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Correa says again that ‘dollarization was a bad idea’; Says the dollar puts country in a financial 'straight jacket'

Cuenca High Life - Sat, 12/20/2014 - 08:09

President Rafael Correa repeated on Tuesday his criticism of Ecuador’s decision to use the U.S. dollar as its currency.

His comments come as oil prices, which are based on the dollar, are approaching five year lows. Correa said that if Ecuador had its own currency or was using a regional South American currency, as he has advocated, the affect on the country would be less severe.

“Dollarization was a bad decision,” Correa said. “Right now, it is doing exactly the opposite of what (it) must do to address the scenario of falling oil prices.”

Ecuador, which is the smallest member of OPEC, has used its oil revenues to improve the country’s infrastructure and social services. With oil prices slumping, Correa says Ecuador needs a flexible currency now more than ever. “In these difficult times we will see just how important it is to have a national or regional currency,” he said.

Ecuador adopted the U.S. dollar in 2000 after the value of its former currency nosedived in 1999.

Correa has long warned the continued use of the dollar is holding back the economy, once describing it as a “straight jacket.”

In July, Ecuadorean legislators approved a law paving the way for the use of a parallel electronic currency for domestic us, although it will still depend on the dollar for stability. 

Despite his dislike of the dollar, Correa has said in the past that a change of currency is probably years away.

Photo caption: President Rafael Correa |Digg It! |Furl |Reddit |StumbleUpon
Categories: Ecuador

Is Ecuador selling its environmental and economic future to China?; Chinese running country's biggest projects

Cuenca High Life - Sat, 12/20/2014 - 08:02

By Andrew Ross

At the point where the lazy, blackwater Cuyabeno runs into the faster currents of the Aguarico, carrying a chill from their Andean source, sandbars stretch out from the verdant banks. These are the Playas de Cuyabeno, and the name has attached itself to the indigenous Cofan community in this region, deep inside Ecuador’s portion of the Amazon Basin. Until very recently, an assortment of thatched, wooden dwellings sat above the river. Today it has been replaced by an orderly hamlet of evenly-spaced, two-story, prefab houses, all steel and white plaster, connected by improbably clean roads, and sprinkled with basketball courts and childrens’ playgrounds. This is Ecuador’s first Comunidad de Milenio (Millenium Community), a $21 million benefit from the proceeds of the Pañacocha oil field that borders the community. Under the terms of the country’s 2010 Hydrocarbon Law, a portion of the royalties from oil production must be ploughed back into the communities affected by drilling and extraction.

The region’s indigenous people have good reason to welcome these freshly-minted villages after forty years during which their ancestral lands were ravaged by Texaco, Occidental, and other foreign petroleum concerns. Each comunidad comes with wifi, cable TV, and a well-stocked school and health center, while the shipshape streets and parks give a modern eco gloss to the older rituals of jungle living. When President Rafael Correa, the popular left-wing leader of Ecuador since 2007, traveled to Playas de Cuyabeno for its grand opening last year, he drew attention to its ecofriendly design: “There will be no motorized vehicles. People will walk and use their bikes."

For his devotees, the comunidads are the latest perks of his “citizens' revolution,” which has seen one of the most ambitious, and costly, assaults on poverty in South America. Correa rarely fails to point out that his country’s oil royalties are no longer flowing to the oligarchs in Quito, Gyuaquil, Miami, or Houston, and that they are bettering the lives of all (in accord with his administration’s Buen Vivir national plan). In almost every sector—access to free education and healthcare, dignified housing, public works, labor and disability rights, social security, fair wages, broadband access, and economic growth—the performance indicators are impressive. But for Correa's critics on the left, the new jungle settlements (up to 200 are to be built) are the slickest of bribes, intended to buy smooth passage for the oil companies, both state-owned and foreign, that are lining up to drill in the most remote reaches of the Amazon. Correa's own popularity, sharpened by fears of a decisive electoral swing to the right, has tempted him to consider seeking a fourth term in 2017. If he mounts another run, the battle over the Amazon’s oil reserves will be a big talking point in the election, but the outcome will also be shaped by deals being made on the other side of the world, in Beijing.

When he took office in 2007, Correa appointed a Debt Audit Commission to determine which of Ecuador’s crushing debt obligations should be honored, and which were illegitimate. It was a bold response to the debt trap that captured so many South American countries during the previous three decades. Acting on the Commission’s recommendations, Ecuador defaulted on $3.9 billion of its external debts, and the country instantly became a pariah on the international finance markets. PetroChina offered a lifeline with a $1 billion two-year loan at a 7.25 percent interest rate. In repaying it diligently, Ecuador would be able to reestablish its standing as a trusted borrower.

The credit flow from Beijing has only widened and deepened ever since—in return for an ever-larger percentage of the country’s oil production. Last year, Chinese funds were estimated to cover 61 percent of the government’s $6.2 billion in financing needs and, in return, China claimed the lion’s share of Ecuador’s oil. Because it can be sold anywhere by middlemen, much of that oil currently ends up in refineries in California, including some operated by Chevron—the target of a $9.5 billion class-action lawsuit for its alleged contamination of Amazon lands and communities.

Then, in 2010, Correa launched an ambitious effort to fund Ecuador's social programs while keeping the oil in the soil in the Ishpingo-Tambococha-Tuputini (ITT) area of the Yasuni National Park. A single hectare there contains more tree species than all of the United States and Canada combined. The Yasuni-ITT initiative rested on a key contention of the climate justice movement: that poor countries should be compensated if they are to forego their development to help stabilize global carbon emissions. Correa’s wager was that if carbon-rich countries and donors ponied up enough money to indemnify Ecuador for lost public revenue, then the Yasuni would be left alone. Donations came nowhere close to the $3.6 billion goal set by Correa (50 percent of the market value of the ITT oil reserves). The initiative was terminated, and the government began developing the ITT oil blocks through Petroamazonas, the state oil company, adding to the Yasuni concessions purchased by Andes Petroleum, a subsidiary of the China National Petroleum Corporation and SINOPEC, and selling off blocks to the country's largest creditor, China.

