five-man full-time team for surveillance and general investigations in Quito and, in addition, he has two reporting agents in the important southern sierra town of Loja. These two agents are on the fringes of communist activities there.

Station direction of this operation is entirely through Lieutenant- Colonel Paredes, who uses the SIME organization as cover and as ostensible sponsor for the other agents in the operation. Another sub-agent is the chief of the identity card section of the Ministry of Government. As all citizens are required to register and obtain an official government-issued identity card, this agent provides on request the full name, date and place of birth, names of parents, occupation, address and photograph of practically any Ecuadorean. His main value is to provide this data for the station LYNX List, which is a list of about 100 communists and other activists of the extreme left whom the station considers the most dangerous. The LYNX List is a requirement for all Western Hemisphere stations, to be maintained in case a local government in time of crisis should ask (or be asked by the US government) for assistance in the emergency preventive detention of dangerous persons. The ECJACK team spends part of its time updating addresses and place of employment of current LYNX List members and in getting the required information on new additions.

The team is also used for following officers of the Cuban Embassy or for following and identifying persons who visit the Embassy. Their surveillance work is recognized by the station as clumsy and indiscreet, but plans call for additional training, vehicles (they have no team transportation) and perhaps radio equipment. Paredes, of course, maintains close contact with military officers in SIME so that the station can monitor that service and confirm the reporting from the US Army Major who is the Military Assistance Advisory Group (MAAG) intelligence advisor.

ECSTACY. In the central Quito post office, ECSTACY-1 ‡ is the chief of the incoming airmail pouch section. As pouches arrive from Cuba, the Soviet bloc and Communist China, he sets them aside for his brother, ECSTACY-2, ‡ who passes them to the station. John Bacon, the station reports officer, processes the letters and returns them the same day for reinsertion in the mails. Payment is made on a piecework basis. Processing requires surreptitious opening, reading, photography of letters of interest, and closing. Each week Bacon reports by dispatch the gist of the letters of main interest, with copies to headquarters and other interested stations.

As most of the letters are from Ecuadoreans who are visiting the countries from which the letters are mailed, this postal intercept operation enables the station to monitor travellers to communist countries and their potential danger when they return. The letters also reveal leads to possible recruitment of Ecuadoreans who have been invited to visit communist countries, as well as those selected for scholarships to schools such as Moscow's People's Friendship University. Still other letters are from residents of the country where the letter originates, who are writing to Ecuadoreans who have visited that country. Attention is paid to possible political disaffection of the writers, for recruitment as agents in the country where the letter originates.

Since the letter intake amounts to about thirty to forty letters per day, the ECSTACY operation is time-consuming for the station officer in charge. Nevertheless it is a valuable support operation and of considerable interest to the Cuban, Soviet, Eastern Europe and Communist Chinese branches in the DDP in headquarters.

ECOTTER. Travel control is another standard support function enabling the station to monitor the movements of communists, politicians and other people of interest on the flights between Quito and other cities and on the international flights. ECOTTER- 1, ‡ an employee of the civil aviation office at the Quito airport, passes copies of all passenger lists to ECOTTER-2, ‡ who brings them to the station in the Embassy. The passenger lists, which arrive in the station only one day after the flights, are circulated for perusal by each station officer and returned when the new batch is delivered.

ECOTTER-1 has arranged with airport immigration inspectors to note on the lists whenever a traveller's passport indicates travel to a communist country or to Cuba, and this information is reported to headquarters and indexed for station files. Any travel by people of importance, mainly local communists or communist diplomats, is reported to headquarters and appropriate stations and bases where the passenger list indicates they are travelling.

ECTOSOME. The principal station agent for intelligence against the Czechs is Otto Kladensky, ‡ the Oldsmobile dealer in Quito. His reporting has diminished since the Czechs were expelled three years ago, but now that relations have been reestablished he will undoubtedly be in close contact with Czech officials when they open a Quito Embassy. For the time being he reports on the occasional visits of Czech trade officials, and he provides the link to a high-level penetration of the Velasquista movement, ECOXBOW-1.

ECOXBOW. Before this year's political campaign, Noland began cultivating a retired Army lieutenant-colonel, Reinaldo Varea Donoso, ‡ ECOXBOW-1, whom he met through Kladensky. Recruitment of Varea, an important leader of Velasquistas in military circles proceeded with the assistance of Kladensky. Funds were provided by Noland via Kladensky for Varea's successful campaign for the Senate, and in August he was elected Vice- President of the Senate. He reports on military support for Velasco and he maintains regular contact with the leadership in the Ministry of Defence and the principal military units.

Varea's station salary of 700 dollars per month is high by Ecuadorean standards but his access to crucial intelligence on government policy and stability is adequate justification. The project also provides funds for a room rented full-time in Kladensky's name in the new, luxurious Hotel Quito (built for the Inter- American Conference) where Kladensky and Varea take their playmates. Noland occasionally meets Varea in the hotel, but he is trying to keep the relation with Varea as discreet as possible by channelling contact through Kladensky.

AMBLOOD. Early this year the Miami Operations base, cryptonym JMWAVE, was established to support operations against the Castro regime in Cuba. The Havana station is preparing to continue operations from Miami when relations with Cuba are broken and the Embassy in Havana is closed. As part of the Cuban operation stay-behind procedures, the Quito station was asked to provide accommodation addresses for communicating with agents in Cuba by secret writing. Lieutenant-Colonel Paredes, the chief of the surveillance and investigative team, rented several post-boxes which have been assigned to Cuban agents who -are part of a team located in Santiago, Cuba. The chief of the team is Luis Toroella, ‡ AMBLOOD-1, a former Cuban government employee who has been trained in the US and is now being sent back to Cuba to head the AMBLOOD team.

The messages to Cuba are written in secret writing (SW) in Miami and forwarded by pouch to the Quito station where a cover letter is written by Francine Jacome, ‡ ECDOXY, who is an American married to an Ecuadorean and who performs occasional support tasks for the station. The messages from Cuba to Quito are also written in a liquid SW system and are retrieved from the post-boxes by Paredes, passed to the station, and forwarded to the JMWAVE base in Miami.

Quito Psychological and Paramilitary Operations (PP)

ECURGE. The major station agent for placing propaganda is Gustavo Salgado, ‡ an ex-communist considered by many to be the outstanding liberal political journalist in the country. His column appears several times per week in El Comercio, the main Quito daily, and in several provincial newspapers. Salgado also writes under pseudonyms for wider publication.

Proper treatment of Ecuadorean and international themes is worked out in the station by John Bacon, who is in charge of this operation too, and passed to the agent for final draft. Headquarters guidance on propaganda subjects is also passed over in considerable volume and, on request from other stations, Salgado can comment on events in other countries to be later replayed there.

Salgado is also extremely useful for publishing intelligence received from agent penetrations of the PCE and like-minded groups, and for exposing communist backing for disruptive activities. The agent is paid on a production basis.

ECELDER. Fly-sheets and handbills are a major propaganda medium in Ecuador and the ECELDER operation is a secret means for printing these kinds of throwaway notice. Five brothers, most of whom have other employment, divide the work of operating a small family printing business. The family name is Rivadeneira and the brothers are Marcelo, ‡ Jorge, ‡ Patricio, ‡ Rodrigo, ‡ and Ramiro. ‡ The brothers are well known in local basketball circles and have been the mainstays of the principal Catholic preparatory-school team, La Salle, in its traditional rivalry with the principal lay preparatory school, Mejia. Noland, who is also active in basketball circles, handles the contact with whichever brother is running the printing plant at a particular moment.

The text of the fly-sheets is usually written in the station by John Bacon and passed to Gustavo Salgado for final draft. After printing they are given to a secret distribution team. The ECELDER printing plant is a legitimate operation with regular commercial orders. For the station handbills, fictitious print-shop symbols are often used because Ecuadorean law requires all printed material to carry the print-shop symbol. The shop also has symbols for the print shop used by the communists and related groups, for use when a station-written handbill is attributed to them.

ECJOB. A team of Catholic university students directed by ECJOB-1 ‡ is used to distribute the station handbills printed at the ECELDER shop. Because the handbills have false print-shop symbols and the team distributes without official permits, techniques for fast, efficient distribution are necessary. Usually several trucks are rented and as they move swiftly along the crowded Quito streets the handbills are hurled into the air. Several times team members have been arrested but ECJOB-1 has been able to buy their freedom without difficulty. None of the team except the leader himself knows about US Embassy sponsorship of the operation.

The team is also used for wall-painting, another major propaganda medium in Ecuador. Usually the team works in the early hours of the morning, painting slogans on instruction by the station or painting out and mutilating the slogans painted by communist or pro-communist groups. Extreme caution is taken by the team in order to avoid street clashes with the opposition wall-painters who sometimes roam the streets searching for the anti-communists who spoil their work. John Bacon is also in charge of this operation.

ECACTOR. The most important station operation for anticommunist political action consists of funding and guidance to selected leaders of the Conservative Party and the Social Christian Movement. The operation developed from the most important station penetration agent of the Ponce government, Renato Perez Drouet, ‡ who was Secretary-General of the Administration under Ponce and has since returned to manage his Quito travel agency. Through Perez, the station now finances the anti-communist propaganda and political action of the Social Christian Movement, of which Perez is a leader.

Before the 1960 election campaign Perez proposed to Noland the support of a young engineer, Aurelio Davila Cajas, ‡ ECACTOR-1, whom Noland began to cultivate. Davila intensified his activities in the Conservative Party and with station financing he was elected in June to the Chamber of Deputies, representing the distant and sparsely populated Amazonian province of Napo. Davila is now the fastest rising young leader in the Conservative Party and very closely associated with the Catholic Church hierarchy which the party represents in politics. He is an outspoken and militant anti-communist and is considered by Noland, moreover, to have an enlightened stance on social reform. The station is now helping him to build up his personal political organization, which is branching out into student politics at the Catholic university. Normal communications between Noland and Davila, and the passage of funds, is through Renato Perez. In emergencies, however, messages and money are passed via Barbara Svegle, ‡ the station secretary-typist, who rents an apartment in Davila's apartment-building where the agent also lives.

Also through Renato Perez, Noland cultivated and eventually recruited Rafael Arizaga, ‡ ECACTOR-2, who is the principal leader of the Conservative Party in Cuenca, Ecuador's third largest city. Through this agent Noland financed Conservative Party-candidates in Cuenca including the agent's son, Carlos Arizaga Vega, ‡ ECACTOR-3, who was elected to the provincial council of Azuay -- the province of which Cuenca is capital. Communications with this branch of the ECACTOR operation are difficult, but usually Noland travels to Cuenca for meetings although the principal agent may go to Quito. Funds channelled through this project are now being spent on anti-communist propaganda, student politics at the University of Cuenca, and local militant street-action by Conservative Party youth groups.

Another agent has recently been added in order to fulfil the project's goals in Ecuador's fourth largest city, Ambato, another sierra provincial capital. The agent is Jorge Gortaire, ‡ ECACTOR- 4, a retired Army colonel who has recently returned from service on the Inter-American Defense Board in Washington. Gortaire is on the list of pro-Ponce military officers now being purged. In 1956 he was elected as functional Senator for the Armed Forces, but he served only part of his term before being assigned by Ponce to the Inter-American Defense Board. In Washington he was cultivated by a CIA headquarters officer assigned to spot and assess potential agent material in the delegations to the Defense Board, and reports on Gortaire were forwarded to the Quito station. Noland has initiated contact with Gortaire and the Ecuadorean desk is processing clearance for use of this agent in anticommunist political action and propaganda in Ambato. Special importance is attached to this new agent because the mayor of Ambato is a Revolutionary Socialist and is using the municipal government machinery to promote infiltration by the extreme left there. Gortaire has excellent potential because he would be a likely candidate for Minister of Defence if Ponce is re-elected in the next elections. Meanwhile he will also be reporting on any rumours and reports of discontent in the military commands.

ECOPTIC. The socialists, it will be remembered, have split into two rival groups: the Democratic Socialist Party of Ecuador (PSE) and the Revolutionary Socialist Party (PSR). Through his work in the University Sport League which sponsors one of the best Ecuadorean professional soccer teams, Noland met, cultivated and finally recruited Manuel Naranjo, ‡ ECOPTIC-1, a principal leader of the PSE. With financial support from Noland, Naranjo, an outstanding economist, was elected to the Chamber of Deputies in June, representing Pichincha (Quito) Province. Financial assistance is continuing so that this agent, like the others, can build up a personal political organization and influence his party to take desired action on issues such as communism and Castro, while fighting the PSR.

ECBLOOM. Labour operations are perhaps the weakest part of the Quito station operational programme, although considerable potential exists in political-action agents such as Aurelio Davila and Manuel Naranjo. However, because of Velasco's appeal to the working class and the poor, Noland has continued to support a long-time agent in the Velasquista movement, Jose Baquero de la Calle. ‡ Baquero has presidential ambitions and is the leader of the rightist wing of the Velasquista movement, closely identified with the Catholic Church hierarchy. He is now Velasco's Minister of Labour and Social Welfare, and Noland hopes that non-communist labour organizations can be strengthened through his aid. His close identification with the Church, however, is restricting his potential for labour operations to the Church-controlled Catholic Labor Center ‡ (CEDOC) which is a small, artisan-oriented organization. Noland pays Baquero a salary and expense money for his own political organization and for intelligence on the government and Velasquista politics.

ECORT. Student operations are run for the most part from the Guayaquil base. However, the Quito station finances and directs the most important Ecuadorean anti-communist student newspaper, Voz Universitaria. ‡ The agent in this operation is Wilson Almeida, ‡ ECORT-1, who is the editor of the newspaper. Almeida gives the publication a liberal orientation because the Catholic student movement is supported through Renato Perez, of the Social Christian Movement and Aurelio Davila of the Conservative Party. Propaganda against the Cuban Revolution and against communist penetration in the HUE (university students federation) is the main function of the ECORT newspaper.

The following are the main operations of the Guayaquil base:

Fl-CI Operations

ECHINOCARUS. There are already increasing signs of a policy split in the Communist Party of Ecuador (PCE) over the problem of revolutionary violence v. the peaceful road to socialism. The PCE leadership grouped around Pedro Saad, the Secretary- General, generally favour the long struggle of preparing the masses, while the sierra leaders grouped around Rafael Echeverria Flores, leader of the Pichincha Provincial Committee, tend towards early initiation of guerrilla action and terrorism. Thus the communists themselves are beginning to split along sierra-coast lines, and the Guayaquil base is charged with monitoring the Saad group.

The best of several base penetration agents is ECHINOCARUS- 1 ‡ whose access is superior to cell-level, but far from the secrets of Saad's Executive Committee. The Guayaquil base is hoping to snare a really first-class penetration agent, or mount a productive technical penetration, on the basis of a new targeting study now underway.

ECLAT. The counterpart to the ECJACK surveillance and investigative team in Quito is the ECLAT operation in Guayaquil. This is a team of five agents who have access to government identification and police files. The team is directed by an ex-Army officer who also reports information picked up among his former colleagues in the coastal military garrisons. As in Quito, the investigative team in Guayaquil keeps the LYNX contingency list current for quick action against the most important-activists of the extreme left.

ECAXLE. The main political intelligence collected by the base is through Al Reed, ‡ an American who has spent a large part of his life in Guayaquil. He inherited a family business there, which has been doing rather badly, but he manages to keep close relations going with a variety of business, professional and political leaders.

Guayaquil PP Operations

ECCALICO. What the base lacks in intelligence collection is made up in labour and student operations. ECCALICO is the labour operation through which the base formed an organization to defeat Pedro Saad in the coast election of a Functional Senator for Labour earlier this year. The same organization forms the nucleus for a new coastal labour confederation that will soon be launched.

The principal agent in the operation is Emilio Estrada Icaza, ‡ the general manager of one of the country's largest banks. The main sub-agents are Adalberto Miranda Giron, ‡ a leader of the Guayas Provincial Federation of Employees (white-collar workers) and the base candidate who defeated Saad; Victor Contreras Zuniga, ‡ anti-communist Guayaquil labour leader; and Enrique Amador Marquez, ‡ also an anti-communist labour leader. Through Estrada the base financed Miranda's electoral campaign, which mainly consisted of the forming and registering of new, anti-communist unions in the coastal provinces, mostly in Guayas (Guayaquil). The election was based on a point system weighted according to the numbers of workers in the unions recognized by the electoral court. Although the new unions registered through the operation were really only company social clubs, for the most part, and were generally encouraged by management as a result of the prestigious but discreet support from Estrada, the protests from the CTE and other communist-influenced labour groups were disallowed by the electoral court. On the contrary, just before the election the electoral court disqualified some fifteen pro-Saad unions following protests from the ECCALICO agents. The balance swung in favour of Miranda, and he was elected. Blair Moffet, ‡ the Guayaquil Base Chief, received a commendation from headquarters on this operation, which eliminated the PCE Secretary-General from a Senate seat he had held since the 1940s.

The base plan now is to follow through with the formation of a new coastal labour confederation using the same unions, agents and cover as in the election. The CIA labour programmes and the ORIT labour representative will also be used, as they were in the electoral campaign, although they are not in direct contact with the base. The long-range strategy in labour operations, obviously, is to weaken the communist and revolutionary socialist-dominated CTE while establishing and strengthening the station and base-controlled democratic union structure.

ECLOSE. Student election operations for control of the Ecuadorean Federation of University Students (FEUE) are run by the Guayaquil base through Alberto Alarcon, ‡ ECLOSE, who is a businessman active in the Liberal Party. At different times each year, the five Ecuadorean universities elect new FEUE officers. An annual convention is also held when the national seat of FEUE goes in rotation from one university to another. Alarcon manages teams of agents at these electoral conventions, who are armed with anti-communist propaganda and ample funds for purchasing votes and other activities designed to swing the elections away from the communist and pro-communist candidates. Through this operation national control of the FEUE has been kept out of communist hands for several years, although communist influence is still very strong nationally and at several of the local FEUE chapters. Nevertheless, efforts to have the FEUE pull out of the communist International Union of Students in Prague, and to affiliate with the CIA-controlled COSEC ‡ in Leyden, have been unsuccessful.

Washington DC November 1960

Tension and crisis prevail in the most important breakthrough in operations against the Cubans in Quito. In October the Cuban Embassy chauffeur, a communist, offered his services to the Embassy through an intermediary and was immediately picked up by the station. His motivation is entirely mercenary but his reporting so far has been accurate. His access is limited, of course, but he will be an extremely valuable source for information about the Cuban diplomats which we can use in trying to recruit some of them.

The problem is that the agent, ECALIBY-1, ‡ missed a meeting several weeks ago and has also failed to appear for later alternative meetings. Blair Moffet, the former Guayaquil Base Chief who has gone temporarily to Quito until I arrive, is handling the case and has even checked at the agent's home. Nobody there knew anything of his recent movements. Moffet is afraid the chauffeur is in some kind of trouble because the ECJACK surveillance team has reported that he hasn't been showing up at the Embassy. For the time being Moffet will continue to work the alternative meeting-sites with extreme caution against a possible Cuban provocation.

The station's campaign to promote a break in diplomatic relations between Ecuador and Cuba is stalled because Manuel Araujo, the Minister of Government and an admirer of the Cuban revolution, is the principal leader of Velasco's programme to denigrate the Ponce administration and to purge the government of Ponce's supporters. Araujo's campaign has been fairly effective, at least enough to keep our Conservative and Social Christian political-action agents, on whom we must rely for increasing pressure for the diplomatic break, on the defensive. Araujo has also been effective in his public campaign to equate support to the government with patriotism because of increasing tension over the Rio Protocol and the Peruvian boundary issue.

Last month, for example, Araujo accused the Conservative Youth Organization, through which Aurelio Davila carries out station political-action programmes, of treason because it called on the Conservative Party to declare formal opposition to Velasco. Araujo was then called to the Chamber of Deputies by Conservatives to answer charges that he had violated the Constitution with his remarks about treason. The session lasted from 10 p.m. until 5 a.m. the next morning. Araujo, cheered on by the screaming Velasquista galleries which shouted down the Social Christians and Conservatives, turned the session into another denunciation of corruption in the Ponce administration. He even accused the forty-eight purged military officers of treason. Because of the deafening roar from the galleries' wild cheering for Araujo, the Conservative, Social Christian, Liberal and Socialist deputies who had planned to question him were forced to leave the session.

Araujo's new accusation of treason caused a big ripple in the military services, and the Minister of Defense and Velasco himself followed with denials that any of the officers were guilty of treason.

Since those events of early October the Velasquistas have continued to equate patriotism on the Peruvian question with support for the government. Thousands turned out on 18 October in Guayaquil for a street demonstration to support Velasco and Araujo, and a similar mass demonstration was held in Quito the following day. On 20 October, the FEUE sponsored what was described as the most massive demonstration in the history of Quito. Students, government workers and people from all walks of life joined in the march and rally at a Quito soccer stadium where Velasco and others denounced the Rio Protocol.

Early in November, Araujo was called again before the Congress to answer questions. He made the trip from his Ministry to the Legislative Palace riding a decrepit old horse that he claimed had been sold by Ponce's Minister of the Interior (a Social Christian and close station collaborator) to the National Police for 30,000 sucres -- about 2500 dollars. He said the former Minister had made his brother appear as the seller and that the useless nag ought to be embalmed and placed in a museum as a monument to the Ponce Administration.

During the ride from the Ministry to the Congress Araujo picked up a large crowd of followers -- the spectacle of this physically deformed man less than five feet tall with a Van Dyke beard ridiculing the Poncista elite was just the sort of conduct that makes him so popular with the poor masses. The Velasquistas again packed the galleries to cheer Araujo wildly during his interpellation while shouting down any attempts by Conservatives or Social Christian legislators to criticize him. Later the same day a group of Velasquistas attacked a demonstration by a Conservative student group, and the police -- controlled by Araujo as Minister of Government -- first attacked the students and later persuaded the Velasquista mob to disperse.

The day after the 'horse parade' Araujo nearly uncovered our ECJOB propaganda distribution team. Four of the team were distributing a fly-sheet against communism and Castro when by chance they were seen by Araujo himself. Araujo personally made the arrests, and our agents were charged with distributing flysheets without a print-shop symbol -- the ECELDER print shop had erred in failing to use one of its fictitious symbols that take longer to trace. The distribution team leader couldn't buy their release this time so Noland had to get Aurelio Davila to use his Congressional leverage to get them out.

The station started a campaign to get Araujo thrown out, but it is progressing slowly. Through Davila a fly-sheet was circulated calling Araujo a communist because of his support for the Cuban revolution, but Velasquista agents like Baquero, the Minister of Labour, and Reinaldo Varea, ‡ Vice-President of the Senate, haven't been able to shake President Velasco's confidence in Araujo. The campaign is difficult because it's bound together with the political battle of Velasco against the Conservatives and Social Christians -- almost negating the effectiveness of our Velasquista agents against Araujo. Care is being taken, in the campaign through the rightist political agents like Davila, to focus on identifying Araujo with communism and to avoid criticizing Velasco himself.

Our forces came off second best just a few days ago, however, when the Social Christians sponsored a wreath-laying ceremony in commemoration of the death of a student killed during Velasco's previous administration when police invaded a school to throw out strikers. During the days before the ceremony, which was planned to include a silent march, Araujo's sub-secretary denounced the ceremony as a provocation designed to cause a clash between Catholic students and the government. When the march arrived at the Independence Plaza in front of the Presidential Palace, groups of Velasquistas attacked with clubs and rocks. The marchers were forced out of the Plaza, and their floral offering left at the Independence Monument was destroyed. The Velasquista mob, now in control of the Plaza, cheered Velasco wildly when he returned to the Palace after a speech in another part of town. Numerous clashes followed during the afternoon and evening as the Velasquista mobs roamed the streets attacking the remnants of the Social Christian march which was also repressed by police cavalry. The government, however, clearly prefers to use its political supporters rather than the police to suppress opposition demonstrations, and the same tactics used in the Congress are now proving their worth in the streets.

As if all this weren't bad enough, Araujo just expelled one of our labour agents: John Snyder, ‡ the Inter-American Representative of the Post, Telegraph and Telephone Workers International ‡ (PTTI) who for two years has been organizing Ecuadorean communications workers. Araujo accused him of planning a strike to occur just before the Inter-American Conference, but the real reason was a CTE request for Snyder's expulsion because he was so effective. Jose Baquero de la Calle, ‡ our Minister of Labor, could do nothing to help -- he just doesn't carry the weight with Velasco that Araujo carries.

The campaign against Araujo has been hampered by the crisis atmosphere over the boundary problem with Peru. In September Velasco sent his Foreign Minister to the UN General Assembly where he repeated the denunciation of the Rio Protocol because it was signed while Peruvian troops still occupied parts of Ecuador. The Minister added that Ecuador would raise the issue at the Inter-American Conference. Peru countered by calling for a meeting of the Guarantor Powers and threatening not to attend the Conference. The Guarantor Powers, including the US delegation, met in Rio de Janeiro in October but no public statement was issued. However, State Department documents at the Ecuador desk reveal that the Guarantors voted to disallow Ecuador's unilateral abrogation of the Protocol, but they followed with private appeals to both countries for a peaceful settlement. In early December, nevertheless, a public statement is going to be issued rejecting Velasco's position. The reaction in Ecuador will be strong -- in Guayaquil in September our Consulate and the Peruvian Consulate were stoned because of the Rio Protocol.

The station has received isolated reports that Velasco might turn to the Soviets or Cubans for support when he sees that the boundary issue is going against him. Moreover, the Minister of Education is suspected of having opened negotiations for an arms purchase during his recent trip to Czechoslovakia, although the announced purpose of the trip was for the purchase of technical equipment for Ecuadorean schools.

In Ecuador the Congressional sessions are set by the Constitution from 10 August until 7 October, but extension for up to thirty days is possible. This year's Congress voted the extended session, but in the battling between rightists and Velasquistas there was no significant legislation on any reforms, particularly agrarian reform, which had been one of the central promises of the Velasquista campaign. On the other hand repeal of the Civil Service Career Law set administrative reform back a few years. Worse still, the Congress in secret session just before going into recess, voted a 50 per cent increase in its own salaries retroactive to the opening of the session in August. The new amount is equivalent to 25 dollars per day -- by Ecuadorean standards rather generous considering that two thirds of the population have a family income of only 10 dollars per month.

During the final two weeks before I was appointed to the Foreign Service I had to take a special course in labour operations. Although the course was supposed to be for mid-career labour operations specialists, the WH Division training officer told me I was needed to fill a quota while he assured me that I wouldn't have to run labour operations just because the course is on my record.

Nominally the course was under the Office of Training, but the people who really run it are from 10/4 (Branch 4, labour, of the International Organizations Division). The course was dominated by bickering between the 10 officers and the area division case officers over use of the labour agents controlled by 10 Division under Cord Meyer. ‡ Officers from WH Division were practically unanimous in condemning ORIT ‡ which is the regional organization for the Western Hemisphere of the International Confederation of Free Trade Unions.  ‡ They said ORIT is hopeless, discredited and completely ineffective for attracting non-communist labour organizations in Latin America. Agency leaders (at the apparent urging of George Meany ‡ and Serafino Romualdi ‡) are convinced, however, that ORIT can be salvaged, and so WH Division must try to help.

Much emphasis was given to the advantages of using agents in the different International Trade Secretariats in which, in Latin America at least, the Agency has considerable control. Lloyd Haskins, ‡ Executive Secretary of the International Federation of Petroleum and Chemical Workers, ‡ gave us a lecture on how he can help in organizing Latin American workers in the critical petroleum industry. Also having interesting possibilities for Latin America is the International Federation of Plantation, Agricultural and Allied Workers ‡ (IFPAAW) which was founded last year to carry on the rural organizing begun several years ago through the ICFTU Special Plantation Committee which had special success in Malaya. In Latin America we use this union in a similar way to deny the peasant base of guerrilla movements through the organization and support of peasant unions within the larger area of agrarian reform and development of cooperatives. Overall, the course emphasized that Agency labour operations must seek to develop trade unions in underdeveloped countries that will focus on economic issues and stay away from politics and the ideology of class struggle. This is the Gompers tradition of American trade-unionism which, when promoted in poor countries, should raise labour costs and thereby diminish the effect that imports from low-cost labour areas has on employment in the US.

After the labour course I took the two-week orientation course at the State Department's Foreign Service Institute. Although the course was generally boring, and I only took it because of cover requirements, it got me thinking about the place Agency operations occupy within the larger context of US foreign policy towards Latin America. There seem to be two main programmes that the Latin American governments must promote: first, economic growth through industrialization; and second, economic, social and administrative reforms so that gross injustice can be eliminated.

For economic growth they need capital, technology and political stability. US government programmes are helping with these needs, particularly since Vice-President Nixon's trip two years ago: the Inter-American Development Bank was founded last year, Export-Import Bank financing is being increased, the technical assistance programmes of ICA are being expanded, and now the Social Progress Trust Fund is to be established with 500 million dollars from the US for health, housing, education and similar projects. From Kennedy's speeches on Latin America, some people conclude that these programmes will be expanded still more when he becomes President.

CIA operations are crucial to the economic growth and political stability programmes, because of the inevitable capital flight and low private investment whenever communism becomes a threat. The Cuban revolution has stirred up and encouraged the forces of instability all over the hemisphere and it's our job to put them down. C I A operations promote stability through assisting local governments to build up their security forces -- particularly the police but also the military -- and by putting down the extreme left. That, in a nutshell, is what we're doing: building up the security forces and suppressing, weakening, destroying, the extreme left. Through these programmes we buy time for friendly governments to effect the reforms that will eliminate the injustices on which communism thrives.

The Cuban Revolution has swung to the far left, the State Department, and American businesses, are fearful that Cuba will try to export its revolution to other countries in the hemisphere, which might result in nationalization of holdings. The top priority of the United States in Latin America is to seal off Cuba from the continent. In Quito, our orders are to do everything possible to force Ecuador to break diplomatic and economic relations with Cuba, and also to weaken the Communist Party there, no matter what the cost.

For weeks Janet and I have been getting shots, for every known disease, I think, and she's been attending sessions on Foreign Service protocol and on what's expected of an embassy wife. Bob Weatherwax has been telling us a lot about housing and the life there. It sounds just too fantastic. He brought a Christmas shopping list from the Noland family and we're sending all their gifts down with our air freight. It won't be long now.

Today I made my last stop in the division on final check-out. It was in the Records Branch for assignment of pseudonym -- the secret name that I'll use for the next thirty years on every piece of internal Agency correspondence: dispatches, cables, reports, everything I write. It will be the name by which I'll be known in promotions, fitness reports and other personnel actions. I signed the forms, acknowledging with my true name that in secret employment with the CIA I will use the assigned official pseudonym. Then I read the name -- how can I miss with JEREMY S. HODAPP?

Quito, Ecuador 6 December 1960

Finally here. Out plodding DC-7 took over ten hours to get to Quito, including stops in Panama and Cali, but Janet and I were in the first-class section thanks to government policy allowing the extra expense for long flights. Former Ecuadorean President Galo Plaza, the Liberal Party leader who lost to Velasco this year, was sitting behind us and it would have been interesting to talk to him, but I was afraid it might seem presumptuous.

The weather was clear and sunny as we approached Quito, and through the windows of the aircraft we could see snowcapped volcanos and green valleys that extended up the sides of mountains to what seemed like almost vertical cultivations. I wonder how they plough at such an angle. Everyone's heard of the Andes mountains but actually to see this breathtaking scenery is almost overwhelming.

At the Quito air terminal, an ultra-modern building just completed for the Inter-American Conference, we were welcomed by Blair Moffet who gave us the Embassy orientation folder, mostly pointers on Ecuadorean health hazards. Then he dropped us at a small hotel in a residential section less than a block from the Embassy itself. A little while later Noland came to greet us with a pleasant surprise; he had tickets for us to see the bullfight this afternoon with his wife and some of their friends.

Today is Quito's most important annual festival: the celebration of the city's liberation from Spanish rule. The festivities have been going on for some days with bullfights, parades and livestock shows. I'm not sure I liked the bullfight. It was exciting all right, and the music and oles were stirring, but if Paco Camino is really one of the world's best I wonder what second-raters are like. He practically butchered that bull trying to get him to fall.

Afterwards we went to a party with the Nolands at the home of the family that controls the movie theatres. Everyone there seemed to be related by blood or marriage, almost, and among the guests was Jorge Acosta, ‡ Velasco's nephew and one of the station's best friends in the government. He runs the National Planning Board, not a terribly powerful job, but as President Velasco's family favourite he is not far from decision-making. Just recently Acosta advised that Weatherwax, our officer under Public Safety cover, can now return without danger.

Tension on the political scene has increased,' if anything, in the past week. On 1 December the Quito Municipal Government, which is under Liberal Party control, began its new sessions. There was serious rioting between Liberal and Velasquista mobs, and when Araujo's police intervened they threw their first teargas grenade at the Liberal Mayor.

Tomorrow the Guarantor Powers will release their decision denying Ecuador's claim that the Rio Protocol is void. Noland doesn't think the announcement will be taken calmly.

Quito 8 December 1960

They say it takes a while to get used to this 9000-feet-plus altitude. The air is thin and I seem to be unusually sleepy, but neither of us has had any sign of the terrible headaches some people get. The nights are cool, and there is quite a difference between being in the shade and the sunshine, but because it is so dry here, people wear woollen clothing even on hot days. The nicest thing about Quito, so far, are the flowers. It seems just like springtime, in fact, and someone told me that here there are only two seasons, wet and dry, but flowers all year. As soon as we can we're going to visit the monument north of town where the equator passes. It's about a half-hour drive and you can take photographs with one foot in the northern hemisphere and one in the southern.

Noland says he wants me to take over the operations that Blair Moffet has been running so that he can return to Washington. But Blair said he can't return until he finds out what happened to the Cuban Embassy chauffeur.

The announcement on the Rio Protocol was a bitter blow in the face of all the recent civic demonstrations and new hopes fomented by Velasco since he took office. A really big demonstration is being organized for tomorrow at the Independence Plaza.

Quito 9 December 1960

Emotions have overflowed. Today, my fourth day in Quito, I saw my first mob attacks against a US Embassy. I was late leaving the hotel and the manager warned me that rioters had already been stoning the Embassy. When I arrived only a small group was still chanting in front, but I entered at the rear and saw that many windows were broken during the earlier raids.

Throughout the day the station telephones were ringing as agents called to report the movements of the URJE-led rioters who returned to attack the Embassy a number of times. Araujo kept the police away, so the mobs could operate almost at will. I watched from the station offices on the top floor. Their favourite chant, as they hurled their stones, was: 'Cuba, Russia, Ecuador'. The Ecuadorean-North American Cultural Institute which is run by USIS and the Peruvian Embassy were also attacked, as was our Consulate in Guayaquil.

While the Embassy was being attacked almost all the Quito buses suspended service and gathered north of town where they began a caravan into Independence Plaza picking up loads of people along the way. The Plaza was jammed with thousands when the speeches began, which included attacks on the Rio Protocol by Velasco and his Foreign Minister. Araujo, for his part, called for diplomatic relations with the Soviets if that were necessary for Ecuador to attain justice. The crowd chanted frequent denunciations of the Guarantor Powers and the OAS. Later the Foreign Minister announced that two Czech diplomats will be arriving shortly to open the Czech Legation here.

Quito 14 December 1960

Attacks against the Embassy have continued but they now seem smaller and more sporadic. Police protection has been improved and there were even some Army units sent to the Embassy. Araujo was forced to send the police protection back by cooler heads in the government like Acosta. The riots spread to other cities, too, where bi-national cultural centres were attacked. More public demonstrations have been held, the largest of which was yesterday when a 'March of Justice' brought thousands again to the Independence Plaza. URJE continues to be the most important force behind the attacks although the marches and demonstrations are sponsored by a variety of organizations and are inspired mostly from civic motives.

Two important labour organizations have just been formed but for the time being only one is ours. In Guayaquil the ECCALICO agents who ran Miranda's ‡ campaign to defeat the PCE General Secretary, Saad, as Functional Senator for Labour, held a convention on 9-11 December and formed the Regional Confederation of Ecuadorean Coastal Trade Unions ‡ (CROCLE) as a permanent mechanism to fight the CTE on the coast, mainly in Guayas Province. Both of the principal-action agents, Victor Contreras ‡ and Enrique Amador ‡ are on the Executive Committee, Contreras as President. The ORIT representative was very helpful, especially in providing unwitting cover for our agents. The plan now is to affiliate CROCLE with the ORIT-ICFTU structure in place of the current Ecuadorean affiliate, the small and ineffective Guayas Workers Confederation (COG) which our Guayaquil base had been supporting.

In Quito the USOM labour division, whose main work consists of giving courses in free trade-unionism throughout the country, has taken the first step towards the formation of a national, noncommunist trade-union confederation. Under their direction during the first week this month the Coordinating Committee of Free Trade Unionists of Ecuador was established. This committee will soon begin establishing provincial coordinating committees which will develop into provincial federations. Eventually a national confederation will be established. The station plan is to let USOM direct these early stages and later, after the new Deputy Chief of Station arrives, we will probably move in on the formation of the national confederation. For the moment, getting Miranda in the Senate and forming CROCLE are as much as we can manage.

Bill Doherty, ‡ the Inter-American Representative of the PTTI, ‡ and another of IO Division's international labour agents, arrived a few days ago to pick up the pieces from John Snyder's ‡ expulsion. He's trying to arrange for continued PTTI support to the communications workers' union, FENETEL, ‡ in organization, training and housing, but Araujo's hostility hasn't changed. Noland is reluctant to show our connections with Doherty to Baquero de la Calle, the Minister of Labor, by insisting on special treatment, but even if he tried, Baquero probably couldn't outmanoeuvre Araujo.

Guayaquil student operations have also had a big success. The FEUE National Congress was held in Portoviejo earlier this month, and the ECLOSE forces under Alberto Alarcon ‡ finally attained a long-sought goal. The Congress adopted a new system for electing officers of the various FEUE chapters. From now on the elections will be direct, obligatory and universal as opposed to the old indirect system that gave the communist and other leftist minorities a distinct advantage. The national seat for the coming year will be Quito where FEUE leadership is in moderate hands.

I've met Ambassador Bernbaum -- he arrived only a few weeks before I did and this is his first post as Ambassador. He is a career Foreign Service man and not very colourful. Noland said he knows nothing about our operations, not even the political-action operations, and doesn't want to. Today the Ambassador visited Velasco with a message from Kennedy, and he took advantage of the visit to announce that loans for certain public works and development projects have been approved in principle by US lending institutions. The announcement is supposed to assuage anti-US sentiment.

Press reports have alleged that several governments are seeking a postponement or change of site for the Inter-American Conference, partly because of the riots, and the Cuban press and radio are suggesting that Ecuador may follow Cuba in repudiating the Inter-American System.

Quito 15 December 1960

Aurelio Davila, ‡ one of the main political-action agents of the ECACTOR project, won an important and clever victory today. He was behind a mass demonstration of support to Velasco's policy on the Rio Protocol which backfired on Araujo. Students from all the Catholic schools and the Catholic university marched to Independence Plaza where they chanted slogans against communism. Velasco was on the platform and the Minister of Defense had begun to speak when a small group of counter-demonstrators began chanting 'Cuba, Russia, Ecuador', which prompted a flurry of' down with communism' from the mass of students.

Araujo, who was also on the speaker's platform, descended to join the counter-demonstrators. Almost immediately a riot began and Velasco had to grab the microphone and ask for calm. The speeches continued, including one by Velasco, but the President was clearly annoyed at Araujo's having disrupted this huge demonstration of support.

At the instigation of Davila and other Conservative Party leaders the Cardinal issued a pastoral letter which was released today. The Cardinal, whose influence is at least equal to that of any politician including Velasco, warns that religion and the fatherland are in grave and imminent danger from communism, adding that Ecuador should not move towards Cuba and Russia in search of support on the boundary issue.

