Part 4: Inside The Company, CIA Diary...April 1 1962- May 11 1963

By Philip Agee

Part Two (Cont.)

Quito 1 April 1962 

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

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

Quito 2 April 1962 

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

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

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

Quito 4 April 1962 

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

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

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

Quito 5 April 1962 

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

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

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

Quito 6 April 1962 

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

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

Quito 10 April 1962 

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

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

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

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

Quito 23 April 1962 

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

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

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

Quito 27 April 1962 

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

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

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

Quito 1 May 1962 

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

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

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

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

Quito 3 May 1962 

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

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

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

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

Quito 12 May 1962 

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

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

Quito 13 May 1962 

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

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

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

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

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

Quito 21 May 1962 

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

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

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

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

Quito 4 June 1962 

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

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

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

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

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

Quito 15 June 1962 

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

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

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

In the station, we will work with Major Breslin, ‡ the intelligence advisor of the US military mission. He will use the mission personnel who visit and work at the projects as a type of scout—keeping their eyes open and reporting indications of hostility, level of communist agit-prop activities and general programme effectiveness. The other new programme is more closely related to regular station operations and is Washington's answer to the limitations of current labour programmes undertaken through A I D as well as through ORIT and CIA stations. The problem is related to the controversy over the ineffectiveness of ORIT but is larger—it is essentially how to accelerate expansion of labour-organizing activities in Latin America in order to deny workers to labour unions dominated by the extreme left and to reverse communist and Castroite penetration. This new programme is the result of several years' study and planning and is to be channelled through the American Institute for Free Labor Development ‡ (AIFLD), founded last year in Washington for training in trade-unionism. 

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

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

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

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

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

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

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

Quito 21 July 1962 

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

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

Quito 2 August 1962 

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

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

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

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

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

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

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

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

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

Quito 10 August 1962 

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

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

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

Quito 29 August 1962 

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

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

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

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

Quito 3 September 1962 

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

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

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

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

Quito 10 September 1962 

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

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

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

Quito 3 October 1962 

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

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

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

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

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

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

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

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

Quito 7 October 1962 

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

*** 

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

Quito 15 October 1962 

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

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

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

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

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

Quito 6 November 1962 

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

Quito 8 November 1962 

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

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

Quito 20 December 1962 

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

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

*** 

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

Quito 28 December 1962 

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

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

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

Quito 12 January 1963 

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

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

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

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

Quito 16 January 1963 

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

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

Quito 18 January 1963 

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

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

Quito 30 January 1963 

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

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

Quito 15 February 1963 

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

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

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

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

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

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

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

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

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

Quito 1 March 1963 

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

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

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

Guayaquil 31 March 1963 

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

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

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

Guayaquil 2 April 1963 

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

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

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

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

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

Quito 5 April 1963 

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

Quito 12 April 1963 

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

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

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

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

Quito 14 April 1963 

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

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

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

Quito 19 April 1963 

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

Flores was very careful not to mention his trip by telephone, but his wife let it slip out a couple of days ago. We're monitoring the telephone now from the apartment above and to the side of Flores's. Rodrigo Rivadeneira ‡ moved into the apartment with his brother Ramiro ‡ and his mother, and between him and Ramiro the transcriptions are kept right up to date. The connection was easy because the building is completely wired for telephones and Rafael Bucheli ‡ and an assistant simply made the connections in the main terminal box in the basement of the building. While Flores is away we'll try to get going on the audio 1 operation although the audio technician isn't enthusiastic about drilling through reinforced concrete at such a difficult angle.

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

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

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

Quito 24 April 1963 

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

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

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

Quito 1 May 1963 

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

*** 

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

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

Quito 11 May 1963 

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

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

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

Next

17 May 1963

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