When development drilling in the Yasuni began, the president pledged that drilling would occur in only a minute fraction of the park, and that it would be low-impact. But extractive operations drilling by Petroamazonas, whose properties are nearer to towns and thus much more visible than the blocks being developed by China, is already proving how difficult it will be to keep that promise. In June, a satellite photo revealed a 26-meter wide road, big enough to handle heavy trucks, had been cut 20 km into the Yasuni. In response, Petroamazonas insisted that it was an “ecological trail” (sendero ecologico), which would be revegetated. In April, a youth collective called the YASunidos submitted nearly 800,000 signatures it had gathered on a petition calling for a national referendum about exploitation of the ITT oil fields. The country’s electoral authority rejected the petition after it claimed to have invalidated many of the names.

In August, I arranged to go on a toxic tour of some of Petroamazonas's oil wells destruction with a community ecologist, Wilson Suárez, who lives in a village an hour east of the gritty oil town of Lago Agrio. In the past, Correa has helped to sponsor so-called “toxic tours” of the jungle areas contaminated during the Texaco era (1964 to 1990). Politico celebrities, such as Daryl Hannah, Bianca Jagger, Trudy Styler, and Kerry Kennedy were encouraged to take the tours to amp up international support for the grueling legal fight against Chevron (the company that swallowed Texaco in 2001). I contacted Suárez because he pointedly does not do the Texaco tour. Instead, he agreed to take me to visit more recent sites, in the Libertador oil field, just south of the Colombian border, that have been contaminated by Petroamazonas.

As a public health worker, Suarez had done research for the first community studies of the Texaco production sites in 1993. The evidence he found, of cancer clusters, miscarriages, skin infections, intestinal diseases, and respiratory problems, strengthened the case against the American oil giant. One of the major legal complaints against Texaco/Chevron is that the company dodged standard industry procedure by failing to re-inject formation waters, sands and other production materials into strata three kilometers underground. To cut costs, the company simply let the sludge accumulate in open, unlined pits and pools. The pollution poisoned the land, the waterways, the air and the people who lived nearby. If the sites that Suárez took me to were representative, they offered ample evidence that the same practices were continuing under the state oil company.

We visited several field stations where crude is separated from the gas and formation waters that are brought up along with the “black gold.” Gas pipes vented into the open air or were capped by a bright flare, while sizeable lakes of sludgy water had claimed the forest floor. Though the company had cleaned up a few of the pits by the roadsides—Suárez called them “Potemkin lakes”—there were little or no protections evident on those a hundred yards inland. Small population centers used to enjoy 10 km exclusion zoning, but the laws have changed or they go unenforced. Not two hundred yards from Suárez’s own village, the company was now drilling. The river water was no longer potable, and the rainwater increasingly polluted from air contamination. Suárez is from a campesino family who suffered when coffee prices went through the floor, and he knows how desperation can eat away at resistance. In these parts, a family’s survival now depends on at least one of household being on the oil company payroll. As a longtime organizer, he has also seen communities bought off, one by one, or played off against each other. “Population pacification” is how he described the company’s offers of employment, gift packs (of food, clothing, machetes), automobiles, community centers, and even the new comunidads themselves.

For Correa, the modernity on display in those comunidads is quite the opposite. Each village is: a showpiece the rightful fruits of the citizens revolution that is, a prime showpiece heralded in propaganda-style billboards by the side of jungle roads. Indeed, the upgraded infrastructure in these remote regions is redolent of Lenin’s electrification campaign, so central to 1920s Soviet state planning. In a 2012 interview in the New Left Review, Correa dismissed his left critics as romantic reactionaries who see the poverty of rainforest people as “something folkloric.” He has even less patience these days for those who want to keep the oil in the Amazonian soil. Invoking “the classic socialist tradition” of “Marx, Engels, Lenin, Mao, Ho Chi Minh and Castro,” none of whom “said no to mining or natural resources” Correa insists that, without extraction, what he has called the “twentieth century socialism” of the Andean countries “will not be able to offer any viable political projects.”

But the president’s promise of a new era of sustainable extraction got dented in July of this year when a pipeline ruptured near an upriver tributary of the Aguarico, just above Dureno. The spill, an estimated 16,000 barrels, spread for almost a hundred miles down through the precious 600,000-hectare Cuyabeno wildlife reserve, as far as Zabalo. The residents of the new comunidad at Playas de Cuyabeno watched the slick slide by, terrified at the prospect of losing their vital supplies of fish and water. Ramon Noteno, the grandson of a shaman, told me that, through an ayahausca-inspired dream, his grandfather had foretold the calamity, along with the illnesses that would result, and had pre-selected some jungle plants as medicinal insurance against the worst impacts. The Dureno spill was also a timely reminder to Noteno and his neighbors, who are being hotly courted by Petroamazonas for permission to drill nearby, that no extraction is failsafe. The neighboring Siona community, who get little or no benefit from the reserve’s eco-tourist lodges, are keen to take what the company is offering. Afraid of being cut out entirely, and of losing access to common land in between them, the people of the Playas have begun to negotiate. So far, the compensation on the table amounts to a single payment of $1600 per family ($3000 for those directly affected by drilling infrastructure), plus rental of their canoes by the company, and some promises of employment.

What about potential damage to the eco-system, one of the most biologically diverse spots on the planet? Community leaders are trying to establish some control over protections of the most sensitive areas, including a clay lick that is critical to the health of the parrots who thrive around their local eco-lodge. But Noteno is worried that the whole thing is a devil’s deal: “We have so little education, and there are no experts in the community who can advise on the consequences.” The eco-biological expertise on offer “all comes from the government or the company.” Nor, in his view, has CONAIE (the federation that spearheads Ecuador’s once powerful indigenous movement) been “able to provide good solutions.”

The outgoing comunidad president, Jesús Grefa, reported that “originally, we thought it would be a small operation, but now it’s gotten much bigger and they are talking about a pipeline.” Ultimately, the community has a weak hand to play, because the Ecuadorean state considers all subsurface mineral resources to be public property, and can extract even if the occupants of the land object. (In the United States, what lies beneath the soil is more typically considered private property, though the federal government still holds the rights to 31% of subsurface resources, mostly in mineral-rich Western states). For all his worries about the impact of the drilling, Grefa is a Correa partisan, and a firm advocate of the gains furnished by the new village: “Before, we had mud up to our knees.” Noteno has a more measured view. Like most other residents, he has a small farm further downriver, and spends a fraction of his time in the new village. Children attending the school, and their mothers, are the chief occupants. Domiciles in the old village had generous backyards of their own, hosting crops and play areas. Now, the amenities are all shared, much like the common-interest developments (CIDs) that are the dominant feature of American suburbia. Houses cannot be sold to outsiders, so there is no speculation, and, while this is not a company town in the lineage of Fordlandia, Henry Ford’s screwball Amazonian colony for his rubber workers, the paternalistic presence of Petroamazonas is keenly felt.