Tonight another demonstration of support for Velasco's Peruvian policy was held -- but it was by a leftist organization called the Popular Revolutionary Liberal Party (PLPR) which is an offshoot of the youth wing of the Liberal Party but with many Velasquista supporters. The speakers included Araujo and Gonzalo Villalba, a Vice-President of the CTE and one of the leaders of the Communist Party in Quito. They called for diplomatic and commercial relations with the Soviets while condemning the US and conservatives.

Quito 16 December 1960

Araujo's out! Late this afternoon it was announced at the Presidential Palace that Araujo's resignation had been accepted, but we had been receiving reports all day that Velasco was getting rid of him. We have poured out a steady stream of propaganda against him for some weeks and his behaviour at yesterday's demonstration clinched matters. The Foreign Minister, who is a good friend of the US, has also been working to get Araujo fired, and of course Araujo's own identification with the extreme left gave him little room to manoeuvre.

Since Araujo's resignation was announced, street clashes have been continuous between his supporters, mostly from the URJE, and anti-Araujo Velasquistas. Right now the downtown area is full of tear-gas but we learn from several agents that the rioters are finally dispersing.

Quito 22 December 1960

Civic demonstrations on the Peruvian question have continued but they have lost their anti-US flavour. In fact they have almost been replaced by a campaign by Catholic groups to show support for the Cardinal in response to an attack against his pastoral letter on communism, made by the Revolutionary Socialist Labor Senator. Aurelio Davila is leading the campaign, funded from the ECACTOR project, which includes letters and signatures published in the newspapers by Catholic organizations like CEDOC, the labour confederation, and the National Catholic Action Board, of which Davila is a Vice-President.

Today the campaign reached a peak with a demonstration by thousands who marched through the Quito streets in the rain chanting slogans against Cuba, communism and Russia. The Cardinal himself was the main speaker and he repeated his warning in the pastoral letter of the imminent danger of communism. He's almost ninety years old, but he's really effective.

I've taken over my first operations and met my first real-live agents -- at last I'm a genuine clandestine operations officer.

The first operation I took over was ECJACK, the surveillance and general investigations team run by Lieutenant-Colonel Paredes. Blair took me out to meet him a couple of days ago, and through him I'm continuing to keep a watch near the Cuban Embassy for any signs of the missing chauffeur. With this operation I also took over the secret-writing correspondence with the agents in Cuba, and I've proposed to headquarters that we could save time if a trainer were sent to teach me to write and develop the letters. That way we could cable the messages and save the time required to pouch the SW letters. In a few days Noland will introduce me to Francine Jacome, ‡ who writes the cover letters.

Blair also turned over the ECFONE operation to me. The principal agent, Oswaldo Chiriboga, ‡ was appointed Ecuadorean Charge d'Affaires to Holland and The Hague station is going to use him against Soviet and satellite diplomats. We had to get a new cutout to Basantes,; the Communist Party penetration agent, and Noland chose Velasco's physician, Dr Ovalle, ‡ in order to sustain the cover story used from the beginning on this operation. Dr Ovalle will advise by telephone when he gets reports from Basantes, and I'll go to his office to get them. This operation took on even greater significance in October when Basantes was elected to the Pichincha Provincial Committee. With the schism growing between the PCE coastal and sierra leadership this is equivalent to having an agent on the local executive committee.

The station seems to have turned into a Santa Claus operation these last few days. At Noland's house all the wives with their servants have been wrapping bonbons, cartons of cigarettes, boxes of cigars, bottles of whiskey, cognac, champagne and wine -- and dozens of golf-balls. These are operational Christmas gifts to agents and to 'contacts' -- (friends who might eventually be useful agents).

Most officers in CIA stations are expected to develop personal relationships with as wide a variety of local leaders as possible, whether in business, education, professions or politics. State Department cover in WH Division facilitates the cultivation of these 'contacts' while station funds for entertainment, club dues, gifts and supplements to the regular housing allowances give us considerable advantages over our State Department colleagues.

Noland is clearly a great hit with the Ecuadoreans. He seems to know everyone in town who counts. He's a former college football star and coach with lots of personal charm and energy. His wife is the national women's golf champion and an ex-Captain in the WAC'S. Together they are the most effective couple in the Embassy and are lionized by the local community. Mostly they've developed these' contacts' through Noland's political and sports work and the very active role both have at the Quito Tennis and Golf Club.

Quito 30 December 1960

There seems now to be little doubt that the Inter-American Conference will be postponed. Peru insists it won't attend because of Ecuador's intention of raising the Protocol issue; Venezuela and the Dominican Republic are still in a crisis over Trujillo's attempt to assassinate Betancourt; and US-Cuban relations are getting still worse. We all know the invasion is coming but certainly not I until Kennedy takes over.

Peru's break in relations with Cuba today hasn't helped prospects for the Conference. The break is partly a show of appreciation to the US for the October ruling by the Guarantors on the Protocol, but it's also the result of a Lima station operation in November. The operation was a commando raid by Cuban exiles against the Cuban Embassy in Lima which included the capture of documents. The Lima station inserted among the authentic documents several that had been forged by TSD including a supposed list of persons in Peru who received payments from the Cuban Embassy totalling about 15,000 dollars monthly.

Another of the forged documents referred to a non-existent campaign of the Cuban Embassy in Lima to promote the Ecuadorean position on the Rio Protocol. Because not many Peruvians believed the documents to be genuine, the Lima station had great difficulty in getting them publicized. However, a few days ago a Conservative deputy in the Peruvian Congress presented them for the record and yesterday they finally surfaced in the Lima press. Although the Cubans have protested that the documents are apocryphal, a recent defector from the Cuban Embassy in Lima -- present during the raid and now working for the Agency -- has 'confirmed' that the TSD documents are genuine. The Conservative Peruvian government then used the documents as the pretext for breaking relations with Cuba. We could do something similar here but Velasco probably wouldn't take action. He wants Cuban support against Peru on the Protocol issue, if he can get it.

The disappearance of the Cuban Embassy chauffeur is now solved. He tried to impress the Embassy gardener by telling him about working for us. The gardener told one of the Cubans and the chauffeur was fired. He panicked and has been hiding out in a provincial village, convinced that the Cubans will try to kill him.

He came into the Embassy yesterday and Blair met him. There's no saving the operation but Blair gave him a modest sum to get him back to the village and help him for a little while. Noland is really angry with Blair because he thinks Blair didn't take enough pains teaching the agent good security. Too bad -- I was hoping I might get this operation too. Blair returns to Washington now.

Quito 4 January 1961

The Inter-American Conference will definitely be postponed now that the US has broken relations with Cuba. All cables and correspondence formerly sent to the Havana station are now to be sent to the JMWAVE station in Miami. I suppose the Conference won't be held until after the JMARC invasion by the exiles. Holding it after the Cuban revolution is wiped out will change the security situation here. For one thing we won't have the Cuban Embassy's support to URJE to worry about, and all these would-be protesters and agitators may not be so enthusiastic.

Two Czech diplomats have just arrived to open a Legation. Headquarters had traces on only one of them who is a suspect intelligence officer. At headquarters' request we will watch closely, through agents like the Oldsmobile dealer, Kladensky, for indications on the permanent building they intend to buy or rent. Before their expulsion in 1957 we had their code-room bugged and headquarters wants to try again.

Weatherwax, our Public Safety officer, is back and through him we hope to improve intelligence collection in rural areas, which is now almost nil. Contraband operations complicate the problem. Some areas, particularly those from just north of Quito to the Colombian border, live from the contraband traffic, and rural security forces, if they're not in the pay of the contraband rings, are often engaged in small wars against them. The weakness of rural security forces is practically an invitation to guerrilla operations, so we hope to strengthen them through the Public Safety Mission and get some rural intelligence collection going at the same time.

Quito 29 January 1961

Today is the anniversary of the signing of the Rio Protocol and we thought we might get some attacks on the Embassy. The only violence, however, was among the Ecuadoreans. In Guayaquil the Minister of Foreign Relations gave a speech on the boundary problem and in a procession afterwards to Guayaquil University he was jeered and booed as a traitor. Araujo and his friends in URJE are determined to get the minister fired because he was one of the forces behind Araujo's expulsion and he's also a good friend of the US. The campaign against him is based on his having been a member of the Ecuadorean commission that signed the Protocol in 1942.

I've taken over the ECSTACY letter intercept from John Bacon. He has been using old-fashioned techniques that took a lot of time so I asked for a TSD photographic technician to come and overhaul the station darkroom where I have to process the letters. The TSD photographic and SW technicians have now both finished their work. The darkroom looks brand new. Everything's in order and the technician will send some new equipment in coming weeks. An SW technician has also come to train me to write and develop the messages to and from the agents in Cuba, and she left a supply of developer and ink pills. Now the Miami base will cable messages for me to send and I'll cable the incoming messages after development.

Quito 1 February 1961

Velasco's low tolerance of opposition is about to touch off another crisis. Two days ago at the opening ceremony of the National Medical Association Convention he, exchanged angry words with the Liberal Quito Mayor. Then yesterday, at the inauguration of a new fertilizer plant where both were present Velasquistas hissed and booed the Mayor and threw tomatoes at him, forcing him to leave the ceremony. Last night supporters of both Velasco and the Mayor held street demonstrations and the Minister of Government is making threats against people who disturb public order -- not to be mistaken for the Velasquistas, of course.

Today the Minister of Government closed a Quito radio station under an administrative pretext (failure to renew its licence on time) following an opinion programme in which listeners were encouraged to call and participate in the programme by expressing their support for the Mayor. The Minister himself called the radio station during the programme and his threats against the station were broadcast as part of the programme. Later he closed the station. More Velasquista street demonstrations tonight.

Quito 8 February 1961

There has been a serious uprising at a large hacienda in Chimborazo Province south of here. Some 2000 Indians turned against the hacienda owner and the local authorities. Three policemen were injured, the Army was called out, two Indians were killed and over sixty arrested. The leaders of the Indians were organizers from the Campesino Commission of the CTE, and the Revolutionary Socialist Labor Senator (also a CTE leader) has started a campaign for the Indians' release.

The Indians' grievances were legitimate enough -- they often are badly treated on these enormous estates. In this case the owner hadn't paid them since last year and wasn't keeping accounts of their daily work. The CTE is also demanding an investigation into alleged torture of the Indians who were arrested, and recognition of their demands: wages, housing and schools.

Several people have told me that this is the type of incident that chills the blood of the landowners here. If only one of these risings got out of hand and began to spread there would be no telling where it would end. Probably right in the Presidential Palace.

Quito 15 February 1961

Our new Deputy Chief of Station, Gil Saudade, ‡ arrived early this month. He's taking over the labour and student operations but Bacon will keep the ECURGE media operation. Saudade and I are working closely on preparing agents to send to the Latin American Conference for National Sovereignty, Economic Emancipation and Peace, scheduled for the first week of March in Mexico City.

Gil's agents are Juan Yepez del Pozo, Jr., ‡ ECLURE-2, and Antonio Ulloa Coppiano, ‡ ECLURE-3. Until he arrived they were treated as developmental prospects by Noland who was helping finance their takeover of the Popular Revolutionary Liberal Party ‡ (PLPR). This party is attracting a considerable following among young supporters of Velasco, and we hope to use it to channel these radicals away from support to Cuba and from anti-Americanism. Araujo's supporters are among those we most hope to attract, and Gil will be certain that the party keeps its leftist character and firm opposition to the traditional Ecuadorean political parties. The agent really in control is Juan Yepez del Pozo, Sr., ‡ a writer who is also director of the Ecuadorean Institute of Sociology. He has larger political ambitions and is the party's chief advisor.

The Conference in Mexico City is sponsored by the leftist, former President of Mexico, Lazaro Cardenas, as a propaganda exercise in support of the Cuban revolution. Because communists and leftists from all over the hemisphere will be there, headquarters asked stations months ago to propose agents who could attend for intelligence gathering.

Besides Gil's agents, we're sending Atahualpa Basantes, ‡ one of our best PCE penetration agents. Both headquarters and the Mexico City station were pleased that he can attend, and I've sent requirements to him in writing through Dr Ovalle. If possible he will try to get invited for a visit to Cuba after the Conference is over.

Our propaganda operations have been promoting considerable comment adverse to Cuba. The general theme is the danger of penetration by international communism in the Western Hemisphere through Cuba, but recently specific stories have highlighted statements by Cuban exile leaders Manuel de Varona ‡ and Jose Miro Cardona. ‡ Alarmist accusations of Cuban subversive activities included one report coming from Cubans in Miami that Castro has sent arms to guerrillas in Colombia and arms to Ecuador to use against Peru -- these stories originally surfaced in El Tiempo in Bogota and were repeated in El Comercio in Quito. Still another story which came from Havana alleged that Castro's efforts to penetrate South America are concentrated mainly through Ecuador and Brazil. This story also accused Castro of contributing 200,000 dollars to the Mexico City Conference. Araujo has helped our propaganda operations by appearing on television in Havana and promising the support of the Ecuadorean government and people to the Cuban revolution. The reaction here was strong, and both Velasco and the Foreign Minister issued statements rejecting Araujo's generosity.

Gustavo Salgado, ‡ the well-known columnist, is placing most of this material for us, and he also arranged for a replay of follow-up propaganda about the exile assault on the Cuban Embassy in Lima last November. The commando leader has recently been interviewed by the Agencia Orbe Latinoamericano ‡ news service which is a hemisphere-wide propaganda operation of the station in Santiago, Chile. He said that other documents captured during the raid (besides the list of Peruvians paid by the Cuban Embassy in Lima) revealed that Cuba was using certain Peruvians and Ecuadoreans in the hope of setting off an armed conflict between the two countries, which in turn would prepare the atmosphere for a communist rising in Peru. In his column today Salgado rehashed the background and the interview and called for the publication of the names of the Ecuadoreans working in this Cuban adventure. Araujo, of course, would be first on the list. The 'other documents' are, of course, also Agency produced.

The purpose of the campaign is to prepare public opinion so that reaction to the Cuban invasion, when it comes, will be softened. Other stations in Latin America are doing the same, but here we can also tie the propaganda to Cuban interference in the boundary dispute.

Quito 18 February 1961

Velasco is reacting strongly to the leftist campaign to force the Foreign Minister to resign, and some of our reports suggest this may be the beginning of the end for his fourth term.

Yesterday morning the Foreign Minister had accompanied a distinguished Colombian jurist (an expert in international law and proponent of the Ecuadorean thesis on the nullity of the Rio Protocol) to the Central University where he had been invited to speak. As they arrived several hundred students began jeering the Foreign Minister and throwing tomatoes at him. Several tomatoes hit him but he found shelter in the building and the Colombian made his speech. Velasco was furious because the scandal has upset his propaganda campaign for using the Colombian against Peru, even though it was the Foreign Minister who was attacked.

Today the government arrested five URJE members for taking part in the incident, which in turn has caused another spate of protests. The CTE condemned the arrests and also demanded freedom for the PCE Indian organizer Carlos Rodriguez, who is in jail in Riobamba over the recent Chimborazo Indian rising. The Revolutionary Socialists are protesting because three of those arrested are members of its youth group. The FEUE is protesting because the five arrested are university students. The protests include demands for the resignations of both the Foreign Minister and the Minister of Government, the latter for illegal arrest of the students and the closing of the radio station on 1 February.

Quito 20 February 1961

This has been a day of great violence. Yesterday the Minister of Government ordered the release of the five students but they refused to leave the jail. They demanded a habeas corpus hearing because that would be held under the Quito Mayor and could be used to embarrass Velasco and force the resignation of the Minister. During the early hours of this morning the students were forced into police cars and driven separately to isolated sectors of town where they were forced out of the cars.

The law and philosophy faculties led by members of URJE began an indefinite strike this morning for the resignations of the Ministers of Government and Foreign Relations.

The strike committee is supported by the Quito FEUE leadership which has called a forty-eight-hour strike for the whole university, and the university council headed by the rector has issued its own protest against the government.

After the strike was announced this morning a Velasquista mob composed mostly of government employees in the state monopolies and customs service gathered at the downtown location of the philosophy faculty. After a verbal confrontation with the striking students the mob began stoning them to force them inside the faculty building. For much of the morning they continued to control the streets around the faculty and to menace the students with terrible violence.

The university administration and the students formed a special committee to visit the Minister of Government to plead for police protection for the striking students against the mob. The minister simply advised that the government would not move against the strikers, leaving open the question of police protection.

About five o'clock this afternoon the mob gathered again, this time in Independence Plaza where they chanted praise to Velasco and condemnation of the students. From there they marched to the Ministry of Government where the minister spoke to them from a balcony, saying he had acted legally in arresting the jive students for throwing tomatoes at the Foreign Minister, but that no sooner were they released than they declared a strike.

I've had the surveillance team under Colonel Paredes scattered about the downtown area since the strike began this morning. Paredes has given us their reports on the movements of the mob and the danger that the students might be lynched. We've cabled reports to headquarters but Noland isn't making predictions yet on whether Velasco will last -- he thinks there will have to be some bloodshed before the military gets restless.

Quito 21 February 1961

Guayaquil was the centre of today's action. A street demonstration by FEUE and URJE this morning was attacked by Velasquista mobs controlled by the Mayor (unlike Quito, in Guayaquil the Mayor is a powerful supporter of Velasco). The marchers were forced several times to seek refuge in the buildings of Guayaquil University when shots were fired from the mob. Police eventually broke up the clash with tear-gas, and university authorities have protested to the government and asked for protection for the students.

Another demonstration by the students in Guayaquil was held tonight and was again attacked by Velasquista mobs. Eventually the marchers returned to the university and who should be the main speaker but Araujo! He had just returned from Cuba today and was carried by the students on their shoulders from his hotel to the university. In his speech he lavished praise on the Cubans and described recent protest demonstrations in Havana against the killing of Patrice Lumumba.

Manuel Naranjo, ‡ Noland's agent who is a Deputy of the moderate Socialist Party, got the party to publish a statement today criticizing the role of URJE in the student strike and in the tomato attack against the Foreign Minister. Wilson Almeida, ‡ the editor of our main student propaganda organ Voz Universifaria, also published a statement against URJE participation and in support of the Foreign Minister. The Velasquista association of professionals published a statement supporting the Minister of Government.

The main propaganda item today, however, was from the Cuban Embassy which released a sensational statement alleging that during the coming Holy Week attacks will be made against religious processions by persons shouting 'Viva Fidel, Cuba and Russia'. Blame for the attacks would be placed on the Cuban Embassy. In the statement the Cubans also denied the allegation circulated recently that sixty Cubans had come to Ecuador to make trouble -- adding that agents paid by the US are entering the country from Peru. The statement also tried to clarify Araujo's television remarks in Havana as an expression of solidarity between Ecuadoreans and Cubans such as Velasco has repeatedly expressed. The statement went on to defend the Cuban photographic exhibit now on display in Quito as expressive of the works of the revolution, not communist propaganda as suggested in recent rightist criticism of the exhibit, adding that the exhibit is sponsored by the CTE, the National Cultural Institute and Central University as well as the Embassy. The statement ended by alleging that all these recent provocations are designed to disturb the good relations between Cuba and Ecuador and to impede Cuban participation in the Inter-American Conference. The real culprit, according to the statement, is the US government with assistance from Peru because of Cuba's support to Ecuador on the Rio Protocol issue. The statement ended with words of praise for Velasco.

From what I gather this is an extraordinary statement for a diplomatic mission to make. It shows among other things, that our propaganda is hurting the Cubans, and Noland hopes to get the political-action agents like Renato Perez and Aurelio Davila to charge the Cubans with meddling in Ecuadorean politics.

Quito 22 February 1961

In response to the Cuban press release yesterday, our Ambassador issued a statement today that had everyone in the station smiling. The Ambassador said that the only agents in Ecuador who are paid and trained by the United States are the technicians invited by the Ecuadorean government to contribute to raising the living standards of the Ecuadorean people. He added that the US has promoted a policy of order, stability and progress as demonstrated in our technical and economic assistance programmes, and he suggested that the Cuban Embassy present their accusations and appropriate proof to the Ecuadorean government.

In Havana the Cuban Embassy statement has been prominently replayed for distribution over the whole continent, with emphasis that collaboration between the US and Peru is part of a plan to isolate Cuba from the rest of Latin America and to impede Cuban participation in the Inter-American Conference. They couldn't be more accurate on the matter of isolation -- that's the central theme of our propaganda guidance.

Today Guayaquil had the worst violence yet. The striking students in the university buildings were attacked by a much larger group of Velasquista students and government employees who forcibly ejected the strikers. Eight people were hospitalized before the morning was over. In the afternoon two bombs caused extensive damage at the Guayaquil Municipal Palace, although there were no victims, and another bomb was reported by the Mayor's office to have been hurled through a window into his office but without exploding. Expressions of support to the Mayor have begun to pour in, and tonight he announced that terrorists had tried to kill him. The Guayaquil base reported that several of their agents believe the bombs were planted by the Mayor himself.

Press reports confirmed by our National Police agents indicate opposition to the government has spread to Cuenca. Yesterday a group of students held a march to the provincial governor's office to plead for payment of certain money that is due to the school. They had nothing to do with the strikers here or in Guayaquil, but police didn't know this and the march was attacked by the cavalry with sabres and several students were wounded. Cuenca is a very conservative city and this was bound to cause a reaction against Velasco. Today the university students held a demonstration of support for the students in Quito and Guayaquil, and in protest against the police stupidity yesterday. They also joined in the call for the resignation of the two Ministers.

Quito 23 February 1961

Important efforts by the ECACTOR project agents, especially Aurelio Davila, to focus attention on communism and Cuba are getting results. Today the Cardinal issued another pastoral letter -- this one signed by all the archbishops, bishops and vicars in the hierarchy. Davila had been rallying the leadership of the Conservative Party to call on the Cardinal for this new letter for some weeks. The letter calls on all Catholics to take serious and effective action against the communist menace in Ecuador, while accusing the communists of trying to take advantage of the border problem for their own subversive purposes. The letter also laments the weakening of the Ecuadorean case on the border issue because of these communist tactics.

More important still was the call today by the Conservative Party for a break in diplomatic relations with Cuba. This is the first formal call for a break with Cuba by any of the political parties, and it is based partly on the Cuban Embassy statement of two days ago.

The new pastoral letter and the call for a break in relations are designed to use patriotism and the border issue rather like Velasco does, but more subtly, in order to discredit the extreme left and the Cubans. We hope a wave of mass opinion can be created, especially among Catholics, that will equate URJE, Araujo, the CTE and the PCE -- and the Cuban Embassy of course -- with divisive efforts to weaken Velasco's campaign against the Rio Protocol. Hopefully this will strengthen the Foreign Minister's position and suck Velasco himself into the current. But because of Velasco's attacks against the political right, the animosity is so great that he may resist and lash out again at our ECACTOR crowd. In that case we will simply continue the campaign through all our propaganda machinery to deny the enemy the banner of patriotism on the Protocol issue.

Through the same political-action agents we are promoting the formation of an anti-communist civic front that will concentrate on getting a break in relations with Cuba and on denouncing penetration of the Ecuadorean government by the extreme left. Right now the signature campaign is coming to a close and formation of the front will be announced in a few days.

John Bacon is starting a new programme through Gustavo Salgado, ‡ his main media agent, which will consist of a series of 'alert' notices to be placed in the newspapers as paid advertisements against communism, the Cubans and others. They will be short notices, and if Bacon can write them fast enough they'll appear two or three times each week. The ostensible sponsor will be the non-existent Ecuadorean Anti-Communist Front, not to be confused with the political-action civic front which is going to be a real organization.

Quito 28 February 1961

Yesterday was National Civics Day and suddenly it seemed that the whole country had forgotten its internal hatreds in the government- promoted demonstrations against Peru. The demonstrations were sharply anti-Peruvian because in recent days regular accusations have emanated from Lima that Ecuador has accepted support on the boundary problem from Castro and communism in general. The accusations are inspired by the Lima station in order to preclude Cuban support to Ecuador and Ecuadorean acceptance if support were ever offered.

Today things were back to normal. Our ECACTOR-financed anti-communist civic front was launched with a two-page newspaper notice containing about 3000 signatures and announcing the formation of the National Defense Front. ‡ In the statement at the beginning, the signatories, mostly Conservatives and Social Christians, denounce communist penetration of the government, the CTE and the FEUE, together with the selection of Ecuador by the international communist movement as the second target after Cuba for conquest in America. The purpose of the Front is described as defence of the country against communist subversion, and the first objective is the break in relations with Cuba.

Although the political colouring of the rightist forces behind the Front is well known, Noland hopes that the Front will have more manoeuvreability than the political parties because it focuses on only one political issue: communism and Cuba. As such the Front should be a more effective tool for pressure on Velasco to break with Cuba and curb URJE, Araujo, the CTE and the rest. This will take some doing -- in a speech in a provincial capital today Velasco said that communism in Ecuador is impossible. Today El Salvador became the seventh Latin American country to break with Cuba.

Quito 5 March 1961

The student strikes have subsided and Velasco seems to have survived although opposition to him is growing steadily, particularly among the poor classes who voted for him, because of inflation and corruption in the government.

Our propaganda operations relating to communism and Cuba are intensifying opposition to Velasco among the rightists, if that's possible. With financing from the ECACTOR and ECURGE projects, we've been turning out a stream of handbills, editorials, declarations, advertisements and wall-painting, mostly through Salgado and the National Defense Front. Bacon's' alert' notices in El Comercio have also started.

Because of a new spate of rumours that the Inter-American Conference will be postponed, the government has issued several statements on its determination to maintain order at the Conference. Nevertheless, only on 1 March were the first arrests made in Guayaquil for the 22 February attack against the university strikers. A higher court forced the lower court to take action and those arrested were revealed to have been commanded by an assistant to the Guayaquil Mayor. The FEUE and URJE leaders arrested during the strike have also been released. This won't help the Conference.

The Mexico City Conference on National Sovereignty, Economic Emancipation and Peace opened today. Three of the five Ecuadorean delegates are our agents: if this were the case with all our stations the possibilities would be endless. No word yet on whether Basantes, my PCE penetration agent, will go on to Cuba.

Quito 7 March 1961

The Soviet Ambassador to Mexico arrived in Quito today for a goodwill visit. He'll be here for about three days, discussing, among other things, Ecuador's desire to sell bananas to the Soviets. We have a programme planned for disruption and propaganda against him. It began today with a statement by the National Defense Front calling for his expulsion. Another announcement arranged by Davila is from the Catholic University Youth Organization, denouncing the millions of dollars spent each year by the Kremlin to infiltrate Latin America, adding that the budget against Ecuador for propaganda, agitators' salaries, secret go-betweens and instructors in sabotage, explosives and weapons is 250,721.05 dollars.

John Bacon's 'alert' is directed against this visit. It runs:

On the alert, Ecuadoreans, against communist agitators! The official Soviet newspaper is Pravda -- which means Truth, one of the tremendous sarcasms of contemporary history.

If we unmask the actors of this farce, we will find that it is not the plain truth, but distorted, calumnied truth. That's Russia and that's communism. And that is now Cuba and Fidelism. Disciples used by the great international fakes, and at the same time masters in deceit and subversion, try to introduce methods in Ecuador similar to those that their dictatorship employs. First, in order to avoid being responsible, the authorized agents wash their hands like Pilate even though the first terrorist bombs are heard elsewhere. Alert, Ecuadoreans, there is friendship that could dishonour us.

Still he has run into a problem in this campaign of 'alert' notices attributed to the Ecuadorean Anti-Communist Front. He was surprised to read this morning that a real organization with that name has been founded. They published their first bulletin today with the theme: 'For Religion and the Fatherland We Will Give Our Lives'. The symbol of the group is a condor destroying with his powerful claws a hammer and sickle.

Quito 10 March 1961

Six anti-communist organizations including the National Defense Front have been denied permits to hold street demonstrations against the Soviet Ambassador. Nevertheless, Davila sent some of his boys around to the Hotel Quito the other night and they made a small fuss. Police protection of the Soviet delegation is considerable and so far there's been no violence.

The Soviet Ambassador has seen the Ministers of Foreign Affairs and Education as well as President Velasco, and it was announced that an Ecuadorean commercial mission will soon visit the Soviet Union. The government wants to sell bananas, Panama hats and balsa wood in exchange for agricultural and road building equipment. The overwhelming police protection, which has included the cavalry, when the Ambassador visits colonial churches and other tourist sites, is helping our propaganda campaign.

Today's 'alert' notice was also against the Soviets:

Alert, Ecuadoreans! Communism enslaves. Communism imposes the hardest slavery known through the centuries, and once it is able to enslave a people it is very difficult for the victim to break the chains.

Hungary tried in 1956. The valiant Hungarians in an unsuccessful and heroic struggle rose up demanding bread and freedom. But they were destroyed by Soviet tanks that massacred more than 32,000 workers and reduced the whole country to still worse slavery. In this terrible crime against humanity the puppet traitor Janos Kadar went over to the side of the muscovite hordes that assassinated his brothers and enslaved his fatherland. Alert! There are puppets of the same kind who want to sell out Ecuador.

Tonight the Defense Front held an indoor rally at a theatre where Velasco was attacked for his permissive policies towards communism, particularly his continued favouritism towards Araujo. He was also attacked for inflation and the increased benefits for representation and housing given to members of his Cabinet. After the rally, participants were attacked in the street by a mob of Velasquistas and URJE members shouting vivas to Araujo. Our Embassy-sponsored bi-national cultural centre was stoned and shots were fired at the home of a Social Christian leader.

If the opposition to Velasco over Cuba and communism is getting serious, it's even more serious over economic policy. In the past three days the Monetary Board (comparable to the US Federal Reserve Board) has reversed the fiscal and economic policies begun when Velasco took office -- largely because of the growing opposition of the sierra Chambers of Agriculture, Commerce and Industry.

The problem derives from the competing economies of the coast and sierra and from Velasco's having placed monetary policy in the hands of Guayaquil Velasquista leaders. Just after the election these people started a campaign against the old leadership of the Monetary Board and the Central Bank which under Ponce had followed policies of stability through tight money and balanced foreign trade. The coastal Velasquista leaders, however, claimed that such policies were strangling economic development and they proposed expansion of the money supply. When Velasco took power this group received the most important government financial positions, including the Ministries of Economy and Development, and eventually the chiefs of the Monetary Board and the Central Bank resigned and were replaced by people from the same Guayaquil financial circle.

Quito 11 March 1961

The Peace Conference in Mexico City is over, and a cable arrived from the Mexico City station advising that Basantes has been able to get an invitation to visit Cuba. He will be there for two or three weeks at least, and when he returns to Mexico City he'll be debriefed by an officer from the Miami station. The Mexico City station was quite pleased with our agents' work at the Conference. The Conference adopted the predictable resolutions: support to the Cuban revolution; annulment of all treaties that tend to revive the Monroe Doctrine; opposition to the military, technical and economic missions of the US in Latin America; nationalization of heavy industry and foreign companies: establishment of cultural and diplomatic relations with the Soviet bloc and Communist China; support to Panama in its efforts to gain possession of the Panama Canal.

Since most visitors of importance to Quito stay at the Hotel Quito I suggested to Noland that we could provide better coverage of their visits by taking advantage of the US company that manages the hotel in order to bug the rooms. I suggested that we get a couple of the standard hotel lamps and send them to headquarters for installation of transmitters that we will be able to monitor from other rooms in the hotel. Through the American manager (whom we all know) we can get the lamps placed in the appropriate rooms before the guests arrive.

Noland liked the idea and is going to get two lamps through Otto Kladensky ‡ who rents the room used in the operation with Reinaldo Varea, ‡ Vice-President of the Senate. After we get them back we'll decide whether to use the manager or some other means for placing them. I'm going to suggest battery-operated equipment so that it will work if the lamp is unplugged.

Quito 15 March 1961

President Kennedy's speech to the Latin American Ambassadors in Washington on the Alliance for Progress has caused much excitement here and almost unanimously favourable comment. We're using Castro's speech the day after Kennedy's against him: he said the Cuban revolution is supported by Ecuador, Uruguay and Brazil. Through the National Defense Front we're generating continuous propaganda against Velasco's policy on Cuba which may well be what caused the stoning of Ponce's house two nights ago. The attackers got away but they were probably Velasquistas.

Other propaganda is generated through coverage of the Cuban exiles. We are getting fairly good presentation of the bulletins of the main exile group, the Revolutionary Democratic Front, ‡ and statements made by exiles when they arrive, usually in Guayaquil, but so far Noland hasn't wanted to get into direct contact with Cuban exiles in Ecuador.

Noland is financing the formation of the Anti-Communist Christian Front in Cuenca, Ecuador's third largest city. The principal agent is Rafael Arizaga, ‡ ECACTOR-2, a leader of the Conservative Party there whose son, Carlos Arizaga, ‡ ECACTOR- 3, is a Provincial Councillor and will be active in the Front. Formation of the Front has just been announced.

Bacon has solved his problem by changing the name of his nonexistent organization to 'Ecuadorean Anti-Communist Action' instead of 'Front'.

Quito 19 March 1961

The lines are drawing tighter, which is just what we want. The leftists have conducted a signature campaign of their own to support Velasco over maintaining relations with Cuba. Two days ago they published a declaration accusing the Defense Front of aiding Peru by calling for a break in relations with Cuba. The announcement was followed by three pages of signatures including Araujo and other leftist political, educational and cultural figures.

Velasco himself, in a speech yesterday commemorating the deaths of his supporters which occurred a year ago, when he arrived in Quito to begin campaigning, insisted that Ecuador will never break with Cuba while he is President. He also emphasized that Ecuador is not communist, but he alluded to a subversive plot against him -- a reference no doubt to recent rumours of rightist plotting in the military. Araujo was a speaker at the same rally. If this keeps up we will isolate Velasco on the Cuban issue so that his main support will be from the extreme left.

On our side Gil Saudade, the Deputy Chief of Station, has had Juan Yepez del Pozo, Jr, National Coordinator of the Popular Revolutionary Liberal Party, issue a manifesto on his return from the Mexico City Peace Conference. The manifesto, which is just being put out today, condemns the Conservative and Social Christians for their current campaign against communism and Cuba while also criticizing strongly the Liberal Party and the communists. In his appeal to the Velasquista masses of poor people, Yepez calls for an integral revolution favouring the poor, but insists that it be effected within the law. The manifesto also denounces de facto regimes and totalitarianisms from both left and right. If this party can really get moving we will bring under control much of Velasco's leftist support, gradually bending it against the Cuban solution. Gil is now going to have Yepez establish an organization in Guayaquil.

Quito 27 March 1961

Velasco is showing signs of erratic behaviour, partly at least as a result of our propaganda. On 23 March he had the former Army commander under Ponce arrested for subversion, but two days later he was released by the Quito Mayor at the habeas corpus hearing. The government looked so ridiculous that Velasco had to fire his Minister of Government, who today resigned 'for reasons of health'. In announcing the appointment of his new minister, Velasco criticized what he called the tendentious notices appearing almost daily in the press. With his habitual reference to his 400,000 votes he accused the propagandists of trying to provoke disorder. Velasco's physician, Dr. Ovalle, ‡ is examining Velasco almost every week and he told me Velasco is feeling considerable strain over loss of popular support, which he attributes to the rightist campaign against Cuba and communism.

Atahualpa Basantes, my PCE penetration agent who went to Cuba after the Mexico City Peace Conference, is back. He returned via Mexico City where he was debriefed by an officer from the Miami station. In his first report, which I just got from Dr. Ovalle, Basantes strongly insinuates he knows he's working for the Agency, undoubtedly because of his meetings with officers in Mexico City. Noland wants to continue the Velasquista pretext for the time being, however, so I won't be meeting him personally yet. The agent can't stop praising the Cuban revolution -- I'm not sure what to do about this.

Quito 2 April 1961

Pleasant surprises for the station this week. Yesterday the University Sports League professional soccer team elected new officers and Noland was named as a Director. Manuel Naranjo, ‡ the Socialist Party Deputy whom Noland met and recruited thanks to the Sports League, was elected President of the club. This is a matter of some prestige for Noland, an American Embassy official, to become an officer of Quito's top soccer club. Partly, it reflects his ability to move in the right circles and partly, no doubt, it is because he brought in uniforms and equipment for the team via the diplomatic pouch and contributed generously from his representation allowance. More important, the Socialist Party has been holding its annual convention, the first since the party split last year into the moderate wing and the extreme-left Revolutionary Socialist Party. Naranjo was elected Secretary-General today which means we will have still more influence in keeping the party moderately oriented. Naranjo and his colleagues call themselves Marxists but they reject the concepts of class struggle and dictatorship of the proletariat. It's important that we have some influence in a group that will attract people of social-democratic persuasion.

Propaganda remains intense. The Catholic University Youth Organization has just held a convention which we helped to finance through Davila. The convention received considerable publicity, including a visit by a convention delegation to the Cardinal, and a closing declaration against communism and Cuba was issued.

Quito 4 April 1961

Velasco continues to struggle against the rightist campaign against communism and Cuba. He again lashed out against the National Defense Front, ‡ accusing the rightist political parties of using the Front to turn people against his government for economic as well as political reasons. He was answered later by the Deputy Director of the Conservative Party, who is also on the Executive Committee of the Defense Front, with accusations that Velasco is letting himself be carried away emotionally in his attacks on the Front. He also belittled Velasco's accusations that the Front is being manipulated like an opposition political party.

Velasco's nervousness is evident in a new purge in the Army leadership, and in the resignation today of his Minister of Defense. The new minister is from a clique of Guayaquil Velasquistas, and his appointment will intensify charges that the President is being manipulated by the coastal Velasquista oligarchy.

Quito 15 April 1961

The invasion against Cuba has started with the bombing of Cuban airfields by 'defectors'. A leftist rally was held against the bombing in Independence Plaza with Araujo as main speaker, but no attack has yet been made on the Embassy. Noland has arranged with Colonel Lugo ‡ and also with Captain Vargas ‡ to be sure we get good protection during the next few days. The invasion will give URJE and the others all the excuse they need for another round of window-breaking.

Quito 18 April 1961

The invasion really got going today but reports are conflicting and headquarters hasn't said anything yet. There have been anti- US riots all day in Quito and Guayaquil and the Army was called out to protect the Embassy, USOM and the bi-national cultural centre. Araujo is leading the mobs here in Quito.

Davila tried to get a demonstration going in support of the invasion but they were outnumbered this time and had to be protected by police. Sentiment in general is running against the invasion even though many of those against it understand perfectly what would happen here if there was a communist revolution. They just hate US intervention more than they hate communism.

The main Jesuit church in downtown Quito, a relic of colonial architecture, was stoned tonight during the URJE riot, and later tonight a bomb exploded in our Embassy garden. Things could be much worse however.

Quito 19 April 1961

Things are indeed much worse. This morning we received a propaganda guidance cable -- it was sent to all WH stations -- with instructions on how to treat the Bay of Pigs invasion. The cable said we should describe the invasion as a mission to re-supply insurgents in the Escambray mountains, not to take and hold any territory. As such the mission has been a success. Noland says this means the whole thing has failed and that heads are going to roll in headquarters. I've never seen him so glum.

The Defense Front got together a sizeable demonstration of support for the invasion, which included speeches against Castro and communism. There was also a march through downtown Quito with the burning of a Russian flag and chants against Fidel, URJE and the stoning of the Jesuit church.

I don't know what to think about the invasion. It's like losing a game you never even considered losing. I'm also worried about the AMBLOOD agents in Cuba. Press reports indicate that thousands have been arrested, many simply on suspicion of not supporting Castro. We have exchanged only five or six letters with secret writing, and they weren't very revealing. Toroella ‡ has large sums of money, weapons and a yacht but apparently he communicates with Miami by radio as well as by the SW via Quito. I wonder if he is all right.

