Mark Weisbrot
The Hill, February 16, 2017

The Huffington Post, February 17, 2017

See article on original site

In a last ditch move to bring down the leading candidate in Ecuador’s February 19 (Sunday) presidential election, Lenin Moreno, the opposition is slinging charges of corruption at his running mate. Moreno is a former vice president to Ecuador’s current President Rafael Correa and his Alianza PAIS party, who have governed Ecuador over the past decade.

Before looking at the specifics, it is worth noting that this has become the main tactic of right-wing parties in Latin America for several years now, as they struggle to win back much of Latin America, and especially South America, which elected and re-elected many left governments in the 21st century (e.g. Argentina, Brazil, Bolivia, Ecuador, Venezuela, Uruguay, Paraguay, Honduras, El Salvador, Nicaragua). The strategy has potential because most of the media are an opposition force against the left governments, and can use their control over most of the means of communication accordingly. The right can also often count on help from the international media — most of which has a tendency to side with Washington against these same governments.

The Brazilian media deployed the corruption meme to successfully topple President Dilma Rousseff of Brazil last year, even though she was not charged with any corruption and committed no impeachable offense. In Argentina, former President Cristina Kirchner, along with her finance minister and head of the Central Bank have been indicted for something that was nothing more than a normal central bank operation, with no corruption or illegality whatsoever.

In Ecuador, which gets most of its government revenue and foreign exchange from oil, a former minister of hydrocarbons and head of the state oil company (Petroecuador) Carlos Pareja Yannuzzelli, has come forth as accuser of Jorge Glas, the current vice presidential candidate. He claims that Glas knew about the corruption that took place at Petroecuador. On that basis, the government’s opponents, including most of the media, hope to capitalize on enough free-floating cynicism to swing the election against the governing party.

One problem is that the witness himself is a fugitive from justice, having fled the country in September. Prosecutors have charged him with taking at least $1 million in bribes and depositing them in an offshore account. He has confessed to wrongdoing and pleaded with President Correa for clemency for himself and his son, who is also accused of having received some of the bribe money.

Another problem for the case against the government is that President Correa has taken a hard line against corruption, including against Pareja, rejecting Pareja’s plea for clemency.. Also, by campaigning against the government, Pareja greatly increases his chances that the will not be extradited to Ecuador from the United States.

The Ecuadorian government is currently promoting one of the biggest attacks ever on corruption in the hemisphere, with a referendum on the ballot this Sunday that takes aim at tax havens. This is exactly where this type of money stolen from the citizenry, as well as other illegal capital flight, ends up. The ballot initiative is actually quite creative: recognizing that no government can outlaw these tax havens in places like the Cayman Islands or Switzerland, it instead seeks to prohibit anyone who uses them from running for or holding public office. Since tax havens are an essential part of almost any serious bribery or theft in countries like Ecuador, no government that wanted to profit from or even tolerate corruption would promote such legislation. The Ecuadorian government has even taken this initiative to the United Nations, in an effort to get other countries to follow suit and therefore make it easier for all to reduce corruption and illegal capital flows.

Of course, the choice for voters in any country is not going include a government that is completely free from corruption. Look at the United States, a rich country with an eroding but still comparatively well-developed rule of law. We have a system of legalized bribery whereby corporations and billionaires can have massive influence on policy through campaign contributions. In addition, we have deferred bribes to government officials that clearly affect their decisions while in office. The list of such people is so long that President Obama sought to pass a very unpopular commercial agreement, the TPP (Trans-Pacific Partnership), in the lame duck session of Congress because the swing votes were representatives who would be leaving in a few months to work for lobbying firms.

The choice for voters in Ecuador is going to be about which party or candidate is going to reduce corruption. In Ecuador, that is pretty clear. The leading opposition candidate, Guillermo Lasso, is a big Ecuadorian banker, who also has banking interests in Panama, one of the largest centers for illegal capital flows in the hemisphere. The next leading candidate, the right-wing former congresswoman Cynthia Viteri, wants to eliminate taxes on capital flight. These candidates transparently represent the banks who used to run the country before Correa was elected. To think that they would reduce corruption is like believing that Donald Trump’s Goldman Sachs appointees and advisers are there to “drain the swamp” in Washington.

Of course most people in Ecuador are more concerned with their basic needs and well-being, and here the current government has delivered quite a bit over the last decade. The Correa government has doubled social spending as a percent of GDP, and more than doubled public investment. Access to health care, education, electricity, as well as roads and other infrastructure has greatly increased; while inequality has been substantially reduced. Incomes have grown much faster than they did over the previous quarter century, and the poverty rate has been reduced by 38 percent.

Corruption is not most people’s primary concern, but the opposition and its media would like to make it that way. After all, what else do they have to offer?


Mark Weisbrot is Co-Director of the Center for Economic and Policy Research in Washington, D.C., and the president of Just Foreign Policy. He is also the author of the new book “Failed: What the ‘Experts’ Got Wrong About the Global Economy” (2015, Oxford University Press). You can subscribe to his columns here.