A visit to Noteno and his wife’s three-bedroom house, which enjoys a generous riverfront view, revealed a few more cracks in the picture window. The electricity supply is dodgy, the wifi connection is so bad that no one bothers to use it, and problems with the telecom antennae have plagued phone reception. The materials used in construction have made interiors hotter, and the company offers only a five-year guarantee, after which residents are on the hook for repairs and liable to taxation for all governance, utility, and infrastructure needs. The school is the main attraction, but it has lost several teachers already, and recruiting replacements from outside the community to such a remote location will not be easy. Nonetheless, Noteno is optimistic about this new village. But his chief hope is for his children to grow up with the same abundantly diverse jungle wildlife as he did.

While large swaths of the Amazon Basin remain uncharted, the most telling maps depict the region carved into numbered oil blocks, some of them hundreds of square miles in area. The Pañacocha field, for example, sits in Block 12; the ITT oil reserve is located in Block 43; and Block 57 is where Suarez took me. The blocks are periodically auctioned off as concessions to oil companies, and more and more of them are marked as a Chinese claim or interest. The Chinese extraction sites are remote, but anyone traversing the Amazon waterways, as I did this past summer, will routinely pass boatfuls of Chinese oil workers. At this point, China exercises a near monopoly on Ecuador’s oil—up to 90% this year alone—and is fast becoming the dominant player in mining and mineral extraction. If Petroamazonas threatens the sovereignty of local communities, China's ownership of vast oil blocks poses the same threat to the nation.

Of course, Ecuador is hardly alone in its growing dependence on Beijing. China committed almost $100 billion in loans to Latin America between 2005 and 2013—$15 billion last year alone, while the World Bank lent a mere $5.2 billion. But many believe that the erosion of sovereignty has been sharper in Ecuador than elsewhere in the region. The terms of its loans from Beijing are not fully transparent, giving rise to the worst suspicions. A March 2014 Amazon Watch report alleged that Petrochina has the contractual right to seize assets from any oil companies operating in Ecuador if the nation does not pay back China in full. A more extreme version of this claim is that the terms of loans include a "sovereignty immunity waiver," that permits China to seize Ecuador’s own assets if it defaults. One of the administration’s chief critics, Acción Ecológica’s director Alexandra Almeida, told me that “the agreements with the Chinese are unlike any other. Even with Chevron we knew what we were getting. No one knows that much about the Chinese loans.”

When I quizzed Piedad Mancero, senior economist at the Finance Ministry and former member of the Debt Audit Commission, about these charges, she dismissed them as “rumors circulated for political gain.” She had worked on many of the Chinese loans, and reported that they were not only in much better shape than the external debts reviewed by the Commission, but also “entirely in keeping with the spirit of the Constitution,” which decreed that “loans can only be contracted for projects already set out in the National Plan.” That said, most of the loans were regarded as “prepaid oil sales,” with interest built in, and so they were not defined as “debts,” strictly speaking. “Most of the terms are publicly accessible,” she added. “The only ‘secret clauses’ are the ones relating to employment of Chinese workers.”

This last issue is quite contentious in Amazon communities where oil production is rapidly becoming the only solid source of livelihoods. PetroChina and Andes Petroleum (its Ecuadorean joint venture), are only supposed to employ Chinese personnel in highly skilled positions—engineer, toolpusher, project manager—but several locals told me that many of the unskilled jobs also went to Chinese nationals, especially in the more remote regions where regulation was less certain. The situation is reminiscent of scenarios in some African countries, where festering resentment of imported labor teams has sharpened local friction around the presence of Chinese enterprises.

Mancero had also reviewed Chinese funding for the country’s massive hydro-electric projects, aimed at providing 93% of Ecuador’s energy needs by 2017, and recently served on another Correa commission that recommended the termination of all the nation’s remaining Bilateral Investment Treaties, signed over the last two decades with as many as 26 countries. Having seen her share of bad public loans, she was sanguine about the future: “our debt portfolio is more diversified, and, after the refinery, we will rely less on the Chinese.” She was referring to a large oil refinery, financed through China National Petroleum Corporation, that will be built near Manta, whose Pacific coastal port is also now under Chinese management. When it is fully built out, China will control a complete production logistics line—from the jungle to the coast—to guarantee the smooth delivery of crude to the Asian mainland.

If oil were a more prosaic mineral, like copper, then monopolistic moves like this would not raise the same concerns about threats to sovereignty. But oil is always a special case. For countries, like Ecuador, without a diversified economy, extraction is the top priority, and any domestic policy changes are closely monitored from abroad. The World Bank, concerned that China has replaced it as the lender of choice in Latin America, recently returned to Ecuador, issuing a $1 billion loan for Quito’s planned subway system in April of this year. Notably, the loan carries much better terms (1.24 percent interest over thirty years) than the Chinese ones (typically around 8 percent over eight years).

It is worth asking how the new dependency on Chinese credit-for-oil compares with the much-hated former regime of multilateral lending. Unlike that earlier era, where Northern loans covered a broad spectrum of projects, Chinese credit is surgically focused on infrastructure, energy, and extraction. Whereas the IMF programs of structural adjustment were aimed at transforming an entire society into an open marketplace, the Chinese, so far, have no such aspirations. But what has been gained from exchanging Chevron for PetroChina?

On the face of it, BeijingChina is not as easy to demonize as the infamous Paris Club which represents the interests of Northern creditors. China’s role cuts across the well-worn polarity of North and South, and it has no history of ecological debt to Latin America. Indeed, its national managers often use the same anti-Western, anti-colonial rhetoric as today’s Bolivarian champions. The case for restitution from Chevron is still crying out for a just resolution, but the misdeeds of Texaco cannot be used to divert attention from those of the Chinese (and the Ecuadorean, Venezuelan, and Brazilian) companies operating in the Amazon. The record of Chinese extractivism elsewhere is not pretty, least of all in mainland China itself, where community opposition to petrochemical facilities is a frontline part of the growing protest wave against industrial operations in open violation of environmental standards. Contamination of Amazonian lands and cultural disruption among rainforest communities is a certain outcome in the years to come, intensifying the conflict between the technocratic left in the Correa administration and the movement left which operates in the new political space opened up by the Andean embrace of the “rights of nature.”