Quito 24 April 1961

Mostly through the efforts of Davila the anti-communist reaction to the Bay of Pigs failure has driven the leftists off the streets. There was another pro-Castro demonstration three days ago but then the government banned all outdoor demonstrations for a week in order to let tempers cool. On the 21st the formation of the Ecuadorean Brigade for the struggle against Castro was announced with a call for inscriptions and the claim that among those already signed up are military officers, students, workers, nurses, priests and white-collar workers. The same day an indoor rally supporting the invasion was held at the Catholic University.

By coincidence the traditional Novena to the Sorrowful Mother going on right now is serving as a pretext to evade the ban on outdoor demonstrations. The sermons have focused on the imminent danger of communism, which is penetrating the country by passing itself off as Velasquismo. This can't please the President because this is one of the most heavily attended religious occasions, and is held at the Jesuit church that was attacked during the URJE demonstration against the invasion. Yesterday the novena service ended with a street procession that included thousands of people who turned it into a political rally against communism and URJE. Today a one-and-a-half-page notice was published in the newspaper condemning the attack against the Jesuit church. Araujo and URJE have denied the attack and the chances are high that the Conservative Party Youth or a Social Christian squad actually did it.

Through all the commotion Gil Saudade has been working on an international organization. Last month the Secretary-General and the Administrative Secretary of the International Commission of Jurists ‡ (ICJ) arrived in Quito in order to lay the groundwork for an Ecuadorean affiliate of the iCJ. Saudade managed to arrange for them to meet Juan Yepez del Pozo, Sr., the sociologist and leader of the Bolivarian Society who is chief advisor to the Popular Revolutionary Liberal Party. ‡ The visit by the ICJ officials was part of a tour of Latin America to form affiliates where they don't already exist and to generate publicity for the ICJ'S work.

***

Today the Ecuadorean affiliate of the ICJ was formally established, and Velasco was named Honorary President. The Rector of Central University, a Liberal-leaning independent, is President of the provisional Executive Board, which also includes the President of the Ecuadorean Supreme Court. Other distinguished lawyers and legal associations are also taking part, including Carlos Vallejo Baez, ‡ who with Yepez runs the learned magazine Ensayos to which Saudade gives financial assistance. Vallejo is also active in the PLPR, and Yepez was named Secretary-General of the ICJ affiliate.

Gil is also working with the Inter-American Federation of Working Newspapermen ‡ (IFWN), which was founded in Lima last year with the American Newspaper Guild ‡ as cover. This organization is more like a trade union, as opposed to the Inter- American Press Society which is mostly composed of publishers. The IFWN serves to promote freedom of the press and as a mechanism for anti-communist propaganda; Its annual conference has just taken place in Quito, with statements against Cuba and the rightist dictatorships in the hemisphere. They also called for economic, social and political reforms. US journalists in attendance were used to spot and assess possible new media agents for different stations, while Saudade worked through the host organization, the Ecuadorean National Union of Journalists. ‡

Quito 30 April 1961

USOM has made its contribution towards countering the Bay of Pigs humiliation. They delivered a check for half a million dollars to our Minister of Labor and Social Welfare, Baquero de la Calle, ‡ for colonization and integration of the campesino. Present at the well-publicized ceremony was Jorge Acosta, ‡ who is head of the National Colonization Institute. Acosta has a strange relationship with the station. Most of us know him fairly well and he's closer than being just a 'contact'. Since we don't pay him he's not really a controlled agent, but he tells us as much as he can. The problem he has is that Velasco seems bent on losing all his support except the extreme left rather than break with Cuba. Not even Acosta can overcome that stubbornness.

The Inter-American Conference is definitely off. Velasco publicly accepted a proposal made jointly by the Presidents of Colombia, Venezuela and Panama that it be postponed indefinitely. We weren't surprised because now security would really be a problem. The rum ours have never ended that one country or another was proposing postponement because of security hazards, and recent discoveries here of contraband arms shipments from the US haven't helped to allay the fears.

The day before Velasco announced the postponement he called for national unity and the easing of partisan political passions. But the same day the Quito Chamber of Commerce denounced the failure of the government to publish the weekly statistical bulletin of the Central Bank. It hasn't come out for five consecutive weeks and the Chamber insists the government is making a deliberate effort to hide the worsening economic situation. The government is indeed considering a number of possible emergency economic decrees but has announced ahead of time that none of them involve new taxes.

Quito 5 May 1961

Pressure on Velasco from the National Defense Front and from the Cardinal has been helped by Velasco himself. On 30 April the Cardinal was expelled from the prestigious National Defense Board which is composed of eminent citizens and is responsible for advising on how secret defence funds are to be spent. Since the announcement of Velasco's action many Catholic groups have made well-publicized visits of solidarity to the Cardinal, including one today from the Defense Front. The visits have usually included speeches on the inhumanities of communism and the imminent danger of a communist takeover in Ecuador. Velasco's action in expelling the Cardinal is clearly retaliation for the Cardinal's criticism of the government on the communist issue, and sympathy for the Cardinal especially among the poor and illiterate can only further erode Velasco's power base.

Quito 7 May 1961

We have just had a remarkable breakthrough. One of our most valuable PCE penetration agents, Luis Vargas, ‡ recently reported on what he thought was the beginning of serious guerrilla operations here. Vargas was not in the group currently being trained but his close and frequent association with the leaders of the group gave significant intelligence. Rafael Echeverria Flores, the number one PCE leader in the sierra, and Jorge Ribadeneira Altamirano, also a PCE leader in Quito and a principal leader of URJE, were the leaders, and the training was being conducted by a foreign specialist whose nationality was unknown to the agent.

Vargas the agent got the word in time to the station and Noland advised Captain Jose Vargas, the Chief of the Police Intelligence. This morning Lieutenant Sandoval ‡ laid a trap and during the course of the morning twenty members of URJE were arrested on the mountain that rises above Quito. Ribadeneira and Echeverria are among those arrested. The foreigner conducting the training is a Bolivian and we're getting traces on him from the La Paz station for police intelligence. Too bad he isn't Cuban, but the propaganda dividend is going to be considerable anyway.

Quito 9 May 1961

The guerrilla arrests are headlines this morning! Yesterday the Sub-Secretary of Government gave a press conference in which he distributed the police report written by the intelligence unit. At Noland's suggestion the police report described those arrested as only one small group among many other groups that have been receiving guerrilla training for some time at secret sites around the country. The press stories very effectively sensationalize the police report, which described the training as including explosives, guerrilla warfare, street fighting and terrorism.

The foreigner is Juan Alberto Enriquez Roncal, a thirty-two-year-old Bolivian who came to Ecuador last month and had been training URJE members in Guayaquil before coming to Quito. He has admitted everything to the police including giving training sessions in Ribadeneira's law office.

Velasco issued a statement today that he will severely repress any terrorists, but he has released all those arrested except Ribadeneira, Echeverria and Enriquez. In Guayaquil the leader of the previous trainees was arrested, but the release of the others is sure to provoke a negative public reaction, since last night a power plant in Guayaquil was bombed.

Quito 13 May 1961

Basantes, another PCE penetration agent and a retired Army major, reported that the PCE leadership in Guayaquil (Pedro Saad and company) is furious with Ribadeneira and Echeverria. They think Enriquez may be a CIA agent provocateur and that Echeverria and Ribadeneira fell into the trap.

However, the guerrilla trainer admitted today that he is really an Argentine, aged thirty-six, named Claudio Adiego Francia. He told police intelligence that he had no money and was giving the guerrilla training so that he could continue travelling. Cuba is his destination but he said he has no invitation. He described his long background in Argentine revolutionary activities, and then changed his story, now claiming he wasn't really giving training but only recounting to the URJE and PCE people his experiences in Argentina.

This new twist is keeping the story in the newspapers and the case has been a help to our signature campaign for mercy for the Bay of Pigs prisoners. The campaign has been promoted by stations all over Latin America. In Quito the ECACTOR political-action agents have circulated the petition: today the telegram to Castro pleading mercy was published, followed by two pages of the more than 7000 signatures obtained.

Student operations of the Guayaquil base have had a series of successes in recent months culminating two days ago with the disaffiliation of the FEUE from the Prague-based International Union of Students.

This final victory began with the change in FEUE election procedures at Portoviejo last December, followed by election victories at the University of Cuenca in March and the Central University in Quito last month. In both instances the forces led by Alberto Alarcon defeated the candidates for FEUE offices put up by the Velasquistas and the extreme left. Our only defeat was at the University of Loja where the leftist candidate won. The picture is confused in Guayaquil because the FEUE has split between a Velasquista group that supports the Mayor and an extremeleftist group led by members of URJE.

The vote today by the National FEUE Council in Quito will have to be ratified by the FEUE Congress later this year, but in the meantime relations between the FEUE and the Agency-controlled COSEC ‡ in Leyden can be cemented.

Quito 15 May 1961

Ambato is the site of the most recent action. Yesterday in Ambato a Cuban photographic exhibit was inaugurated under sponsorship of the Ambato chapter of the Cuban Friendship Society. The ceremony was held in the Municipal Palace approval for which had been granted by the Ambato Mayor, a Revolutionary Socialist. The Mayor in his speech went so far as to call the Quito Cardinal a traitor, and the Cuban Ambassador gave a fiery speech against the US.

Following the speeches an unexplained electrical failure prevented the showing of a film on Cuba and later a group of about twenty men invaded the Palace and destroyed most of the photographs and mountings. The police arrived after the damage was done and the group left quickly, firing their revolvers into the air as they went. No arrests were made.

Jorge Gortaire, ‡ a retired Army colonel and leader of the Social Christian Movement in Ambato, was the organizer of the raid. Noland has been financing him from the ECACTOR project since last year to help build up a militant action organization and to promote a political campaign against the Mayor. Careful planning of the attack, especially through coordination with the police, was the reason it was so successful. Even so, the Mayor is getting more photographs down from Quito so that the exhibit can stay open.

Quito 22 May 1961

In Guayaquil the police recently arrested, at base request, three Chinese communists who arrived some days ago. They had been given courtesy visas by the Ecuadorean Ambassador in Havana and supposedly were here representing the Chinese Youth Federation. The base tried to arrange for them to be held for a long period, so that recruitment possibilities could be studied, but the order for their expulsion had already been issued.

The police are carrying out the base request to sensationalize the case. The official report charges them with propaganda and subversion, claiming they had a powerful radio transmitter in their hotel room, with which they were in communication with Cuba and other communist countries in the evenings after ten o'clock. Preposterous charges, but there's so much fear and tension in the atmosphere right now that most people will believe it.

The same day the Chinese communists were deported, a sensational plot to assassinate Velasco surfaced. The attempted assassination was reported by a Guayaquil radio station (falsely, for which the radio station was ordered to be closed) but on checking sources the trail led straight to the Cuban Consul. The Consul refused to testify in the investigation and has been expelled by the Ecuadorean' government. His departure has given us another propaganda peg for demonstrating Cuban intervention in Ecuador, even though he was simply a victim of provocation because he had reported the plot to security authorities in Guayaquil. It appears to us that the provocation was rigged by Velasco or his lieutenants in order to appease the Defense Front and other anti-communists.

Here in Quito the National Defense Front has been more strident than ever in its propaganda created through public meetings, press conferences and published statements. The Front is criticizing Velasco for his policy towards Cuba, demanding the firing of the Ecuadorean Ambassador to Cuba over the presentation of a portrait of Castro 'in the name of the Ecuadorean people', demanding that Velasco suppress communism, and demanding the expulsion of the Cuban Ambassador for his anti- US speech in Ambato. The Front continues to insist that Velasco define himself on communism even though he recently insisted in a speech that while he is President Ecuador will not become communist. The Conservative Party has also joined the campaign for expulsion of the Cuban Ambassador.

In Cuenca, Carlos Arizaga Vega, ‡ a leader of the ECACTOR operation there, circulated a petition and sent it to Velasco demanding the firing of the Ambassador to Cuba over the portrait presentation. Velasco, for his part, has dismissed the military commander of the Cuenca zone who is a well-known anti-communist -- provoking renewed criticism there.

In Ambato, the Mayor was severely denounced by Municipal Councillors for his remarks about the Cardinal and for having granted use of the Municipal Palace for the Cuban photographic exhibit. But at the closing of the exhibit yesterday the Mayor, Araujo, CTE and PCE speakers all repeated the anti-clerical themes. They began a march in the street afterwards, but were met by a Catholic counter-manifestation organized by Gortaire and armed with rocks, clubs and firearms. A pitched battle followed and, although shots were fired, no one seems to have been wounded. The much larger counter-demonstration easily overwhelmed the leftists and at one point Araujo was in danger of being lynched. If the police hadn't intervened something serious might have happened.

Somehow amidst all these crises labour operations continue to move, although not without some serious problems. CROCLE, our coastal organization, has served consistently for anti-Cuban and anti-communist propaganda, but our agents in it are not as effective in trade-union activities as we would like. They are constantly feuding among themselves and failing to get out and organize. However, they won't be terminated until Gil Saudade is able to move some of his agents from the PLPR ‡ into the leadership of the national free labour confederation now in its embryonic stage. Miranda, ‡ our Coastal Labour Senator, is also ineffective and he is feuding with the CROCLE agents. Finally, Jose Baquero, our Minister of Labor, is determined to promote the small and ineffective Catholic labour group, CEDOC, instead of our budding. secular organizations. His effectiveness is also limited because as Minister he is responsible for the public-health service, the social-security system, protection of minors, the fire departments and cooperatives as well as labour matters.

On two recent occasions the International Organizations Division in headquarters has sent in agents to help us. In March William Sinclair, ‡ the Inter-American Representative of the Public Service International ‡ (PSI), and William H. McCabe, ‡ also a PSI representative, came to assist in planning for a congress of municipal employees that a few weeks later launched a new National Federation of Municipal Employees. Also, an exploratory visit was made by an international representative of the International Federation of Plantation, Agricultural and Allied Workers ‡ (IFPAAW) for possible assistance in organizing Ecuadorean rural coastal workers.

Quito 28 May 1961

The Cubans have made a timely manoeuvre. Yesterday Carlos Olivares, the Cuban Sub-Secretary of Foreign Relations and their most important trouble-shooter, arrived in Guayaquil. He is on a 'goodwill' tour trying to bolster Cuban relations with South American countries, capitalizing, of course, on the Bay of Pigs invasion. Today he saw Velasco, but we haven't been able to get a report on their private meeting.

Olivares's visit coincides with new reports on the considerable publicity given in Cuba to recent speeches by the Ecuadorean Ambassador at Cuban universities. According to Cuban press releases the Ambassador has attacked the US, alleging that Ecuador, like Cuba, has been the victim of the 'arbitrary, unjust and rapacious American imperialism'. The reports have provoked new outrage against Velasco on his Cuban policy.

Today Velasco gave another speech and made no attempt to hide the damage our campaign is doing. He condemned persons unnamed for trying to divide the country between communists and anti-communists, and he repeated that while he is President, Ecuador will never become communist.

Our campaign through Salgado, Davila, Perez, Arizaga, Gortaire and other agents goes on. John Bacon is also continuing to publish the 'alert' notices every two or three days, and other propaganda themes include concern over the Bay of Pigs prisoners and the recent guerrilla arrests in Quito.

In Ambato, Gortaire has managed to launch an Anti-Communist Front that includes Liberals as well as the Conservatives, the fascist ARNE and others. This is the first instance of significant Liberal Party participation in anti-communist fronts and clearly reflects the prestige and organizing ability of Gortaire.

Quito 29 May 1961

If our propaganda and political-action campaign doesn't force Velasco to take the right action, the worsening economic situation will. Today the President of the Monetary Board, appointed by Velasco himself, resigned in protest against the damage to the economy that uncertainty over Cuba and communism is causing.

Since the return in early March to policies of monetary stability, inflation has failed to slow down while Velasco has created a considerable number of new indirect taxes that are very unpopular. While Velasco and his lieutenants continue their theme of 'forty years of Velasquismo' most of the people have been struggling against their declining purchasing power. One indication of how bad the situation is getting is the decline in free-market value of the sucre: from about eighteen per dollar six months ago to over twenty-two right now.

The President of the Monetary Board, in resigning, attributed the worsening economic situation to lack of confidence based on Velasco's tolerance towards communism internally and his ambiguity towards Cuba. He insisted that Velasco must take action instead of making philosophical statements, and he pinpointed the following specific problems: the activities of the Ecuadorean Ambassador to Cuba; the agitation emanating from the Cuban Embassy in Quito and the Cuban Consulate in Guayaquil; the Cuban Ambassador's speech in Ambato; and the lack of clear definition by Velasco on communism.

Velasco is really embarrassed by this resignation which Noland says is bound to have some effect. The resignation statement couldn't have been better if we had written it ourselves. Exactly what we want.

Quito 30 May 1961

Finally Velasco is taking action. Several of the Velasquista penetration agents have reported that Velasco asked Olivares to withdraw the Cuban Ambassador. There is not going to be a persona non grata note -- simply a quiet exit. This is a significant start and it shows Velasco is facing reality: he just can't continue ignoring the pressure of the Social Christians, Conservatives, Catholic Church and all the other anti-communists -- and us. As soon as we learn of the Cuban Ambassador's travel plans we'll pass word for a hostile farewell committee.

On the negative side a judge today released Echeverria and Ribadeneira for lack of evidence. He's the best friend of the extreme left in the court system and was the last hope for those two. Earlier the habeas corpus proceeding had failed them and the CTE campaign for their release hasn't been very effective. The judge ordered documents from the police on the original sources of the police information, including names of their informants. As the station is the only source, this effectively killed the legal case.

Quito 3 June 1961

Velasco made a very important speech tonight. At a political rally he tried to make the political definition that the Defense Front and the rightist political parties have been demanding. He announced a doctrine of liberalism which for him means cooperation rather than conflict between classes. He denounced communism, praised representative democracy, and described his own course as between the extremes of left and right. He also said that communism should be attacked not by police repression but through the elimination of misery, hunger, sickness and ignorance. He showed the effect of our campaign, charging the anticommunists with trying to take away the bases of his support by dividing the 400,000 Ecuadoreans who voted for him on the pretext of anti-communism.

This speech, coming on the heels of the Cuban Ambassador's expulsion, will tend to soften the campaign. Our goal is a complete break in relations with Cuba, not just an expulsion. Economics will probably help us. The sucre is now down to twenty-three per dollar from eighteen six months ago, and a controversy is raging over inflation, especially the prices of medicines which are among the highest in Latin America.

Quito 7 June 1961

Velasco's 'anti-communist' speech has been very well received and even the Conservative Party has issued a statement of guarded approval. What most people are watching, however, are his actions and we have some distance to cover before relaxing. The day after Velasco's speech, the Minister of Defense made it clear that Velasco now considers his position defined as anti-communist -- a clear attempt to stop erosion of support from the station-backed anti-communist campaign.

The Liberal Party has rather suddenly taken a strong stance against the President, partly no doubt because of a recent attack by a Velasquista mob on their paper El Comercio. At the annual celebration of the Party's founding it was said that the past thirty years of Velasquismo have pulled down the county in a cataleptic state and, of course, that only the Liberal Party can save it. The Liberal's complaints are mostly founded on the worsening economic situation: the sucre has now fallen to twenty-five.

Some relief has become available, however, largely because of Velasco's anti-communist actions of the past two or three weeks. Today in Washington the International Monetary Fund announced a ten-million-dollar stand-by loan for a stabilization programme in Ecuador. In the announcement the IMF also said that the Central Bank, which requested the loan, is going to adopt a policy of credit restriction and other measures to end the flight of capital, recognizing also that measures have already been taken to slow the fall in foreign-exchange reserves.

The IMF announcement was embarrassing to the government here, which didn't want publicity. The Minister of Economy even declined to comment on the announcement, saying that questions should be directed to the IMF in Washington.

Quito 12 June 1961

This past week, since Velasco made his 'anti-communist' speech, has been the first fairly calm period since I arrived. In the hectic pace as we've passed from crisis to crisis I almost haven't noticed how far my Spanish has come along. Noland is especially pleased with my progress on the language and also with the way I have been developing friends among the Ecuadoreans, impossible, of course, without the language. Mostly I've been spending time meeting people at the golf-club while learning to play.

Janet has a mental block on the language and it's growing as a source of friction between us. Among other things this limits her friends to those who speak English and it also hinders her running servants and shopping. Politics, unfortunately, are not interesting to her either. But these are small complaints and common, I'm told, at overseas posts. And they certainly pale before the big news: in October our first child is due, something we didn't exactly plan but we were both happily surprised.

The work routine at the station is arduous -- nights, week-ends, whenever things are happening. After reading the newspapers each morning we begin writing and distributing papers: pouched dispatches on operations, intelligence reports, cables for urgent matters. Noland insists that each day we all read the cable chronological file so that we're up to date on all the incoming and outgoing traffic. The pouched material, both out and in, is circulated so that each officer will know exactly what the others are doing, their successes and their problems. Each of us also looks over the flight passenger lists each day, and Noland insists that we also read the State Department cables and pouched material handled by the Embassy staff. With all this reading, I'm pressed to get out for agent meetings, although I am only meeting directly about five. The worst is writing intelligence reports because the special usage and format must be followed.

The propaganda and political-action campaign against Araujo, Cuba and communism in general has clearly been the major station programme since I arrived six months ago. The ECACTOR project has accounted for much of this activity. It costs about 50,000 dollars a year and in a place like Quito a thousand dollars a week buys a lot. The feelings I have is that we aren't running the country but we are certainly helping to shape events in the direction and form we want. The other main station activity, the PCE penetration programme, has consistently provided good information. There's no question that Echeverria and his group here in the sierra are doing all they can to prepare for armed guerrilla operations. We have to keep the pressure on Velasco to break with Cuba and clamp down on the extreme left.

Quito 15 June 1961

Velasco apparently thinks his 'anti-communist' definition had ended the campaign. In a speech the other day he repeated his old theme that Ecuador will never become communist under him, but he insisted that he will not break relations with Cuba without a diplomatic cause.

On the other hand Jorge Ribadeneira, the URJE leader arrested on the guerrilla training exercise, has been sent to an isolated Amazon jungle outpost to do his military service. His absence will be a severe blow to the URJE leadership in Quito and also to the PCE.

Through Gustavo Salgado we are trying to relate the guerrilla arrests last month to exile reports on guerrilla training in Cuba. The JMWAVE station in Miami recently released an article on guerrilla training in Havana of groups of ten to fifteen who have been arriving from various Latin American countries. The article was passed to Salgado who added the URJE training episode of last month and arranged for publication on two consecutive days. Somehow we have to retain the sense of urgency in the propaganda campaign on communism and Cuba.

Today the Foreign Ministry announced that the Ecuadorean Ambassador to Cuba is retiring from the post 'at the convenience of the Foreign Service'. Velasco is certainly making an attempt to placate the rightists, but the fact is that he has no other choice now.

Quito 16 June 1961

It was recently announced that Vice-President Arosemena will leave on 18 June for a trip to the Soviet Union, Czechoslovakia and Poland. We've known about this trip for some time. The invitation is from the Supreme Soviet and the group will include several legislators as well as Arosemena. Formally this is a 'private' trip with no diplomatic or commercial purposes, but Arosemena is well known for his leftist ideas -- he is also an alcoholic -- and some mischief will come from the trip for sure.

Velasco is against the trip because Adlai Stevenson arrives the day Arosemena leaves, and Velasco is desperate for economic assistance. Stevenson is touring Latin America promoting the Alliance for Progress and trying to pick up the pieces from the Bay of Pigs fiasco, and Velasco is going to give him a list of requirements. He doesn't want Arosemena's trip to jeopardize his requests for aid to Stevenson, especially after expelling the Cuban Ambassador and firing his own anti-US Ambassador to Cuba to prepare a favourable atmosphere. So Arosemena's trip has sparked a sharp public exchange between him and Velasco. The Foreign Minister announced today that the Cabinet unanimously resolved that Arosemena's trip at this time is 'inconvenient' with emphasis that the trip is on Arosemena's own account with no official standing. Arosemena for his part defended the trip by denouncing unnamed Velasquista government leaders as money-crazed. Dr. Ovalle reports that Velasco is furious.

Quito 20 June 1961

Arosemena left as planned and today Ambassador Stevenson also leaves. Velasco presented Ecuador's development needs in a seventeen-page memorandum that lists initial requirements totalling about 200 million dollars. Stevenson also met with moderate leaders of the Quito FEUE chapter and with leaders of the free trade-union movement. I had a short chat with him in the Embassy yesterday. In a few days an Ecuadorean delegation headed by the Minister of Development will leave for Washington to press for new loans. Arosemena's trip doesn't seem to have damaged Velasco's requests to Stevenson, but the split between the two won't be mended easily.

Today Velasco changed his Minister of Government again. He named a former Defense Minister under Ponce in what is an obvious move to make adequate security arrangements before the Congress reconvenes in August.

Quito 29 June 1961

Noland has decided to move ahead on coverage of the Cubans here by putting a telephone tap on the Embassy. He asked me to take charge of this new operation, and a few days ago he introduced me to Rafael Bucheli, ‡ the engineer in charge of all the Quito telephone exchanges. Bucheli is an old friend of Noland because his brother (cryptonym ECSAW) was our principal political-action agent in the Ponce government until he was killed in an automobile accident. Bucheli is going to make connections in the exchange where his office is located and which serves both his home and the Cuban Embassy. Noland also introduced me to Alfonso Rodriguez, ‡ the engineer in charge of all the telephone lines system outside the exchanges. Noland met Rodriguez through his work on the University Sports League soccer team where Rodriguez is also active. He recruited Rodriguez who suggested that Bucheli might also help, not knowing yet that Bucheli had also agreed.

The two engineers, Noland and I began planning the operation but Noland is going to let me handle it alone. The first thing I must do is get headquarters approval for the operation and some equipment from the Panama station where the TSD has just set up a regional support base. The Panama station is located at Fort Amador in the Canal Zone where they have various support staffs who are able to save several days travel time to most of the WH stations. Then Rodriguez will run a special line to Bucheli's house where we'll set up the LP. I'll ask Francine Jacome, who was writing the cover letters for the AMBLOOD SW messages, to do the transcribing.

Quito 7 July 1961

Good news from Velasco for a change. Today he appointed Jorge Acosta Velasco ‡ as Minister of the Treasury. Until now Acosta has been Director of the Colonization Institute and the Vice- President of the National Planning Board, somewhat removed from his uncle, the President. He has been keeping Noland informed on Velasco's obstinacy over breaking with Cuba, but now he'll be able to work on the problem from within the Cabinet.

Ambassador Bernbaum is also trying to soften up Velasco on the Cuban problem. Thanks to his insistence a five million dollar development loan for housing has just been approved, and he also arranged an invitation for Velasco to visit Kennedy, which will be announced in a few days, probably to take place in October.

Davila and the Conservatives continue to squeeze. Today the Party forbade any of its members to accept jobs in the Velasco administration.

Quito 11 July 1961

The Cardinal issued an anti-Cuban pastoral yesterday which may have overshot the mark. It's inflammatory, alarmist, almost hysterical in its warning against Cuba and communism. He urges all Ecuadorean Catholics to take action against communism but he doesn't say what action. The statement is so emotional it may be counter-productive, but Noland has faith that the Davila crowd, who at our instigation urged the Cardinal to produce it, know what they are about.

Today we distributed an unattributed fly-sheet through the ECJOB team. This severely attacked the Cardinal for these statements. The Catholic organizations are at once, as expected, beginning their protests.

Quito 15 July 1961

The political situation has taken a new turn that promises to obscure the Cuban and communist issues. Opposition to the government has suddenly united behind Vice-President Arosemena, thanks largely to Velasco himself.

Three days ago Velasco appointed a new Minister of the Economy who is a paving contractor with large government contracts. He is also associated with the Guayaquil financial interests surrounding Velasco and his appointment immediately rekindled the criticisms that Velasco is dominated by the Guayaquil clique. Yesterday the government announced the unification of the exchange rate which will mean that importers of machinery, raw materials, medicines and other basic materials will have to pay about 20 per cent more in sucres for each dollar of foreign exchange purchased through the Central Bank for their imports. The unification measure is practically the same as an official devaluation of the sucre and will cause prices to rise immediately, because no compensatory measures such as tax adjustments or tariff exemptions were included. The economic sector most affected will be sierra agriculture but prices generally will rise throughout the country.

The unification decree has come just as a series of new indirect taxes has been announced on carbonated beverages, beer, official paper, unearned income, highway travel and other articles. These taxes will also cause prices to rise or buying power to drop and they violate Velasco's own recent statements that taxes are already too high.

In Washington the International Monetary Fund has issued a statement supporting the measure on unification, which is not surprising because everyone knows unification was a condition for the ten-million-dollar standby announced last month. In Ecuador, however, almost every significant political organization, and other groups such as the FEUE and the CTE have announced opposition to both unification and the new indirect taxes.

Announcement of the new economic decrees couldn't have been made at a worse time for Velasco, because the other event yesterday was Arosemena's return from his trip to Moscow. His supporters, including leaders of the extreme left, had been promoting a big reception for him for over a week. At the Quito airport several thousand turned out with Araujo as one of the leaders. Posters were prominent with slogans such as 'Cuba si, Yankees no', 'Down with Imperialism' and 'We Want Relations with Russia'.

Velasco is going to have to struggle hard to keep his balance. Just possibly he will break with Cuba in order to gain rightist support, but we aren't taking bets.

Quito 23 July 1961

Arosemena has become undisputed leader of the opposition to Velasco. Although the Conservatives and Social Christians continue their opposition on the Cuban and communist issue, the new economic decrees have given the FEUE, CTE, URJE, the PCE and the Revolutionary Socialists the perfect pretext to line up behind Arosemena. Even the reactionary Radical Liberal Party and the moderate Socialist Party under our agent Manuel Naranjo have joined the extreme left in supporting Arosemena as the opposition leader.

Velasco is rattled by Arosemena's sudden popularity. During the reception for him at Guayaquil the local tank units were placed on alert to create fear and (unsuccessfully) to cut down attendance. While trying to defend the economic measures on the grounds that the government needs more income for public works, Velasco has bitterly attacked Arosemena for dividing the Velasquista Movement. As Arosemena and some of his supporters are still calling themselves Velasquistas even though they have turned against Velasco, the President has told them to leave the Movement and form another group with a different name.

Guayaquil student operations have just had a setback. Elections were held a week ago for FEUE officers at the University of Guayaquil -- possibly the most important FEUE chapter because of the high level of militancy of the students there. Our forces, financed from the ECLOSE project and led by Alberto Alarcon, lost to the extreme left. A leader of URJE was elected FEUE President. The election came at a bad time just as the extreme left was making noisy support for Arosemena against Velasco on the economic issues.

Quito 27 July 1961

Gil Saudade, our Deputy Chief of Station, decided to risk the future of his ECLURE party, the Popular Revolutionary Liberal Party (PLPR), on Velasco's longevity in the Presidency. His hope is still to attract the Velasquista left away from Araujo even if this means open and direct support for Velasco. When the party's first national convention opened in Quito a couple of days ago, Velasco was named Honorary President.

Preparations for the convention have been underway for several months and have included public statements on major issues. In late June, for example, the PLPR published a statement supporting Velasco on his Cuba policy (a conscious manoeuvre by Saudade) but strongly denouncing 'the twenty families that have been exploiting Ecuador since before Independence and that seek to conserve their privileges by keeping the country under the landlords and bosses'. The statement also affirmed that the real enemies of the Ecuadorean people are the Conservative Party, the Social Christian Movement, the Radical Liberal 'Party and the Socialist Party -- all of whom represent the rich oligarchies who oppress the poor masses of the country.

Two weeks later the PLPR published another statement sharply criticizing the most recent pastoral letters of the Cardinal, whom our agents accused of being just one more oligarch using the communist scare for his own purposes. Right now Gil has on the payroll the party's National Director, Juan Yepez del Pozo, Jr; the National Coordinator, Antonio Ulloa Coppiano; ‡ the Legal Counsel, Carlos Vallejo Baez; ‡ and the mastermind behind the operation, Juan Yepez del Pozo, Sr. who holds no office.

Saudade is very pleased with the PLPR convention which ended last night with Velasco as the principal speaker. The final session got ample publicity and was overflowing with people. Although the party had to support Velasco on his Cuban policy for tactical purposes, Saudade was careful to have Juan Yepez, Jr, in his opening speech describe the PLPR as opposed to the extremes of left or right, adding that the party could never approve of the despotism of Soviet Marxism.

Gil has also picked up two new agents from the convention, both of whom he plans to guide into the free labour movement to ensure station control beyond the CROCLE operation of the Guayaquil base. One of the new agents is Matias Ulloa Coppiano, ‡ brother of Antonio Ulloa who is PLPR National Coordinator. Matias is a leader of a collective transportation cooperative. The other new agent is Ricardo Vazquez Diaz, ‡ a leader of the Guayaquil PLPR delegation, who was one of the secretaries of the convention.

Quito 31 July 1961

Velasco and the Cubans seem to be on the verge of establishing a mutual-aid society. Yesterday an interview with the new Ambassador was published wherein the Ambassador claims that Cuba was the first country to back Ecuador in its demand for revision of the Rio Protocol, comparing the forceful imposition of the Protocol to the imposition by the US of the Platt Amendment and our retention of the Guantanamo naval base. Today the Foreign Ministry issued a statement emphasizing Ecuador's opposition to any form of collective or multilateral intervention in Cuba.

The Defense Front forces, however, haven't relaxed. At a pro- Cuba rally three nights ago Araujo's speech was interrupted by an unexplained power failure. Police troops and cavalry outside the theatre prevented another riot with counter-demonstrators. Similarly, when the new Cuban Ambassador presented his credentials at the Presidential Palace, an anti-Castro group sent by the Defense Front clashed with an URJE group that had come to the Palace to cheer the Ambassador. A riot followed and was finally broken up by the police with tear-gas.

The TSD support office in Panama sent tape-recorders, dial-recorders and actuators for setting up the telephone tap on the Cuban Embassy (cryptonym ECWHEAT). Last week the audio technician, Larry Martin, ‡ was here to train Rafael Bucheli ‡ to use the equipment, and Bucheli made the connections in the exchange aided by an assistant. Bucheli and the assistant are both active in the Quito model airplane club and I'm going to get a catalogue from headquarters so that they can select items that I can order through the pouch. Later we'll talk of salaries.

Quito 4 August 1961

Velasco's tactics of bullying the opposition have cost him another Minister of Government. In a recent open polemic between the Minister and the National Director of the Radical Liberal Party the Minister launched such severe personal insults that he was challenged to a duel by the Liberal leader. Yesterday the Minister resigned so that he could accept the challenge, since duelling in Ecuador is illegal. The Liberal leader, who is from Guayaquil, flew up to Quito yesterday for final preparations, but he was met at the airport by several hundred rioting Velasquistas, most of whom were plain-clothes policemen and employees of the government monopolies and customs. The Liberal leader barely escaped lynching while several international flights were disrupted because of the tear-gas used by police and the general chaos. The duel was later called off, however, because the seconds somehow arranged for satisfactory excuses by the ex-Minister and honour was satisfied.

During the riot at the Quito airport a touring Soviet goodwill delegation flew in unexpectedly. We've had reports from other WH stations on their tour but the exact date they would proceed to Quito was undecided, probably to avoid a hostile reception. Our National Defense Front agents will publish statements and demonstrate against the visit. They are staying at the Hotel Quito but we still have not received the bugged lamps back from our technical support base in Panama.

Quito 31 August 1961

Our propaganda and political-action campaign to keep the opposition to Velasco focused on Cuba and communism is being diverted because of the greater importance of last month's economic decrees on unification of the exchange rate and new taxes. Inflation has also become a major public issue. The government, however, is determined to retain the economic decrees in order to stimulate exports. Similarly, the new taxes are being justified as needed for the police, armed forces, education and public works. Nevertheless, the decrees have become the unifying issue for Velasco's opposition, and tomorrow the Chambers of Commerce of the entire country will call for repeal of the unification decree.

The Congress, which reconvened three weeks ago, is the centre of opposition political debate, and already the Velasquista tactics of intimidation by hostile mobs in the galleries have been renewed. During one session, when the acting Minister of Government was called to answer questions about police repression in Guayaquil, nothing could be heard over the screaming of the galleries. Orange and banana peelings and showers of spittle fell on the opposition Deputy who was trying to question the Minister. Nevertheless, the Deputy spoke for several hours against repression in Guayaquil, but he was vilified continuously by the galleries, finally being forced to seek shelter. Meanwhile, fights broke out on the Chamber floor between Deputies, ashtrays were hurled by opponents, and the Chamber's security forces refused to eject the rioters in the galleries.

Arosemena, as President of the Congress, continues as the leader of the opposition to Velasco. Although loyal Velasquistas have been elected to offices in both houses, the exact party balance is unclear because of uncertainty over defections of Velasquistas to Arosemena -- as in the case of Reinaldo Varea, ‡ who was reelected Vice-President of the Senate and has declared for Arosemena. Two weeks ago a delegation from the CTE was invited by Arosemena to a joint session of Congress with Arosemena presiding. Members of the delegation asked the Congress to nullify the July decrees on unification and new taxes, adding that if the decrees are not cancelled the CTE will call a general strike. This time Arosemena had the Velasquista mob ejected when they started shouting.

Quito 2 September 1961

Saudade is certainly moving his Popular Revolutionary Liberal Party (PLPR) along -- this time with help from the Bogota station. Since arriving in Quito Saudade has been corresponding with the Bogota station which supports a leftist wing of the Liberal Party called the Revolutionary Liberal Movement (MLR). Experience with the MLR in Colombia has been important for Saudade here because he hopes to achieve success with the PLPR comparable to the Bogota station's success with the MLR.

Some weeks ago Saudade had Juan Yepez del Pozo, Jr. of the PLPR invite the leader of the MLR, Alfonso Lopez Michelson, ‡ to visit Quito to exchange experiences and to promote PLPR organizational work. Saudade, of course, didn't reveal the CIA interest in the MLR but the Bogota station assured acceptance of the invitation. I wonder whether Lopez is witting and contact with him is direct or whether the Bogota station's access to him is through other MRL leaders.

Lopez arrived yesterday and will see Velasco and Arosemena and make a number of speeches. He will also visit Guayaquil. Saudade is picking up the tab, and good publicity is already coming out.

Quito 4 September 1961

Arosemena is cementing his political support from the CTE. Today the Senate under his prodding gave 50,000 sucres to the CTE for its national convention, scheduled for later this month in Ambato. The CTE responded with thanks from the Revolutionary Socialist sierra Labor Senator and invited Arosemena to address the convention's closing session; he accepted.

The CTE'S campaign against the decrees on unification and taxes continues, along with promotion of a general strike, the date of which still hasn't been set.

Our PCE penetration agents report joy in the party over Arosemena's cooperation with the CTE and the extreme left generally but leftist leaders are worried about his alcoholism and will be careful not to get burned by getting too closely associated with him.

In a few days we are going to bug the Czech Legation. For months Noland has had Otto Kladensky eliciting information from the Czechs on possible permanent locations for the Legation, and they finally signed a contract on a large house now nearing completion. On checking the building records, Noland discovered that the engineer in charge of construction is a friend of his from the University Sports League. Noland also knows the owner of the house, but after discussions with the engineer he decided not to speak to the owner for fear he would oppose risking his contract.

Equipment has arrived from headquarters for five or six installations, and the audio technicians are already here studying the building plans to determine how the rooms will be used. Their first priority is the code-room, followed by the Minister's office, and then studies and bedrooms.

Since the house is in one of Quito's nicest new areas, we have plenty of support bases available for use during the installation. The plan is for the two audio technicians to enter the house at night with the engineer who luckily speaks English. I will be in an observation post overlooking the house which is a back bedroom of the home of an Embassy USIS officer. Noland and Captain Vargas, ‡ Chief of Police Intelligence, and several of Vargas's strong-arm boys, will be in a support base in the apartment of Noland's administrative assistant who lives only two blocks from the target house. We will have walkie-talkie communications between the target house, my OP and the support base. If anything goes wrong, we will call on Vargas and his boys to step in and take over 'officially' while our audio technicians make a getaway. Vargas and his boys won't know why they're on standby unless they're needed.

