QUITO, Ecuador (AP) - Former Ecuadorean leaders said Friday that President Rafael Correa was playing politics when he accused them of taking bribes during $3.9 billion in debt renegotiations.
Correa said the former officials and two investment banks — U.S.-based J.P. Morgan and Salomon Smith Barney, now part of Citigroup Inc. — should repay debtholders after a government audit found they profited off of the "illegitimate" deals.
Spokesmen for both banks declined to comment on the charges. But former President Sixto Duran-Ballen, who worked with J.P. Morgan to refinance debt in 1994, said a government-appointed audit was full of "lies" and that his negotiating team acted in good faith.
The audit found that Ecuador should never have renegotiated the debt at all because it was unable to make payments for six years after a devastating earthquake, meaning that under U.S. law it should have been wiped from the books.
"The lenders were going to just let it expire? There wouldn't have been a lawsuit against Ecuador?" Duran Ballen asked Ecuavisa TV.
The audit also found that two sets of bonds issued in 2000 were illegitimate because dates on key documents were altered and lacked presidential authorization.
Gustavo Noboa, who was president at the time, did not answer calls from The Associated Press. But his former economy minister, Jorge Gallardo, wrote a letter from the United States, where he now lives, saying the audit was "full of errors" and shows "ignorance" and "bad faith."
Politics Minister Ricardo Patino, who participated in the audit, denied any political motives and said the courts should decide whether the negotiations were corrupt. The government has already hired a U.S. law firm to review the audit and counsel Ecuador on its legal options, Patino told the Associated Press. He refused to elaborate.
Noboa and Gallardo were charged in 2003 with embezzling funds during the deal but were pardoned in July.
Ecuador delayed $30.6 million in interest payments on the debt last week, saying it would use a 30-day grace period to assess the results of the yearlong, 30,000-page audit. Correa must make a final decision on whether to default by Dec. 15.
Ecuador's foreign debt hit $10 billion in August, 21 percent of its gross domestic product. |