Indeed, environmentalists, like the YASunidos, have become Correa’s number one enemy, labeled by some of his ministers as “enemies of the state.” Recent shifts in the interpretation of the penal code have made it possible to criminalize dissidents as “terrorists,” and domestic repression is growing. In his comments on the opening of the second comunidad, in Pañacocha itself, the president took the occasion to deliver another broadside against “demagogues,” especially “full-belly environmentalists,” opposed to his extractivist policies. The new village was proof, he declared, that "poverty is no longer part of the culture and folklore of our people; it is an insult to human dignity, not the outcome of identity but the result of discrimination and exclusion."

The 2008 revision of Ecuador’s constitution included recognition of the “Rights of Nature”—it was the first nation to do so. Contention over how these new rights should be interpreted almost immediately became quickly been a source of discord, resulting in the early resignation of the president of the Constituent Assembly, Alberto Acosta, one of the strongest advocates of constitutional protection for ecosystems. The ongoing strife has widened the gulf between Correa and the social movements that built the pathway for his initial election. Winning a fourth term in 2017 (a feat that will need a constitutional amendment) may require a rapprochment. The alternative—a grisly one—will see Correa running against the leadership of indigenous organizations, like CONAIE, CONFENAIE, and Pachakutik, and supporters of environmental groups, like Acción Ecológica.

As in the region’s other resource-rich Andean countries, the administration’s reliance on extractivism to fund its cash-transfer programs to the poor has set the stage for a face-off with advocates of more radical environmental policies. In accord with the human-nature communion evoked by Buen Vivir (or sumak kawsay, its indigenous version) Ecuador’s eco-socialists they were promised another world, and it’s still possible. But the decisive entry of China’s credit and its hunger for oil and minerals has complicated matters, driving new wedges into the fractured political landscape.

Credit: The Nation,; Photo caption: A recent oil spill in Ecuador’s Amazon region; Photo credit: The Nation |Digg It! |Furl |Reddit |StumbleUpon
Categories: Ecuador

Government says begging is down 80% but it increases during the holidays; Says giving makes problem worse

Cuenca High Life - Fri, 12/19/2014 - 08:07
Ecuador’s Ministry of Economic and Social Inclusion (MIES) said Wednesday that its campaign 'Give Dignity' has been reduced street begging in Ecuador by 80% since 2008.

According to Cecilia Tamayo, MIES deputy director, the campaign has focused on child begging, which was made illegal by a 2009 law. Prior to that, Tamayo said that adults would often post their children on sidewalks to ask for money. “In many cases, the parents would sit nearby, doing nothing, as their children begged,” she said. “There were even cases where non-family members would borrow children to beg, and then split the proceeds with the children’s parents.”

In addition to stopping child begging, Tamayo says the government has started a number of assistance programs to stop begging. “There are alternatives to begging, no matter how poor a person is,” she says. “Go to any MEIS office and we tell you about them.”

Officials in Cuenca agree that the amount of begging as decreased but say it increased during the Christmas holidays.

Regional MEIS director Gloria Astudillo says that families send their children to beg in December in Azuay and Cañar Provinces. “When we see it we tell parents that it is illegal but also tell them about other programs that provide family help,” she said.

Astudillo says that begging by the elderly also increases at Christmastime.

Cuenca’s municipal social welfare office also works to reduce begging. Program director Andrés Peñafiel said his office tells street beggers about its programs and “alternative livelihoods.”

Peñafiel urges the public not to give money to beggers. “One of the reason we have the problem is that people continue to pay. If they stop, the beggers will find other assistance,” he says.

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Categories: Ecuador

U.S. travel ban lifted after wealthy Ecuadorian fugitive family gives thousands to Democratic campaigns

Cuenca High Life - Fri, 12/19/2014 - 08:01

By Frances Robles

The Obama administration overturned a ban preventing a wealthy, politically connected Ecuadorean woman from entering the United States after her family gave tens of thousands of dollars to Democratic campaigns, according to finance records and government officials.

The woman, Estefanía Isaías, had been barred from coming to the United States after being caught fraudulently obtaining visas for her maids. But the ban was lifted at the request of the State Department under former Secretary of State Hillary Rodham Clinton so that Ms. Isaías could work for an Obama fund-raiser with close ties to the administration.

It was one of several favorable decisions the Obama administration made in recent years involving the Isaías family, which the government of Ecuador accuses of buying protection from Washington and living comfortably in Miami off the profits of a looted bank in Ecuador.

The family, which has been investigated by federal law enforcement agencies on suspicion of money laundering and immigration fraud, has made hundreds of thousands of dollars in contributions to American political campaigns in recent years. During that time, it has repeatedly received favorable treatment from the highest levels of the American government, including from New Jersey’s senior senator and the State Department.

The Obama administration has allowed the family’s patriarchs, Roberto and William Isaías, to remain in the United States, refusing to extradite them to Ecuador. The two brothers were sentenced in absentia in 2012 to eight years in prison, accused of running their bank into the ground and then presenting false balance sheets to profit from bailout funds. In a highly politicized case, Ecuador says the fraud cost the country $400 million.

The family’s affairs have rankled Ecuador and strained relations with the United States at a time when the two nations are also at odds over another international fugitive: Julian Assange, the WikiLeaks founder, who has taken refuge in the Ecuadorean Embassy in London.

But while scrutiny has typically focused on whether the family’s generous campaign donations have helped its patriarchs avoid extradition, the unorthodox help given to Ms. Isaías, the daughter of Roberto, has received little attention.

In the spring of 2011, Ms. Isaías, a television executive, was in a difficult situation.

Her father and uncle were Ecuadorean fugitives living in Miami, but she was barred from entering the United States after she brought maids into the country under false visa pretenses and left them at her parents’ Miami home while she traveled.

“Alien smuggling” is what American consular officials in Ecuador called it.

American diplomats began enforcing the ban against Ms. Isaías, blocking her from coming to Miami for a job with a communications strategist who had raised up to $500,000 for President Obama.

What happened next illustrates the kind of access and influence available to people with vast amounts of money.