Quito 20 September 1961

The first try for the audio operation against the Czech Legation failed. It was the technicians' fault and they were lucky not to have been caught. Bunglers! Everything went perfectly until about five o'clock in the morning when, as I was fighting to keep awake, I noticed the two technicians hurrying out of the house with their suitcases of equipment and running down the street to the getaway car. The engineer went running after them and they all drove away. I advised Noland by walkie-talkie and we went to the Embassy to rejoin the technicians.

Incredible story. They worked all night making three installations in the walls and were about to plaster over the transmitters when they were surprised by four Indian guards who had been asleep in another room all night. The engineer is known to the Indians, who were told by the owner not to let anyone enter the house, and he told them our frightened technicians were simply some electricians he brought to work. At five o'clock in the morning? While the engineer occupied the Indians, the technicians ripped the installations out of the walls and packed up.

The Czechs are visiting the house every day and are bound to notice the big holes left where the installations were ripped out. Noland gave the engineer some money to buy silence from the Indians but the engineer will have difficulty making explanations to the Czechs. He'll just have to play dumb and hope the Indians keep quiet.

It may be too late to try again because the Czechs will soon be moving in, so I suppose headquarters will ask for telephone tapping instead. We have technical problems on this operation too -- the tap on the Cuban Embassy still isn't working right. Headquarters wanted us to try a new type of equipment that actuates the tape-recorders from the sound on the telephone wires instead of from changes of voltage. The trouble is that the wires pick up a near-by radio station and all we're getting is reels and reels of music.

The only real casualty of this botched job will probably be my dog. Poor Lanita. I tested the dog tranquillizer on him last week just in case the Czechs suddenly put guard dogs at the house -- several years ago the station spent about five nights using this special powder mixed with hamburger meat, but they couldn't get the Czechs' dogs to sleep so they could make an entry. Now, however, only a few minutes after I gave Lanita the prescribed dose he began to fade away. Hours passed and he just went into a coma. The vet came the next day and took him away, saying his central nervous system was paralysed. He's still at the kennels and if he dies I will send a big bill to the TSD.

Quito 24 September, 1961

The CTE convention got underway in Ambato yesterday and it was almost like the Congress. Arosemena was one of the guests, and when the ceremonies began a group of Velasquistas who had infiltrated the theatre began shouting vivas to Velasco and abajos to Arosemena and communism. The CTE people started shouting vivas to Cuba and Arosemena and a vast fist-fight ensued. Pistols were fired into the air, stink-bombs were set off, and only when the police arrived and filled the theatre with tear-gas could the brawl be stopped. It continued in the street outside, however, while the inauguration ceremony began in the lingering stench of tear-gas combined with stink-bombs.

Velasco simply cannot learn to compromise; this episode can only be counter-productive.

Quito 25 September 1961

Now I know what happened to the agents in Cuba on the other end of the secret-writing channel. El Comercio this morning carries a front-page article on the arrest of Luis Toroella ‡ and the other AMBLOOD agents and a story about their plan to assassinate Castro. The article is a wire-service dispatch from Havana based on yesterday's Cuban government press release and the El Comercio article is naturally headlined with reference to the Quito- Havana secret-writing channel.

Apparently the agents told everything, but the story doesn't include the number of the Quito post-office box, which is under Colonel Paredes's true name. I sent a priority cable to the Miami station asking that they inform us if the box number was revealed, because Colonel Paredes will need to cover himself to protect the surveillance team. The agents undoubtedly were arrested several months ago, perhaps at the time of the Bay of Pigs invasion, but Miami should have told us so we could cancel the box and perhaps destroy the records of the name of the holder.

I hadn't known they were planning to assassinate Castro but the press report reveals a detailed plan using bazookas in an ambush near the Havana sports complex. The radio channel must have been used for this operation. No indication on how they were caught -- I hope it wasn't from my bad SW technique. No indication either of when they'll get the paredon [1] -- maybe already.

Quito 3 October 1961

The CTE set tomorrow as the day for the twenty-four-hour general strike against the July economic decrees. They claim 500 unions will participate and have been joined by the FEUE and by the Socialist Party of Manuel Naranjo. Velasco described the strike as a proclamation of revolution against his government, adding that if the new taxes are repealed there will be no money for 'teachers, police and military'.

For the past few days the government has been promoting a propaganda campaign against the strike. Large numbers of 'unions' which are really Velasquista political organizations have been publishing statements of boycott. But the only real unions boycotting the strike are the Catholic CEDOC and our own free trade-union movement including CROCLE, both of which are for annulment of the taxes but against strengthening the CTE.

Tonight Baquero de la Calle, our Minister of Labor, made a nationwide radio broadcast in which he called the strike a subversive political action having nothing to do with labour matters, to counter CTE insistence that the strike is purely for economic motives having nothing to do with politics. Both are wrong because the strike is both political and economic, but we're against it because of its extreme-left promotion.

No one doubts there will be violence when the strikers set up road-blocks to stop transportation. We've set up special communications with our police agents to get timely news on their reports from around the country. Tension is high.

Quito 4 October 1961

Velasco is truly incomprehensible. This morning most of the commercial activities in Quito and Guayaquil were normal and it was evident that the strike would be only partially successful. However, by noon the police cavalry and Army tanks had made such a show of force that everything closed, and as the afternoon went on the strike became total in both cities. If the government hadn't created such a climate of fear the strike would probably have been a failure. But there was considerable violence in the provinces, especially at Tulcan, on the Colombian border. Several have been killed and wounded there.

Quito 6 October 1961

The strike continues in Tulcan. Yesterday a Congressional Commission that included Manuel Naranjo went there along with the Minister of Government and other high police and security officials. The meeting of the Congressional Commission, the Minister's group, and the Tulcan strike commission turned into a political rally against Velasco and the government. The crowd, in fact, became so menacing that the Minister had to seek refuge in a government building under military protection.

Today a popular strike committee in the coastal province of Esmeraldas decided to follow the lead in Tulcan by extending the strike indefinitely.

Velasco continues the hard line. Four of the principal CTE leaders are being held since the day before the strike, and an arrest list of nineteen others has been published.

Quito 11 October 1961

Velasco ended the strikes in Tulcan and Esmeraldas by promising public works, and tomorrow he goes to Tulcan to listen to complaints. A few days ago in Guayaquil he again defended unification and the new taxes, but he had the Mayor accuse Arosemena of subverting public order from the Presidency of the Congress. The Congress is now in its thirty-day extraordinary period, but there is little sign that anything of significance will result -- probably more riots and clashes with Velasco. No one expects the lull of the past two days to continue.

Today the national golf tournament ended: I was awful but Noland and his wife played well. I'm skipping the celebrations at the club tonight because Janet is due to deliver any day. Her obstetrician is the Quito golf champion and will be leading the party tonight. I hope his early prediction of delivery on Columbus's Day will be slightly off because he won't be in condition tomorrow.

Quito 12 October 1961

He was right! I had to get Alberto out of the golf-club at five o'clock this morning. Miraculously everything was perfect -- a boy.

Quito 16 October 1961

The political security office of the Ministry of Government has invented a 'plot' as a pretext for arresting opposition leaders. It's so unlikely that it will probably make Velasco look worse than ever. For the past three days political-security agents have been arresting opposition leaders, including a leftist deputy who tried to question the Minister of Defense last August, and some of the rightist leaders of the National Defense Front. Luckily none of our agents is among the sixteen arrested although the security agents are looking for communists and conservatives alike.

The 'plot' was announced today by the Director-General of Security who runs the political security arm of the Ministry of Government -- an office we've purposely stayed far away from. Leaders of the 'plot', which was to break out tomorrow night, are from the extreme right and the extreme left. A sizeable quantity of arms was put on display, said to be of Iron Curtain origin and found in the homes of communists during raids. No thinking person could believe such a transparent fabrication, but Velasco obviously hopes it will rekindle the support he needs from the poor and uneducated if he decides to close the Congress by force.

In answer to the arrests and 'plot' the Liberals, Conservatives, Social Christians, democratic Socialists and the fascist ARNE all joined today in a coordinating bureau to fight assumption of dictatorial powers by Velasco.

Jorge Acosta, ‡ the Minister of the Treasury, returned from Washington today. He tried to make the trip sound successful by telling reporters of several loans that are 'pending' and' ready to be signed', but he wasn't able to bring immediate relief. Velasco must certainly be disappointed.

Almost unnoticed in this atmosphere of crisis was the resignation today of Jose Baquero de la Calle, our Minister of Labor. Velasco wanted to get him out, so he let him fire the Guayaquil Fire Chief for irregular use of funds, then cancelled Baquero's action, leaving the agent no choice but to resign. He has been an ineffective miI1ister and not a particularly effective agent either, so Saudade isn't too sorry to see him fired. Now he'll try to ease him off the payroll.

Quito 17 October 1961

A shoot-out in the Congress last night has the whole country in an uproar, and rumours are beginning to circulate that there may be a military move against Velasco.

At a joint Congressional session last night the loyalist Velasquista mob packed the galleries and began hurling orange and banana peelings as well as the worst insults they could articulate. Loyalist Velasquista legislators joined the rioters in the galleries, and when Arosemena, who was presiding, ordered the galleries to be cleared the police refused to act. Stones began to fly from the galleries and opposition legislators sought shelter under their desks while others formed a protective shield around Arosemena.

By one o'clock this morning, after nearly four hours of rioting, shots also began to be fired from the galleries, some directed right at Arosemena's desk. He finally pulled out his own revolver, emptied it into the air, and left the chamber, claiming that over forty policemen were in the galleries in civilian dress with their service revolvers.

Today Velasco denied that he is seeking to install a dictatorship, while the loyalist Velasquista legislators are justifying last night's riots as necessary for the preservation of Ecuadorean democracy. Arosemena said today he will charge Velasco before the Supreme Court with trying to assassinate him. In Guayaquil today police with tear-gas, firing weapons into the air, broke up a FEUE manifestation against the government. This can't go on forever.

Quito 24 October 1961

Yesterday the Minister of Government resigned rather than face political interrogation by Congress over repression since the general strike three weeks ago. Velasco named Jorge Acosta as Acting Minister of Government, which is a break for the station, but Noland thinks the situation may be too desperate to hope for productive work with Acosta.

Today Velasco finally made his expected move for Conservative Party support. Noland has been insisting with Davila that he do all he can to sustain the Conservatives in making a break with Cuba their condition for supporting Velasco. Thus Velasco's offer today of the Ministry of Labor was rejected by the Conservatives, and Velasco's position continues to weaken. Acosta told Noland that Velasco is as stubborn as ever on breaking with Cuba, but he is going to do all he can to convince his uncle that the only hope of survival for the government is to break with Cuba and gain Conservative backing.

I haven't seen anything in writing on whether the Agency or State Department want to see Velasco survive or fall -- only that our policy is to force a break with Cuba. The obvious danger is that Velasco will fall because of his obstinacy and that a pliable Arosemena, strongly influenced by the CTE, FEUE and other undesirables, will end up in power. This makes Acosta's influence on Velasco for the break absolutely crucial.

Quito 27 October 1961

We weren't able to re-enter the Czech Legation before they moved in, so the audio operation is definitely lost.

A couple of nights ago someone fired shots through the huge front windows of the Legation, but a bomb placed in the garden at the same time failed to explode. The windows are very expensive and have to be imported from the US, so that will keep the Czechs off balance for a while -- what's left of the windows is all boarded up. We didn't instruct any agents to make this terrorist attack, but Noland thinks it was Captain Vargas, our Chief of Police Intelligence. Vargas's office is in charge of investigating the attack.

I've just taken over a new operation -- the Tulcan portion of the ECACTOR political-action project. Noland had been meeting irregularly with a leader of the Conservative Youth organization there, Enrique Molina, ‡ but guidance and funding were difficult because the agent could come to Quito only infrequently and Noland lacks the time to go there: two long days to drive to the Colombian border and back.

The drive between Quito and Tulcan is so spectacular that it's beyond adequate expression. There are green fertile valleys, snowcapped volcanoes, arid canyons eroded by snaking rivers, lakes smooth as glass, panoramic views from heights almost as from an airplane. All the way the cobble-stoned Pan-American highway winds around and up and down the mountains, passing through colourful Indian villages where every few kilometres the hats, ponchos, even the hair-styles change to distinguish one community from another.

I took money to Molina and told him to use it for the anticommunist front in Carchi province but he'll probably use it mainly for propaganda against Velasco. I also set up a communications channel for him to report intelligence on political unrest and we will try to alternate meetings; one month he'll come to Quito and the next I'll go there.

Quito 1 November 1961

New violence broke out yesterday in Cuenca when a FEUE manifestation against the government was severely repressed by police. The students had been joined by a large number of people and when the demonstrators attacked government buildings the Army was called in. Seven persons were wounded in the shooting.

Velasco announced that in spite of the violence he will make an official visit to Cuenca for its provincial independence celebrations the day after tomorrow. There is much speculation that more violence will occur because the people in the Cuenca area are so angry at Velasco's failure to alleviate the effects of declining prices of the area's products -- especially Panama hats. Hunger migrations from the province, a rare occurrence even in Ecuador, have been going on for some time, and representatives of the Quito government are increasingly unpopular in this strongly Conservative and Catholic region.

Reports from our police agents indicate that the rioting in Cuenca is continuing today.

Quito 3 November 1961

Military rule was imposed yesterday in the province of Azuay (of which Cuenca is the capital) as at least ten more people were wounded during a popular uprising. Velasco fired the provincial governor and other leading government officials and sent Jorge Acosta, Acting Minister of Government, to Cuenca for a firsthand inspection. Acosta's trip only caused further protest, which was followed by more arrests. Municipal authorities in Cuenca cancelled the independence celebrations scheduled for today and asked Velasco not to come.

But Velasco is in Cuenca right now, and many reports are coming from the radio and the police that serious new rioting and shooting is going on.

Quito 4 November 1961

In Cuenca yesterday at least two were killed and eight more wounded. On arrival Velasco headed a procession on foot from the airport into town -- a grave provocation against the local hostility reflected in funeral wreaths and black banners decorating the houses in sign of mourning. Along the way Velasco and his committee were jeered, taunted and finally attacked with stones and clubs. Shooting followed as the riot was suppressed, but Velasco insisted on presiding at the military parade. Afterwards, however, he was forced to give his speech in an indoor hall where he blamed the violence on opposition political leaders.

From Cuenca Velasco is motoring to several small towns for speeches and then to Guayaquil. In the Congress today the debate over events in Cuenca went on for eight hours. The CTE, FEUE and Revolutionary Socialists have condemned Velasco, along with the Conservative Party and the Social Christian Movement. A strange alliance for our political-action agents but momentum against Velasco dominates the scene.

Jorge Acosta, Acting Minister of Government, got Velasco's approval to expel another Cuban -- this time it's the Charge d' Affaires because the Ambassador is in Havana right now. After meeting today with the Cuban Charge, the Minister of Foreign Affairs announced that the Charge will be leaving. He gave vague reasons, suggesting an association between certain Ecuadorean political figures and the Cuban government, but he emphasized that the Charge's departure does not mean any change of policy towards Cuba. The Charge on the other hand said he is leaving for Cuba voluntarily. It's clear that the Foreign Minister was reluctant to follow Acosta's order to expel the Cuban -- and it's equally doubtful that this desperate move by Velasco to obtain support from the Conservative Party and other rightists will work. Acosta told Noland that Velasco still refuses to break completely with the Cubans, but he is also going to move against the Prensa Latina representative.

Velasco finally got some good news on economic aid. Two large loans have just been signed in Washington: one a 4.7 million dollar loan for development of African palm oil and sheep ranching and the other a 5 million dollar loan for middle-class housing. Good publicity but no early effects expected.

Quito 5 November 1961

Today Jorge Acosta announced that the Cuban Charge is being expelled as persona non grata. His clarification has been broadcast continually over the government radio network. The Cuban Embassy, however, insisted (in order to save face) that the Charge was never told that he is being expelled, while at the Foreign Ministry confirmation was made of expulsion rather than voluntary return to Cuba.

Quito 6 November 1961

If he goes, Velasco will not have gone quietly. More violence today, both in Quito and in Guayaquil, where eleven have been killed and at least fourteen wounded -- all students and workers. We've been sending one report after another to headquarters and the Guayaquil base is doing the same.

Congress went into session at noon and Arosemena accused Velasco of having violated the Constitution. A FEUE delegation visited the Congress to express support, and about three o'clock this afternoon the Congressional Palace was sealed off by Army troops and telephone communications were cut.

This morning the entire Cabinet resigned, and Velasco, who only arrived from Guayaquil at noon, spent most of the afternoon visiting military units. He also made a radio broadcast in which he accused Arosemena of proclaiming himself a dictator, adding that he was firing Arosemena as Vice-President.

I'll be spending the night here in the Embassy listening to the police and military radios and taking calls from agents in the street. The latest is that Arosemena and other legislators were allowed to leave the Congressional Palace just after midnight, and as they walked towards Arosemena's house a few blocks away they were arrested by Velasco's Director-General of Security. Arosemena and the others have been taken to jail, but several agents believe that it's a deliberately dangerous scheme on the part of Arosemena to force Velasco to unconstitutional action -- which could provoke the military to move against him.

In spite of the Cabinet resignations, Acosta continues to function as Minister of Government. This morning he expelled the Prensa Latina correspondent, a Cuban who had been expelled last year under Ponce but had slipped back into the country while Araujo was Minister of Government. We're sending situation reports to headquarters practically every hour.

Quito 7 November 1961

It's all over for Velasco but the succession isn't decided. About five o'clock this morning the engineers battalion in Quito rebelled on the grounds that Velasco had violated the Constitution in arresting Arosemena, but was attacked by loyalist Army units. A ceasefire occurred about 8 a.m. for removal of dead and wounded and later in the morning the Military High Command decided that both Velasco and Arosemena had violated the Constitution. They later named the President of the Supreme Court to take over as President of an interim government. Velasco has accepted this decision and the Supreme Court President has taken over the offices in the Presidential Palace.

Velasco visited several of the loyalist military units after leaving the Presidential Palace this afternoon and according to military intelligence reports he is at the home of friends but asking for asylum in a Latin American embassy. Acosta received asylum earlier today in the Venezuelan Embassy.

Arosemena is making a fight of his own to succeed to the Presidency. He and the other legislators were released from prison tonight and went immediately to the Legislative Palace where Arosemena convoked a joint session and was himself named President. The constitutional limit on Congress's extended session ends at midnight tonight, but the Congress is remaining in the Palace with Arosemena.

Tonight I sleep in the Embassy again -- just in case the Military Command decides to move in favour of either of our two Presidents. Let's hope they stick with the President of the Supreme Court, a rightist who would be favourably disposed to a break with Cuba and suppression of the extreme left in general.

Quito 3 November 1961

It's Arosemena! This morning the Legislative Palace was surrounded by Army paratroopers and tanks but just after noon Air Force fighters flew low over the Palace firing their guns into the air to intimidate the Army units. When it became clear that the Air Force was backing Arosemena and the Congress, the Supreme Court President resigned -- he had lasted as President only eighteen hours -- and the Army units were withdrawn from the Palace. The Military High Command recognized Arosemena later this afternoon.

During the hours before the outcome was known today, URJE and FEU E demonstrations in favour of Arosemena broke out in different parts of Quito and later expressions of support to Arosemena have poured in from all over the country, especially from the CTE organizations, FEUE and URJE.

While the Legislative Palace was still surrounded this morning Arosemena named a centrist Cabinet consisting of two Liberals, two Democratic Socialists, one Social Christian, one Conservative and three independents. One of the Socialists is Manuel Naranjo who was named Minister of the Treasury. This afternoon Arosemena has been meeting with supporters, including Araujo whom Arosemena described as 'that great fighter'. But when Araujo got up on a chair and tried to give a speech to the crowd milling about, he only got out 'Noble people of Quito', when he was shouted down with much ridicule. Arosemena's first act, even though he won't be inaugurated until tomorrow, was to convoke a special session of Congress for election of a new Vice-President and other business. Reinaldo Varea Donoso was presiding officer at the first session today.

Velasco hasn't given up -- quite. From the Mexican Embassy he issued a statement that he hasn't resigned and he again reminded everyone of the 400,000 votes he got last year. Four times elected and three times deposed: a winner on the stump but a loser in office. If he had only broken with Cuba he could have won Conservative and other right support and weathered the left campaign over economic issues.

Quito 9 November 1961

This morning before the inaugural ceremony the FEUE organized 'Operation Clean-up' which was a symbolic scrubbing down and sweeping up at the Presidential Palace to cleanse the place before Arosemena took over.

Arosemena and his new Cabinet then led a march of thousands from the Legislative Palace to the Presidential Palace at Independence Plaza. In his speech Arosemena described Velasco's regime as one that started with 400,000 in favour and ended with 4,000,000 against. In promising action instead of flowery speeches, he pledged that his government will be one of peace and harmony and that he will be President of all Ecuadoreans, not just the privileged few. But from our point of view the most important of his remarks was his pledge to continue diplomatic relations with Cuba.

In other ominous indications from the inaugural speeches the President of the CTE attacked 'yankee imperialism' while praising the Cuban revolution and calling for the formation of a Popular Revolutionary Front. (Formation of the Front has already been reported by our PCE penetration agents and will include the CTE, Revolutionary Socialists, PCE, URJE, Ecuadorean Federation of Indians, and a new student front called the Revolutionary University Student Movement.) The FEUE President also spoke, recounting the participation of the students in Velasco's overthrow. Although he's a moderate and was elected with support from the Guayaquil base student operation, opposition to Velasco has been growing too strongly in recent months for economic and other motives to permit Alberto Alarcon and his agents to keep the moderate FEUE leadership from supporting Arosemena.

Diplomatic relations with the Ecuadorean government are continuing as if Velasco had died or resigned -- which means there is no question of formal recognition of the new government. Everything's been legal and constitutional.

Quito 11 November 1961

The general political atmosphere is one of relief, optimism, satisfaction -- almost euphoria. After fourteen months of intimidation by Velasco, supporters of the traditional parties are happy to see Arosemena in power, at least for the moment.

Davila was elected President of the Chamber of Deputies for the Extraordinary Congressional Session. Reinaldo Varea was elected Vice-President of the Senate -- offering, in his acceptance speech, to die before violating the legal norms 'of this new and unmerited honour'. Congress then recessed for two days and on Monday they will reconvene to elect a new Vice-President. There's going to be plenty of tension over the week-end as deals are made to see who becomes number two to Arosemena. The importance of this election is very great because no one knows how long Arosemena can last with his frequent drinking bouts. Noland thinks Varea, one of the leading candidates, has a good chance. The Rector of Central University, a Liberal-leaning independent, is the main contender and is backed by the FEUE and extreme left.

Velasco was put on a Panagra flight to Panama this afternoon. Most of the country is peaceful again and the vandalism and looting of stores has disappeared. From the general strike on 4 October until now, at least thirty-two have died in five cities and many more were wounded, forty-five in Quito alone. It wasn't exactly a bloodless coup.

Quito 13 November 1961

Noland has pulled off a coup of his own. Over the week-end Varea called for a meeting at the Hotel Quito safe house. He wanted to know if Noland knew where he might get support for election as Vice-President, particularly whether Noland thought the Conservatives might support him. Noland said he thought so, but naturally had to be tactful in order not to reveal any relation with Davila or other rightist agents.

Later Noland met with Davila who asked for advice on whom the Conservatives should support for Vice-President. Noland was able to promote Varea discreetly, reasoning that if the Central University Rector were elected, the Vice-Rector, a Revolutionary Socialist, would take over the University. Davila pledged to throw the Conservative vote to Varea. Later Davila and Varea met for agreement, and Noland is convinced that neither knew of the other's meeting with him.

This morning a notice in El Comercio placed through Gustavo Salgado compromised the Rector pretty badly. It was an announcement of support attributed to the Ecuadorean Communist Party and URJE. Denial will come but too late because Congress reconve6ed at noon to elect the Vice-President.

The galleries were packed by the CTE and FEUE militants screaming for the Rector's election. Davila was the presiding officer and on the first ballot Varea got sixty-four votes -- the most of the four candidates but twelve short of the two-thirds needed. When the results of this vote were announced the galleries began to riot. Varea was elected on the next ballot and the FEUE and CTE people really broke loose, showering Davila with stones, spit and wads of paper. No police around as usual.

Varea, in his inaugural speech after Davila proclaimed him Vice-President, seemed a little too humble: 'You will see that I lack the capacity to be Vice-President of the Republic. I am full of defects, but against this is my life, which I have filled with modesty and sacrifice. You and I with the help of God can solve little by little the great problems that affect the Ecuadorean people.' Noland said he's going to raise Varea from seven hundred to one thousand dollars a month, and if he gets to be President we'll pay him even more.

Senator Humphrey arrived yesterday and we're reporting on possible demonstrations against him. He'll visit Arosemena and address the Congress, but yesterday he was right on target in remarks to newsmen: the US is ready to finance the development of poor countries but their governments have to effect agrarian, tax and administrative reforms. Otherwise the US will just be financing eventual bolshevization.

Quito 17 November 1961

Arosemena's government is not yet two weeks old but there are clear signs that he will have significant leftist participation in his regime. Appointments at the Minister and Sub-Secretary level like Manuel Naranjo, the new Minister of the Treasury, are certainly acceptable. But jobs on the middle level are increasingly falling into hands of Marxists and other leftists who are unfriendly to the US even though they may not be formally affiliated with the PCE or the Revolutionary Socialists. The objectionable appointments are mostly in education and the welfare and social-security systems, although the new governments of Guayaquil and Guayas Province are also taking on an unfortunate colouring.

Both in the station and at the Guayaquil base we have been preparing memoranda on the new faces in Arosemena's government for the Ambassador, the Consul-General and the State Department in Washington. The memoranda are based on our file information and also on queries to our PCE penetration agents on Party reaction to the appointments. First indications are that influence from the extreme left will be much greater under Arosemena than under Velasco.

Reaction from the State Department and from headquarters is moderately alarmist and headquarters has sent special requirements on continued close monitoring of Arosemena appointments. The worry is that this is only the beginning and that Ecuador will continue sliding to the left much as Brazil is moving that way already. On the Cuban question the Foreign Ministry announced today that the Cuban Charge expelled by Velasco can now remain -- in the confusion during Velasco's last days he had stayed on in Quito.

To counter these developments we are going to start a new round of propaganda and political-action operations through the ECACTOR agents such as Davila, Perez, the National Defense Front and propaganda agents such as Gustavo Salgado. Reinaldo Varea, the Vice-President, will also be extremely important because he is well-known as an anti-communist. He's a retired lieutenant-colonel in the Army and he studied at Fort Riley and Fort Leavenworth in the US. He was also Ecuadorean military attache in Washington and advisor to the Ecuadorean representative on the Inter-American Defense Board, Sub-Secretary of Defense and later Minister of Defense.

As an opening and somewhat indirect thrust, the Guayaquil base had the CROCLE labour organization publish a half-page statement in the newspapers yesterday on the danger of communism and the subservience of the CTE to the WFTU in Prague. It called for repression of communism, warned against opening diplomatic relations with the Soviet Union, and forecast the establishment of the Ecuadorean Confederation of Free Trade Union Organizations as a democratic alternative to the CTE.

Arosemena has started a shake-up in the internal security forces. Today an investigation was started to verify the lists of agents on the role of the National Security Directorate, the political security office responsible for Arosemena's arrest on the night of 6-7 November. It is expected that many of the agents listed simply do not exist and that their salaries were pocketed by top officers of the NSD.

The top echelons of the National Police are also being shaken up. Captain Jose Vargas, Chief of the Police Intelligence organization, will undoubtedly be purged because he is well known as the leader of a secret pro-Velasco organization within the police. We're hoping, however, that Lieutenant Luis Sandoval, ‡ the chief technician under Vargas and fairly apolitical, will not be moved.

Quito 20 November 1961

The station programme for penetrating the PCE is suddenly in better shape than ever. The Pichincha PCE members have just elected a new Provincial Committee and not only was Basantes re-elected but Cardenas and Luis Vargas ‡ were elected too. This gives us three agents on the eight-member committee which is comparable to a national Central Committee because of the growing split between the coastal leadership under PCE Secretary-General Pedro Saad and the sierra leadership under Rafael Echeverria, chairman of the Pichincha Provincial Committee.

I've taken over another operation from Noland -- this time it's Colonel Oswaldo Lugo, ‡ our highest-level penetration of the National Police. The other night Noland introduced me to Lugo who advised that he has been appointed Chief of the National Police in the Southern Region with headquarters in Cuenca. He won't be leaving for a few weeks, and meanwhile he will introduce me to his stepson, Edgar Camacho, ‡ a university student who will serve as cutout for reports from Lugo's sub-agents in the CTE. Lugo expects to come to Quito at least once a month when we'll meet, but he'll send urgent reports through Camacho. A very friendly, intelligent and sharp officer.

Operations at the Guayaquil base got a jolt yesterday when their most important labour and political intelligence agent died suddenly. He was Emilio Estrada Icaza, ‡ director of one of Ecuador's largest banks, president of a fertilizer company, former Mayor of Guayaquil and well-known collector of pre-Hispanic artifacts. It was through Estrada that the base organized the successful campaign to oust Saad from the Senate and then formed the CROCLE labour organization.

Quito 19 December 1961

There has been a flurry of activity prior to the Christmas lull, with little of particularly happy significance to us. Three days ago Arosemena was the principal speaker at the Congress of the CTE-controlled Ecuadorean Indian Federation. He shared the platform with the CTE President, a Revolutionary Socialist; Carlos Rodriguez, the PCE organizer in charge of the Indian Federation; and Miguel Lechon, an Indian and PCE member who was elected President of the Federation. In his speech to the thousands of Indians trucked into Quito for the ceremony, Arosemena promised quick action to abolish the huasipungo.

The Indian Congress was followed yesterday by the Congress of coastal campesinos which is the CTE'S organization for rural workers on the coast. Arosemena was also the principal speaker at this Congress which, like the Indian Congress, was highly successful for the extreme left.

Student operations of the Guayaquil base under Alberto Alarcon have suffered another defeat. The National FEUE Congress recently ended in Guayaquil and the extreme left dominated. Guayaquil University, with the FEUE chapter run by URJE militants, will be the national seat for the coming year. Delegations from the universities of Cuenca and Portoviejo, which are controlled by Alarcon, walked out of the Congress when resolutions, supporting the Cuban revolution and condemning the Alliance for Progress, were passed. Protests against the take-over by the extreme left were also made through Davila and the Catholic University Youth Organization and through Wilson Almeida, editor of Voz Universitaria.

We also had a setback in student operations when a Revolutionary Socialist was elected President of the Quito FEUE chapter. After the voting the new officers issued a statement supporting Arosemena on the need for agrarian reform and on 'non-intervention' with regard to Cuba.

Now both the Quito and the Guayaquil FEUE chapters, as well as Loja, are in extremist hands. Meanwhile URJE continues to dominate the streets. A few days ago a group of Cuban exiles (several hundred have arrived to reside in Guayaquil) was attacked by URJE militants as they reported to a government office to register.

Operations with the National Police are in transition. Jose Vargas ‡was not only relieved of command of the Police Intelligence unit -- he is under arrest along with other members of his secret Velasquista police organization. Luckily Luis Sandoval was left untouched and will continue in the unit. I've been seeing him much more frequently since Vargas was removed and until we can evaluate the new Police Intelligence Chief, Major Pacifico de los Reyes, ‡ Sandoval will be our main Police Intelligence contact -- in effect he's a paid penetration agent. De los Reyes came to the station under a pretext related to some equipment we gave Vargas, but the visit was obviously to begin contact. Noland and I will alternate contact with him without telling him that I am meeting regularly with Sandoval.

Colonel Lugo has taken command in the Cuenca Zone. Regular communications with him will be through Edgar Camacho, his stepson, except on the trips he makes to Quito every month or so. He wants me to hold his salary and the salaries of his sub-agents for passing directly to him, so I imagine he'll come every month.

Progress continues on the formation of a national free labour confederation. On 16-17 December the existing free labour organizations led by CROCLE ‡ held a convention for naming the organizing committee for the Constituent Congress of the national confederation -- to be called the Ecuadorean Confederation of Free Trade Union Organizations ‡ (CEOSL). Enrique Amador, one of the Guayaquil base labour agents, was President of the convention and Adalberto Miranda Giron, ‡ the base agent elected last year as Labour Senator from the coast, was a principal speaker. The Constituent Congress was set for late April of next year.

Nevertheless, serious problems are growing behind the facade of progress among the free trade-union groups. Mainly it's a question of job security and bureaucratic vanity among the leaders of the different organizations. Competition among them to get the best jobs in CEOSL, when it's established, is creating jealousies and friction. In early November, IO Division's most important Western Hemisphere labour agent, Serafino Romualdi ‡ (AFL-CIO representative for Latin America), came to Guayaquil and tried to establish a little harmony. The convention just over was a result of his trip, but the various leaders are still fighting.

Now that Velasco is out, Gil Saudade's Popular Revolutionary Liberal Party is bound to decline if not disappear completely. He is going to move some of his agents from that party as fast as possible into the CEOSL organization, so that with salaried agents in place the organization will have some discipline and order. Otherwise it will be forever weak and no match for the CTE.

Our National Defense Front has issued another call for a break in relations with Cuba, but at the recent Conservative Party Convention it was decided to give general support to Arosemena while still insisting on a break with Cuba. (The photographs published on the Conservatives' meetings are embarrassing -- they keep a crucifix, about half life-size, on the front of the speakers' table, and it looks like a Jesuit retreat.) Davila was elected Sub-Director-General of the Party. All the other political parties of importance have also held conventions, and all are continuing general support to Arosemena.

The State Department, too, is going to gamble on Arosemena and, perhaps, on the anti-communist tradition in the military. A few days ago a new loan was announced: 8 million dollars for budget support from the US government -- forty years at no interest. It had originally been negotiated by Jorge Acosta as Minister of the Treasury under Velasco.

Congress recessed until next August with practically no legislation to show for its 112-day session that cost over ten million sucres. Incredibly, Congress took no action to repeal the decree on unification of the exchange rate that had unified the opposition to Velasco. Arosemena and the CTE also seem to have forgotten their big issue.

Quito 23 December 1961

The pace is slowing for the end-of-the-year celebrations and we've been taking advantage to make the rounds with whisky, cigarettes, golf-balls and other gifts. Noland is taking the new Administrative Assistant, Raymond Ladd, ‡ around to meet the Quito travel-agent and tourism crowd so that he can take over and expand the station travel-control operations. The new principal agent will be Patricio Ponce, ‡ an old friend of Noland and prominent bullfight figure, whom Ladd is going to set up in a cover office as soon as possible. In January I'll also turn the ECSTACY letter intercept over to Ladd.

We were fortunate to get Ladd for the administrative job, which is usually filled by a woman, because he can handle some operations too. During his previous assignment in San Jose, Costa Rica, he learned some operational techniques, and although he was refused the operations training (for lack of formal education) Noland wants to use him on non-sensitive matters. He works in perfectly because he's a champion golfer, poker addict and general hustler.

When I stop to think about the excitement and continual state of crisis over the past year, I realize that we've tried to attain only two goals and have failed at both. We haven't been able to bring about a break in diplomatic relations with Cuba, and we haven't been able to get the government to take action against the growing strength of local communist and related movements. With Velasco, we made no direct effort to overthrow his government. But by financing the Conservatives and Social Christians in the quasi-religious campaign against Cuba and communism, we helped them destroy Velasco's power base among the poor who had voted so overwhelmingly for him. By the time Velasco introduced the new taxes and unification of the exchange rate, our campaign, led by the rightists and assisted by inflation, had already turned popular opinion against him. It was an easy matter then for the CTE, URJE, FEUE and others with extreme-left inclinations to usurp the anti-Velasco banner using Arosemena as their anti-oligarchical symbol and as legitimate successor.

Our principal tasks in the coming months will be to renew the campaign against relations with Cuba through the National Defense Front and other operations while monitoring carefully the penetration by the extreme left of Arosemena's government -- and their preparations for armed action. Although both the second and third in succession to Arosemena are on our payroll, it would be difficult to argue that the present security situation is an improvement on the Velasco regime.

The fundamental reasons why there is any security problem at all remain the same: concentration of wealth and power in the hands of the very few with marginalization of the masses of the people. Such extreme injustice can only encourage people to resort to extreme solutions, but there is still no sign of the reforms that everyone talks about. I wonder about reforms. Certainly the attitudes of my friends -- whether blue-blood conservatives, new-rich liberals or concerned independents -- are not encouraging. Their contemptuous term for the poor who supported Velasco -- the chusma -- shows how much distance has still to be travelled.

My son is only ten weeks old but already he's beginning to show some personality and awareness. Proud father, yes I am -- he was baptized three weeks ago in the old church in Cotocollao in a beautiful white dress given by the families in the station.

I'm not sure what to do about Janet. We continue to grow apart for lack of common interests. She knows practically nothing of my work, and her lack of interest in politics and the language has turned her to bridge with other American wives who tend to complain over trivia. I must help her, but the strain of daily events leaves so little energy -- except for golf where I'm spending most of my free time. It's an unfair escape, I know, but it's also a relaxation.

Quito 2 January 1962

The Cuban Sub-Secretary of Foreign Relations, Carlos Olivares, is back in Ecuador -- this time drumming up support in advance of the OAS Foreign Ministers Conference scheduled for later this month in Punta del Este, Uruguay. At the Conference, the US government hopes to get some collective action going against Cuba -- at least a resolution that all countries still having diplomatic and commercial relations with Cuba move to break them. Yesterday Olivares met with Arosemena at a beach resort and Arosemena reaffirmed his policy of non-intervention towards Cuba. Today he said, Ecuador will be against any sanctions against Cuba at the Punta del Este Conference.

One reason why we're trying to isolate Cuba is that headquarters believe the Cubans are training thousands of Latin Americans in guerrilla warfare, sabotage and terrorism. Every station is required to report on travel to Cuba, or to Moscow or Prague, which are longer but also widely used routes to Cuba. Right now there are at least sixty-two Ecuadoreans in Havana invited for the celebrations of the third anniversary of the revolution. Some no doubt will be funnelled off to the training camps. Miguel Lechon, President of the Ecuadorean Federation of Indians, is in the group.

Quito 16 January 1962

Our new campaign is off to a bang -- literally. The national convention of URJE was to have opened in Cuenca two days ago but during the night before bombs exploded in the doorways of two Cuenca churches. There were no injuries from the bombs -- the anti-communist militants under Carlos Arizaga Vega were careful -- but large 'spontaneous' demonstrations against the bombings occurred on the day the convention was to start. Public authorities then banned the URJE convention in order to avoid bloodshed.

The Conservative Party under Davila's direction has called on Arosemena for a definitive political statement on Cuba and communism (the prelude to new Conservative pressure). He answered that Ecuadoreans should concentrate on national problems that are' above' the problem of Cuba. Davila is organizing a demonstration for the day after tomorrow in Quito in solidarity with the Cuenca one.

Yesterday the Popular Revolutionary Movement (formed by the PCE, URJE and other extreme leftist organizations when Arosemena took over) sent a delegation to visit the Minister of Government. They told him that the bombings in Cuenca were not their work and that they reject terrorism as a political instrument. Last night in Guayaquil Pedro Saad's home was bombed -- again no one injured.

The main theme of our propaganda in recent days has been the shooting last month in Havana when a group of Cubans tried to obtain asylum in the Ecuadorean Embassy by crash-driving an automobile on to the grounds. Cuban security forces opened fire to impede them and several bodies were carried away.

