Part 2: Inside The Company, CIA Diary...Quito Ecuador Station ...July 1960- July 11th 1961

Inside The Company, CIA Diary

By Philip Agee

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 (W.H) 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 W.H 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 Suriname. 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. 

W.H 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 W.H as a fiefdom of Colonel J. C. King ‡—he's been W.H Division Chief now for some years. The other reason for disdain towards W.H (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 Khrushchev 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 Ecuadorians 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 Ecuadorians 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. Ecuadorians 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 left wing 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 90 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 flysheets, 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 INSIDE THE COMPANY: CIA DIARY 91 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 Ecuadorians 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 Ecuadorians 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 Ecuadorians 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.[It will be interesting to follow Davila from here, 2019 looks like life has treated him and his family well,or someone else.D.C] 

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.[Same as above with this guy and family DC] 

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 reelected in the next elections. Meanwhile he will also be reporting on any rumours and reports of discontent in the military commands. 
https://lahora.com.ec/tungurahua/noticia/1102255011/juan-ignacio-gortaire-es-el-nuevo-gobernador-de-tungurahua

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 InterAmerican 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. CIA 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. Our 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 snow capped volcanoes 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 Ecuadorians. 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  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 Ecuadorians. 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 Ecuadorians 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 Ecuadorians 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 five 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 Ecuadorians 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 nonexistent 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 maneuverability 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, Ecuadorians, 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, calumniated 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, Ecuadorians, 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, Ecuadorians! 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 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 Enrique. 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 extreme leftist 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 anticommunist—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 troubleshooter, 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 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 Ecuadorians 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 anticommunist 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 anticommunist 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 Ecuadorians, 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. 

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Quito 15 July 1961 
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