A Senator’s Assistance
For more than a year, Senator Robert Menendez, Democrat of New Jersey, and his staff engaged in a relentless effort to help Ms. Isaías, urging senior government officials, including Mrs. Clinton’s chief of staff, Cheryl Mills, to waive the ban. The senator’s assistance came even though Ms. Isaías’s family, a major donor to him and other American politicians, does not live in his state.

The Obama administration then reversed its decision and gave Ms. Isaías the waiver she needed to come to the United States — just as tens of thousands of dollars in donations from the family poured into Mr. Obama’s campaign coffers.

An email from Mr. Menendez’s office sharing the good news was dated May 15, 2012, one day after, campaign finance records show, Ms. Isaías’s mother gave $40,000 to the Obama Victory Fund, which provided donations to the president and other Democrats.

“In my old profession as a prosecutor, timelines mean a lot,” said Ken Boehm, a former Pennsylvania prosecutor who is chairman of the National Legal and Policy Center, a government watchdog. “When a donation happens and then something else happens, like the favor, as long as they are very, very close, that really paints a story.”

In 2012, the Isaías family donated about $100,000 to the Obama Victory Fund. Campaign finance records show that their most generous donations came just before a request to the administration.

Ms. Isaías’s mother, María Mercedes, had recently donated $30,000 to the Senate campaign committee that Mr. Menendez led when she turned to him for help in her daughter’s case. At least two members of Mr. Menendez’s staff worked with Ms. Isaías and her father, as well as lawyers and other congressional offices, to argue that she had been unfairly denied entry into the United States.

Over the course of the next year, as various members of the Isaías family donated to Mr. Menendez’s re-election campaign, the senator and his staff repeatedly made calls, sent emails and wrote letters about Ms. Isaías’s case to Mrs. Clinton, Ms. Mills, the consulate in Ecuador, and the departments of State and Homeland Security.

After months of resistance from State Department offices in Ecuador and Washington, the senator lobbied Ms. Mills himself, and the ban against Ms. Isaías was eventually overturned.

Mr. Menendez’s office acknowledged going to bat for Ms. Isaías, but insisted that the advocacy was not motivated by money.

“Our office handled this case no differently than we have thousands of other immigration-related requests over the years, and to suggest that somehow the senator’s longstanding and principled beliefs on immigration have been compromised is just plain absurd,” said Patricia Enright, the senator’s spokeswoman.

Ms. Enright said Mr. Menendez’s office worked on the case because Ms. Isaías had previously been allowed to travel to the United States six times despite the ban, and the decision to suddenly enforce it seemed arbitrary and wrong. She said the senator routinely acted on cases he got from across the nation.

Mr. Menendez is currently under investigation by the Justice Department for his advocacy on behalf of another out-of-state campaign donor, Dr. Salomon E. Melgen, who ran afoul of federal health officials for unorthodox Medicare billing.

In the Isaías case, the senator wrote seven letters for various members of the family, including four on April 2, 2012, alone.

A month after succeeding in Ms. Isaías’s case, Mr. Menendez sent another letter to the head of the United States Citizenship and Immigration Services to waive a ban on her sister, María — who had also been deemed an immigrant smuggler because she had brought maids into the United States and left them with her parents while she traveled abroad.

As that letter went out, their mother gave $20,000 more to the Obama Victory Fund.

Immigration officials forwarded the senator’s inquiries to Homeland Security Investigations, the immigration bureau’s investigative arm. Officials there noticed that the Isaías family had made several donations to the senator, and informed the F.B.I. in Miami.

Agents with Homeland Security Investigations are working to have the Isaías brothers deported. The Ecuadorean government has repeatedly requested that the men be extradited, but Washington has declined, saying that the extradition request was poorly prepared and did not meet legal standards. The criminal case in Ecuador was also marred by irregularities.

Support on Capitol Hill
The Isaías brothers consider themselves political exiles unfairly attacked by the Ecuadorean government and have garnered support on Capitol Hill, where sentiment against Ecuador’s leftist president runs strong.

But the case involving Estefanía could prove awkward for Mrs. Clinton, who was in charge of the State Department at the time high-ranking officials overruled the agency’s ban on Ms. Isaías for immigration fraud, and whose office made calls on the matter.

Alfredo J. Balsera, the Obama fund-raiser whose firm, Balsera Communications, sponsored Ms. Isaías’s visa, was featured recently in USA Today as a prominent Latino fund-raiser backing Mrs. Clinton for president in 2016.

Mr. Balsera declined repeated requests to explain what work Ms. Isaías had done for his company, which has close ties to the Obama administration. To stay in the country under her three-year visa, Ms. Isaías would have to remain employed by Balsera Communications, request a change of immigration status or get another employer to sponsor her.

The company website does not list her as one of its 12 employees, though it has biographies and photos of even junior account executives, and news releases were issued when others were hired. Ms. Isaías’s name has not been mentioned on the company’s blog, Facebook page or Twitter timeline, and she is not present in any of the dozens of photographs posted on social media sites of company outings, parties, and professional and social events.

David A. Duckenfield, a partner at the company who is now on leave for a position as deputy assistant secretary of public affairs at the State Department, said Ms. Isaías worked for the firm but declined to comment further. Another senior executive at the firm said she must work outside the office because he had never heard of her.

A spokesman for Mrs. Clinton and her chief of staff, Ms. Mills, denied any special treatment for Ms. Isaías. Although Ms. Mills is unlikely to serve in any official capacity on a potential 2016 presidential campaign, she would undoubtedly be a strong behind-the-scenes presence and one of a small number of longtime advisers whom Mrs. Clinton would rely on for advice.

“There are rigorous processes in place for matters such as these, and they were followed,” said the spokesman, Nick Merrill. “Nothing more, nothing less.”

A White House spokesman, Eric Schultz, declined to comment, saying that visas are issued free from political interference by other federal agencies.

‘Not His Constituents’
Linda Jewell, the American ambassador in Quito, Ecuador, from 2005 to 2008, when Ms. Isaías’s immigration fraud was detected, said the intervention in Ms. Isaías’s case was far from routine.

“Such close and detailed involvement by a congressional office in an individual visa case would be quite unusual, especially for an applicant who is not a constituent of the member of Congress,” Ms. Jewell said after reviewing emails and documents related to the case. “This example of inquiry is substantially beyond the usual level of interest.”