Gil Saudade keeps grinding away with his international organizations. This time it's the Ecuadorean affiliate of the World Assembly of Youth ‡ (WAY) -- called the National Youth Council. ‡ It groups together students, workers, sports organizations, rural and religious youth groups, Boy and Girl Scouts and the Junior Red Cross. Gil runs this operation through Juan Moeller ‡ who is President of the Ecuadorean Junior Red Cross and who just put in another leader of the Junior Red Cross as Secretary-General of the Youth Council. The main business in coming months will be to arrange for Ecuadorean participation in the WAY Congress scheduled for August and to pass headquarters' guidance to the Ecuadorean leader on which issues to support and which to oppose.

Quito 19 January 1962

The campaign is back in full swing in Quito. Yesterday's rally against Cuba and communism was enormous -- and considerably helped by the government. After days of promotional work by the ECACTOR-financed organizers; yesterday morning the Minister of Government, a Liberal, prohibited public political demonstrations throughout the country until further notice including the rally planned for yesterday afternoon. His decision was based on the recent wave of bombings and the tension caused by our renewed campaign.

The organizers sent the word around that the rally would take place in spite of the prohibition as a show of solidarity with the recent demonstrations in Cuenca and Guayaquil. The crowd gathered at a theatre on the edge of the downtown area, soon grew into thousands, and began to move towards the Independence Plaza. Police tried to stop it with tear-gas and cavalry but lost the pitched battle that followed in spite of wounding twelve people. The demonstrators also attacked an URJE counterdemonstration which quickly disappeared. Riobamba thanks to the efforts of a new agent of Noland's named Davalos. ‡ Through Renato Perez and Aurelio Davila, Noland is also getting money out for demonstrations in Loja and other provincial cities in days to come.

The Punta del Este Conference opens today but in spite of all the pressure we're bringing on the government through the right it appears that Ecuador will not support any joint move against Cuba.

Quito 31 January 1962

The Punta del Este Conference finally ended yesterday. All our efforts to get sanctions against Cuba failed, thanks to opposition from countries like Ecuador. Even on the resolution to expel Cuba from the OAS only fourteen countries voted in favour with Ecuador among the abstentions.

Today the Social Christian Movement formally ended its participation in the Arosemena government, and the Conservative Party is issuing a statement against the government's position at Punta del Este. The Foreign Minister, a prominent Social Christian, will either have to resign or quit the party.

Last night, the Czech Legation was bombed again and the huge new windows just installed because of the October attack were completely shattered. I drove by the Legation on my way to work this morning and the carpenters were already at work boarding up again. The bombers escaped through the heavy fog last night -- must have been the Social Christian squad.

Quito 28 February 1962

Most of the important political parties have held conventions this month to begin preparations for the local, provincial and Congressional elections scheduled in June. Where possible we have instructed agents to push for resolutions on the Cuban and local communist issues.

Once in the Independence Plaza the crowd frequently shouted against the government and Arosemena. Speakers attacked communism and Castro and called for a break in relations with Cuba while urging Ecuadorean support for a programme of sanctions against Cuba at the coming Punta del Este Conference.

Yesterday, when the Minister of Government announced the prohibition of demonstrations he denounced the right's 'battle plan' founded on the government's lack of definition on communism and Cuba. Today the Minister called for a pause in the fighting between Ecuadoreans over 'external problems', while the Cardinal issued another anti-communist pastoral letter accusing the communists of the bombings in the Cuenca churches.

The campaign is getting under way in Tulcan as well. Yesterday an anti-communist demonstration was held in spite of the prohibition and afterwards the demonstrators clashed with leftists in a counter-demonstration.

The Ambassador is also active making propaganda that nicely complements ours. Yesterday with considerable publicity he presented a cheque to Manuel Naranjo ‡ representing the second instalment of the 8 million dollar budget support loan announced just after Arosemena took over. Photographs of the Ambassador handing over the cheque were prominent in the newspapers this morning.

Quito 21 January 1962

In Guayaquil the base financed a demonstration yesterday. Thousands turned out after a bomb exploded in the morning at the entrance to one of the main churches -- again with no injuries. These bombings are mostly being done by a Social Christian squad in order to whip up emotions. One would think the people would realize this, but Renato Perez, Noland's principal Social Christian agent, says they can keep it up as long as is needed. Participating organizations in the Guayaquil demonstration were the Defense Front, our CROCLE labour organization, the Liberals, Conservatives, Social Christians and the fascist ARNE.

An anti-communist demonstration was also held yesterday in Manuel Naranjo was only partially successful at the Socialist Party convention where his party decided to join again with the Liberals in the National Democratic Front as a joint electoral vehicle. The statement on re-establishing the Front called for struggle against the totalitarian movements now operating in Ecuador -- but also affirmed the party's belief in Marxist philosophy as 'adapted to the Ecuadorean political and economic reality'. In a foreign policy statement issued two days after the convention closed, the principle of non-intervention in Cuba was sustained along with opposition to expulsion of Cuba from the o A s and to the economic blockade.

The Conservative Party has issued another statement insisting that Arosemena dismiss communists and pro-communists from the administration while alleging that a communist plot is underway for uprisings to occur soon throughout the country. The Conservatives in Azuay Province (Cuenca) have elected Carlos Arizaga Vega, ‡ one of our principal ECACTOR agents there, as a party director.

Araujo is also active trying to build an organization that will attract leftist Velasquista voters. His new People's Action Movement held an assembly today in preparation for the elections.

Our own campaign continues to consist of stimulating charges of communist leanings of appointees in the government. Debate has also continued over Ecuadorean failure to back resolutions against Cuba at Punta del Este, and Arosemena is being forced on the defensive. Through political action and propaganda operations we are trying to repeat what we did with Velasco: cut away political support on the Cuban and communist issues so that only the extreme left is left on his side. For his part Arosemena has been protesting frequently in public that communists will never become an influence in his government.

The Argentine break with Cuba a few weeks ago, which was the climax of increasing military pressure on President Frondizi, has already generated a spate of new rumours that the Ecuadorean military will bring similar pressure on Arosemena. The rumours are mostly rightist-inspired as suggestive propaganda targeted at the military, but they may well have an effect -- especially since less than three weeks after the break Argentina got 150 million dollars in new Alliance for Progress money. Now only Ecuador and five other Latin American countries still have relations with Cuba.

Quito 1 March 1962

In another effort to create military ill-feeling towards the left, the Social Christians infiltrated a FEUE march today in order to shout insults against the military that appeared to come from the marchers. The march was through the downtown area to the Independence Plaza where Arosemena spoke and the leaders of the march presented a petition for increased government support to the universities. The situation is indeed grave -- professors at Central University, for example, haven't been paid since last December.

The Social Christian plan worked perfectly. The march was headed by the President of the FEUE, the Rector and Vice-Rector of the University and the Ministers of Education and Government. At the Independence Plaza just before the speeches began, shouts were clearly heard of 'Death to the Army' and 'More universities and less Army'. An almost electric current is passing through the officer corps of the military services and new rumours, not ours this time, are beginning on possible military reactions.

Quito 3 March 1962

Reactions to the Social Christian infiltration of the FEUE march have been most satisfactory. Yesterday the Minister of Defense and the chiefs of all the services issued a statement in which they admitted breaking a long silence on the many activities going on that are designed to sow chaos in the armed forces and separate them from the Ecuadorean people and the government. These activities, according to the statement, are directed by international communism through campaigns in periodicals, magazines, radio, rumour, strikes, work stoppages, rural risings, militia training and, most recently, the FEUE demonstration of 1 March. Instead of a demonstration for greater economic resources, according to the statement, the march was perverted to make propaganda against the armed forces. The statement ended with an expression of the determination of the Minister and the service chiefs to take whatever measures are necessary to defend military institutions.

The military statement yesterday coincided nicely with a rally we financed through Aurelio Davila with participation of the Conservatives, Social Christians, ARNE, and Catholic youth, labour and women's organizations. The purpose of the rally was another demand for a break in relations with Cuba, and Davila was the principal speaker. He blamed the insults of 1 March against the military on communists and Castroites who seek to form their own militias. He accused Arosemena, moreover, of giving protection to the communist menace and, as President of the Chamber of Deputies, he sent a message of support to the Minister of Defense and the chiefs of the services.

Quito 16 March 1962

Fate's heavy hand has just fallen on our Vice-President, Reinaldo Varea. Yesterday the government announced that a million dollars' worth of military equipment purchased by a secret mission sent to the US last year by Velasco has turned out to be useless junk. The announcement came just a couple of days after one of Velasco's ex-ministers made a public call for Velasquistas to begin organizing for the June elections. Obviously the announcement was made to begin a campaign to discredit the Velasquista movement prior to the elections.

Varea is implicated because as Vice-President of the Senate he was chief of the purchasing mission. There is no accusation that any money was stolen, but to be swindled out of a million dollars by a US surplus parts company is sheer incompetence on someone's part. Photographs of the tanks and armoured personnel carriers are being published -- some without motors, others with no wheels, others simply rusted and falling apart.

Varea had told Noland that the case might come to the surface but he had hoped to keep it under cover. There's no telling how badly this will affect Varea's position as Arosemena's successor, but Noland is in a really black humour.

The PCE has just held one of its infrequent national congresses. Basantes and Cardenas attended as members of the Pichincha delegation. Divisions within the party over whether to resort to armed action soon or to continue working with the masses indefinitely are continuing to grow. Rafael Echeverria, the Quito PCE leader, is emerging as the most important leader of those favouring early armed action, although Pedro Saad was reelected Secretary-General and remains in firm control. Unfortunately neither of our agents was elected to the new Central Committee.

Quito 25 March 1962

For some days the anti-communist (Social Christian and Conservative) forces in Cuenca have been preparing for another mass demonstration against relations with Cuba and communist penetration of the government. Noland financed it through Carlos Arizaga who will use it to show solidarity with the important military command there. The affair was very successful. In spite of police denial of permission thousands turned out with posters and banners bearing the appropriate anti-communist, anti-Castro and anti-URJE themes. Demands were also made for the resignation of Arosemena and his leftist appointees, and expressions of solidarity with the military services against their extremist attackers were also prevalent. A petition with 2000 signatures was presented to the provincial governor, Arosemena's chief representative.

Colonel Lugo, National Police commander in Cuenca, advised that although he was unable to grant permission for the street march because of orders from Quito, he was able to avoid taking repressive measures. The march in fact had no police control and there was no disorder.

Quito 28 March 1962

The Cuenca military garrison under Colonel Aurelio Naranjo has suddenly sent a message to Arosemena giving him seventy-two hours to break relations with Cuba and fire the leftist Minister of Labor. The whole country is shaken by the revolt although the outcome is uncertain because so far no other military units have joined.

Arosemena spoke this afternoon with Vice-President Varea and with the press. He's taking a hard line promising severe punishment for those responsible for the rebellion. The traditional parties are ostensibly supporting Arosemena and the Constitution, but the Conservatives have issued a statement insisting on a break with Cuba and Czechoslovakia and a purge of communists in the government. The FEUE, CTE, URJE and other extreme leftists are of course backing Arosemena.

The key is the reaction of the Minister of Defense and the armed services commanders here in Quito. We're checking various agents who have access but haven't been able to get straight answers because apparently the military leaders are taking an ambiguous position.

This Cuenca revolt is clearly a result of the renewed agitation we have been promoting since January through the Conservatives and Social Christians. There was no way to tell exactly when action of this sort would occur but several sensational events of the past two days have probably had an influence. Yesterday news reached Quito of an uprising at the huge Tenguel Hacienda on the coast which is owned by a subsidiary of United Fruit and where communist agitation has been going on for some time. Eight hundred workers are striking over the company's contracting of land to tenant farmers, and the strike has touched off rumours of other risings in rural areas. At a Social Christian rally yesterday where Renato Perez was one of the speakers the Tenguel rising was attributed to the communist leadership of the workers. Also yesterday, in Cuenca, the provincial committee of the Conservative Party called on the National Committee to declare formal opposition to the Arosemena regime. Key figures in this move are Carlos Arizaga Vega in Cuenca and Aurelio Davila Cajas ‡ on the National Committee.

The other sensation is the overthrow of President Frondizi by the Argentine military. Although the Peronist victory in this month's elections is the immediate reason for the military move there, we will interpret the coup in our propaganda as related strongly to Frondizi's reluctance to break with Cuba and his general policy of accommodation with the extreme left.

Quito 29 March 1962

The crisis continues. Today the Cuenca garrison issued a public statement on the need to break relations with Cuba and Czechoslovakia and to purge the government of communists. The Minister of Defense, the Chief of Staff and the commander of the Army are all indirectly supporting the Cuenca commander by not sending troops to put down the rebellion. In response to today's statement by the Cuenca garrison, the Army commander publicly ordered the Cuenca commander to refrain from political statements, but he also sent an open statement to the Minister of Defense that the armed forces are in agreement on the need to break with Cuba.

Demonstrations have occurred today in most of the major cities: in Quito one in favour and one against Arosemena; in Guayaquil in favour of Arosemena; and in Cuenca against -- marchers there carried posters reading 'Christ the King, Si, Communism, No'.

Arosemena is trying to strike back but in the absence of cooperation from the military he's almost powerless. He had the entire Cabinet resign today, accepting the resignations of the Ministers of Government (for allowing the security situation to degenerate), Labour (as a gesture to the rightists who have focused on him as an extreme leftist), and Economy (for being one of the Conservative Party leaders of the campaign against communism and relations with Cuba).

Quito 30 March 1962

The stand-off between Arosemena and the Cuenca garrison has continued for a third day although Arosemena is grasping for an alternative to save face. He announced today that within ten or fifteen days a plebiscite will be held on relations with Cuba. The idea of a plebiscite has already been proposed by several groups including the Pichincha Chamber of Industries whose members are suffering the effects of all the tension and instability of recent months.

Arosemena may not have ten or fifteen days left for the plebiscite. This afternoon in Quito a massive demonstration calling for a break with Cuba was sponsored by the anti-communist forces including a four-hour march through the streets. At the Ministry of Defense the Chief of Staff, a well-known anti-communist, told the demonstrators that he and other military leaders share their views on Cuba. The demonstration also had pronounced anti-Arosemena overtones. Similar demonstrations have occurred today in Cuenca and Riobamba. In the press we are stimulating statements of solidarity with the movement to break with Cuba including one from the Popular Revolutionary Liberal Party ‡ which Gil Saudade had to wring out of Juan Yepez, Jr.

In spite of all the crisis other activities continue. Today Noland was honoured at a ceremony presided by Manuel Naranjo for his year as a Director of the University Sports League. He got a medal and a diploma of appreciation -- plenty of good publicity.

Quito 31 March 1962

A solution is emerging The Conservatives today formally ended their participation in Arosemena's government, and conversations between Arosemena and the National Democratic Front -- composed of the Liberals, Democratic Socialists and independents -- have begun. One of the Front's conditions for continuing to support Arosemena is a break with Cuba and Czechoslovakia. Meanwhile the Electoral Court quashed the plebiscite idea for constitutional reasons.

Conservative withdrawal from the government was highlighted by the publication today of an open letter from the Conservative ex-Minister of the Economy who resigned two days ago. In the letter the Cuenca rightist charged communists whom Arosemena has allowed to penetrate the government with thwarting the country's economic development.

The solution, interestingly, has resulted because Varea, the Vice-President, is unacceptable to the military high command because of his implication in the junk swindle. Otherwise Arosemena would probably have been deposed in favour of Varea for his resistance on the Cuban break. The Liberals and others in the Democratic Front expect to improve their electoral prospects from a position of dominance in the government. And the Conservatives and Social Christians will be able to campaign on the claim that they were responsible for the break with Cuba (if it takes place). Everyone is going to be satisfied except Arosemena and the extreme left -- although Arosemena will at least survive for now.

The Social Christian bomb squad finally slipped up last night. Just after midnight they bombed the home of the Cardinal (who was sleeping downtown at the Basilica) and a couple of hours later they bombed the Anti-Communist Front. By a stroke of bad luck the two bombers were caught and have admitted to police that they are members of the Anti-Communist Front itself. So far they haven't been traced to the Social Christian Movement which planned the bombings. These produced lots of noise but little damage, to provide a new pretext for demonstrations of solidarity with the Cardinal.

Quito 1 April 1962

The crisis is over and the Cubans are packing. Today the announcement was made that the National Democratic Front will enter the government with five Cabinet posts and that relations with Cuba will be broken. The new Minister of Government, Alfredo Albornoz, ‡ is an anti-communist independent known personally by Noland. (His son is a friend of Noland's and of mine -- he's President of the YMCA board on which I replaced Noland in January. The new minister is an important banker and owner of the Quito distributorship for Chevrolets and Buicks. Noland intends to begin a liaison arrangement with him as soon as possible.)

Today new anti-communist demonstrations and marches were held in Quito and down south in Loja celebrating the break with Cuba. The Conservatives and Social Christians are promoting still another massive demonstration in three days to show support for the Cardinal -- in spite of the admission by the bombers (which in the newspapers was relegated to a small, obscure notice).

Quito 2 April 1962

Success at last. Today the new Cabinet, in its first meeting with Arosemena, voted unanimously to break relations with Cuba, Czechoslovakia and Poland (which just recently sent a diplomatic official to Quito to open a Legation). After the meeting Arosemena lamented that the plebiscite was impossible while Liberal Party leaders claimed credit for the break.

Tomorrow the Foreign Ministry will give formal advice to each mission. Besides the Pole there are three Czechs and seven Cubans. The main problem for the Foreign Ministry is to find a country with an embassy in Havana that will take the asylees in the Ecuadorean Embassy -- almost two hundred of them. The extreme left has been trying to promote demonstrations against the decision but they've only been able to get out small crowds.

This afternoon we had a champagne victory celebration in the station, and headquarters has sent congratulations.

Quito 4 April 1962

The Social Christian and Conservative street demonstration today was said to be the largest in the history of Quito. Tens of thousands swarmed through the downtown streets to the Independence Plaza where the Cardinal, who was the last speaker, said that, following the teachings of Christ, he would forgive the terrorists who had tried to kill him. Aurelio Davila was one of the organizers of the demonstration, and he arranged for a Cuban flag to be presented to the Cardinal by a delegation of the exiles. (The main exile organization, the Revolutionary Student Directorate, is run by the Miami station and in some countries the local representatives are run directly by station officers. In our case, however, Noland prefers to keep them at a distance through Davila.)

Noland is already meeting with the new Minister of Government, Alfredo Albornoz, ‡ to pass information on communist plans that we get from our penetration agents. Today we got a sensational report from one of Jose Vargas's sub-agents to the effect that Jorge Ribadeneira, one of the principal leaders of URJE, has called his followers into immediate armed action in a rural area towards the coast. Communications with the sub-agent are very bad right now but Noland is trying to get more details. When Noland met with the Minister he learned that the Minister also has information on the guerrilla operation -- it's concentrated near Santo Domingo de los Colorados, a small town a couple of hours' drive towards the coast from Quito. Tonight the Ministry of Defense is sending a battalion of paratroopers to the area to engage the guerrillas. As a precaution the Minister has banned all public demonstrations until further notice, but he and the Minister of Defense hope to keep the guerrilla operation secret until the size of the group is known. That may be impossible, however, because other agents including Lt. Col. Paredes, ‡ the surveillance team chief, are beginning to report on the paratroopers' mobilization.

The thought of facing an effective guerrilla operation is one of our most persistent nightmares because of the ease with which communications and transport between coast and sierra could be cut. The difficult geography, moreover, is ideal for guerrilla operations in many areas, and if the imagination of the rural Indians and peasants could be captured -- admittedly not an easy task because of religion and other traditional influences -- the guerrillas would have a very large source of manpower for support and for new recruits. This is why we have been continually trying to induce government action against the various groups of the extreme left in order to preclude this very situation.

Quito 5 April 1962

Communications are impossible with Jose Vargas's agent in the guerrilla band and little news of substance is coming into the Ministry of Defense from the operations zone. I sent Lieutenant- Colonel Paredes down to Santo Domingo to see what he could pick up, but he hasn't been able to get close to the operations. Our best information from the Ministry of Defense is coming from Major Ed Breslin, ‡ the US Army Mission Intelligence Advisor. He has been in Quito only a short time but has already worked his way in with the Ecuadorean military intelligence people much more effectively than his predecessor. Both Noland and I have been working more closely with him on targeting for recruitments in the military intelligence services, and our relationship with him is excellent -- he trained the tank crews that landed at the Bay of Pigs last year. Breslin reports the guerrillas are offering no resistance and that several arrests have been made.

At the Guayaquil airport last night two events related to Cuba will give us good material for propaganda. First, an Ecuadorean returning from a three-month guerrilla training course in Cuba was arrested. He is Guillermo Layedra, a leader of the CTE in Riobamba, whose return was reported to the base by the Mexico City station which gets very detailed coverage of all travellers to and from Cuba via Mexico through the Mexican immigration service. Data on Layedra's travel was passed to Lieutenant- Colonel Pedro Velez Moran, ‡ one of the liaison agents of the base. Of propaganda interest are the books, pamphlets, phonograph records of revolutionary songs and, especially, a photograph of him in the Cuban militia uniform. Through Velez the base expects to get copies of his interrogation and will pass questions at headquarters' request.

The other case, also the work of Lieutenant-Colonel Velez, occurred during a refuelling stop of a Cuban airliner bound from Chile to Havana. It was carrying some seventy passengers most of whom were Peruvian students going to study on 'scholarships' in Cuba -- most likely they were really guerrilla trainees. The base asked Velez to get a copy of the passenger list, an unusual demand for a service stop, which the base will forward to the Lima station. During the stop, however, the pilot was seen to give an envelope to the Third Secretary of the Cuban Embassy in Quito (the Cubans haven't left yet) and a customs inspector demanded to see the envelope. The Cuban diplomat took out a .45 pistol and, after waving it menacingly at the customs inspector, he was arrested by the airport military detachment. Only about 10 a.m. this morning was he allowed to go free, but he was allowed to keep the envelope.

Quito 6 April 1962

The press carried its first stories of the Santo Domingo guerrilla operation this morning -- sensational accounts of 300 or more men under the command of Araujo. The Ministry of Defense, however, announced later that thirty guerrillas have been arrested along with a considerable quantity of arms; ammunition and military equipment. First reports from interrogations indicate that the guerrilla group numbers less than 100 and that Araujo isn't participating, but military operations continue.

Although the early interrogation reports also indicate that the guerrilla operation was precipitated by the Cuenca revolt and very poorly planned, we will try to make it appear serious and dangerous in our propaganda treatment. Most of those arrested are young URJE members -- followers of Jorge Ribadeneira who may well be expelled from the PCE if, as is likely, the Executive Committee under Saad had nothing to do with the operation. Reports from PCE agent penetrations coincide in the view that Ribadeneira was acting outside party control.

Quito 10 April 1962

The Santo Domingo guerrilla affair is wiped up. Forty-six have been captured with only a brief exchange of fire. Only one casualty occurred -- a guerrilla wounded in the foot. All have been brought to Quito and we're getting copies of the interrogations through Major Breslin. In an effort to help Pacifico de los Reyes ‡ make a good impression in his new job as chief of the intelligence department of the National Police, I have been giving him information on many of those arrested, which he is passing as his own to the military interrogation team.

Propaganda treatment is only partly successful. The Minister of Defense has announced that the weapons seized are not of the type used by the Ecuadorean Army and must have been sent from outside the country -- although the truth is that the weapons are practically all conventional shotguns, hunting rifles and M-1's stolen from the Army. Interrogation reports released to the press allege (falsely) that the operation was very carefully planned and approved at the PCE Congress held last month.

Press comment, however, is tending to romanticize the operation. Participation of four or five girls, for example, is being ascribed to sentimental reasons. Those arrested, moreover, once they have been turned over to police and are allowed to see lawyers, are saying that they only went to Santo Domingo for training in the hope of defending the Arosemena government from overthrow by the Cuenca garrison. The FEUE has set up a commission of lawyers for the guerrillas' defence, and unfortunately the early public alarm is turning to amusement and even ridicule.

Of continuing importance will be two factors. First, the ease with which the guerrillas were rolled up has given the Ecuadorean military new confidence and may encourage future demands for government suppression of the extreme left. Second, the operation is bound to exacerbate the growing split on the extreme left, both inside and outside the PCE, between those favouring early armed action and those favouring continued long-term work with the masses. In both cases this pitiful adventure has been fortunate for us.

Quito 23 April 1962

Back in the cool thin sierra air after a brief holiday. The Pole, Czechs and Cubans have all left so we have no hostile diplomatic missions to worry about any more. The telephone tap on the Cubans was only of marginal value because they were careful, but I'm going to begin soon to monitor Araujo's telephone and perhaps one other if I can arrange for transcription. The technical problems with the sound-actuated equipment were never solved so we reverted to the old voltage-operated machines.

Although we tried to keep the Santo Domingo guerrilla operation in proper focus it hasn't been easy. The Rio station helped by preparing an article on the communist background of one of the girls in the operation, a Brazilian named Abigail Pereyra. The story was surfaced through the Rio correspondent of the hemisphere-wide feature service controlled by the Santiago, Chile, station -- Agencia Orbe Latinoamericano. ‡ The story revealed that her father is a Federal Deputy and the personal physician of Luis Carlos Prestes, long-time leader of the Communist Party of Brazil, while her mother is the Portuguese teacher at the Soviet Commercial Mission in Rio de Janeiro. Both parents are leaders of the Chinese-Brazilian Cultural Society, and her mother went to Cuba early this year to visit Abigail -- who was taking a guerrilla training course, according to the article. This may help keep her in jail for a while, but public opinion is favourable to early release.

Gil Saudade has established another of his front organizations for propaganda. The newest was formed a few days ago and is called the Committee for the Liberty of Peoples. ‡ Through this group Gil will publish documents of the European Assembly of Captive Nations ‡ and other Agency-controlled organizations dedicated to campaigns for human rights and civil liberties in communist countries. The agent through whom he established the Committee is Isabel Robalino Bollo ‡ whom he met through Velasco's former Minister of Labor, Jose Baquero de la Calle. Robalino is a leader of the Catholic Labor Center (CEDOC), and is Gil's principal agent for operations through this organization. She was named Secretary of the Committee which includes many prominent liberal intellectuals and politicians.

Quito 27 April 1962

The government has lifted the prohibition on public political demonstrations in effect since the turmoil over the break with Cuba, and the campaign for the June elections is picking up steam. Quite a number of our agents will be candidates but so far our main electoral operation is in Ambato where Jorge Gortaire, a retired Army colonel and Social Christian leader, is working to defeat the Revolutionary Socialist Mayor running for re-election.

Gortaire is also a leader of the Rotary Club and is President of the Ambato Anti-Communist Front which we finance through him. Because of his exceptional capability the Front is running a single list of candidates backed by the Conservatives, Liberals, Social Christians, independents and, of course, the fascist ARNE. Noland thinks Gortaire is one of the best agents he has -- after Renato Perez and Aurelio Davila.

Gil Saudade is about to see a giant step forward in his and the Guayaquil base labour operations. Tomorrow the constituent convention of the free trade-union confederation to be called CEOSL ‡ begins, and Gil is fairly certain that between the base agents in CROCLE and his Popular Revolutionary Liberal Party agents, we will come out in control. In recent months the PLPR agents have become increasingly active and Gil is counting on them to offset the divisive regionalism of the CROCLE agents.

Quito 1 May 1962

The CEOSL -- Ecuadorean Confederation of Free Trade Union Organizations - is formally established with several agents in control: Victor Contreras Zuniga ‡ is President, Matias Ulloa Coppiano ‡ is Secretary for External Relations, and Ricardo Vazquez Diaz ‡ is Secretary of Education. Publicity build-up has been considerable, including messages of solidarity from ORIT in Mexico City and ICFTU and International Trade Secretariats in Brussels. Leaders of other Agency-controlled labour confederations such as the Uruguayan Labor Confederation ‡ (CSU) were invited.

The main business of the first sessions was to seek affiliation with the ICFTU and ORIT which has just opened an important training-school in Mexico. Soon CEOSL will begin sending trainees to the OR IT school, which is run by the Mexico City station through Morris Paladino, ‡ the OR IT Assistant Secretary-General and the man through whom IO Division controls ORIT. (The new Secretary-General of ORIT, Arturo Jauregui, ‡ hasn't been directly recruited yet although he was here in March to promote the school.)

Gil Saudade will now have to coordinate closely with the Guayaquil base so that his agents, Ulloa and Vazquez, will work in harmony with the base's agent, Contreras. None is supposed to know of the others' contact with us.

Unfortunately the controversy between the Guayaquil base agents from CROCLE and the ECCALICO election operation of two years ago came to a head. Adalberto Miranda Giron, the Labor Senator from the Coast, was terminated by the base several months ago because certain of his inappropriate dealings with companies became known. At the CEOSL constituent convention he was denounced as a traitor to the working class, the beginning of a campaign to get him completely out of the trade-union movement.

Quito 3 May 1962

The 'junk swindle' has become Ecuador's scandal of the century and is being used increasingly by the left to ridicule the military. Today the Chief of Staff and the Commander of the Army issued a joint statement defending themselves from attacks by CTE leaders in May Day speeches and other recent attempts to connect them with the junk swindle. Final liquidation of the armed forces, they warned, is the purpose of the leftist campaign. Resentment is also growing in the military over recent leaflets and wall-painting labelling them 'junk dealers'.

A new crisis has developed in rural areas violently demonstrating the backwardness of this country. For the past two months the government has been trying to conduct an agriculture and livestock census to aid in economic planning. Numerous Indian uprisings have occurred because of rumours that the census is a communist scheme to take away the Indians' animals. On several occasions there were dead and wounded, as in Azuay Province, for example, where a teacher and his brother, who were taking the census, were chopped into pieces with machetes and only the arrival of police impeded the burning of what remained of their bodies.

Because priests serving rural areas are often responsible for the rumours, the government had to ask the Church hierarchy to instruct all priests and other religious to assist in the census wherever possible. In Azuay, nevertheless, the census has been suspended.

One has to wonder about the strength of religious feeling here. On Good Friday two weeks ago tens of thousands of Indians and other utterly poor people walked in procession behind images from noon till 6 p.m. -- despite heavy rain. The same occurred in Guayaquil and other cities.

Quito 12 May 1962

Some of our agents are running solid electoral campaigns but others have pulled out for lack of support. Both Jose Baquero de la Calle, ex-Minister of Labor under Velasco and running as an independent Velasquista, and Juan Yepez del Pozo, Sr., General-Secretary of the Ecuadorean affiliate of the International Commission of Jurists, ‡ and running for the Popular Revolutionary Liberal Party, ‡ declared for Mayor of Quito. When Baquero's candidacy was repudiated by the Conservative Party, he resigned, and when Yepez failed to attract significant Velasquista backing, he resigned. Oswaldo Chiriboga, ‡ long-time penetration of the Velasquista movement, also declared for Mayor but is pulling out. For all of these candidates station support was only nominal because their possibilities for success were obviously rather limited.

On the other hand the candidacies of Renato Perez for the Municipal Council, Aurelio Davila for the Chamber of Deputies and Carlos Arizaga Vega for Deputies are going very well. Alfredo Perez Guerrero, President of the ICJ ‡ affiliate and reform-minded Rector of Central University, is heading the Deputies list of the National Democratic Front (Liberals, Socialists and independents) and will win without our help. Other candidates of the Social Christian Movement and the Conservative Party are being financed indirectly through funds passed to Perez and Davila.

Quito 13 May 1962

Because Arosemena continues to resist firing extreme leftists in his government -- penetration in fact continues to grow -- Noland recommended, and headquarters approved, expansion of the political operations financed through the ECACTOR project. Not only will continued and increased pressure be exerted through the regular agents in Quito, Cuenca, Riobamba, Ambato and Tulcan, but we have made two new recruitments of important Social Christian leaders in Quito. I am in charge of both these new cases.

The first new operation is with Carlos Roggiero, ‡ a retired Army captain and one of the principal Social Christian representatives on the National Defense Front. Roggiero is chief of the Social Christian militant-action squads, including the secret bomb-squad, and I have started training him in the use of various incendiary, crowd dispersement and harassment devices that I requested from TSD in headquarters. Through him we will form perhaps ten squads, of five to ten men each, for disrupting meetings and small demonstrations and for general street control and intimidation of the Communist Youth, URJE and similar groups.

The other new operation is with Jose Maria Egas, ‡ a young lawyer and also a leading Social Christian representative on the National Defense Front. Egas is a fast-rising political figure and a really spellbinding orator. Through him I will form five squads composed of four to five men each for investigative work connected with our Subversive Control Watch List -- formerly known as the LYNX list. The surveillance team under Lt. Col. Paredes simply hasn't the time to do the whole job and is needed on other assignments. With the group under Egas's control we will have constant checking on residences and places of work so that if the situation continues to deteriorate and a moment of truth arrives, we will have up-to-date information for immediate arrests. If Egas's work warrants it, we may train him in headquarters and even extend the operation to physical surveillance.

In another effort to improve intelligence collection on the extreme left I have arranged to add another telephone tap through Rafael Bucheli ‡ and Alfonso Rodriguez. ‡ The new tap will be on the home telephone of Antonio Flores Benitez, a retired Army captain and somewhat mysterious associate of Quito PCE leader Rafael Echeverria Flores. We have several indications from PCE penetration agents Cardenas and Vargas that Flores is a key figure in what seems to be an organization being formed by Echeverria outside the PCE structure properly speaking. The chances are that Echeverria is developing a group that may be the nucleus for future guerrilla action and urban terrorism, but he hasn't yet taken any of our agents into it. I will tap Flores for a while to see if anything of interest develops -- Edgar Camacho will do the transcribing as Francine Jacome has only time for transcribing the Araujo line. The LP remains in Bucheli's home under the thin cover of an electronics workshop.

Raymond Ladd, ‡ our hustling administrative officer, has been very active in the basketball federation, teaching a course in officiating and helping to coach the local girls teams. Through this work he met Modesto Ponce, ‡ the Postmaster-General of Ecuador, who soon insisted that Ladd review in the Embassy all the mail we are already getting through the regular intercept. In order to avoid suspicion that we are already getting mail from Cuba and the Soviet Bloc, Ladd accepted Ponce's offer, and now we get the same correspondence twice. We may attempt certain new coverage through Ponce so Ladd has begun giving him money for the mail under the normal guise of payment for expenses.

Quito 21 May 1962

Arosemena struck back for his humiliation at the hands of the military when he was forced to break with Cuba. Last week he fired the Minister of Defense, sent the Army Commander to Paris as military attache and sent the Air Force Commander to Buenos Aires as military attache. Immediate protests came from the Social Christians, Conservatives and others over the removal of these staunchly anti-communist officers with new charges of communist penetration of the government.

Then Alfredo Albornoz, ‡ the Minister of Government appointed only seven week ago, resigned. Next, all the other National Democratic Front Ministers resigned. The issue is Arosemena's refusal to honour his promise of last month, when the Front came into the government, to dismiss two key leftist appointees: the Secretary-General of the Administration and the Governor of Guayas Province.

Noland is sorry to lose Albornoz because they were developing a worthwhile relationship both from the point of view of intelligence collection through Albornoz and from action by Albornoz on undesirables within the government. Arosemena is searching for new support, but the Front is holding out for the resignations.

But yesterday new ministers were named after Arosemena made another promise in secret to fire the Governor of Guayas Province. Today the resignation was announced. Although this is a step in the right direction, the Secretary-General of the Administration remains (he is like a chief of staff with Cabinet rank) along with many others of the same colouring. Among the new ministers is Juan Sevilla, ‡ a golfing companion of mine who was named Minister of Labor and Social Welfare. Gil Saudade will decide whether Sevilla could be of use in his labour operations.

Quito 4 June 1962

Traditional violence flared up in several cities during the final days before the elections which were held yesterday. The right was split, as were the centre and the Velasquistas -- with a profusion of candidates all over the country excepting the extreme left which didn't participate.

The Conservative Party won the most seats in the Chamber of Deputies (although not quite a majority), and victories in most of the municipal and provincial contests. Aurelio Davila, who managed the Conservative campaign in Quito, was elected Deputy for Pichincha. ReRato Perez was elected Quito Municipal Councillor from the Social Christian list. And Carlos Arizaga Vega was elected Conservative Party Deputy for Azuay Province.

The Velasquistas have had a disaster, winning only six deputies and two mayors' races -- one of which was in Ambato. Jorge Gortaire's candidate there, backed by the Anti-Communist Front, ‡ was second but Gortaire is being given overall credit for the defeat of the Revolutionary Socialist incumbent.

The elections are a clear indication of the effectiveness of the Conservatives' campaign against communist penetration in the government and are a severe defeat both for Arosemena and for the National Democratic Front. When Congress opens there can be little doubt that the Conservatives will exert new and stronger pressure for elimination of extreme-leftists in the government.

Reinaldo Varea has been taking a severe beating in the continuing controversy over the junk swindle. The case is colouring the whole political scene and unfortunately for us Varea isn't very effective in what is a very difficult defence. In a few days he'll go to Washington for treatment of stomach ulcers at Walter Reed Hospital -- Davila will be acting Vice-President.

Quito 15 June 1962

The International Monetary Fund has just announced another stabilization credit to Ecuador of five million dollars over the next twelve months for balance of payments relief. The announcement was optimistic and complimentary, noting that Ecuador since mid-1961 has stopped the decline in its foreign exchange reserves and obtained equilibrium in its balance of payments. The new standby, of course, is conditional on retention of last year's exchange-rate unification, that contributed to Velasco's overthrow.

Two programmes are getting under way this month as part of a new US country-team effort in staving off communist-inspired insurgency. One is the Civic Action programme of the Ecuadorean military services and the US military assistance mission -- in fact under way for a couple of years but now being expanded and institutionalized. The purpose of Civic Action is to demonstrate through community development by uniformed military units that the military is on the side of the people so that tendencies of poor people to accept communist propaganda and recruitment can be reversed. It's a programme to link the people, especially in rural areas, to the government through the military who contribute visibly and concretely to the people's welfare.

The Civic Action programme just announced as the first of its kind in Latin America calls for contributions in money and equipment by the US military-assistance mission worth 1.5 million dollars plus another 500,000 dollars from the AID mission. Projects will include road-construction, irrigation-canals, drinking-water systems and public-health facilities, first in Azuay Province to be followed by Guayaquil slums and by the Cayambe-Olmedo region north of Quito. Widespread publicity will be undertaken to propagandize these projects in other areas in order to generate interest and project proposals in these other regions.

In the station, we will work with Major Breslin, ‡ the intelligence advisor of the US military mission. He will use the mission personnel who visit and work at the projects as a type of scout -- keeping their eyes open and reporting indications of hostility, level of communist agit-prop activities and general programme effectiveness.

The other new programme is more closely related to regular station operations and is Washington's answer to the limitations of current labour programmes undertaken through A I D as well as through ORIT and CIA stations. The problem is related to the controversy over the ineffectiveness of ORIT but is larger -- it is essentially how to accelerate expansion of labour-organizing activities in Latin America in order to deny workers to labour unions dominated by the extreme left and to reverse communist and Castroite penetration. This new programme is the result of several years' study and planning and is to be channelled through the American Institute for Free Labor Development ‡ (AIFLD), founded last year in Washington for training in trade-unionism.

The reason a new institution was founded was that AID labour programmes are limited because of their direct dependence on the US government. They serve poorly for the dirty struggles that characterize labour organizing and jurisdictional battles. ORIT programmes are also limited because its affiliates are weak or nonexistent in some countries, although expansion is also under way through the establishment of a new ORIT school in Mexico. Control is difficult and past performance is poor. The CIA station programmes are limited by personnel problems, but more so by the limits on the amount of money that can be channelled covertly through the stations and through international organizations like ORIT and the ICFTU.

Business leaders are front men on the Board of Directors so that large sums of AID money can be channelled to AIFLD and so that the institute will appear to have the collaboration of US businesses operating in Latin America. Nevertheless, legally, AIFLD is a non-profit, private corporation and financing will also be obtained from foundations, businesses and the AFL-CIO.

