News

Former President of Ecuador Rafael Correa Under Investigation for Public Debt Irregularities

January 11, 2018

January, 9 2018 (Panampost)

The Comptroller General of Ecuador has opened an investigation into the internal and external debt contracted by the government under former President Rafael Correa, which amounts to US $42 billion.

Officials will audit the debt accumulated between January 1, 2012 and May 24, 2017. Comptroller General Pablo Celi said the results of the investigation will be published in a report in April, but that their conclusions won’t be binding; rather, the investigation is “an exercise in providing transparent information to citizens.”

He added, “Our intention is to observe the process, the procedures and the methodology carried out by the technical teams from the Comptroller’s Office in order to audit, in the terms established, the internal and external public debt.”

Celi said it’s the first time this kind of practice has been carried out in Ecuador.

The initiative comes after Ecuadorian President Lenin Moreno, who served as Vice President under Correa between 2007 and 2013, learned that some operations under the previous administration were not included in official reports of the public debt. Moreno has criticized the management of his predecessor and accused him of having left the country in debt.

Meanwhile, former President Correa described the audit as evidence of “persecution” against him.

Tweet: I just heard about a supposed “preliminary report”about the debt audit (which has already been done) and about a supposed “committee of eminent persons” consisting of many people who hate the RC, to once again “audit” it. I hope everyone can see what is really going on here. This time they have gone too far!

Comptroller Celi said there were at least five preliminary findings obtained during the debt audit. Among them were the secret and reserved declaration of debt documentation, and operations for the anticipated sale of oil, which was not considered debt.

Additionally, officials are investigating Executive Decree 1218, which arranged to take the consolidated debt as an index of the debt rather than the total.

The inter-institutional agreement signed between the Ministry of Finance and EP Petroecuador will also come under scrutiny, as it gave the company the status of financial manager. Officials, including the former ministers of economy and finance, were notified about the audits.

“This is a fundamental principle of a democracy of representation … public control with citizen participation contributes to the necessary transparency and trust in public action, which is fundamental for the legitimacy of state action,” Celi said.

Concerns about debt reportedly worsened after the Correa administration changed its method of calculating the debt to reduce the ratio between debt and gross domestic product so it would not exceed the constitutional limit of 40 percent. Up to November 2017, the consolidated debt amounted to 32.2 percent of the GDP, while the aggregated debt — which included all the country’s commitments — was 46.2 percent.

2018-01-11T21:35:30+00:00