A Presidential Candidate Proposes a Tax Change That Would Give Him Millions of Dollars – Should That Be Part of the News?

Guillermo Lasso in the Banco de Guayaquil, in Machala

March 24, 2017

It’s day nine since the story of Ecuadorian Presidential candidate Guillermo Lasso’s bank holdings and possible legal violations first broke. The international media (and largest private Ecuadorian media) is still maintaining its unexplained silence, although by now millions of people in Ecuador have probably heard of it. To be clear, we are not talking about media that is ignoring the presidential election; we are talking about media that is covering this election.

In my last piece on this scandal I wrote that the media silence was “as if the US and international media had failed to report on the controversy over President Trump’s refusal to release his tax returns during the 2016 presidential election.” But that was actually an understatement. It is more like ignoring controversy over Trump’s tax returns with the reporters having access to the actual returns.

My colleague Jake Johnston uses publicly available documents to add more detail here. He points to another big piece of missing news: Lasso stands to gain millions of dollars from eliminating certain taxes on financial transactions, as he has proposed to do. How do we know this? Public records show that trusts apparently owned by Lasso and various family members own about $179 million, or 61 percent, of Banco Guayaquil’s $293 million in shares. Ecuador’s tax agency shows that clients of Banco Guayaquil paid out $116 million in taxes on capital leaving the country in 2015. Of course we don’t know exactly how much of it was paid by Lasso and his family. But since they appear to own 61 percent of the bank, it is extremely likely that their transactions were handled through that bank rather than a competitor. So some chunk of those taxes was likely theirs. Banco Guayaquil itself also paid $10 million in taxes on its assets held abroad in 2015, another tax that Lasso is looking to eliminate. All of this adds up to millions of dollars that Lasso and his family and other wealthy Ecuadorians  won’t have to pay this year if he wins the election and carries through on his promise to eliminate the tax on capital flight and assets held abroad.

My own view is that Lasso’s meeting with US government officials and  according to leaked embassy documents sharing with them his plans to build an opposition to the Correa government among the business community, should also be worthy of mention. But many people  including some journalists  don’t think it’s wrong to collaborate with a foreign power against one’s own government, if that foreign power happens to be the United States. Whatever one thinks about the controversy over Donald Trump and the Russian government’s alleged involvement in the 2016 US presidential election  and some of the allegations remain to be proven  I’m glad that the media is willing to take the issue seriously. If only they felt the same way when the shoe is on the other foot.

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