The AIFLD is headed by Serafino Romualdi, IO Division's longtime agent who moved in as Executive Director and resigned as the AFL-CIO's Inter-American Representative. Among the Directors are people of the stature of George Meany, ‡ J. Peter Grace ‡ and Joseph Beirne, ‡ President of the Communications Workers of America ‡ (CWA) which is the largest Western Hemisphere affiliate of the Post, Telegraph and Telephone Workers International ‡ (PTTI). AIFLD, in fact, is modelled on the CWA training school of Front Royal, Virginia where Latin American leaders of PTTI affiliates are being trained. Day to day control of AIFLD by IO Division, however, will be through Romualdi and William Doherty, ‡ former Inter-American Representative of the PTTI and now AIFLD Social Projects Director. Prominent Latin American liberals such as Jose Figueres, ‡ former President of Costa Rica and also a longtime Agency collaborator, will serve on the Board from time to time.

The main purpose of AIFLD will be to organize anti-communist labour unions in Latin America. However, the ostensible purpose, since union organizing is rather sensitive for AID to finance, even indirectly, will be 'adult education' and social projects such as workers' housing, credit unions and cooperatives. First priority is to establish in all Latin American countries training institutes which will take over and expand the courses already being given in many countries by AID. Although these training institutes will nominally and administratively be controlled by AIFLD in Washington, it is planned that as many as possible will be headed by salaried CIA agents with operational control exercised by the stations. In most cases, it is hoped, these AIFLD agents will be US citizens with some background in trade-unionism although, as in the case of ORIT, foreign nationals may have to be used. The training programmes of the local institutes in Latin America will prepare union organizers who, after the courses are over, will spend the next nine months doing nothing but organizing new unions with their salaries and all expenses paid by the local institute. Publicity relating to AIFLD will concentrate on the social projects and 'adult education' aspects, keeping the organizing programme discreetly in the background.

This month, in addition to training in Latin American countries, AIFLD is beginning a programme of advanced training courses to be given in Washington. Spotting and assessment of potential agents for labour operations will be a continuing function of the Agency-controlled staff members both in the training courses in Latin America and in the Washington courses. Agents already working in labour operations can be enrolled in the courses to promote their technical capabilities and their prestige.

In Ecuador, the AIFLD representative from the US who is now setting up the training institute -- the first course begins in three weeks -- is not an agent but was sent anyway in order to avoid delays. However, Gil Saudade arranged for Ricardo Vazquez Diaz, ‡ the Education Secretary of CEOSL, to be the Ecuadorean in charge of the local AIFLD training programmes. Carlos Vallejo Baez, ‡ who is connected with the Popular Revolutionary Liberal Party, ‡ will also be on the teaching staff. Eventually Saudade will either recruit this first AIFLD representative or headquarters will arrange for a cleared agent to be sent.

These two new programmes, military Civic Action and the AIFLD, are without doubt being expanded faster here than in most other Latin American countries. Recently I read the report by a special inter-departmental team of experts from Washington called the Strategic Analysis Targeting Team (SATT), which in months past secretly visited all the Latin American countries. Their purpose was to review all US government programmes in each country and to determine the gravity of the threat of urban terrorism and guerrilla warfare. We prepared a secret annex for the SATT Report, and among their recommendations were expansion of the Subversive Control Watch List programme and updating of contingency planning in order to continue our operations from a third country -- in case we lose our Embassy offices. Ecuador, in fact, shared with Bolivia and Guatemala the SATT Report's category as the most likely places for early armed insurgency. Emphasis on immediate expansion of Civic Action and labour programmes is probably a result of the SATT Report.

Quito 21 July 1962

A breakthrough in Guayaquil student operations. The anticommunist forces led by Alberto Alarcon have just won the FEUE ‡ elections. They replace extreme-leftist officers who are members of URJE. Less than two weeks ago, Alarcon was here in Quito for a golf tournament sponsored by Ambassador Bernbaum, and he and Noland made final preparations for the FEUE elections.

Gil Saudade has launched another new operation -- an organization of business and professional people to promote economic and social reform. Civic organizations of this sort have been established by other stations and have been effective for propaganda and as funding mechanisms for elections and other political-action operations. Our group is called the Center for Economic and Social Reform Studies ‡ (CERES) and is headed by two agents, Mario Cabeza de Vaca ‡ and Jaime Ponce Yepez. ‡ Cabeza de Vaca formerly was the cutout to PCE penetration agent Mario Cardenas but they had a personality clash of sorts so John Bacon shifted Cardenas to Miguel Burbano de Lara ‡ who was already handling another PCE penetration agent, Luis Vargas. ‡ Bacon then turned Cabeza de Vaca over to Saudade to front in the CERES organization. Jaime Ponce is the Quito Shell Oil dealer and already a friend of mine and Noland's. Noland recruited him to work in CERES and then turned him over to Saudade. The Bogota station is helping by sending a delegation from its reform group called Center of Studies and Social Action ‡ (CEAS). They are here now.

Quito 2 August 1962

Arosemena's back from a state visit to Washington. During his main business meeting with Kennedy he was feeling no pain and proved he could name all the US Presidents in order from Washington on. He also claimed he couldn't remember the Ecuadorean Presidents, there have been so many, for the last half-century. Kennedy apparently was amused, but the State Department reports on the trip are sombre.

Thanks to Arosemena the last of the Santo Domingo guerrillas have been released. In recent months they've trickled out slowly with little publicity, and unless Davila and others can create an issue during the Congressional session opening in a week, the cases will just sink away into the bureaucratic swampland. Several of the guerrillas have already gone to Cuba for additional training.

The telephone tap on Antonio Flores Benitez is producing better information right now than any of our PCE penetration agents. Flores has ten or fifteen persons who call and say very little, only code-phrases for arranging meetings, obviously using code-names. Using the ECJACK surveillance team under Lt. Col. Paredes I've been trying to identify Flores's contacts but the work is very slow, especially because Flores simply cannot be followed -- partly it's the size and low proficiency of the team, but, mainly Flores is watching constantly and taking diversionary measures.

Even so, I have identified Rafael Echeverria, Principal PCE leader in Quito, as one of the clandestine contacts, along with a non-commissioned officer in the Ministry of Defense Communications Section, the chief of the archives section of the Presidency and the deputy chief of Arosemena's personal bodyguard. Analysis of the transcripts has been most helpful because even though Flores is careful when he speaks by telephone, his wife is very garrulous when he's out of the house. Several important identifications have been made from her carelessness.

My impression at this point is that Flores, who is not a PCE member, is in charge of the intelligence collection branch of an organization Echeverria is continuing to form outside the established PCE structure. If he is doing as well in the guerrilla and terrorism branch we will have to act soon to suppress the organization before armed operations begin.

In order to speed up transcriptions we have brought in another transcriber. He is Rodrigo Rivadeneira, ‡ one of the brothers who run the clandestine printing press. Rodrigo is one of Ecuador's best basketball players and was on a scholarship in the US obtained for him by Noland. He returned to Ecuador in June and because of family financial problems he will probably have to give up the scholarship. Francine Jacome will be unable to work for a few months so Rodrigo will take over the Araujo line which, while interesting, is not producing as much as the Flores line.

Two police agents have been transferred to new assignments. Pacifico de los Reyes, ‡ Chief of Police Intelligence, left yesterday for the FBI course at Quantico, Virginia. We got the scholarship for him through the AID Public Safety office and he will be gone until the end of the year. Before he left he asked me if I would like to keep up contact with the Police Intelligence unit while he is away. He selected Luis Sandoval, ‡ chief technician of the Police Intelligence unit, with whom I have been meeting since last year but without de los Reyes's knowledge. He introduced Sandoval to me three days ago and somehow we both kept a straight face. Before leaving, de los Reyes was promoted from captain to major. With the Office of Training in headquarters I am arranging special intelligence training for him to follow the FBI course.

Colonel Oswaldo Lugo, our oldest and most important penetration agent of the National Police, has been reassigned from the Cuenca district to the job as Chief of the Fourth District with headquarters in Guayaquil. This new job puts him in command of all the National Police units on the coast and will be an important addition to the Guayaquil base operations. In a few days I will make a quick trip to Guayaquil to introduce Lugo to the Base Chief.

Guerrilla training in Cuba is on headquarters' highest priority list for Latin America and instructions have been sent to all stations asking that efforts be made to place agents in the groups sent for training. We haven't been able to get an agent sent for training yet, but I've been meeting lately with the new Director of Immigration, Pablo Maldonado, ‡ who has expressed interest in helping impede travel to Cuba by administrative procedures where prior knowledge of the travel is available. Maldonado, whom I met through mutual friends, is also willing to arrange close searches of Ecuadoreans who return from Cuba. I have begun passing on information which comes from the Mexican and Spanish liaison services using the immigration documents of travellers to and from Cuba through the two main travel points: Mexico City and Madrid.

Quito 10 August 1962

Congress opened a new session today and acknowledged that agrarian reform is one of the first items on its order of business. In the Senate the National Democratic Front is in control while in the Chamber of Deputies the Conservative Party has a slight edge when backed by the leftist Concentration of Popular Forces' two or three deputies.

The Conservatives are out to get Varea's ‡ resignation and Noland has no way either to stop it or to salvage Varea. Once Varea is thrown out over the junk swindle the Conservatives will try to get Arosemena thrown out or force his resignation for physical incapacity. Unfortunately Varea has to go first because ousting Arosemena with Varea as Vice-President will be almost impossible.

Varea continues as President of the Senate and Carlos Arizaga Vega, ‡ our ECACTOR political-action agent from Cuenca, was elected Vice-President of the Chamber of Deputies. He has quickly replaced Davila as leader of the rightist bloc -- Davila is concentrating on organizational work and wasn't a candidate in the Chamber of Deputies.

Quito 29 August 1962

After four days of political crisis, including the resignations of all Cabinet ministers, Arosemena finally had to dismiss his leftist Secretary-General. Without doubt this is a significant victory for the Conservatives and Social Christians, although certain Liberals and Socialists are also aligned in the campaign since last year against the key administration leftist.

The only other Cabinet resignation accepted was that of Manuel Naranjo, ‡ Minister of the Treasury and Noland's agent leading the democratic Socialist Party. His resignation comes as a result of increasing opposition from businessmen to his austerity policies although he is widely and favourably recognized for his personal honesty and the beginnings of tax-reform.

The situation worsens for another of Noland's agents. Two nights ago the Chamber of Deputies voted to impeach Varea for his participation in the junk swindle -- still the supreme issue in current Ecuadorean politics. He's not being charged with stealing any of the money, just with negligence and ineptitude. The Minister of Defense at the time of the swindle is being prosecuted by the Chamber along with the Vice-President. Carlos Arizaga Vega is leading the attack.

Araujo has arrived back in Guayaquil after a trip to China that started late last month. At the airport five rolls of training film on street-fighting techniques were confiscated as well as propaganda. In China he was received by the Vice-Premier -- we're going to try and discover if he got other assistance too.

Quito 3 September 1962

Labour operations proceed with their usual mixed accomplishments. The CROCLE leadership within the CEOSL has insisted in attacking Adalberto Miranda, the Labor Senator from the coast, because of his dealings with the Guayaquil Telephone Company. Now they are accusing him of being involved with efforts by the United Fruit subsidiary to fire certain employees who are members of the subsidiary's trade union which recently affiliated with CROCLE and CEOSL. The same Guayaquil CROCLE leaders tried to get Miranda disqualified from the Senate but that move failed too. This campaign against Miranda is justified in some ways, according to the base, but undesirable right now because of its divisive nature. Soon the base plans to terminate the CROCLE agents who also insist on retaining the regional identity of CROCLE in opposition to our efforts to replace it with coastal provincial federations. When that happens, Gil Saudade will move his Quito agents into full control of CEOSL; he is now preparing for that development.

Meanwhile the AIFLD programme is continuing to progress with close coordination with CEOSL through Ricardo Vazquez Diaz. Next month Vazquez will conduct a seminar for labour leaders from which four will be selected for the three-month AIFLD course starting in October in Washington.

Two weeks ago a PTTI delegation was here to discuss organization and a low-cost housing programme with their Ecuadorean affiliate, FENETEL, ‡ which is one of the most important unions in CEOSL. The PTTI is training FENETEL leaders at their school in Front Royal, Virginia, and the visit was also used to create publicity for the AIFLD seminar programme. Included in the delegation was the new PTTI Inter-American Representative and a Cuban who is leader of the Cuban telephone workers' union in exile. This PTTI organization is without doubt the most effective of the International Trade Secretariats currently working in Ecuador under direction of IO Division.

One has to wonder how the Ecuadorean working class can even stay alive to organize. Two weeks ago the President of the National Planning Board, in a general economic report to the Chamber of Deputies, revealed that the worker in 1961 received an average monthly income of only 162 sucres -- about seven dollars.

Quito 10 September 1962

Noland has turned over another branch of the ECACTOR political-action project to me. From now on I'll be handling the Ambato operation with Jorge Gortaire.

Two weeks ago I went with Noland down to Ambato to meet Gortaire and to plan a bugging operation that we think may reveal information on Chinese support to Araujo, if any. Previously, the manager of the Villa Hilda Hotel in Ambato, a Czech emigre, reported to Gortaire that Araujo had made reservations for one of the cottages. This will be Araujo's first trip to visit his Ambato followers since returning from Communist China and Gortaire suggested that we bug the cottage -- which he will monitor when Araujo goes there at the end of the month.

Last week-end I returned with the equipment and spent a couple of days with Gortaire. He had taken the cottage which Araujo will use and we installed a microphone, transmitter and power supply behind the woodwork of the closet door. It works perfectly and Gortaire can monitor at ease from his house, which is only two blocks from the Villa Hilda. The only problem was that Gortaire forgot to lock the door and, when I was standing on a table in the closet making the installation, a couple of maids burst in on us. They were clearly puzzled by my strange activity, but Gortaire believes they simply could not imagine what I was really doing. He will stop by to see the manager from time to time to find out if the maids mentioned seeing me on the table.

Quito 3 October 1962

Arosemena has survived another attempt at impeachment for incapacity, largely because the Conservatives fell apart on the issue, and because Varea is so discredited.

Through my work with Pablo Maldonado, ‡ Director of Immigration, on attempting to stop or delay Ecuadoreans from travelling to Cuba and to carefully review their baggage on return, I have met the Sub-Secretary of Government, Manual Cordova Galarza, ‡ who is Maldonado's immediate superior.

Cordova expressed willingness to cooperate in trying to cut off travel to Cuba, and he said Jaime del Hierro, ‡ the Minister of Government, is also anxious to see effective controls established. He added that any time I wish, I can call on him or on the Minister to propose new ideas.

Noland isn't anxious to get involved with Cordova or del Hierro because, according to him, Arosemena won't allow them to take really, effective action. He said they are probably just trying to appear to be cooperative since serving as Minister and Sub-Secretary of public security in this government is beyond redemption. In his view they're like the other Liberals serving Arosemena: disgraceful opportunists. For the time being I'll continue with Maldonado and avoid contacts with Cordova and del Hierro.

Today Cordova went to Cuenca to investigate a macabre incident that occurred in an Indian village about twenty kilometres outside Cuenca. A medical team of the Andean Mission, an organization supported by UN agencies and dedicated to teaching social progress and self-help to rural Indians in several countries, was making the rounds of villages when they encountered strange hostility just outside a community they had already visited several times. They stopped the jeep and the doctor and social-worker proceeded on foot leaving the nurse and chauffeur in the vehicle. In the village the doctor and the social-worker found the Indians assembled in the church for a religious service, but when they entered the church they were greeted with extreme hostility by the Indians who began to jostle them about. When they did not return for some time the nurse also left the jeep and entered the village, but at the church she too was menaced as she joined the others. By now the Indians were whipped into a rage by several of their leaders who thought the Andean Mission people were communists. As matters grew worse the Mission team fled to the sacristy for safety but were followed by the Indians who surrounded them and would not let them leave. The elderly priest, who had been in the parish thirty-eight years, appeared and the team begged him to confirm to the Indians that they were not communists, but were simply there to help them. The priest refused to intervene even as the team knelt before him begging protection, and he simply blessed them and disappeared. The team was then severely beaten -- the nurse left for unconscious while the doctor and the social-worker were dragged to the street.

The nurse escaped, returned to the jeep and obtained a police patrol from Cuenca. When they returned to the village the doctor and social-worker had been killed with stones, clubs and machetes while a local schoolteacher who tried to intervene had also been attacked. The Indians, in fact, were about to burn him, thinking he was dead, when the nurse and police arrived.

Preliminary investigation revealed that the priest had earlier instructed the Indians to resist the agriculture and livestock census because it was a communist plot, and that the priest also spread the story that the Andean Mission team were communists. My friends tell me that the priest will probably be sent to a religious retirement house as punishment.

Arosemena rewarded Manuel Naranjo ‡ by naming him Ecuadorean permanent delegate to the UN General Assembly. He has gone to New York and Noland has arranged for contact to be established with him by officers from the Agency's New York office. We expect that the CIA will try to use him for special operations at the UN.

Quito 7 October 1962

Brazilian elections are being held today as the climax of one of WH Division's largest-ever political-action operations. For most of the year the Rio de Janeiro station and its many bases in consulates throughout the country have been engaged in a multimillion dollar campaign to finance the election of anti-communist candidates in the federal, state and municipal offices being contested. Hopefully these candidates will become a counter-force to the leftward trend of the Goulart government -- increasingly penetrated by the communists and the extreme left in general.

***

Noland's transfer back to Washington, expected by him for many months, is now official. After five years here he is being replaced in December by Warren L. Dean, ‡ currently Deputy Chief of Station in Mexico City. No one here knows anything about the new chief except that he's a former FBI man who wants Noland to arrange for immediate release of his dogs, that are coming on the same flight from Mexico City.

Quito 15 October 1962

The Santo Domingo guerrilla adventure has reached a conclusion as far as the PCE is concerned. At a Central Committee Plenum just ended Jorge Ribadeneira was expelled from the party for his 'divisionist' work in URJE and for leading PCE and JCE members into the guerrilla operation. The expulsion was in agreement with a resolution of the Pichincha Provincial Committee following their investigation in August. Ribadeneira was an alternate member of the Central Committee and a full member of the Pichincha Provincial Committee under Rafael Echeverria. Our PCE agents report that the struggle will now turn to URJE where the Ribadeneira forces are struggling with the forces controlled by the PCE and Pedro Saad. One can only wonder what the Central Committee would think of Echeverria's parallel activities outside the PCE as reports continue to reveal preparations by his group for armed action and terrorism. This comes through the ECWHEAT telephone tap on Antonio Flores.

I continue working with my two Quito Social Christian leaders, Carlos Roggiero and Jose Maria Egas, in their respective fields of militant action and subversive watch-control. Egas has been under rather intense cultivation by the chief of the Embassy political section (ostensibly my boss) who doesn't know he is my agent. Egas has just left on a State Department leader grant to observe the US electoral campaign. He'll spend most of his time in California but after the elections he'll return to Washington where headquarters will give him a month of intense training in clandestine operations, mainly surveillance and investigations.

Velasco is again beginning to haunt the political scene and the spectre of his return for the 1964 elections looms not far over the horizon. Through the Agenda Orbe Latinoamericano ‡ news service we arranged to have Velasco interviewed recently in Buenos Aires, and he affirmed his plans to return in January 1964 for the campaign. Publication of the interview here has caused just the ripple we want so that the ECACTOR agents will begin plotting to keep him from returning or from being a candidate.

Noland has a new Velasquista agent who began calling on him at the Embassy some weeks ago to offer tidbits on organizational work of Velasquista leaders in Quito. The new agent is Medadro Toro ‡ and he has Noland extremely nervous because of his reputation as a gunman. He was one of the four people arrested for firing at Arosemena during the shoot-out in the Congress in October last year, and he was jailed from then until February when the Supreme Court threw out the case. He was back in jail in April for insulting Arosemena and in May he was a Velasquista candidate for Deputy in the June elections. He lost and is obviously looking for some way to keep body and soul together. So far his information has helped resolve persistent rumours of Velasco's imminent return and Noland, although personally fearing this man, thinks he has long-range potential. What bothers Noland are Toro's beady eyes looking through him, but he'll either have to begin discreet meetings outside the Embassy very soon or forget the whole thing. Politically Toro is dynamite.

Gil Saudade is trying to salvage his Popular Revolutionary Liberal Party ‡ (PLPR), although several of the agents are now firmly entrenched in the CEOSL labour organization. After the fall of Velasco the struggle resumed in the PLPR between our agents and a group of extreme-leftists who were close to Araujo, coming to a head last week with the expulsion of Araujo's friends. Now Gil will try to get his agents active again in the organization, again to attract the Velasquista left away from Araujo, so that the PLPR will have some influence if Velasco returns for the 1964 election campaign.

Quito 6 November 1962

At long last Reinaldo Varea's impeachment proceedings, which have dominated the political scene since August, have ended. Today he was acquitted by the Senate although Velasco's Minister of Defense at the time of the junk swindle lost his right to hold public office for two years. Varea may have survived as Vice- President but his political usefulness is practically wiped out. The only hope is for him to work very hard to rebuild his reputation so that when Arosemena's next drunken scandal occurs Varea might not be such an obstruction to ousting Arosemena for physical incapacity. Even so, there is little or no indication that Varea could ever overcome the Conservative and Social Christian opposition to him -- he is, after all, a Velasquista.

Quito 8 November 1962

Congress's final session last night kept tradition intact. In addition to a fistfight involving Davila, the national Budget was adopted. Discussion of the Budget only began yesterday and was, of course, shallow and precipitate. There is a general agreement that it will be very difficult to finance in spite of new tax measures.

The 1962 Congressional session, as in 1961 and 1960, ended with no agrarian, tax or administrative reform. The session was controlled by the Conservatives and Social Christians who sought to use the Congress as a political forum, with the junk scandal as the issue, to attack both the Arosemena administration and the Velasquista movement. Significant legislation was never seriously considered.

Quito 20 December 1962

Another crisis -- the worst yet -- broke today. President Allesandri of Chile stopped in Guayaquil this afternoon for an official visit to Arosemena after a trip to see Kennedy. At the airport Arosemena was so drunk he had to be held up by aides on both sides and later at the banquet he had to call on a guest to make the welcome toast.

News of this disgrace has spread around the country like a flash and already Carlos Arizaga Vega is moving to gather signatures for convoking a special session of Congress to throw Arosemena out. This time Arosemena may well have to resign.

***

The new Chief of Station arrived with his wife and dogs and next week the Nolands leave. Today Jim was given a medal by the Quito Municipal Council in recognition of his work with youth and sports groups in Quito. Renato Perez, Acting Council President, presided at the ceremony. Tomorrow at the golf-club the Nolands will be honoured at a huge party, and the following day Janet and I have invited about a hundred friends to a farewell lawn party for the Nolands at our house.

Quito 28 December 1962

The Nolands left and the new Chief of Station, Warren Dean, ‡ hasn't wasted any time letting us know how he works. The other day, even while Noland was still here, Ray Ladd and I went off to spend the afternoon with a crowd of friends, mostly from the tourism business, at a bar and lounge of questionable respectability called the Mirador (it overlooks the whole city). The next day Dean gave us a verbal dressing down in a staff meeting and left no doubts he wanted to know where everyone is at all times. Afterwards Noland gave me another of his friendly advice sessions, warning me that my wilder habits may not sit well with Dean and that I'd better be a little more discreet. Frankly I think this new chief is pulling the old military shakedown technique -- a mild intimidation to establish authority. Surely, with the extra hours worked at night and on week-ends, an afternoon taken off now and then is justified.

This new chief is a big man, about six feet four inches and somewhat overweight. He's obviously having difficulty with the altitude even though he has come from Mexico City -- each afternoon after lunch he sits behind his desk fighting to keep his eyes open. So far the main changes he has indicated are increased action against the extreme left in collection of information through technical operations and new agent recruitments. He also wants me to increase my work with Major Pacifico de los Reyes, the former Chief of Police Intelligence who has just returned from training at the FBI Academy in Virginia and at headquarters, where he was given several weeks training in clandestine intelligence operations. He's just been appointed Chief of Criminal Investigations for Pichincha but will continue to oversee the intelligence department.

Jose Maria Egas, the young Social Christian leader, is also back from his State Department trip and from our special training programme. Dean also wants me to intensify the use of this agent because headquarters is getting frantic that serious insurgency may be imminent. Programmes like the Subversive Control Watch List are getting increased emphasis and Egas's teams are crucial for this effort. From now on I'll pay him the equivalent of 200 dollars a month, which is very high by Ecuadorean standards but consistent with Dean's instructions.

Quito 12 January 1963

In Guayaquil last week a national convention of URJE voted to expel Jorge Ribadeneira and nine other URJE leaders, most of whom were involved in the Santo Domingo guerrilla operation. The expulsions reflect PC E control of the convention and the specific charge against those expelled was misuse of 40,000 dollars that Ribadeneira and his group were given by the Cubans for guerrilla operations around Quevedo rather than Santo Domingo.

The best report on the convention was from a new agent of the Guayaquil base who is one of the URJE leaders expelled. Although the agent, Enrique Medina, ‡ will no longer be reporting on URJE the base will try to ensure that he participates in the organization that these former URJE leaders will now form.

From now on the URJE ceases to be the main danger for insurgency from our point of view. The most important leaders have been thrown out and now that the PCE is back in control the emphasis will be on organization and work with the masses rather than armed action, not to eliminate, of course, selective agitation through bombings and street action. Our main concern now will be to monitor any new organization set up by Ribadeneira and the others who were expelled, together with improving our penetrations of the Araujo and the Echeverria groups in Quito. In a few days the base will bring out an appropriate story in the Guayaquil press on the URJE convention and we'll give it replay here in Quito. This will be a blow to URJE and to those expelled, since normally they try to keep these internal disputes quiet. Ribadeneira couldn't have been more effective for our purposes if he had been our agent.

My year as a director of the YMCA is ending, but now I am going to organize a YMCA basketball team. Dean has approved the use of station funds for players' salaries so we will be able to attract some of the best in Quito. We'll also buy uniforms and bring in shoes from the US by diplomatic pouch. The station administrative assistant, Ray Ladd, will coach the team. The advantage to the station is to continue widening our range of contacts and potential agents through the YMCA, which was only established here a couple of years ago.

Quito 16 January 1963

Reorganization of CEOSL is moving ahead although termination of the old CROCLE agents by the Guayaquil base required a visit in November by Serafino Romualdi, Executive Director of AIFLD and the long-time AFL-CIO representative for Latin America. The struggle between the old CROCLE ‡ and COG ‡ agents, who favoured retention of their unions' autonomy within CEOSL, and our new agents, who insisted (at our instruction) that CROCLE and COG disappear in favour of a new Guayas provincial federation, finally led to the expulsion a few days ago of the CROCLE and COG leaders from CEOSL. Those expelled included Victor Contreras ‡ who only last April became CEOSL's first President. Matias Ulloa Coppiano is now Acting Secretary-General of CEOs L and Ricardo Vazquez Diaz is Acting Secretary of Organization. Both are agents of Gil Saudade who originally recruited them through his Popular Revolutionary Liberal Party.

Ricardo Vazquez Diaz has been very effective in expanding the AIFLD education programme along with Carlos Vallejo Baez. ‡ In recent months, courses have been held in Guayaquil and Cuenca as well as Quito. Other courses are being planned for provincial towns in order to strengthen the CEOSL organizations there.

Quito 18 January 1963

Student election operations through Alberto Alarcon have again been successful in Quito. In December the elections for officers of the Quito FEUE chapter were so close that both sides claimed fraud and the voting was annulled. Today another vote was held and Alarcon's candidate, a moderate, won. The national FEUE seat is now in Cuenca where anti-communist forces are also in control.

The Guayaquil base has made several PCE documents public, by having Colonel Lugo, Commander of the National Police in the coastal provinces, add them to a three-ton haul of propaganda he captured last October. In a few days these documents will come to light in the report emerging from a Senate commission's investigation of the propaganda. Included is the PCE Central Committee resolution expelling Ribadeneira. Dean is determined to create as much fear propaganda as possible as part of a new campaign for government action against the extreme left.

Quito 30 January 1963

Our new station officer under Public Safety cover has arrived and Dean put me in charge of handling his contact with the station. His name is John Burke ‡ and he's the most eager beaver I've ever met. Seems to think he'll be crawling in the attic of the Presidential Palace next week to bug Arosemena's bedroom. His problem is that he broke his leg training, and while it mended for the past year and a half he took every training course offered by the Technical Services Division, for lack of anything else to do. In recent months he has sent to the station masses of audio, photo and other technical equipment including about 200 pounds of car keys -- one for every Ford, General Motors and Chrysler model built since 1925. Dean finally blew up over this equipment and fired off a cable telling headquarters not to send one more piece of technical gear unless he specifically asks for it. Poor Burke. He's not off to a very good start, and Dean has told me to make him stick exclusively to the AID police work until further notice. His first AID project, it seems, will be to take a canoe trip down in the Amazon jungles to survey rural law enforcement capabilities there - not exactly clandestine operations but it could get interesting if he runs into any Auca head-shrinkers.

In fact Burke will have plenty to keep him busy in the straight police work. Under the Public Safety programme this year AID is giving about one million dollars' worth of weapons and equipment to the police: 2000 rifles with a million rounds of ammunition, 500 .38 calibre revolvers with half a million rounds, about 6000 tear-gas grenades, 150 anti-riot shot-guns with 15,000 shells, almost 2000 gas-masks, 44 mobile radio units and 19 base radio stations, plus laboratory and investigations equipment. In addition to training the national police here in Ecuador, the Public Safety office is also sending about seventy of them to the Inter- American Police Academy ‡ at Fort Davis in the Panama Canal Zone. This Academy was founded by our Panama station last year and is intended to be a major counter-insurgency facility similar in many ways to the training programmes for Latin American military officers under the military aid programmes.

Quito 15 February 1963

Dean is getting more determined each day to avoid a surprise insurgency situation. He wants to increase coverage of two groups in particular and he wants me to do most of the work. The two groups, not surprisingly, are those led by Araujo and Echeverria.

We've had a breakthrough in coverage of the Araujo group through the recent recruitment of one of his close collaborators, a Velasquista political hack named Jaime Jaramillo Romero. ‡ Jaramillo was arrested last month with Araujo and two of the expelled PLPR leaders while recruiting in the provinces. Soon after, he was a 'walk in' to the Embassy political section, and after being informed by the State Department officer who spoke with him we decided to make a discreet contact with him using the non-official cover operations officer of the Guayaquil base. I arranged for this officer, Julian Zambianco, ‡ to come to Quito and with automobiles rented through a support agent, Jose Molestina, ‡ Zambianco called on Jaramillo at his home. A meeting followed in Zambianco's car, which I recorded in another car from which I was providing a security watch for Zambianco. Earlier I had rigged the Zambianco car with a radio transmitter to monitor their conversation. Jaramillo's information looks good -- including information about an imminent trip by Araujo to Cuba for more money. As Dean is a great believer in the polygraph I have requested that an interrogator come as soon as possible to test Jaramillo. If he's clean I'll turn him over to a new cutout so that we won't have to call Zambianco to Quito for each contact. Telephone coverage continues on Araujo but it hasn't produced good information.

On the other hand telephone coverage of Antonio Flores Benitez -- one of Echeverria's principal lieutenants -- is still providing excellent information. Flores is obviously getting very good intelligence from his agents in the Ministry of Defense, the Presidential Palace and the police. Our problem is inadequate coverage of Echeverria's plans and of his organization for terrorism and guerrilla warfare, although we are getting some information from Mario Cardenas, one of our PCE penetration agents who is close to Echeverria. On Dean's instruction I am studying three new operations for increasing coverage of Echeverria.

First, we will try to install an audio penetration of the Libreria Nueva Cultura, the PCE bookstore in Quito run by Jose Maria Roura, the number two PCE leader in Quito and Echeverria's closest associate. The two of them often meet at the bookstore, which is a rendezvous for PCE leaders in general and consists of a street-front room on the ground floor of an old colonial house in downtown Quito. On checking records for the owner of the house I discovered that it belongs to a golfing companion of mine, Ernesto Davalos. ‡ Davalos has agreed to give me access and security cover during the audio-installation which we will make from the room above the bookstore on a Sunday when it is closed. For a listening post (LP) I hope to obtain an office in a modern, multi-storey building across the street from the bookstore, where we could also photograph visitors and monitor the telephone.

Second, we will try to bug Echeverria's apartment. He lives in a fairly new building in downtown Quito but access for the installation will be difficult. On the floor beneath his apartment is the Club de Lojanos (the regional club of people from Loja), from which we might be able to drill upwards to install the microphone and transmitter. This installation would be very slow and difficult, especially if we have to do it while Echeverria or his wife are at home, but Cardenas believes Echeverria has important meetings at home and probably discusses all his activities with his wife, who is a Czech. I am also checking on whether I can get an apartment across the street from Echeverria's that would serve as listening and observation post for this operation.

The third new operation is another technical installation, this time against Antonio Flores Benitez. He has recently moved into a modern multi-storey apartment-building where we might be able to monitor both his telephone and an audio-installation from the same LP. Although there seems to be little chance for access to his apartment or to those around it for the installation, an apartment above and just to the side of his is coming free in a few weeks. I may take that apartment in order to begin monitoring the telephone from there (rather than from the LP in Rafael Bucheli's house) and see later whether the audio technicians can drill to the side and down or whether we will have to make the bugging by surreptitious entry. Already we know that Flores meets many of his contacts in his apartment, and he discusses most of his activities with his wife -- who gossips about them by telephone when he's not at home.

On the government side Dean also wants me to intensify my work with Pablo Maldonado, ‡ the Director of Immigration, and to work into a liaison relationship with Manuel Cordova, the Sub-Secretary of Government and with Jaime del Hierro, ‡ the Minister of Government. Although I have avoided until now regular contact with Cordova and del Hierro (on Noland's instruction last year) picking up with them now should not be difficult. The reason, Dean said, is to discover and to monitor their willingness to take action on information we give to them. Once we determine willingness on the high level, we'll be able to determine more accurately what information will bring action when passed through police agents such as Pacifico de los Reyes and Oswaldo Lugo.

With all this technical coverage I'll need some new agents for transcribing, photographic work and courier duties -- but if they work we'll not be surprised by either Araujo or Echeverria. The team for processing the telephone taps will be Edgar Camacho and Francine Jacome with Francine as courier. Rodrigo Rivadeneira can switch to transcribing the new audio penetration and Francine, will serve as courier for receipt of his material as well. I'll have Francine come by my house each morning at eight to leave transcripts and pick up any instructions for the others.

One other effort coming up that could be important: I've given money to Jorge Gortaire so that he can buy a used Land Rover to make a trip to military garrisons in the southern sierra and on the coast. The purpose of this trip is for Gortaire to sound out military leaders on all the rumours going around about a move against Arosemena while at the same time weighing the predisposition of the military leaders to such an action, even if the rumours aren't true.

Quito 1 March 1963

This morning's newspapers give prominent coverage to Mr. McCone's testimony to the Senate yesterday in Washington on training for guerrilla warfare in Cuba. The Director mentioned Ecuador as one of the countries from which the largest number of trainees has been recruited, and he explained how the Cuban Embassy in Mexico City tries to conceal travel to Cuba by Issuing the visa on a slip of paper with no stamp in the passport. His report follows another headquarters' report, issued last month by the State Department, that between 1000 and 1500 Latin American youths were given guerrilla training in Cuba during 1962.

In commenting on the press reports this morning Dean told me that one of his operations in Mexico City was the airport travel-control team. There the passports of travellers to Cuba are stamped by the Mexican immigration inspectors with 'arrived from Cuba' or 'Departed for Cuba' to make sure the travel is reflected in the passports. The station there also photographs all the travellers' passports and with large press-type cameras photographs are taken as they embark or deplane. Results of the Mexico City travel-control operation are combined with other data on travel, mostly from the other important routes to Cuba via Madrid or Prague, for machine processing. In order to intensify operations with Pablo Maldonado, Dean wants me to pass him copies of the monthly machine runs on Ecuadoreans travelling to Cuba. In addition, Mexico City is cabling the names and onward travel data to stations throughout the hemisphere so that the travellers can be detained or thoroughly searched when they arrive home. I'll also pass this type of information to Maldonado and use it as an entree to Cordova and del Hierro.

I tried to get Dean to reveal why he wants me to work with the Minister and Sub-Secretary, because usually a Chief of Station handles the high-level liaison contacts. He says he wants me to get the experience now because it will help me later. He's bitter about Winston Scott, ‡ the Chief of Station in Mexico City. Scott has very close relations with both the President, Adolfo Lopez Mateos, ‡ and the Minister of Government, Gustavo Diaz Ordaz. ‡ When Scott left the country from time to time or went on home leave he made arrangements for communications to be kept open with the President and the Minister but would never let Dean make personal contact even though he was Acting COS when Scott was away.

Guayaquil 31 March 1963

The best part of being a CIA officer is that you never get bored for long. On Friday, two days ago, I flew down from Quito to recruit someone I've known for about a year and whom the Base Chief, Ralph Seehafer, ‡ wants to use as a cutout to one of his PCE penetration agents. The recruitment went fine and tomorrow I'll introduce the new agent, Alfredo Villacres, ‡ to Seehafer.

I came down on a Friday so that I could spend the week-end out of the altitude, but mostly because Alfredo and I usually spend Saturday nights making the rounds of Guayaquil's sleazy dives. Last night was typical and we left the last stop about eight o'clock this morning with Alfredo roaring down the unpaved, pot-holed streets of a suburban shanty town, firing his .45 into the air while his dilapidated, windowless old jeep station wagon practically shook apart.

This afternoon he called me at the hotel to advise that we had barely escaped involvement in a new Arosemena scandal. It seems that a few minutes after we left the 'Cuatro y Media' last night (it had been an early stop and we left about 1 a.m.) Arosemena and his party arrived. The story is all over town now of how Arosemena and his friends began to taunt the waiters -- all are homosexuals there -- finally ordering one of them to put a lampshade on his head. Arosemena took out the pistol he always carries and instead of shooting off the lampshade he shot the waiter in the head. No one is certain whether the waiter died or is in the hospital, but the blame is going to be taken by Arosemena's private secretary, Galo Ledesma (known to all as 'Veneno' (poison) Ledesma). Ledesma apparently left today for Panama where he's going to wait to see what happens here. Alfredo said that if we had' been there when Arosemena and his group arrived we would have had to stay since it's a small, one-room place and Arosemena always invites everyone to join his group. I can see the Ambassador's face if that had happened and my name was included in the story: good-bye Ecuador.

Guayaquil 2 April 1963

I was to have returned to Quito on the first flight this morning but a very interesting situation suddenly developed yesterday: After introducing Villacres to the Base Chief over lunch, Seehafer and I returned to the Consulate and had a visit from the chief of the USIS office. He told us that a young man had come into the Consulate this morning asking to speak to someone about 'information' and was eventually directed to him. The person said he was a Peruvian and that he had information on the revolutionary movement in Peru and on Cuban involvement. The us Is chief said the Peruvian was so nervous and distracted that he is probably a mental case, but Seehafer asked me to see him if I had nothing better to do. We arranged for the us Is chief to give him my hotel-room number (the Peruvian was to return to the Consulate in the afternoon), where he would call in the evening.

The Peruvian came around to the hotel and we talked for two or three hours. I took copious notes because I know none of the names on the Peruvian scene and sent off a cable this morning to Lima and headquarters. The Peruvian is Enrique Amaya Quintana ‡ and is a middle-level militant of the Movement of the Revolutionary Left (MIR). He has just finished a three months' training course in Cuba along with several hundred other MIR members. They are all reinfiltrating to Peru right now, overland from Colombia and Ecuador.

The important aspect of this future agent, if he's telling the truth, is that he was selected out of the MIR group to receive special training in communications. He showed me a notebook full of accommodation addresses throughout Latin America to which secret correspondence will be sent. Moreover, he also showed me a dictionary that serves as the key to a code system that he will use in secret writing and radio communications with Havana.