Others have expressed concern. When Mr. Menendez’s office reached out to Senator Bill Nelson, Democrat of Florida, to get him to write a letter on Ms. Isaías’s behalf, his office refused.

The office “discovered from the State Department that there were some red flags associated with the individual in question, and we took no further action,” said Mr. Nelson’s spokesman, Dan McLaughlin.

Mr. Boehm, the former Pennsylvania prosecutor, said Senate ethics rules allowed members of Congress to reach out to the administration on behalf of a constituent. “Members of Congress do a lot for their constituents,” Mr. Boehm said.

“These folks are not his constituents,” he added, referring to Mr. Menendez.

The Isaías family did not return several requests for comment. Ms. Isaías did not respond to emails and messages left at her home in Miami. Her lawyer, Roy J. Barquet, did not respond to phone and email messages.

In an interview this year, Roberto Isaías said the family’s donations were targeted to members of Congress who fight for human rights and freedom of speech in Latin America. He said he had met Mr. Menendez once or twice. “If you go to his website,” Mr. Isaías said, “it says, ‘If you have an immigration problem, call me.’ ”

The senator’s website does offer such casework assistance, under a category titled “Services for New Jerseyans.”

Credit: The New York Times,; Photo caption: Roberto Isaías; Hilary Clinton and President Rafael Correa in Quito in 2010 |Digg It! |Furl |Reddit |StumbleUpon
Categories: Ecuador

It’s Ecuadorian workers vs. China after hydro plant accident; Government says there was no ‘malicious intent’

Cuenca High Life - Thu, 12/18/2014 - 08:09

According to several constructions workers at the Coca Codo Sinclair hydro-electric plant east of Quito, employees have been warned by project managers not to discuss last weekend’s deadly cave-in on the site with the media. The 1,500 megawatt plant is scheduled to become operational in early 2016.

The accident in a pressure chamber killed ten Ecuadorian and three Chinese workers. Thirteen more were seriously injured in the cave-in that was caused when higher than expected pressure from the surrounding underground aquifer flooded the chamber.

“They are telling us that we will be fired if we talk to the newspapers about what happened,” said a Coca Codo employee. He said that workers have complained for months to supervisors about what they say are unsafe working conditions throughout the project. “This didn’t need to happen,” the employee said. “We didn’t need to lose our friends.”

All workers who spoke to the media asked not to be named.

Several workers told reporters for El Comercio and Televisa on Sunday that the Chinese construction company managing the project, Sinohydro, has been told repeatedly about dangerous working conditions in the pressure wells.

The workers disputed a statement by company officials that all safety standards had been followed.
"Three days before the accident, the Chinese engineers  examined the well and saw the problems but did nothing," one worker said. He also said that construction workers in the area are not issued hardhats, masks or work suits. “The Chinese do not seem concerned about our health,” he said.

According to workers, the threats were delivered by Marcelo Reinoso, administrative assistant to a Sinohydro project manager. “He told us not to talk to television and newspapers and said we could lose our jobs if we did,” one employee said.

Reinoso denied that he had made any threats but said that workers needed to maintain a positive working attitude. "We do not want unhappy people here, but people with a cheerful attitude," he said.

Sinohydro’s director of human relations, Miriam Baldeón, said that her office will meet with all workers concerned with working conditions on the project. “We abide by all safety requirements and will continue to do so,” she said, adding that her staff  is meeting with Ecuadorian Social Security officials to review safety procedures.

Ecuador Attorney General is investigating the accident but says he believes there was no “malicious intent” leading to the accident. He said he will continue to meet with representatives from Synohidro. "We want to be sure that safety procedures were in place and were appropriate prior to the accident," he said.

In addition to safety issues, some workers say that there are serious cultural differences between Chinese management and Ecuadorian workers. “They don’t understand us and they don’t respect us,” a worker said.

Several families of those killed and injured say they intend to pursue legal action against Synohidro.

Coca Codo Sinclair is one of eight hydro-electric projects currently under construciton in Ecuador, including two in Azuay Province. All are partially funded by the Chinese government with construction managed by Synohidro.

Photo caption: A tunnel at the Coca Codo Sinclair construction site. |Digg It! |Furl |Reddit |StumbleUpon
Categories: Ecuador

Ecuador, Latin America applaud U.S. - Cuban decision to reestablish relations; Is it Obama's greatest act?

Cuenca High Life - Thu, 12/18/2014 - 08:02

By Kate Kilpatrick

Latin America’s top officials appeared unanimous in their celebration Wednesday of a new chapter in United States-Cuba relations, which will witness the renewal of diplomatic ties and the easing of sanctions that have helped raze the Cuban economy.

Latin America has long lobbied the U.S. to lift its 55-year embargo against Cuba.

Venezuela, Cuba’s strongest ally in the region, called the news a “moral” and “historic” victory. President Nicolás Maduro, whose own country is at risk of U.S. sanctions due to political repression, said the release of the three Cuban detainees marks “a victory for Fidel and the Cuban people.”

Somewhat surprisingly, he also praised his U.S. counterpart.

“We must recognize the gesture of Barack Obama, his courage,” said Maduro. “It might be the most important act of his presidency. Obama has said he cannot continue insisting one bringing Cuba to collapse.”

Ecuadorian president Rafael Correa called the announcement “good news” for Latin America. "The reestablishment of relations is an historic diplomatic event," he wrote on his Twitter account, adding that the governments of the U.S. and Cuban deserve equal credit.
Mexican President Enrique Peña Nieto called Cuba a “brother country” that deserves “equal status and equal rights with all other countries of the hemisphere.” Peña Nieto said his government fully endorses normalized relations between the United States and Cuba, and will continue to take actions to support the island nation.

Peru also pointed to its strong ties with Cuba, where many Peruvian students study medicine. President Ollanta Humala appeared on Peruvian TV to applaud the “important, historic and courageous step,” pointing out that Peru has long supported greater integration of Cuba in the region.

Argentina’s Cristina Fernández de Kirchner offered her “deep respect to the Cuban people and their government,” which she commended for upholding their ideals while moving forward with post-blockade relations.

Kirchner called for ongoing diplomacy and constructive dialogue, along with the support of the entire region. "Cooperation without grudges,” she said, “recognizing the difficulty of the task and sincerely supporting it. Helping to obtain a result without looking for anything in return."

