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Ecuador detained fourteen top officials
in Petroecuador graft probe

El Universo

Oil Minister Rene Ortiz in picture urges Petroecuador to "act decisively in the face of such acts that cause enormous damage to the country"...and to "take energetic actions to get to the bottom of the cases".

- Comptroller and previous Petroecuador CEO among those detained
- Scandal follows guilty plea of bribery by former Gunvor trader

By Stephan Kueffner/Bloomberg

Petroleumworld 04 15 2021

Ecuador detains former top oil officials in latest graft probe including Pablo Flores, the one-time boss of state-owned Petroecuador, less than a week after allegations of bribery involving the company emerged from a U.S. investigation.

A team of prosecutors and police led by Prosecutor General Diana Salazar searched residences and offices in three Ecuadorian cities and seized computers and cash. Those detained under suspicion of organized crime also include Pablo Celi, the current comptroller general and former Oil Minister Jose Agusto.

A spokesman for the office of the prosecutor said Tuesday he couldn’t comment as to whether the raids were related to the bribery revelations linking Petroecuador with commodity traders Vitol Group and Gunvor Group Ltd. A former Gunvor employee pleaded guilty in New York last week to helping bribe Ecuadorian officials to win oil deals. Gunvor said it’s cooperating with the U.S. probe.

“We’re finally seeing a prosecution that is acting according to the information in its possession,” said Mauricio Alarcon, a lawyer and the head of transparency watchdog Fundacion Ciudadania y Desarrollo. The detainees could be released soon though given the detentions are only for investigative purposes at this time, he said.

The corruption probe -- which the prosecution began work on in June 2019 -- is the latest among several graft cases that have been investigated in the U.S. since 2017 involving Petroecuador. In addition to the Gunvor scandal, oil trader Vitol agreed to pay $160 million last year to settle allegations that it conspired to pay bribes in Latin America, including to Petroecuador. Petroecuador has since severed ties with both traders.

Cash, Safes, Phones

More than $30,000 in cash along with safes, financial information and mobile phones were seized from a search this week involving 25 properties in Quito, Guayaquil and Samborondon, the prosecutor said on Twitter.

The police and government will support the prosecution’s independent investigation and all executive offices including the energy ministry have been told to provide any required information, Ecuador Interior Minister Gabriel Martinez said in a video on Tuesday. President Lenin Moreno said on Twitter that he had been informed of the investigation and would continue to respect the independence of the judiciary.

Moreno will be succeeded on May 24 by Guillermo Lasso, the first fiscal conservative to govern the South American country in nearly two decades. Early in Moreno’s term in mid-2017, he kept his distance from investigations that ultimately led to a six-year jail term for Jorge Glas, Moreno’s vice president. While his own predecessor, Carlos Polit, fled to Miami, Celi at the time played an active role in investigations of officials with Salazar.

The prosecution’s increased independence will lead to renewed investigative activity in Ecuador and Salazar pouncing “is a product of the electoral outcome,” said Alarcon. “Lasso gives a sensation of tranquility, of stability and of independence of branches and institutions that has allowed the prosecution to start to act almost immediately.”

Fight Against Corruption

In a letter to Oil Minister Rene Ortiz dated April 11, Petroecuador CEO Gonzalo Maldonado said that “the fight against internal corruption is a priority” to “finish the enormous and intolerable corruption” that has afflicted the company for years. Petroecuador has cooperated in investigations of several cases of bribery and money laundering, including the construction of a multipurpose pipeline by Brazilian construction company Odebrecht SA, the Vitol and Gunvor cases, and bribery by officials at state insurance company Seguros Sucre.

Since the Gunvor scandal, Petroecuador has requested sworn statements from PTT International and Petrochina stating that the companies and their employees had “no relation with the described possible acts of corruption” to the case, according to Maldonado’s letter.

Shortly before the merger between Petroecuador and its upstream counterpart Petroamazonas ended in January, confidential papers filed at the latter were shredded, although digital backups exist, the letter said. Meanwhile, the comptroller’s headquarters in the capital are still partially in ruins after arsonists burned it under the cover of fuel riots in October 2019.

A spokesman for the Comptroller General’s Office said he was unaware of who has replaced Celi as he had not been officially informed beyond the prosecution’s information on social media.


By Stephan Kueffner from Bloomberg
04 14 2021



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