This afternoon we got cables back from both headquarters and Lima confirming Amaya's status in the MIR and warning us not to let this one slip away. The MIR is the most important potential guerrilla organization in Peru with hundreds of people trained in Cuba and with advanced plans for armed insurgency.

Lima sent a list of questions for Amaya which I'll go over with him tonight. He really is a case of nerves and won't like working with a tape-recorder but I'm going to insist we record everything so that we don't have to depend on my notes. This way I can get more out of him too. It's not going to be easy getting him to stay with us -- what he wants is financial assistance to get his wife and child out of Peru and to resettle in some other country. He says he became disillusioned during the training in Cuba, but my guess is that he's lost his nerve now that he's almost on the battlefield.

Quito 5 April 1963

This MIR case has people jumping all around headquarters it seems. Not just the Peruvian and Ecuadorean desks -- the Cuban branch and even the Soviet Russia Division are also getting into the act. As a cutout and handling officer I brought in Julian Zambianco, ‡ and yesterday Wade Thomas ‡ arrived from headquarters to take close charge of the case -- he's a specialist in CP penetration operations. Meanwhile I had sessions each day with Amaya on the tape-recorder, summarizing the results in cables to Lima and headquarters. The guy is definitely coming clean -- everything seems to check out -- and yesterday I finally got him to agree to spending at least a short period back in Peru with his former friends. From the sound of the cables from Lima, Amaya is going to be their first important MIR penetration. My participation ended today when I came back to Quito.

Quito 12 April 1963

A report is just in from Mario Cardenas, one of our best PCE penetration agents and a close but not intimate associate of Echeverria. Cardenas reported that Jose Maria Roura, Echeverria's principal lieutenant in Quito, has left for Communist China where he expects to get payments started that will enable the Echeverria group finally to begin armed action. Echeverria has told Cardenas to stand by for travel to Colombia at a moment's notice, so that he can receive money and documents that Roura, who is very well-known, should not bring into the country himself.

We discussed in the station whether to advise Jaime del Hierro, the Minister of Government, or Manuel Cordova, the Sub- Secretary, but for better security we decided to post a special watch on Roura's return through Juan Sevilla, ‡ the Minister of the Treasury. Sevilla, who has been a golfing companion of mine for over a year, jumped at the chance, just as I thought he would, and he assigned his personal secretary, Carlos Rendon Chiribaga, ‡ to watch for Roura's return at the Quito airport. Now we can only hope that Roura comes straight back to Quito with no stop in Colombia so that we're not forced to protect Cardenas. If by chance we learn that Roura will arrive in Guayaquil, Sevilla can send his secretary there to await Roura. Meanwhile I'm moving along with the audio operation against Roura's bookstore and in a couple of days Larry Martin, ‡ the audio technician from the Panama station support unit, will arrive to make the installation.

Besides Roura's trip we are also monitoring for Araujo's return. He is in Cuba right now and perhaps he too will bring back money, although the chances are slim that either he or Roura will be so careless as to bring back money on their persons. So that we can get timely information after his return I've had Zambianco come up from Guayaquil again to turn over Jaime Jaramillo ‡ to a new cutout, Jorge Andino, ‡ who is a hotel owner and Ecuador's best polo player. Andino is another acquaintance from about the time I arrived and he too was quite willing to help. He'll receive the reports at the hotel but pass them to me at another business he owns a couple of blocks away. One of the mysteries we're trying to solve right now is whether there is any close relationship between Araujo's group and Echeverria's group, because Echeverria has given several indications that he is in contact with the Cubans.

Medardo Toro, ‡ the Velasquista gunman whom Noland picked up in a developmental status last year, is now reporting on a regular basis. Dean told me to get him into the groove so I brought Zambianco into the case in an arrangement similar to the one we used with Jaime Jaramillo two months ago. Until I get a good cutout for Toro we'll have to keep it going with Zambianco, but this way it's very secure. Mainly we want to keep abreast of Velasco's plans to return for next year's elections. Too bad Toro is so far from Araujo's group.

Quito 14 April 1963

Each day, it seems, a new wave of rumours spreads around the country signalling the imminent outbreak of guerrilla warfare and terrorism. Partly the rumours reflect our continuing propaganda campaign to focus attention on communism in order to provoke a serious crackdown by the government. But partly the tension is based on real cases such as captures of propaganda by Colonel Lugo's police in Guayaquil and the recent near-death of a terrorist when a bomb exploded during a training session. Our worry is that the Ecuadorean police and military wouldn't be able to cope with a determined guerrilla movement.

A recent incident underlines our doubts. Two nights ago a Navy logistics ship was returning from the Galapagos Islands with a group of university students who had been in the islands on an excursion. A coastal Navy patrol was lurking in the darkness just off-shore in wait for an expected incursion by a contraband vessel. The coastal patrol mistook the logistics ship for the contraband vessel and a two-hour gun battle between the two Navy ships followed. The coastal patrol finally called by radio to Guayaquil for help and the Navy communications centre called off the battle. What was worse was that their firing was so bad that no serious hits were made during the two-hour battle and only one sailor was wounded. After arriving in Guayaquil the students spread the story, which was published in Guayaquil today, but the Navy isn't talking.

When Dean heard this story this morning he told me to get moving faster on the new technical operations -- he said headquarters will get all over us if we get surprised by Araujo, Echeverria or others, what with the guerrilla movements already under way in Peru, Venezuela and Guatemala, and Brazil steadily going down the drain under Goulart. Here the only encouraging sign of late has been increasing willingness by the Minister of Government and Sub-Secretary to increase general travel-control efforts and to allow police action such as Colonel Lugo's recent operations. However, del Hierro and Cordova are clearly being restrained by Arosemena from really effective action.

Quito 19 April 1963

Another important trip to wonder about -- this time it's Antonio Flores Benitez, one of Echeverria's lieutenants, who left today for Cuba. What we can't figure out is why Echeverria would send Flores to Cuba when Araujo is there and Roura is in China. Roura's trip to China, according to Cardenas, was made without the authorization of the PCE Executive Committee in Guayaquil and if Pedro Saad finds out there will be serious trouble for Roura, a member of the PCE Central Committee, and possibly for Echeverria. No doubt now that Echeverria is moving ahead fast with his organization outside the party.

Flores was very careful not to mention his trip by telephone, but his wife let it slip out a couple of days ago. We're monitoring the telephone now from the apartment above and to the side of Flores's. Rodrigo Rivadeneira ‡ moved into the apartment with his brother Ramiro ‡ and his mother, and between him and Ramiro the transcriptions are kept right up to date. The connection was easy because the building is completely wired for telephones and Rafael Bucheli ‡ and an assistant simply made the connections in the main terminal box in the basement of the building. While Flores is away we'll try to get going on the audio operation although the audio technician isn't enthusiastic about drilling through reinforced concrete at such a difficult angle.

I also decided to use Rodrigo Rivadeneira in the listening and observation post for the technical operation against the PCE bookstore. On Sunday Larry Martin and I made the installation from the room above with Ernesto Davalos ‡ giving us security and cover. Davalos was very nervous because his caretaker is a communist and spends most of the time in the bookstore. Although I assured him that we would be very quiet, Martin decided to make the installation behind the baseboards and underneath several of the floorboards. The noise when we ripped them up was so screeching, what with their centuries-old spikes, that Davalos almost had a coronary. The same thing happened when we hammered the boards back into place but luckily the caretaker showed no signs of suspicion -- at least according to Davalos. The audio quality is good (Echeverria is running the bookstore while Roura is in China) although street noise at times drowns the conversations.

Rivadeneira rented the office across the street as an LP and he sits in a false closet I had built by Fred Parker, ‡ a US citizen support agent who has a furniture factory in Quito. Parker built the closet so that it could be carried in by pieces, and Rivadeneira sits in it looking through a masked side, listening, recording, snapping pictures of visitors to the bookstore, and keeping a log.

I had good luck also in getting just the right apartment across the street from and slightly above Echeverria's apartment. This observation and listening post (OP-LP) has just been rented through Luis Sandoval, the chief technician of police intelligence, who accepted my offer to work with us full-time for the foreseeable future. Sandoval is resigning from the police and will open a cover commercial photography studio in the OP-LP. I've given him enough equipment to start -- more is coming later -- and he will do the developing and printing of the photographs taken by Rivadeneira at the bookstore. As soon as we have a chance, we'll get Larry Martin back and try for the audio installation against Echeverria's apartment -- probably by drilling up from the Loja Club that occupies the entire floor underneath Echeverria's place.

Quito 24 April 1963

A sensational case that may be our first real breakthrough has just developed, but it looks as though interference from Arosemena may hamper follow-up. A few days ago, the Guayaquil base received information from one of its penetration agents that a Cuban woman was training URJE members there. The base passed the information to Colonel Lugo who managed to arrest her. Her name is July da Cordova Reyes, at least that's what her documentation says, and we may well have here the first case of the Cubans sending out training missions to work in Latin American countries where they don't have diplomatic missions -- certainly it's the first case of its kind in Ecuador.

Colonel Lugo, however, reported that after her arrest he was ordered not to conduct an extensive interrogation. I took up the matter with Jaime del Hierro, the Minister of Government, in order to emphasize the great importance of this case for discovering the extent of Cuban involvement, especially whether there are other Cubans here besides the woman and all the details about when she arrived, whom she trained, where and whom she has trained before, her intelligence service in Cuba, communications, and much more. We are prepared, I told the Minister, to bring down an expert from Washington who could assist in the interrogation but who would not be recognizable as an American. All I got from the Minister was evasion, and we've concluded that Arosemena gave the order not to exploit the case. Two days ago the Governor of Guayas ordered her expulsion from the country: we're trying to salvage the case but right now we're not hopeful.

The extreme left has been forced into the dubious position of supporting the very government that broke with Cuba. Arosemena certainly isn't fooling the extreme left, or anyone else for that matter, on how hard he must fight for political support. Two days ago he cancelled a provision of last November's Budget Law prohibiting any government salaries higher than the President's. The purpose of the law was to limit the very high salaries and benefits being received by the heads of certain autonomous government agencies and by other officials who hold more than one government job. Some, for example, were making the equivalent of 1000 dollars per month -- twice as much as Arosemena. Obviously he cancelled the law in order to glue on a little more firmly his Liberal Party supporters and others who had been hurt by the salary limitation bill. Disgusting for a desperately poor banana republic where over half the population receives less than 100 dollars per year.

Quito 1 May 1963

Some success on the da Cordova case. On 27 April she was deported to Mexico but was refused entry and returned to Guayaquil. Colonel Lugo can't proceed with interrogation until he gets the go-ahead from the ministry, so I'll bring up the case again with del Hierro or Manuel Cordova. Warren Dean is happy -- he told me very confidentially that Gustavo Diaz Ordaz, the Mexican Minister of Government, is really in the Chief of Station's pocket and that's where I ought to try and get del Hierro. The way to do it, according to Dean, is to provide money for a high government official's mistress-keeping: the caso chico rent, food, clothing, entertainment. In Mexico, he said, the Chief of Station got an automobile for the Minister of Government's girlfriend. The Mexican President, with whom the COS also works closely, found out about the car and demanded one for his girlfriend too. That must be an interesting station.

***

Gil Saudade has made some progress in labour operations. Last month a provincial trade-union federation for Guayas (FETLIG) ‡ was established as the CEOSL affiliate there, replacing CROCLE. This was a long-sought after development and perhaps will now end the dissension that has wracked CEOSL for so long. The AIFLD courses, largely the work of our agents, Ricardo Vazquez Diaz and Carlos Vallejo Baez, continue to expand. Vazquez was recently confirmed as permanent CEOSL Organization Secretary and Matias Ulloa Coppiano was confirmed as permanent Secretary-General. They had been acting in these jobs since the expulsions in January of the old CROCLE agents.

Today only the CTE and the Catholic CEDOC were in the streets to celebrate Labour Day. Instead of a parade, which would have turned out very few people, the CEOSL group were invited by our Ambassador to a reception at his residence which was highlighted with entertainment by Matias Ulloa. ‡

Quito 11 May 1963

Today a sensational new case has solved at least some of the recent bombings and kept the city in a commotion all day. It started just after midnight this morning when four terrorists (two from URJE) hailed a taxi, overpowered and drugged the driver, tied him up and placed him in the trunk. The terrorists then drove around town passing various embassies where they intended to throw the bombs they were carrying -- along with a quantity of weapons and ammunition. Because of recently increased police protection at the embassies, however, they decided against the bombings. Just after dawn the driver regained consciousness and after slipping out of his ropes managed to open the trunk of the taxi. The terrorists saw him escaping but he got away and went for the police.

Major Pacifico de los Reyes took charge of the case. The terrorists panicked and drove to the edge of town where they tried to escape on foot up the volcano that rises on one side of Quito. The manhunt during the day caused widespread alarm and exaggerated fears in Quito but eventually the terrorists were captured. They have already confessed to various recent bombings and armed robberies, through which they were raising funds to finance guerrilla operations. Most sensational of all, however, is that their leader is Jorge Ribadeneira of Santo Domingo guerrilla fame and another member is Claudio Adiego Francia, the Argentine who was arrested in 1961 for training URJE members.

We didn't know about this new Rivadeneira group, and I've told de los Reyes to try to determine if there is any connection between them and the Echeverria group.

Quito 17 May 1963

Major de los Reyes has arrested Francia but Ribadeneira is still in hiding. He has also arrested Echeverria and Carlos Rodriguez, Echeverria's chief lieutenant for Indian affairs, but they protested their innocence and he had to let them go. Propaganda play on the case is sensational, with photographs of the weapons and ammunition spread all across the newspapers. Dean wants to press ahead with propaganda exploitation of every possible case: Layedra, da Cordova, this one -- also the current trips of Araujo, Roura and Flores. Somehow Arosemena has got to be forced into taking repressive action.

It's too soon to be sure but perhaps a change of policy is already under way. Today Pablo Maldonado's Immigration Service denied passports to ten young Ecuadoreans who have scholarships to 'study' in Cuba. I've given Maldonado this type of information before but this is the first time he has taken strong action and it may work. The students asked for passports saying they were only going to Mexico (where they would arrange visas and onward travel). The protests have already started and we shall see how long del Hierro, Maldonado's superior, takes to weaken.

Quito 19 May 1963

Roura's hooked! Juan Sevilla, ‡ Minister of the Treasury, called me this morning to advise that Roura arrived at the airport and was discovered to be carrying 25,000 dollars in cash. Carlos Rendon, Sevilla's personal secretary, was at the airport and made the body search, and right now Roura is being held incommunicado by the police with the money impounded. I suggested to Sevilla that he add to the sensation of the case by starting a story that Roura was also carrying false documents, compromising papers and other similar material. This is going to be a big one.

***

Jorge Gortaire ‡ was back here in Quito a couple of days ago. He has finished his trip to the military garrisons in the south and on the coast -- making several long delays through breakdowns. He's going to write up a complete report back in Ambato, but he said there is very considerable disgust with Arosemena in the military commands. If it weren't for Reinaldo Varea, in fact, there would be nothing to keep the military leaders, once they got organized, from forcing Arosemena's resignation. For now they see nothing to do because they still favour constitutional succession. Varea is still the fly in the ointment, because the junk swindle led to so much ridicule of the military. All the officers with whom Gortaire spoke seriously are concerned about communist infiltration in the government and preparations for armed action, but something more serious will have to happen before they begin to move against Arosemena. So we must keep up the pressure, exploiting every case to the maximum through propaganda media and political-action agents. On Varea, Dean is considering whether or not to ask him to resign, with encouragement in the form of a generous termination bonus, but he hasn't decided.

Quito 21 May 1963

The Roura case is headlines -- supersensational! Everyone in the country is talking about it. Jaime del Hierro has taken charge and is keeping up the suggestions about 'compromising documents'. He told the press that Roura's documents are more important than the money and relate to recent reports from the US that Che Guevara is leading guerrilla-warfare planning for several South American countries including Ecuador. The documents are also said to include a 'secret plan' for guerrilla warfare and terrorism in Ecuador.

Last night del Hierro asked me if I could get someone in Washington to determine whether the bills are counterfeit because the Central Bank experts here believe they're real. I suppose he and his friends. want to keep the money, so I cabled headquarters to see what can be done.

Del Hierro's action puzzles me somewhat because of his sudden enthusiasm. Perhaps Sevilla is pushing him hard because he was responsible for the arrest, yet del Hierro still refuses to give the go-ahead on interrogation of the Cuban, July da Cordova Reyes.

Quito 23 May 1963

Del Hierro is getting worried because the press and others keep urging him for the compromising Roura documents. There aren't any, of course, and now Roura's lawyers are beginning to move. Nevertheless both del Hierro and Sevilla are keeping the publicity going by calling the Roura case an example of the importation of foreign ideology to enslave the country. Del Hierro is also citing the case of the ten students who were refused passports as another example of falsification of documents for travel to Cuba for guerrilla-warfare training. Yesterday Sevilla's secretary, who made the airport arrest, said in a press statement that the Roura documents include instructions on how to organize a Marxist revolution, how to intensify hatred between classes, and how to organize campesinos and salaried agricultural workers.

Yesterday del Hierro ordered the arrest in Guayaquil of the local correspondent of the New China News Agency, whose press carnet was in Roura's pocket when he arrived. The correspondent only returned from Europe a few days ago, and his trip must have been related to Roura's.

Roura's defence began yesterday with publication of a statement that shows he is worried about repercussions from Sa ad and the PCE leadership in Guayaquil. He defended having the money, saying that he had been invited to London by Gouzi Shudian (International Bookstore of Peking) and that his trip was sudden and without authorization of the PCE. Because of recent confiscations by the government of material purchased for sale in his bookstore, Roura said, he had obtained 25,000 dollars for a printing shop to reproduce the materials provided by Gouzi Shudian. From London he went to Peking, he said, and he denounced the confiscation of his notes on visits to communes and other sites.

No doubt Roura will end up in terrible trouble with the PCE -- possibly even expulsion like Ribadeneira. More important, his arrest will drive the wedge deeper between the Saad and the Echeverria groups. What a ridiculous cover story.

Quito 24 May 1963

Roura has had a bad day all around. He made his formal declaration to the court alleging that he discussed the new printing facility in Peking with one Chan Kung Wen. The money, however, was given to him, so he said, in Berne on his return by someone named Po I Fo. We're checking these unlikely names with headquarters -- Roura's imagination knows no bounds.

Roura's lawyer also had a session before the Council of State (the highest body for appeal against government violation of personal liberties) which refused Roura's plea for liberty and took under advisement Roura's charges against Sevilla and del Hierro for violating the Constitution. Now he'll have to stand trial on the basis of the 'documents' and the money. We'll have plenty of time to fabricate appropriate documents for del Hierro to use against Roura but first we're working on something else.

John Bacon, the Station Reports Officer, and I suggested to Dean that we prepare an incriminating document to be used against Antonio Flores Benitez -- to be planted on Flores when he arrives at the airport. There's a chance, of course, that he'll come overland from Colombia or that he'll arrive in Guayaquil, but Dean likes the plan and asked us to go ahead. The document will appear to be Flores's and Echeverria's own report to the Cubans on the status of their organization and on their plans for armed action. We are describing what we know about the organization, filling in with imagination where necessary, on the basis of the information from the ECWHEAT telephone tap and reports from Cardenas and Vargas, our two best penetrations of the Echeverria group. We are emphasizing (for propaganda afterwards) Flores's penetration agents in the Ministry of Defense, Army communications, the presidential bodyguard and the presidential archives. We are also planning to mention relations with Araujo's group and Gonzalo Sono Mogro, who seems to be training a separate organization in explosives and weapons.

Quito 26 May 1963

It has been a busy week-end. Bacon and I finished the 'Flores Report' yesterday and he took it out to Mike Burbano ‡ to put in final form, correct Spanish and proper commie jargon. He knows this usage best because he's the cutout for Cardenas and Vargas. No question but that we've got a really sensational and damaging document.

Bacon included in the report a general analysis of the Ecuadorean political scene with appropriate contempt for the Saad PCE leadership for its 'reformist' tendencies. He infers that the Echeverria group has already received funds from Cuba and that this report is the justification for new funds. The date for commencing an all-out terrorism campaign will be late July (since we already have a report that the CTE plans to announce a general strike for that date). Bombing targets and guerrilla attacks will be set for the homes of police and military officers as well as key installations such as the water-works and the telephone and electric companies.

Burbano passed it back and I typed it this morning -- it filled five sheets of flimsy blue copy paper. Then Dean came to the office and we agreed that Juan Sevilla, the Minister of the Treasury, would be better for getting it planted than Jaime del Hierro, the Minister of Government. I went to see Sevilla; he agreed immediately and said he'll use Carlos Rendon, the same secretary and customs inspector who nailed Roura. When I got back to the Embassy Dean was acting like a little boy. He had gone over to the 'Favorita' to buy a tube of toothpaste and had spent three hours squeezing out the paste and cleaning the tube. Then he crumpled the papers, ground them a little with his shoe, folded them to fit into the tube and pronounced the report genuine beyond doubt. I took the tube, now with the report neatly stuffed inside, back over to Sevilla and tomorrow he will give it to Rendon who will plant it if possible. Rendon won't move from the airport until Flores arrives, and if he comes via Colombia or Guayaquil, we'll figure out some other way to get the document out. One way or another this one should really provoke a reaction.

Quito 29 May 1963

Yesterday still another sensation broke when Araujo arrived back from his trip to Cuba. Too bad we didn't have a document prepared for him but he did just what we wanted. Sevilla's customs people, whom I had advised through Sevilla of Araujo's imminent return, tried a body search but Araujo provoked such a scandal that he was taken to the central immigration offices for the search. He only had forty-one dollars, however, and was later released -- but his screams at the airport that revolution will occur very soon in Ecuador were prominently carried in this morning's newspapers.

Other propaganda is coming out nicely. The Council of State meeting on the Roura case was in the headlines, featuring Sevilla's very effective condemnation of communism and Cuba in defence of his action against Roura. The case of Guillermo Layedra, who blew his hand off training URJE members to make bombs, is in the courts, and Jorge Ribadeneira's latest caper is still causing sensation. Still, we haven't been able to get an interrogation of the Cuban woman.

Quito 31 May 1963

First try at the Echeverria bugging was a near disaster. The audio technicians, Larry Martin ‡ and an assistant, came back from Panama during the week and I worked out an elaborate plan for security and cover. Gil Saudade brought up from Loja one of his agents who works in Catholic student activities there, Cristobal Mogrovejo, ‡ who is the only agent we have who could easily rent the Loja Club which occupies the floor underneath Echeverria's apartment. I brought up Julian Zambianco from Guayaquil to be team leader and to direct Mogrovejo as the shield for cover. Luis Sandoval and I were in the OP-LP across the street observing and communicating with Zambianco via walkie-talkie. I also arranged for two getaway vehicles through Pepe Molestina. ‡

Mogrovejo earlier this week arranged to rent the entire club for this afternoon, a Friday, and to have an option to rent it for the rest of the week-end if his 'business conversations' with the foreigners required additional meetings. From observation we knew which room Echeverria uses as a study and we selected the proper spot beneath from which to drill up.

The team entered the club about ten o'clock this morning and Martin and his assistant began quietly drilling, slowly and by hand in order not to arouse Echeverria or his wife who were coming and going. About four o'clock this afternoon the club manager burst in with about a dozen flower-hatted ladies to whom, he said, he wanted to show the club. Mogrovejo protested that he had been promised absolute privacy but because of the insistence of the club manager and the ladies, Zambianco had to intervene to keep them from proceeding to the room where the drilling was going on. The incident produced enough suspicion in the club manager and enough panic in Mogrovejo to warrant calling the operation off for now. I radioed to Zambianco to have the technicians fill in their holes with plaster and to paint over. This only took a few moments and shortly the team had evacuated the building.

For the time being we'll let this one cool off while I try to discover another way to get access to the Loja Club. Mogrovejo was a bad choice. We won't forget it because Echeverria, according to Cardenas, has given several indications that he has some kind of communications with Cuba -- possibly, one would suppose, with a secret writing and radio link. A photo technician from Panama was recently here and he said that TSD has large lenses that could be used to 'see through' the curtains Echeverria sometimes draws in front of the table where he works so that readable photographs of documents on the table might be obtainable. This would be one way to read his communications.

Quito 2 June 1963

Flores is hooked and we've got another big case! Juan Sevilla and I were playing golf together this morning when a caddy came running out to call him to the telephone. We rushed into the clubhouse and sure enough it was Carlos Rendon, his personal secretary, calling to say that Flores had arrived and that the plant had worked perfectly. Sevilla rushed straight to the airport and I went home to wait. Late in the afternoon he telephoned and when I went to his house he explained that Rendon had seen Flores arrive and had put the toothpaste tube up his sleeve. He let it fall out carefully while he was reviewing Flores's luggage, 'found it' and began to examine it, finally opening it and' discovering' the concealed report.

Arriving with Flores was another well-known communist, Hugo Noboa, who was discovered to be carrying 1,400 dollars in cash in a secret pocket. This money, propaganda material, and phonograph records of revolutionary songs were confiscated along with the Flores report, and both Flores and Noboa were taken under arrest to the political security offices for questioning.

Now to get the publicity going.

Quito 3 June 1963

We're going to have to fight for this one. Only a small notice appeared in the press today on the Flores and Noboa arrests, and the only reference to the 'Flores Report' was an allegation that microfilm had been found in his suitcase. Flores, according to this notice, is protesting that if any microfilm was found it was planted either in San Juan, Puerto Rico, where he was in transit, or here in Quito.

I checked with Juan Sevilla and he told me that he thinks Arosemena is going to try to quash the whole case including the false document. This is why, according to Sevilla, Flores is still in custody of the political security office instead of the police investigations department under Major Pacifico de los Reyes. He added that the key figure is Jaime del Hierro, the Minister of Government and added that if I know del Hierro, I should confirm the importance of Flores and the document. (Neither Sevilla nor del Hierro knows that I am in a working relationship with the other.)

For most of the afternoon I've tried to get either del Hierro or Manuel Cordova, the Sub-Secretary of Government, by telephone. It's not like them to avoid me like this, and Dean is about to blow up because the report hasn't been surfaced.

Quito 4 June 1963

There's no doubt now that Arosemena has tried to cover up the case and protect Flores, but we're prying it loose almost by the hour. Sevilla threatened to resign if the case were suppressed and the rumours of a new Cabinet crisis were so strong yesterday and today that the Secretary-General of the Administration made a public denial of the crisis.

Del Hierro finally called me back today, and when we met at Cordova's house he gave me the 'Flores Report' asking that I check it for authenticity because it is so grave. I couldn't simply give it a moment's look and pronounce it genuine so I took it back to the station. When I told Dean of this he went into a fury, stamped up and down and said I'd better get that report surfaced or else. He's really disgusted with del Hierro, whom he thinks is trying to delay making it public in order to protect the Liberal Party from embarrassment; the document, after all, is pretty damaging to the government, even though it is primarily aimed at exposing the Echeverria group.

A positive sign is that Flores has been passed from the political security office to the police, which places him directly under del Hierro. In his declaration Flores only said that he had been in Europe on a forty-five-day trip as a journalist (he writes for the leftist weekly La Manana) with no mention of travel to Cuba.

Quito 5 June 1963

Dean's fit of temper shows no signs of diminishing. This morning he demanded Jaime del Hierro's private telephone number at the ministry, which I gave him. He called del Hierro and told him angrily that of course the document is authentic and that every Ecuadorean should read it. Dean was careful to record this call on his dictaphone just in case del Hierro complains to the Ambassador.

Then I proposed to Dean that I give a copy of the document to Jorge Rivadeneira Araujo, the brother of Rodrigo Rivadeneira -- the transcriber of the Flores telephone tap. Jorge has long participated in the clandestine printing operation, along with his brothers, and is a writer for El Comercio, Quito's leading daily. We don't usually place propaganda through Jorge, but Dean agreed since it is the fastest way to put pressure on del Hierro to release the original document. Later I took a copy to Rodrigo which he is passing to Jorge who will show it to his editors at the newspaper. This may destroy my relationship with del Hierro and Cordova but Dean doesn't care -- he doesn't think Arosemena and the Liberals can last much longer anyway.

Quito 6 June 1963

Our ploy against del Hierro worked liked a charm. This morning about ten o'clock Cordova called me from the Embassy receptionist's desk and when I went down he took me out back to del Hierro who was waiting in his car. He said he urgently needed back the Flores document because the press had somehow got a copy and he would have to release the original later today. I rushed up for the document, returned it to del Hierro and told Dean who whooped for joy. Then I called Rodrigo Rivadeneira to alert his brother Jorge that the Ministry of Government would release the document later today. It may not be printed in today's evening newspapers but already the whole town is buzzing about it.

Today the Council of State formally rejected Roura's case against del Hierro and Sevilla, which wasn't unexpected. Roura will be on ice for a long time and now Flores's chances of getting off are nil. Tomorrow, Sevilla's formal statement to the Council of State will be published in the newspapers -- a full page which we're paying for and which includes PCE data like membership figures and recruitment priorities that I passed to Sevilla for documentation.

Both Mario Cardenas and Luis Vargas report that Echeverria has been crushed psychologically by this blow. He fears that with the Roura arrest and now Flores he'll surely be reprimanded by the Saad leadership, possibly even expelled from the PCE. He has now gone into hiding and the agents are trying to find out where.

Quito 7 June 1963

Finally it's in print and the sensation is immense. Everything's included: description of Saad and the PCE Guayaquil leadership as 'old bureaucrats full of bourgeois vices, faithful to the Moscow line and acting as a brake on revolution'. Also: 'We (the Echeverria group) are faithful to the experiences of the Cuban revolution and the necessity to prepare for armed insurrection'. Araujo is described as having a good number of trained and armed teams and the Ribadeneira group is cited as possibly useful for 'our' purposes. All the different critical government offices where Flores has his contacts are mentioned -- including the Presidential Palace -- and the date for commencing operations (urban terrorism and rural guerrillas) is given as late July to coincide with 'our' urging of the CTE to call a general strike for that time.

As if this document weren't enough in itself, by sheer coincidence the CTE yesterday announced a general strike for late July. Our agents had reported that this announcement would come some time and we had included it in the Flores document. This announcement was carried in the press today, alongside the Flores document, as proof that the latter is genuine. Moreover, Sevilla's statement to the Council of State also came out this morning.

Quito 15 June 1963

Several pieces of good news. First, I've just received my second promotion since coming to Quito, to GS-11 which is about equivalent to captain in the military service. The other is that I'm being transferred to Montevideo, Uruguay, at the end of the year -- this I learned informally in a letter from Noland the other day. I had asked to be transferred to Guayaquil as Base Chief if the job became vacant, but the Montevideo assignment is good news because we'll be near the seashore again. These mountains are getting oppressive lately, and besides, Noland says Montevideo is a great place to live with good operations going.

Meetings between Zambianco and Medardo Toro, ‡ the Velasquista gunman, have been fruitful but Dean is getting nervous about collecting timely intelligence on Velasco's plans to return for next year's elections. Through Zambianco I have worked out a plan to send Toro to Buenos Aires under cover of medical treatment for a back injury that has needed special attention for some years. Toro will take the treatment in Montevideo but will contact Velasco in Buenos Aires and stay as close to him as possible. Our hope is that Velasco will take Toro into his confidence as a kind of secretary and general handyman -- this shouldn't be difficult as Toro was at Velasco's side with two sub-machine-guns draped over his shoulders up to the moment Velasco left the Presidential Palace. I've notified the Buenos Aires station, set up a contact plan for an officer of that station, and requested that Toro be placed on the list for the polygraph the next time the interrogators come around. Hopefully Toro will have his affairs arranged so that he can leave by the end of the month.

Over the week-end I'm going to Guayaquil and to the beach for a day -- then to Manta and Portoviejo, the two principal towns of Manabi province just north of Guayas. In Portoviejo I'll introduce Julian Zambianco to Jorge Gortaire's brother, Frederico Gortaire, ‡ an Army lieutenant-colonel and commander of the Army units in the province. Because of the extreme poverty in Manabi province, even by Ecuadorean standards, communist activities there have prospered in recent years. Zambianco has been working several operations in the province including support of a well-known anti-communist priest, and he'll be able to handle contact with Gortaire on his frequent trips there. Contact arrangements were made by Jorge Gortaire when he was in the province last month, so getting this new operation going will be easy. The purpose is to be able to pass information on communist activities in Manabi to Lieutenant-Colonel Gortaire who, according to his brother, will not hesitate to take strong and prompt action unfettered by the political restraints often imposed on Colonel Lugo in Guayaquil.

Warren Dean is leaving shortly for six or eight weeks' home leave. Too bad about Gil Saudade. Normally when a Chief of Station leaves the Deputy simply takes over as Acting COS. But with all the tension and instability right now Dean asked for a temporary replacement from headquarters. It'll be Dave McLean, ‡ a Special Assistant to Colonel King, ‡ the Division Chief who, surprisingly, managed to survive the head-rolling exercise after the Cuban invasion. While at headquarters Dean is going to push for one or two more slots for case officers under Embassy cover.

Quito 22 June 1963

The struggle is growing within the government among the factions favouring different lines of action in the face of the growing tension and fear of imminent insurgency. Juan Sevilla, the Minister of the Treasury, is the leader of the hard-liners while Jaime del Hierro, Minister of Government, is somewhere in between, trying to manoeuvre so that the Liberals can stay in the government and retain their emoluments. Arosemena leads the doves, who refuse to see the danger, and the leftists, who would like to see the power of the traditional parties broken. Thus the cooperation we're getting from del Hierro in the security field is mixed.

Today, for example, the government finally announced a programme that I've been pushing since last year to restrict travel to Cuba. From now on travel to Cuba by Ecuadoreans is formally banned and all passports will be stamped 'Not Valid for Travel to Cuba'. This programme is the work of Pablo Maldonado who told me only recently that such a drastic measure would still be very difficult to get approved. On the other hand del Hierro still evades all my requests for access to the Cuban woman who was training in Guayaquil -- now she's been sent to Tulcan which is practically isolated and a place from which she could 'escape' and disappear across the border in Colombia.

In Guayaquil two days ago, an anti-communist television commentator narrowly escaped when a bomb demolished his car. Yesterday Colonel Lugo's police raided a bomb factory and storage facility at the isolated house of Antonio Chang, a militant of an URJE faction, following a lead provided by a base agent. Chang's wife, two sons, a Spanish bomb technician and a helper were all arrested and have made sensational declarations, including the fact that they were trained by a Cuban. (The Cuban hasn't lived in Cuba since the 1940s but this item was hidden in small print in the propaganda coverage.)

Meanwhile we're trying to keep media coverage going on all the cases, old as well as new, and stations in countries nearby are helping. As each case breaks we advise Caracas, Bogota, Lima, Rio de Janeiro, Santiago and others, mailing immediately the clips of what's been published. These stations generate editorial comment on the communist danger in Ecuador and send clips back to us which we use to generate still more comment based on the Ecuadorean image abroad.

Dean has made one last effort before going on home leave to salvage a little mileage from Reinaldo Varea, our discredited Vice-President. He told Varea to get going on speeches related to all the recent cases revealing communist plans for action and the bombings. Yesterday Varea began with a speech at the national convention of the Chamber of Industries, denouncing communism as a cancer seeking to destroy the national life. Hopes for his succeeding Arosemena are ever so slim but three days ago the Supreme Court began hearing charges against three persons in the junk swindle and Varea, happily, wasn't one of them.

Quito 25 June 1963

Yet another sensation broke today: this one without our help. The case began this morning when one of the revolutionary paratrooper group led by Lenin Torres, still under arrest since they were discovered last year trying to help the guerrillas they had arrested to escape, themselves escaped and joined with three others in order to hijack one of the Area Airlines DC-4's that fly between here and Guayaquil. The plan was to fly over Quito distributing fly-sheets from the aircraft telling people to mass at the Presidential Palace and demand the release of Torres and the other paratroopers still being held. Also while the aircraft was circling URJE members would have carried out a series of intimidation bombings and would have demanded the release of Flores, Noboa and Roura as well as the paratroopers. They would have landed, taken aboard the released prisoners and flown to Cuba.

The paratrooper who escaped had been outside the prison under guard on an urgent family matter, but the guard, who was overpowered, tied and gagged, and left behind, got loose and reported the planned hijacking which he had overheard. Pacifico de los Reyes, ‡ Chief of Criminal Investigations in Quito, placed some of his men in maintenance uniforms at the airport and when the four hijackers arrived they were immediately taken into custody. Seized with them were arms, bombs, tear-gas canisters, walkie-talkies, and TNT -- as well as the fly-sheets. After their arrest they implicated Araujo and Ribadeneira in the plan, although this may well be a little provocation by de los Reyes. The whole episode, in fact, may have been staged or at least well-penetrated.

The story is headlines in the afternoon papers and has sent another shock-wave across the country as it's the first political hijacking here.

Quito 27 June 1963

Today is a bigger day for propaganda than most but it illustrates how our campaign to arouse concern over the communist problem has been going. The front page of El Comercio carries four articles related to it. The headlines report a press conference yesterday by Reinaldo Varea ‡ in which he condemned communism for threatening the country with organized subversion, including acts of terrorism and massacre. He also pointed to Cuba, supported by Russia and China, as the focal point for communist terror in America, adding that when the Congress convenes in August a special law against terrorism should be passed, possibly to include the outlawing of communism. A second article reports a press conference by Jaime del Hierro, in which he promised to exterminate every centre of communist terrorism in the country. A third article describes follow-up raids of Colonel Lugo's police in Guayaquil and the discovery of another bomb factory from which 150 bombs were seized -- it also reports a strategy meeting held two days ago between Colonel Lugo, Manuel Cordova, the Commanding General of the National Police and the Governor of Guayas province. A fourth article describes the latest revelations in the frustrated airliner hijacking. Not to be forgotten, of course, is the junk swindle, and a fifth front-page article relates the latest development in this case. Aside from the front page, the lead editorial expresses alarm over the recent terrorist cases and still another editorial wishes success to some Cuban exiles who recently landed a raiding party in Cuba.

Quito 28 June 1963

Police in Guayaquil under Colonel Lugo seized some 300 more bombs in raids yesterday, and arrests of terrorists there now number nineteen.

Also yesterday, Juan Sevilla, ‡ Minister of the Treasury, was honoured at a banquet given by the Chambers of Industry and Commerce and the Textile Association. In condemning communism Sevilla said: 'The country is suffering a grave moral crisis. It is discouraging to walk through government offices and see how moral values have deteriorated. It is indispensable that we reestablish moral values. ' He was given a parchment in appreciation of his 'clear democratic position in defence of free enterprise and of our country's Western ideology'.

Media exploitation of the airliner hijacking continues as does the Roura case. Today it was announced that the money taken from Roura will be examined by experts to see if it is counterfeit. This is a delaying formality because I've already told Jaime del Hierro that the Treasury Department in Washington has refused to certify that the US currency is counterfeit.

Quito 5 July 1963

The chain of recent cases, particularly the Roura and Flores cases, has produced one of the results we wanted. At a special meeting of the PCE Central Committee the whole Pichincha Provincial Committee under Echeverria was dismissed, with Roura expelled from the party and Echeverria suspended. Already Jaime Galarza, one of Echeverria's lieutenants, has published an article suggesting that Pedro Saad, PCE Secretary-General, was behind the revelations in the Flores document and Roura's arrest, because such information could only come from highly placed party members.

The momentum of the last three months' campaign is having other effects. Most of our political-action agents, particularly the rightists in the ECACTOR project, are reporting improving disposition to a military rather than a Congressional move against Arosemena, what with the alarm and gravity of the current situation. At the Ambassador's reception yesterday, moreover, the politicians talked considerably of their surprise that communist preparations have progressed so far. Moreover, everyone seemed to be apprehensive over the spectre of Velasco's return and the probability that he'll win again next year. Some members of Congress are anxious to begin proceedings against Arosemena, but many realize the odds favour Arosemena and his patronage over a weak and divided Congress.