Colombia president Juan Manuel Santos said his government would do whatever is needed to make the next Summit of the Americas — set to take place in Panama City in 2015 — a historic reunion. He stressed the thaw in tensions was “great news for the region and the world.”

“On behalf of all the Colombian people and I think the whole continent, we celebrate the boldness and courage of President Obama and the Cuban government to make this decision," Santos said. "It is a fundamental step for the normalization of the two countries that will impact very well in the hemisphere."

Panamanian president Juan Carlos Varela was also looking toward the next Summit of the Americas, to be held in April. “I welcome the new era in U.S.-Cuba relations,” Varela tweeted. “At the Summit of the Americas we will fulfill the dream of a united region.”

In Chile, Minister of Foreign Relations Heraldo Muñoz called the Obama and Castro speeches the beginning of the end of the cold war in the Americas. “The cold war persisted in our region, in our American hemisphere,” Muñoz said, citing the blockade and absence of diplomatic relations between the U.S. and Cuba. “So this is a step to make that definitively the past.”

Nicaraguan President Daniel Ortega, in a statement, called the joint-messages a “new era in the history of our America and the Caribbean,” one of restitution for Cubans of the rights “that had been usurped by North American authorities.” Ortega said Cuba “keeps surprising the world with the deployment of all its capabilities.”

Several of the leaders highlighted the role of Pope Francis, who Maduro referred to as “the Latin American pope,” in mediating between the two nations.

“Congratulations to his Holiness Pope Francis on his birthday and for his valiant efforts in search of American unity,” Panama’s Varela tweeted.

“Coming from our lands,” said Ortega, “[Pope Francis] has managed to promote equitable solutions to repair damage and historical mistakes.”

Credit: Al Jazeera News,; Photo credit: U.S. President Barack Obama. |Digg It! |Furl |Reddit |StumbleUpon
Categories: Ecuador

Proposed municipal ordinance would crack down on ‘informal’ tourist services, including some by expats

Cuenca High Life - Wed, 12/17/2014 - 08:02

Local tourism agencies are proposing a new city ordinance to stop what they say is the rapid spread of illegal tourist services in Cuenca.

The Azuay Chamber of Tourism and Cuenca Tourism Foundaton with assistance from hotel and restaurant owners, tour and transport services, say the ordinance would increase enforcement and stiffen penalties for violators.

A prime target of the ordinance would be daily and weekly rentals offered to tourists, many by English-speaking expats, that hotel owners say hurt their business. Part of the stepped up enforcement would be heightened monitoring of websites such as Vacation Rentals by Owner (VRBO) and AirBnB, as well as local English-language websites and blogs that advertise short-term rentals.

According to Ivan Lopez, advisor to the National Chambers of Tourism, informal operators of tour and transportation services and short-term rentals are an assault on licensed and regulated tourism providers. “The tourism service owners and employees need protection from illegal activity since it harms their livelihoods,” Lopez said. “Enforcement of existing laws and regulations must be increased and new regulations are needed to stop these practices. This is needed not only in Cuenca but in the entire country,” he said.

Patricio Miller, president of the Azuay Chamber of Tourism, agrees. “There has been a consistent lack of enforcement of the laws in the area of tourism in Cuenca which allows hundreds of illegal operations to function,” he said. He added that an area of high concern is illegal short-term rentals. “We have complained about this many times and very little has been done. We need this ordinance.”

Hotel owner Joaquin Vega said that hotel owners are satisfied with the ordinance and will help in its enforcement. "We know the names of apartment owners engaged in short-term rentals and we can provide these to authorities," he said. "We also plan to watch the websites where these rentals are offered," he said. He said that the problem has grown rapidly as the number of foreign residents in Cuenca has increased.

Vega added that short-term rentals damage restaurants as well as hotels. "If people staying in illegal rentals were in our hotels, they would eat more meals in restaurants."

The proposed ordinance was sent Tuesday to Mayor Marcelo Cabrera and the Cuenca municipal council where it has broad support according to tourism officials.

Photo caption: Hotel owners say a crack down on illegal rentals will also increase restaurant business. |Digg It! |Furl |Reddit |StumbleUpon
Categories: Ecuador

Weekly town meetings help keep President Correa’s popularity high; So far, he’s held more than 400 of them

Cuenca High Life - Tue, 12/16/2014 - 08:09

By Sylvan Hardy

He preaches, he cajoles, he pleads. He laughs, he cries. Sometimes, he dances and sings. Almost always, the audience applauds. Or, laughs, cries, sings and dances with him.

Two weeks ago, President Rafael Correa marked his 400th weekly town meeting in the rural village of Guayllabamba, north of Quito. Called sabatinos, because they are held on Saturday, the three-hour productions combine politics and entertainment and are held in a different city or village each week. Correa has even hosted them in the U.S. and Spain when he was traveling abroad.

The meetings, which have been attended by as many as 15,000, depending on the venue, are broadcast on most of Ecuador’s television channels as well as on radio on Saturday monrings, and are credited by political analysts with keeping Correa’s popularity consistently above 50%. The show is also broadcast overseas via Skype in the U.S., Spain and Italty, where hundreds of thousands of Ecuadorians live.

More than anything, the sabatinos serve as bully pulpit for the president and his Citizens’ Revolution. It is where he announces new government programs and policies, often pleading with his audience for support. It is where he talks about the possibility that he may seek another terms as president. It is also where he attacks his critics with multi-media snippets, complete with sound and laugh tracks.

The sabatinos typically begin with a weekly report of presidential activities, during which Correa narrates video showing him at various functions and events. Recently, the video and narration followed him in visits to a home for the elderly, a school and a hydro-electric dam project.

Almost no subject is off limits. Correa has talked football, teen pregnancy, gay rights, fishing, fast cars, pretty women and cuy recipes. In November, he brought his golden retriever on stage along with her puppies.

Even by international standards, the sabatinos are slick productions, with music that plays on cue and professionally produced videos. As with a football television broadcasts, the cameras scan the audience, picking out faces to show on the big screen on stage behind Correa. There’s even a sidekick, Franklin Rea, who acts as announcer and, occasionally, as straight man for presidential jokes.

“The sabatino is my connection with the people and their connection with me,” Correa said recently in an interview. “In the past, once a president was elected in Ecuador he usually disappeared from public sight. Maybe that’s why most presidents only lasted a year or two,” he said.

