Part 3 Inside The Company..CIA Diary...July 1961-March 31 1962

By Philip Agee

Part Two (Cont.)

Quito 15 July 1961 

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

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

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

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

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

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

Quito 23 July 1961 

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

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

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

Quito 27 July 1961 

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

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

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

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

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

Quito 31 July 1961 

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

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

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

Quito 4 August 1961 

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

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

Quito 31 August 1961 

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

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

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

Quito 2 September 1961 

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

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

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

Quito 4 September 1961 

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

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

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

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

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

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

Quito 20 September 1961 

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

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

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

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

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

Quito 24 September, 1961 

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

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

Quito 25 September 1961 

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

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

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

Quito 3 October 1961 

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

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

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

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

Quito 4 October 

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

Quito 6 October 1961 

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

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

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

Quito 11 October 1961 

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

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

Quito 12 October 1961 

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

Quito 16 October 1961 

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

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

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

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

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

Quito 17 October 1961 

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

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

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

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

Quito 24 October 1961 

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

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

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

Quito 27 October 1961 

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

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

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

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

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

Quito 1 November 1961 

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

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

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

Quito 3 November 1961 

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

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

Quito 4 November 1961 

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

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

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

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

Quito 5 November 1961 

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

Quito 6 November 1961 

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

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

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

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

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

Quito 7 November 1961 

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

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

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

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

Quito 8 November 1961  

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

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

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

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

Quito 9 November 1961 

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

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

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

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

Quito 11 November 1961 

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

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

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

Quito 13 November 1961 

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

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

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

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

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

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

Quito 17 November 1961 

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

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

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

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

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

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

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

Quito 20 November 1961 

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

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

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

Quito 19 December 1961 

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

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

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

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

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

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

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

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

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

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

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

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

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

Quito 23 December 1961 

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

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

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

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

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

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

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

Quito 2 January 1962 

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

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

Quito 16 January 1962 

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

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

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

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

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

Quito 19 January 1962 

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

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

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

Quito 31 January 1962 

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

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

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

Quito 28 February 1962 

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

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

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

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

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

Quito 21 January 1962 

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

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

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

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

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

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

Quito 1 March 1962 

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

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

Quito 3 March 1962 
Reactions to the Social Christian infiltration of the FEUE march have been most satisfactory. Yesterday the Minister of Defense and the chiefs of all the services issued a statement in which they admitted breaking a long silence on the many activities going on that are designed to sow chaos in the armed forces and separate them from the Ecuadorean people and the government. These activities, according to the statement, are directed by international communism through campaigns in periodicals, magazines, radio, rumour, strikes, work stoppages, rural risings, militia training and, most recently, the FEUE demonstration of 1 March. Instead of a demonstration for greater economic resources, according to the statement, the march was perverted to make propaganda against the armed forces. The statement ended with an expression of the determination of the Minister and the service chiefs to take whatever measures are necessary to defend military institutions. 

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

Quito 16 March 1962 
Fate's heavy hand has just fallen on our Vice-President, Reinaldo Varea. Yesterday the government announced that a million dollars' worth of military equipment purchased by a secret mission sent to the US last year by Velasco has turned out to be useless junk. The announcement came just a couple of days after one of Velasco's ex-ministers made a public call for Velasquistas to begin organizing for the June elections. 

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

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

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

Quito 25 March 1962 
For some days the anti-communist (Social Christian and Conservative) forces in Cuenca have been preparing for another mass demonstration against relations with Cuba and communist penetration of the government. Noland financed it through Carlos Arizaga who will use it to show solidarity with the important military command there. The affair was very successful. In spite of police denial of permission thousands turned out with posters and banners bearing the appropriate anti-communist, anti-Castro and anti-URJE themes. Demands were also made for the resignation of Arosemena and his leftist appointees, and expressions of solidarity with the military services against their extremist attackers were also prevalent. A petition with 2000 signatures was presented to the provincial governor, Arosemena's chief representative. 

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

Quito 28 March 1962 
The Cuenca military garrison under Colonel Aurelio Naranjo has suddenly sent a message to Arosemena giving him seventy-two hours to break relations with Cuba and fire the leftist Minister of Labor. The whole country is shaken by the revolt although the outcome is uncertain because so far no other military units have joined. 

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

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

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

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

Quito 29 March 1962 
The crisis continues. Today the Cuenca garrison issued a public statement on the need to break relations with Cuba and Czechoslovakia and to purge the government of communists. The Minister of Defense, the Chief of Staff and the commander of the Army are all indirectly supporting the Cuenca commander by not sending troops to put down the rebellion. In response to today's statement by the Cuenca garrison, the Army commander publicly ordered the Cuenca commander to refrain from political statements, but he also sent an open statement to the Minister of Defense that the armed forces are in agreement on the need to break with Cuba. 

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

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

Quito 30 March 1962 
The stand-off between Arosemena and the Cuenca garrison has continued for a third day although Arosemena is grasping for an alternative to save face. He announced today that within ten or fifteen days a plebiscite will be held on relations with Cuba. The idea of a plebiscite has already been proposed by several groups including the Pichincha Chamber of Industries whose members are suffering the effects of all the tension and instability of recent months. 

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

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

Quito 31 March 1962 
A solution is emerging The Conservatives today formally ended their participation in Arosemena's government, and conversations between Arosemena and the National Democratic Front—composed of the Liberals, Democratic Socialists and independents—have begun. One of the Front's conditions for continuing to support Arosemena is a break with Cuba and Czechoslovakia. Meanwhile the Electoral Court quashed the plebiscite idea for constitutional reasons. 

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

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

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

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Quito 1 April 1962
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