Quito 8 July 1963

Rafael Echeverria is still hiding and has seen our agents only rarely. In order to get closer monitoring of his activities, and possibly to discover his hiding-place, I've arranged to turn over the Land Rover bought for Jorge Gortaire's trip to Luis Vargas, a PCE penetration agent. I gave the car to Jose Molestina, ‡ a support agent and used-car dealer, to place on sale, and at the same time John Bacon sent Vargas around to make an offer. Molestina doesn't know Vargas, much less as a communist, and when he told me of the offer I told him to take it. Now Vargas will probably be asked by Echeverria (who has no private transportation) to drive him around for his meetings.

Media exploitation continues on the recent cases as well as on efforts to salvage Varea. The Guayaquil base placed an editorial in El Universo, the main daily there, praising Varea for his recent anti-communist speeches. We replayed the editorial here in El Comercio. We've also used the CEOSL to condemn communist plans for terrorism.

Operations at the Georgetown station (British Guiana) have just brought a big victory against the Marxist Prime Minister, Cheddi Jagan. Jagan has led that colony down a leftist-nationalist path since coming to power in the 1950s on the strength of Indian (Asian) predominance over blacks there. The Georgetown station operations for several years have concentrated on building up the local anti-Jagan trade-union movement, mainly through the Public Service International ‡ (PSI) which is the International Trade Secretariat for public employees. Cover is through the American Federation of State, County and Municipal Employees, ‡ the US affiliate of the PSI.

Last year through the PSI the Georgetown station financed an anti-Jagan campaign over the Budget that included riots and a general strike and precipitated British intervention to restore order. This past April, with station financing and direction, another crippling strike began, this one led by the Guiana civil servants union which is the local PSI affiliate, and it has taken until just now to force Jagan again to capitulate. Visitors here who have also been to the Georgetown station say eventually the Agency hopes to move the leader of the black community into power even though blacks are outnumbered by Jagan and the Indians.

Quito 11 July 1963

Arosemena's out and a four-man military junta is in.

It began last night at a banquet Arosemena gave for the President of the Grace Lines -- W. R. Grace and Co. has large investments in Ecuador -- to which high-ranking Ecuadorean military men were invited because the Grace Lines President is a retired US Navy admiral. During the toasts Arosemena made favourable commentary about US business operating in Latin America but he insulted our Ambassador by derisive reference to US diplomatic representatives. In his drunkenness Arosemena also demonstrated incredible vulgarity and finally left the banquet and his guests.

This morning the chiefs of the military services decided at a meeting at the Ministry of Defense to replace Arosemena with a junta and about noon the Presidential Palace was surrounded by tanks and troops. I went down to the Hotel Majestic just in front of the Palace where Jorge Andino, ‡ a support agent and owner of the hotel, arranged a room where I could watch the action. I also monitored the military intelligence radio and reported by telephone and walkie-talkie back to the station where frequent progress reports on the coup were being fired off to headquarters and to Panama (for the military commands there who receive all Agency intelligence reporting in Latin America).

Several hours of tension passed as Arosemena, known to be armed, refused to receive a delegation from the new junta. He remained in the presidential living quarters while the junta members arrived and went to work in the presidential offices. Eventually Arosemena was disarmed by an aide and taken to the airport where he was placed on a military aircraft for Panama -- the same place that Velasco was sent to less than two years ago.

As the coup was taking place a leftist protest demonstration was repressed by the military with three killed and seventeen wounded but these figures will probably be much higher if an accurate count is ever made. Also during the coup Reinaldo Varea tried in vain to convene the Congress in order to secure his succession to the Presidency, but it's no use -- he's finished.

The junta is composed of the officers who commanded the Army, Air Force and Navy plus a colonel who was Secretary of the National Defense Council. The Navy captain is the junta chief but Colonel Marcos Gandara ‡ of the Defense Council is said unanimously to be the brains and main influence. No question that these men are anti-communist and will finally take the kind of action we want to disrupt the extreme left before they get their serious armed operations underway.

Quito 13 July 1963

No problem for the junta in consolidating power. Loyal messages were received from military units throughout the country, civil liberties have been suspended, and communist and other extreme leftists are being rounded up and put in jail, more than a hundred in Guayaquil alone. Communism is outlawed (the junta's first act), censorship has been imposed, there is a curfew from 9 p.m. to 6 a.m., and next year's elections are cancelled.

It will take some days for formal US recognition of the junta but we've already started passing data from the Subversive Control Watch List to Major de los Reyes here in Quito and to Colonel Lugo in Guayaquil which they are using with military colleagues in the arrests campaign. For the time being we'll keep working with these police agents, and after US recognition of the junta and Dean's return, decisions will be made on new contacts in the government. The most likely liaison contacts are the Minister of Defense, Colonel Aurelio Naranjo, who was chief of the Cuenca garrison and leader of the movement that forced Arosemena to break with Cuba; the Minister of Government, Colonel Luis Mora Bowen; ‡ and the junta leader, Colonel Marcos Gandara.

Besides outlawing communism the junta is looking favourably at the reforms that the civilians were never able to establish. In their first statement the junta said its purpose is to re-establish moral values because the country had reached the brink of dissolution and anarchy. Their rule will be limited to the time necessary to halt the wave of terrorism and subversion and to resolve the country's most urgent problems. They have also declared that their government will not be oligarchic and will have policies designed to stimulate economic and social development in order to raise the standard of living -- not just through development, however, but also through the redistribution of income. Among its highest priorities are agrarian, tax and public administrative reforms.

In a press conference Colonel Gandara said that reforms will be imposed by decree and that after repressing the extreme left the junta will call for a constituent assembly, a new Constitution and elections. However, he added, the junta might stay in power for two years to accomplish these plans -- which immediately caused a cry of outrage from politicians in all quarters. Today, rather sheepishly, the junta issued a statement saying that they will 'not be in power for a long time'.

In justifying their takeover the junta said that Arosemena had spotted the national honour with his frequent drunkenness and his sympathy for communism. Arosemena, for his part, is saying in Panama, as Velasco did, that he still hasn't resigned. Varea is also in Panama now, but he had a happy departure. At the Quito airport where he was taken under arrest yesterday he was given an envelope from the junta containing a month's pay.

Quito 31 July 1963

The first three weeks of junta rule have been rather mild as military dictatorships go, in fact after all the crisis and tension in recent months one can even note a feeling of euphoria. Today the junta was recognized by the US but all along we've kept busy getting information to Major de los Reyes and Colonel Lugo. Goes to show how important station operations can be at a time when conventional diplomatic contacts are suspended. Even so, the most important communist leaders from our viewpoint, Echeverria, for example, have eluded all efforts to catch them. Very possibly some have even left the country.

At least for the time being the junta has considerable political support from Conservatives, Social Christians and others - not formally as parties but as individuals. How long this will last is unknown because the junta is obviously determined to end the power struggle between Velasco and Ponce and the instability such caudillismo brings. Moreover, by stressing that they intend to wipe out special privilege and the rule of oligarchies while pledging projects in community development, housing, public-health and education, the junta is attracting considerable popular support.

From our standpoint the junta definitely seems to be a favourable, if transitory, solution to the instability and danger of insurgency that were blocking development. By imposing the reforms this country needs and by taking firm action to repress the extreme left, the junta will restore confidence, reverse the flight of capital and stimulate economic development.

Quito 15 August 1963

Dean is back from home leave and is moving fast to get established with the junta. Already he is regularly meeting Colonel Gandara, the most powerful junta member, Colonel Aurelio Naranjo, the Minister of Defense and Colonel Luis Mora Bowen, the Minister of Government. With Gandara he is using as bait the weekly Latin American and world intelligence summaries (cryptonym PBBAND) that are received from headquarters each Friday, translated over the week-end and passed to Gandara on Monday. Already Gandara has given approval in principle to a joint telephone- tapping operation in which we will provide the equipment and the transcribers and he will arrange the connections in the telephone exchanges and provide cover for the LP. Tentatively they have agreed to set up the LP at the Military Academy. What Dean wants is a telephone-tapping operation to rival the one in Mexico City where, he said, the station can monitor thirty lines simultaneously. After this operation gets going we'll save Rafael Bucheli for monitoring sensitive political lines without the knowledge of the junta.

Gil Saudade has been transferred to Curitiba, Brazil (a one-man base in the Consulate) and his replacement, Loren Walsh ‡ doesn't speak Spanish. Walsh, who transferred to WH from the Far East Division after a tour in Karachi, had to cut short his Spanish course in order to take the interdepartmental course in counter-insurgency that is required now for every officer going out as Chief or Deputy Chief of Station. What this means to me is that I've got to take over most of Saudade's operations: Wilson Almeida ‡ and Voz Universitaria; the CEOSL labour operation with Matias Ulloa Coppiano, Ricardo Vazquez Diaz and Carlos Vallejo Baez; and the media operation built around Antonio Ulloa Coppiano, the Quito correspondent of Agencia Orbe Latinoamericano. Most of these agents are also leaders of the Popular Revolutionary Liberal Party and Antonio Ulloa runs the PLPR radio-station that we bought through him and Juan Yepez del Pozo, Jr. as a media outlet. This development is more than a little aggravating because the new deputy won't be able to take over any of these operations as none of the agents speaks good English. Dean said relief will come soon because he got three new Embassy slots; two will be filled in coming months and one early next year. All I can do with these new agents is hold their hands until somebody with time can really work with them.

Right now there are about 125 political prisoners in Quito, including not only communists but Velasquistas and members of the Concentration of Popular Forces. The junta policy is to allow them to go into exile, although some will be able to stay in Ecuador depending on their political antecedents -- judgement of which, in most cases, is based on information we're passing to Colonel Luis Mora Bowen, the Minister of Government. Processing these prisoners, and others in Guayaquil and elsewhere is going to take a long time because of interrogations and follow-up. Although Dean is working closely with the Minister of Government in processing the prisoners, he hopes to use these cases to start a new unit in the Ministry of Defense that will be solely dedicated to anti-communist intelligence collection - basically this is what we had previously set up in the police. In fact the Ministry of Defense will be better because politics sooner or later will come back into the Ministry of Government and the police, while the military unit should be able to remain aloof from normal politics, concentrating on the extreme left.

First on the junta's programme of reforms are the universities and the national cultural foundation called the Casa de la Cultura, both of which have long traditions as centres of leftist and communist agitation and recruitment. Several station and base operations are focused on giving encouragement to the junta for university reform including agents controlled through Alberto Alarcon in Guayaquil and the student publication Voz Universitaria published by Wilson Almeida. According to Gandara the first university reform decree will be issued in a few days with the important provision that student participation in university administration will be greatly reduced.

Quito 30 August 1963

Labour operations always seem to be in turmoil but now and then they produce a redeeming flash of brilliance. Ricardo Vazquez Diaz, one of the labour agents I took over from Gil Saudade, told me the other day that his mistress is the official shorthand transcriber of all the important meetings of the Cabinet and the junta and that she has been giving him copies so that he can be well-informed for his CEOSL work. He gave me samples and after Dean saw them he told me to start paying her a salary through Vazquez. From now on we'll be getting copies of the record of these meetings even before the participants. In the Embassy we'll make them available just to the Ambassador and the Minister Counsellor, and in Washington short summaries will be given limited distribution with the entire Spanish text available on special request. The Ambassador, according to Dean, is most interested in seeing how the junta and Cabinet members react to their meetings with him and in using these reports to plan his meetings with them. Eventually we'll try to recruit Vazquez's mistress, ECSIGH-1, ‡ directly, but for the moment I'll have to work this very carefully in order not to jeopardize the CEOSL operation. Vazquez claims he's told no one of the reports, which I believe, because, if he told anyone, it would be one of the other CEOSL agents who probably would have mentioned it to me. These reports are jewels of political intelligence -- just the sort of intelligence that covert action operations should produce.

(There has been a change, incidentally, in terminology: the operations that used to be called PP operations -- labour, youth and students, media, paramilitary, political action -- are now called covert action, or CA, operations. In headquarters this change in terminology was made at the same time the old PP staff was merged with International Organizations Division to form what is now called the Covert Action Staff.)

In labour operations themselves we've had serious problems with the new government, partly as a result of the junta's arbitrariness --  the right to strike, for example, is suspended. In this respect the junta tends to treat the CEOSL trade-union movement much in the same fashion as it treats the CTE. This general trend is aggravated by the Minister of Economy, Enrique Amador Marquez, ‡ who is one of the former labour agents of the Guayaquil base terminated last year for regionalism. Amador is doing all he can to promote decisions favourable to his old CROCLE and COG friends and detrimental to CEOSL.

Right now the most serious case involves the junta's attempts to reorganize the railways which are one of the many inefficient government autonomous agencies that together spend about 65 per cent of public revenues. The lieutenant-colonel appointed to run the railways is favouring the CEDOC (Catholic) railway union which is backed by COG and CROCLE against the other railway union which is part of CEOSL and is an affiliate of the International Transport Workers Federation ‡ (ITF) in London.

I arranged for Jack Otero, ‡ the Assistant Inter-American Representative of the ITF and one of our contract labour agents, to come to Quito from Rio de Janeiro to help defend the CEOSL railway union. He is here now but instead of following my instructions to approach the matter with restraint he started threatening an ITF boycott of Ecuadorean products. The spectre of boatloads of rotten Ecuadorean bananas sitting in ports around the world provoked counter-threats from the junta and we've had to cut Otero's visit short. The ITF railway union may have to suffer for a while but we're going to get action now from Washington, probably from someone like Andrew McClellan ‡ who replaced Serafino Romualdi as the AFL-CIO Inter-American Representative when Romualdi set up the AIFLD. What the junta needs is a little education on the difference between the free trade-union movement and the CTE, but. this may not be easy with Amador working behind the scenes for CEOSL'S rivals.

The Minister of Government is very cooperative in following our advice over the matter of the political prisoners. We have a special interrogation team here now from the US Army Special Forces unit in the Canal Zone: they're from the counter-guerrilla school there and are helping process the interrogation reports and prepare follow-up leads. The results aren't especially startling but they are providing excellent file information. As a result the prisoners are being released in a very slow trickle and most are choosing exile in Chile. Araujo is one of the big fish that was able to hide, but, a few days ago he and six others got asylum in the Bolivian Embassy. Chances are he'll be there a long time before the junta gives him a safe conduct.

University reform continues. Already the universities in Loja and Guayaquil have been taken over and Central University here in Quito is due next. What this means is the firing of communists and other extreme leftists in the university administrations and faculties. The same process is under way in the primary and secondary schools and is in charge of the military governors of each province.

Reforms in the government administration are also widening. Already the Ministry of Foreign Affairs and the Ministry of Economy are being reorganized. So far the junta's not doing so badly -- tomorrow Teodoro Moscoso, the Coordinator of the Alliance for Progress, arrives to negotiate new aid agreements.

Quito 8 September 1963

These labour operations are so messy they're forcing me to put practically all my other operations on ice for lack of time. No wonder Saudade had so few agents: they talk on and on so that one agent-meeting can fill up most of an afternoon or morning.

Our call for help from McClellan backfired. He sent a telegram to the junta threatening AFL-CIO efforts to stop Alliance for Progress funds and appeals to the OAS and UN if the junta doesn't stop its repression of trade unions. Three days ago the Secretary-General of the Administration denounced McClellan's telegram and showed newsmen documents from CROCLE and COG backing the junta and the colonel in charge of the railways. Now the junta is going to suspend the railway workers' right to organize completely. Somehow we have to reverse this trend and we asked for a visit from some other high-level labour figure from Washington, hopefully William Doherty, ‡ the former PTTI Latin American Representative and now with the AIFLD. Doherty is considered to be one of our more effective labour agents and Dean thinks he might be able to change the junta's attitude towards our organizations.

Not long ago the CA staff sent two operations officers to the Panama station to assist in labour operations throughout the hemisphere much as the Technical Services Division officers in Panama cover the area. They came for a short visit to Quito, more for orientation than anything else, but they're going to get ORIT to send someone to see the junta about these problems. Recently, according to Bill Brown ‡ who is one of the labour officers, the Secretary-General of ORIT, Arturo Jauregui, ‡ was fully recruited so that now he can be guided more effectively. Before, our control of ORIT in Mexico City was exercised through Morris Paladino, ‡ the Assistant Secretary-General and the principal AFL-CIO representative on the staff. Possibly we will get Jauregui himself to intervene.

We've also had two polygraph operators here for the past week testing agents. I decided finally to meet Atahualpa Basantes, ‡ one of our PCE penetration agents who has been reporting since 1960 but who had never been met directly by a station officer, using the polygraph as the excuse.

The interview with Basantes was interesting because it showed how useful the LCFLUTTER is for things other than determining honesty in reporting and use of funds. In the case of Basantes, which· is not unusual according to the operator, the polygraph brought out a flood of remarks about his motivation and his feeling towards us and his comrades in the party. He's certainly a confused man, drawn to us by money yet still convinced that capitalism is destructive to his country. Why does he work for us? Partly the money, but he rationalizes that the PCE leadership is rotten. From now on I'll try to see him at least once a month. His reporting has fallen off during the last six months, mostly because Dr Ovalle ‡ is such a poor agent handler, so I'm now looking for a new cutout. Instead of a raise in pay, which could be insecure, I've agreed to pay the premium on a new life-insurance policy for Basantes -- it's expensive because he's in his late forties and his health is poor, but it'll be one more control factor.

The polygraph operator who worked with me on the Basantes case is Les Fannin. ‡ Fannin was arrested in Singapore in 1960 while he was testing a local liaison collaborator whom the station was trying to recruit as a penetration agent of the Singapore police. The Agency offered the Singapore Prime Minister some three million dollars as a ransom for Fannin and Secretary of State Rusk even wrote a letter of apology in the hope of getting Fannin out. Nevertheless, he spent months in the Singapore jail before being released. He told me the Agency analysis of the case suggested that the British MI-6, which controlled the Singapore service at the time because Singapore was still a British colony, had been aware of the attempted recruitment from the beginning. In a strong reaction to this violation of the long-standing agreement that the CIA refrains from recruitments in British areas except when prior permission is granted, MI-6, according to Fannin, arranged for the Singapore security official to play along, and then at the moment of the polygraph they had Fannin arrested.

One of Saudade's agents whom he sent to Cuba has just been arrested on his return to Guayaquil and nobody seems to know what to do about him. The agent is Cristobal Mogrovejo, ‡ the same Loja agent whom we used to front for the near-disaster audio installation in the Loja Club beneath Rafael Echeverria's apartment. Dean is taking a hard line on Mogrovejo because the agent was told not to return to Ecuador when he was met by officers from the Miami (ex-Havana) station after leaving Cuba. We had sent that instruction precisely to protect Mogrovejo, but since he refused to comply, Dean isn't anxious to spring him loose. He was arrested because he had Cuban propaganda material in his baggage (incredibly stupid) on his arrival. Already the arrest is causing wide comment in Loja where Mogrovejo is President of the University of Loja law-student association and well known as a staunch Catholic.

For the time being the audio operations against Echeverria's apartment and Flores's apartment are suspended. Sooner or later Flores will go into exile and Echeverria is still hiding. The audio-photo operation at the PCE bookstore is also suspended since the junta closed the bookstore right after the coup. Now we'll have to take out the audio equipment with more pounding and squealing of spikes.

Quito 20 September 1963

This has been a month of constant movement of people: agents, visitors and new station personnel. The first of the new station operations officers has arrived -- he's Morton (Pete) Palmer ‡ and his cover is in the Embassy economic section. Unquestionably he'll be an excellent addition to the station and I'm already beginning to unload some of the covert action operations on him.

Dean appointed me to look after another visitor: Ted Shannon, ‡ the former Chief of Station in Panama and now Chief of the section of the CI staff in headquarters responsible for CIA officers under AID Public Safety cover. Shannon was the founder of the Inter-American Police Academy ‡ in Panama (which, incidentally, will be moving next year to Washington with a new name: the International Police Academy ‡) and he was rather upset that we haven't been fully using our Public Safety cover officer, John Burke. ‡ Dean explained to Shannon his fears about Burke's getting into trouble through his over-eagerness, but after Shannon left Dean told me to start thinking about what operations we can give to Burke. Dean is worried about criticism in headquarters that he's not using his people, but in fact there's lots of work Burke can do. The first thing will be to integrate him with the Special Forces interrogation team working on the political prisoners.

Reinaldo Varea ‡ returned to Ecuador yesterday but his troubles are far from over. Immediately after the coup the junta cancelled the impeachment case against Varea but announced that he would have to stand trial if he ever returned. His return means that his trial begins again, and he has also agreed to refrain from political activity. From Panama he had gone to Houston where a headquarters' officer gave him termination pay, but if Dean needs to see him he can establish contact through Qtto Kladensky. ‡

Manuel Naranjo was replaced as Ecuador's UN Ambassador and has also returned. Headquarters was highly impressed with his work for us at the UN, and Dean feels the same -- in fact he's going to nominate Naranjo, who is now back at work in the Socialist Party, for Career Agent status which would mean considerable income, fringe benefits, job tenure and retirement pay.

Juan Sevilla, ‡ Arosemena's Minister of the Treasury, is the only one of our political-action assets in the old government to get a new job with the junta. Probably because of his firm action during the months before the junta took over, he's been named by the junta as Ecuador's new Ambassador to West Germany. We're forwarding the file to the Bonn station and making contact arrangements in case they want to use him in Germany. A few weeks ago I gave Sevilla money for Carlos Rendon, ‡ his private secretary, who caught Roura and made the plant on Flores. Apparently Rendon has been threatened and is going to leave the country for a few months.

Lieutenant-Colonel Federico Gortaire was reassigned from Army commander in Manabi province to Military Governor of Chimborazo Province. For the time being we'll communicate with him through Jorge Gortaire in order to save time, but Dean wants to have one of the new officers begin going directly to Riobamba to see Colonel Gortaire as soon as possible.

Dean still refuses to intercede with the Minister of Government, Colonel Luis Mora Bowen, on behalf of Cristobal Mogrovejo. Mogrovejo told the police that he went to Cuba on our behalf, and his mother even came to see the Ambassador but Dean is playing real dumb. I think he ought to help the poor guy out of that stinking, miserable jail.

The country's honeymoon with the junta is fading fairly fast. The traditional political parties are getting worried that the junta may stay in power longer than they've admitted, and their massive promotions of military officers haven't been very popular. Especially since among the first to be promoted were the junta members themselves: now they are one colonel, one admiral and two generals.

Quito 15 October 1963

Labour operations are still unsettled because of the junta's arbitrary actions. Since last month, a new national traffic law has been in preparation but the junta refuses to consult the national drivers' federation (taxi, truck and bus drivers), which will be the organization most affected by the law. Everyone understands the need to stop the general traffic chaos and the carnage that so frequently occurs on the roads, especially when overcrowded buses roll off the mountainside because of their poor mechanical condition: traditionally, the driver, if he's alive and can move, flies from the scene as fast as he can go. But the drivers' federation is our top priority to woo away from the CTE and eventually into the CEOSL. So we called Jack Otero ‡ back from Rio de Janeiro to see if he could intercede with the junta on the traffic law question, even though the drivers' federation isn't affiliated with the ITF. Something may come from the effort, perhaps not with the junta but with the drivers' federation.

Even the AIFLD operation is beset with problems. The country programme chief here isn't an agent and so we can't guide him (except through Washington) so that his programme harmonizes nicely with ours. Doherty finally came to help straighten out the AIFLD programme for us, but this isn't the end of it. He's going to arrange to have Emilio Garza, ‡ the AIFLD man in Bogota who is a recruited and controlled agent, come here for as long as is needed to make sure the AIFLD programme is run the way Dean wants it run. Mostly it's a question of personnel assignments through which we want to favour our agents. Sooner or later all the AIFLD programmes will be run closely by the stations -- until now the expansion has been so fast that in many cases non-agents have been sent as AIFLD chiefs and can only be controlled through cumbersome arrangements of the kind we've had here.

Political prisoners are being released to go into exile as their cases are reviewed. There are still well over one hundred of them -- Flores and Roura are both going to Chile in exile. Araujo finally got a safe conduct and left for Bolivia a week ago. Echeverria is still in hiding, rejecting the bait we set with the Vargas ‡ Land Rover. Cardenas, Vargas, Basantes ‡ and our other penetration agents have somehow managed to avoid arrest.

For a few days last week our Popular Revolutionary Liberal Party agents were also taken as political prisoners. They held a meeting in violation of the government's prohibition of all political meetings without prior permission, and among those arrested were Juan Yepez del Pozo, Jr., Carlos Vallejo Baez ‡ and Antonio Ulloa Coppiano. ‡ They were only held for a couple of days and later Vallejo and Ulloa admitted to me that they staged the whole thing for publicity. Pete Palmer ‡ is going to take over these agents so that next time they will discuss this sort of caper with us first -- otherwise they can't expect us to bail them out if the junta is slow in letting them go.

Another new station officer arrived: Jim Wall, ‡ an old friend who went through the training programme with me at Camp Peary. Wall has just finished two years under non-official cover in Santiago, Chile, as a university student. He's going to take over some of my operations too -- probably the ECACTOR political-action agents His cover will be in the Embassy economic section, along with Palmer.

The polygraph operators are now in Buenos Aires and Dean wants to be sure that Medardo Toro ‡ is 'fluttered'. Our impression is that the Buenos Aires station isn't taking this case very seriously -- undoubtedly they have plenty of Argentine problems to worry about. In order to see why production from the operation is not better, Dean asked me to go to Buenos Aires to interpret for the polygraph examination of Toro. I'll also go to Montevideo because Toro is taking the treatment for his back there and has made contact on behalf of Velasco with an officer of the Cuban Embassy in Montevideo.

Moscoso's visit brought good news for the Ecuadoreans -- ten million dollars in new loans from the Inter-American Development Bank have been announced this month.

Quito 7 November 1963

It was a strange trip, disappointing on the Toro case but very encouraging for my coming assignment in Montevideo. In Buenos Aires the station considers the Toro case something less than marginal, just as we had suspected. About all we can hope for is to have an officer from the station meet Toro occasionally to receive his reports and pay his salary. In Montevideo it's worse -- the Chief of Station there, Ned Holman, ‡ doesn't want anything to do with Velasco. Holman was Noland's predecessor as Chief of Station in Quito so he's had plenty of chance to get soured by Velasco. Even so, the case is interesting because Velasco is opening a channel to the Cubans through Toro who has already met Ricardo Gutierrez two or three times. Gutierrez is carried by the Montevideo station as the Chief of the Cuban intelligence operation which the station believes is targeted in large part towards Argentina and the guerrilla operations now going on there. It will be interesting to see whether Velasco gets money from the Cubans -- it wouldn't be too unlikely, if he were to become a candidate again for President, because he refused to break with Cuba and has often spoken highly of Castro.

In Buenos Aires, besides interpreting on the Toro case I interpreted on two other cases: one was a labour leader who is one of the station's best penetrations of the Peronist movement and the other was an Argentine Naval intelligence officer and his wife who are working together as a penetration of the Naval intelligence service.

Quito 10 November 1963

On 31 October, the national drivers' federation was required by the government to undergo 'fiscal analysis', which means they're going to bring under control the one organization that can stop the country completely. It'll be a long time before this union can be brought into the ITF. In fact it's not really a union because many of its members are owners of taxis, trucks and buses and even gasoline stations. Its orientation, then, is middle class rather than working class but for our long-range planning it's the most important of the organized trade groups to be brought under greater influence and control.

Bill Doherty ‡ arranged for Emilio Garza, ‡ the Bogota AIFLD agent, to come to help us smooth out the problems between our CEOSL agents and the AIFLD operation. The agent was an excellent choice and I've already recommended that he be transferred to Ecuador when his assignment in Bogota ends. He's the most effective of the career labour agents that I've worked with.

For the past six weeks there have been regular terrorist bombings, mostly against government buildings. They started in Quito -- five occurred in one week in mid-October -- but now they've spread to Guayaquil. None of our agents seems to know what group is behind the bombings and Dean's getting jittery. It's embarrassing because the bombings make the junta look inept in spite of all the arrests and forced exiles.

The day after tomorrow I'm going to try to recruit Jose Maria Roura who's been rotting away in the Garcia Moreno prison since May. He's being allowed to leave the country and will fly to Guayaquil, then to Lima, La Paz, and eventually to Chile.

Colonel Lugo has been in Quito for the past few weeks and he told me that the police interrogators report that Roura is very depressed, even disillusioned, about his political past. He is also extremely concerned about his family which is completely destitute and living on the charity of friends. This information coincides with what we've learned from the interrogation reports received through other sources and from information on Roura's family obtained through the PCE penetration agents. Lugo suggested to me that Roura may be ripe for a recruitment approach but he doesn't think it should be made in the prison.

After discussing the possibilities, Dean asked me take the same Guayaquil-Lima flight as Roura and to try my luck on the plane. We've arranged for ECBLISS-1 ‡ the Braniff manager in Guayaquil, who is an American and a base support agent, to have me seated next to Roura. Headquarters' approval just came in and the Lima station is going to get the police to allow Roura to stay over for a few days if he wants because he only has about two hours between arrival from Guayaquil and departure for La Paz. For our purposes any possible follow-up after the flight should be in Lima rather than La Paz. When I talk to him I'll invite him to stay in Lima at my expense. After all these months in one of the world's gloomiest prisons he might just accept. In any case it's worth the risk of a scene on the plane -- Roura is known to be extremely volatile -- because we need a penetration of the exile community in Santiago and Roura would be an excellent source when he eventually returns here.

Quito 13 November 1962

It didn't go perfectly, but it wasn't a disaster either. I took the noon flight to Guayaquil and to my surprise Roura was on the same flight under police guard. Colonel Lugo had told me that Roura was going on the morning flight and the last thing I wanted was to be seen in Quito by Roura or in any connection with him at all. Arrangements by the base with the Braniff manager were perfect -- he was waiting for me at the airport at three o'clock this morning and gave me the seat right next to Roura who would be released from his police guard when he boarded the aircraft.

When I walked on the plane I was shocked to see that there were only about ten passengers in the whole cabin. The stewardess conducted me to the seat next to Roura, who was already there, and my planned introduction and cover story began to crumble. I had wanted to begin the conversation as some anonymous traveller striking up a conversation with another anonymous traveller. And I wanted the seat next to Roura in case the flight were crowded -- so that someone else wouldn't be sitting in that seat. But now it was too obvious.

A seemingly endless silence followed after I sat down next to Roura. I tried desperately to think of some new excuse to ease into a conversation -- somebody had to say something because I was clearly there for a purpose. Suddenly the stewardess returned and suggested that I might like to move to where I could sleep since row after row was vacant. Time for recovery and a new plan. I went forward to a different seat, maybe ten rows ahead and began to get depressed.

We rolled down the runway and into the air. As the minutes began to go by, five, ten, twenty; I felt more and more glued to my seat. I was going into a freeze and beginning to think up excuses, like bad security, to offer later for not having talked to Roura. But somehow I had to break the ice and I finally stood up and began walking back to Roura's seat, in mild shock as when walking into a cold sea.

I introduced myself, using an alias and Roura agreed nonchalantly as I asked if I could speak with him. I sat down and went into my new introductory routine, relaxing a bit as I went on. I was an American journalist who had spent the past few weeks in Ecuador studying the problems of illiteracy, disease and poverty for a series of articles. At the airport before the flight, I learned to my happy surprise that he was going to be on the same flight and I wondered if he would mind discussing Ecuadorean problems with me from the point of view of a communist revolutionary. I added that I knew of his arrest earlier in the year and I expressed wonderment that such arbitrary and unfair proceedings could occur.

Over coffee we passed the flight discussing Ecuador. Roura spoke openly and relaxedly and we seemed to be developing a little empathy. About twenty minutes before we were to land in Lima I shifted the conversation to Roura's personal situation. He told me that he was taking a connecting flight to La Paz and after a few days would proceed to Santiago. He was bewildered over what to do about his family and was expecting hard times in exile.

Now I had to make my proposal, ever so gently, but clear enough for Roura to understand. I said I would be seeing friends in Lima who are in the same profession, more or less, as I am. They too would probably like to speak with him and I was certain that they would offer him a fee for an interview since they represent a large enterprise. He was interested, but said he had permission from the Peruvians only to remain in the airport until the connecting flight. I said my friends could probably arrange permission for him to remain a few days and that he should ask the immigration authorities if he could spend at least the day in Lima and proceed to La Paz on a later flight perhaps tonight or tomorrow. Who knows, I said, whether some kind of permanent financial support might be arranged for him in Santiago and for his family in Quito. Perhaps, even, he could arrange for the family to go to Santiago to live with him. I sensed he was taking the bait and was beginning to understand.

When the 'fasten seat belt' light came on I took out a piece of paper with my alias typed on it and the number of a post-office box in Washington. I said I would be staying in Lima at the Crillon Hotel and if he was able to stay for a few days he could call me at the hotel and we would continue talking. If not, he could always reach me through the post-office box. He didn't say he would ask the airport authorities for permission to stay, but he didn't say no either. I thought he was deciding to stay. As a final touch, something I hoped would convince him I was knowledgeable, in fact I now hoped he realized I was CIA, I bade farewell pointedly calling him 'Pepito', which is the name his PCE comrades call him. I returned to my other seat for the landing.

At the terminal building I walked down the steps and headed for the entrance where I was met by the Lima station officer who is in charge of liaison with immigration authorities. He had arranged for permission to be granted if asked by Roura, and indeed offered if Roura didn't ask -- without, of course, creating suspicion that we were trying to recruit Roura. From just inside the terminal building we watched the Braniff aircraft because Roura had delayed inside. Eventually he appeared, descended the steps, but suddenly turned and rushed back up the steps and into the aircraft. At that moment about ten uniformed police who had been striding swiftly, practically rushing, towards the aircraft arrived at the steps. The leader boarded the aircraft and a long delay followed. The Lima station officer went to see his airport police and immigration contacts to find out what happened, and I went to the station offices in the Embassy to await news from the airport. If Roura stayed, I would check into the Crillon and wait for his call. If he proceeded to La Paz I would take the noon Avianca flight back to Quito.

When I reached the Embassy they gave me the bad news. Roura had been frightened by the police when they rushed towards him and thought something terrible might happen. In the aircraft he refused to descend to the terminal until the flight continued. Then he was extremely nervous in the terminal and interested only inbeing sure he didn't miss the flight to La Paz which he took as planned.

The Lima Chief of Station; Bob Davis, ‡ apologized for the over-enthusiasm of their liaison service -- the police approaching the aircraft were only trying to give him a warm welcome in preparation' for immigration's offer of permission to stay for a few days. The Lima station botched the operation -- I am convinced that Roura would have stayed -- and now we can only wait for a telegram or letter to the post-box. On the other hand Dean is thinking of a follow-up visit to Roura once he gets to Santiago.

At the Lima station I asked how the penetration operation of the MIR is progressing -- the one I had started in Guayaquil with the recruitment of Enrique Amaya Quintana. The Deputy Chief of Station, Clark Simmons, ‡ is one of my former instructors at Camp Peary and is in charge of the case. He told me that Amaya's information is pure gold. He has pinpointed about ten base-camps and caching sites plus identification of much of the urban infrastructure with full details of each phase of their training and planning. The Lima station has a notebook with maps, names and addresses, photographs and everything else of importance on the MIR which the station considers to be the most important insurgency threat in Peru. The notebook is in Spanish and is constantly updated so that just at the right moment it can be turned over to the Peruvian military.

At the Lima station I sent a cable on the Roura recruitment to headquarters with information copies to Quito and La Paz. Dean had already seen the cable when I got back this afternoon and he's elated even though we can't be sure yet that Roura has accepted. Tomorrow I'll get Bolivian and Chilean visas for quick departure when Roura sends a telegram to the Washington post-box.

Quito 17 November 1963

It didn't take long to resolve the Roura recruitment. This morning we had a cable from the La Paz station with the special RYBAT sensitivity indicator, reporting that Roura was in a secret meeting with two of the leading Bolivian communists. At the meeting he told them of my attempt to recruit him and he said if he ever sees me again he'll kill me. One of the two Bolivians is an agent of the La Paz station, it would seem, although possibly the source is an audio operation. I won't need the visas now, but Dean still thinks Roura may change his mind in six months or a year or two. At least he knows we're interested and he has the post-box number.

I only have about three more weeks before leaving and as I turn over operations to the three new officers I am also terminating a number of the marginal cases -- with provision, of course, for picking them up again if needed.

Among those I've terminated is Dr Philip Ovalle, Velasco's personal physician and the cutout to Atahualpa Basantes, the PC E penetration agent. Ovalle is getting senile and is probably the main reason why Basantes's reporting has been in such a slide. Before termination I was able to get the Ambassador to have Ovalle placed back on the list of approved physicians for visas (the consular section had thrown him off because he sent some people with syphilis to the US), or otherwise he might have been difficult. The chances of Velasco's coming back are now so slight that there's no reason to waste time seeing Ovalle for information on the Velasquistas. I recruited a new cutout for Basantes who I think can get the agent's reporting jacked up. He's Gonzalo Fernandez, ‡ a former Ecuadorean Air Force colonel who was military attache in London until he was forced to retire for political reasons. As Basantes is also a former military officer the chances are that they will work well together.

I also terminated the letter intercepts which I had taken back when the administrative assistant left a couple of months ago. The agents were pretty rattled at first but after I explained that we just don't have time for opening, reading, photography, closing, plus the two meetings for pick-up and return -- they seemed to accept it. They liked the termination bonus and we made arrangements for meetings every two or three months to pay for propaganda they've burned. Not too bad at a couple of hundred dollars a ton. These postal intercepts are a waste of time, in my opinion, and only the headquarters desks that are ready to take anything, like the Cuban branch, will waste effort poring over letters and testing for SW.

Tampa 10 December 1963

On the flight home I compared the existing situation in Ecuador with what I met when I first arrived there. Noland practically wouldn't recognize the place with all the growth. In the Quito station we now have eight officers, including Gabe Lowe ‡ who will arrive in the spring to fill the last new slot, as opposed to five when I arrived, plus two additional secretaries, several new working wives and an additional communications officer. In Guayaquil we still have only two officers inside the Consulate but have added one officer outside. Now Dean plans to add even more officers under non-official cover, particularly in Guayaquil. The station budget has also risen dramatically -- from about 500,000 dollars in 1960, to almost 800,000 dollars now.

Operations are better now, too. The counter-insurgency programme has improved, helped along by all the arrests, the exiling and the general repression undertaken by the junta. We have some new operations under way -- particularly the new telephone tapping and military intelligence unit that Dean is setting up. Many of these activities are carried out in cooperation with the junta which, in turn, we have managed to penetrate through police and military officers and the junta's chief stenographer whom we have on our payroll. It looks as if operations in the student field are going to improve, and in our labour operations, both CEOSL and the AIFLD are well established in spite of all the problems they have had to face. The best of our PCE penetration agents have survived and we have added several more, including those of the Guayaquil base.

So far as the general political situation is concerned the position is even more favourable. When I arrived in Ecuador, Araujo was Minister of Government and for two and a half years the traditional parties made a mess of things, thus encouraging the people to look for extremist solutions. All politicians, Velasco and his followers, the Conservatives, the Social Christians, the Liberals and the Socialists, had struggled for narrow sectarian interests, sometimes under the leadership of our agents and close liaison contacts. But they failed to establish through the democratic process the reforms to which they all paid at least lip-service. Now, at last, these reforms can be imposed by decree and it seems certain that the order imposed by the junta will speed economic growth. Land reform is still the greatest need. In a report published earlier this year, the UN Food and Agricultural Organization noted that some 800,000 Ecuadorean families (over three million people) live in precarious poverty while 1000 rich families (900 landowners and 100 in business and commerce) enjoy inordinate wealth.

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Notes:

1. Wall against which people are executed by the firing-squad.

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