In a recent sabatino, Correa told his audiences that the country faces belt-tightenting due to slumping oil prices. “We must be prepared for difficult times and must understand that we will have to do without some things,” he said. “Maybe we can only build 100 schools instead of 200 next year. We must be careful with our resources.”

Over the years, Correa has invited singers, dancers, poets, comedians and acrobats to participate in the event. “We need to make sure that all of you are awake,” he said in July following a rock group’s presentation that ended with a burst of fireworks.

Correa concedes that three-hours may be too long for the sabatinos but says he has a lot to talk about. “We try to keep it interesting since most of what we talk about is important,” Correa said. He added: “Sometimes, by the end, I think I’m the only one paying attention.”

Photo credit: Correa during a recent sabatino. |Digg It! |Furl |Reddit |StumbleUpon
Categories: Ecuador

Ecuador’s legal battle to win oil pollution settlement from Chevron Oil moves to the Canadian Supreme Court

Cuenca High Life - Tue, 12/16/2014 - 08:07

By Jane Gerster

On the banks of the Aguarico River, where the only respite from stifling humidity and the blazing sun is a dip in the contaminated water, Eduardo Silvio Chapal’s grandchildren splash, oblivious to the decades-long battle over who is responsible for cleaning up their jungle playground.

Chapal, 64, was born and raised here, in Ecuador’s Lago Agrio region, in an indigenous community of about 80 families. So were his children and his grandchildren. From his hammock, he lists his complaints: the children now are shorter and sicker; there are more stillborn babies; there are fewer animals.

“And fish,” he sighs. “They had a delicious taste, a nice taste. Now ... it smells like petroleum.” But the people still catch, cook and eat them.

Chapal is one of roughly 30,000 people who inhabit the 1,500-square-kilometre area, some 300 kilometres east of the capital Quito. They call themselves Los Afectados — the Affected Ones. What affects them is pollution — caused, they claim, by oil drilling that Texaco, which merged with Chevron Corp. in 2001, did there years ago.

While the Supreme Court of Canada in Ottawa is far from Lago Agrio, it’s there, beginning Thursday, that Los Afectados hope to gain the right to attempt to enforce an Ecuadorian verdict of $9.51 billion (U.S.) against Chevron Canada Ltd., the company’s Canadian subsidiary.

It’s the latest chapter in one of the world’s longest-running and bitterest environmental disputes. The battle has lasted longer than Texaco’s time in Ecuador.

In 1964, Texaco partnered with Ecuador’s state-owned oil company, Petroecuador, to drill for oil. By 1972 the oil had begun to flow. Over two decades, some went astray. In 1992, Texaco sold its interest in the consortium to Petroecuador, thereby disposing of its Ecuadorian assets.

Texaco had scarcely left Ecuador when it found itself defending a legal action brought by Los Afectados, demanding money to clean up the toxic mess left behind. Lawyers for the indigenous people filed suit in the United States in 1993. A federal trial court dismissed the case on the condition that Texaco agree to “submit to the jurisdiction of the Ecuadorian courts.” It did.

During the trial, Texaco entered into a remediation agreement with Ecuador. This required Texaco to remediate selected production sites while Petroecuador committed to perform any remaining cleanup. The government of Ecuador oversaw Texaco’s $40-million remediation and certified its completion in 1998, thereby releasing Texaco from further environmental liability. Petroecuador, however, failed to do its part. It continued and expanded its drilling in Lago Agrio.

More than a decade later, in 2011, the Ecuadorean court awarded Los Afectados $18 billion (U.S.) — a judgment later reduced to $9.51 billion. Chevron, which had taken over Texaco, fought what it called a “fraudulent” decision by filing a civil lawsuit against Los Afectados’ attorneys.

Last March, the court ruled in Chevron’s favour.

“The pattern at issue in this case comprises, at the very least, a five-year effort to extort and defraud Chevron,” the judge wrote in his almost-500-page decision.

Though the judge ruled that the Ecuadorian verdict was unenforceable abroad, that was overturned on appeal. Chevron has no assets in Ecuador, and so Los Afectados continues their systematic fight to have the Ecuadorian judgment enforced in countries where Chevron still has assets, including Canada.

Alan Lenczner, the Toronto-based lawyer representing Los Afectados, expects the Supreme Court of Canada to rule in his client’s favour. “I’m hopeful, more than hopeful,” he said. “I believe that they will.”

The first round of the Canadian fight went to Chevron: the Ontario Superior Court agreed Ontario had the jurisdiction to hear foreign proceedings, but stayed the case because Los Afectados “have no hope of success” in accessing Chevron’s assets from within the province. That ruling was overturned on appeal.

The Ontario appeal court noted the broader pattern of the struggle: “For 20 years, Chevron has contested the legal proceedings of every court involved in this litigation — in the United States, Ecuador and Canada.”

Chevron continues to fight.

In an emailed statement, Chevron spokesperson Morgan Crinklaw said: “Chevron Corp. and Chevron Canada Limited look forward to demonstrating to the Supreme Court of Canada that the trial court in Ontario has no jurisdiction to hear the action brought by the Ecuadorian plaintiffs.”

Chevron’s resolve was never clearer than when a company spokesperson — reacting to the Ecuadorian trial, but seemingly foreshadowing the Canadian lawsuits to come — said: “We’re going to fight this until hell freezes over. And then we’ll fight it out on the ice.”

From her home less than 16 metres from one of the old Texaco-Petroecuador oil wells, Mercedes Mikaela Jimenez Romero awaits the outcome of each and every legal battle.

The mother of 11 is skeptical Los Afectados will ever see the land and water remediated; the idea that any areas were ever remediated makes her snort.

Indeed, if you dig a few centimetres into the earth you find fetid, sludgy dirt. Mix it with water and it sticks to your fingers, oily and sparkling in the sun.

“If we had money we would have left a long time ago,” Jimenez Romero said. She relies on a donated rainwater collection and filter system to drink. Even that is yellow-tinged and her stomach always hurts. It’s better than the alternative: “When it doesn’t rain, we don’t have water.”

Credit: The Toronto Star,; Photo caption: Mercedes Mikaela Jimenez Romero says she can't afford to leave her home in Lago Agrio. |Digg It! |Furl |Reddit |StumbleUpon
Categories: Ecuador