Ecuador Audit Calls for Default on Debt

[Judi Lynn]

Ecuador Audit Calls for Default on Debt
By Jeanneth Valdivieso
Associated Press
Friday, November 21, 2008; Page D04

QUITO, Ecuador, Nov. 20 -- A presidential commission recommended Thursday that Ecuador default on almost 40 percent of its foreign debt after finding "illegalities and illegitimacies" in the contracts.

President Rafael Correa said he would seek to halt payment on those debts and hold foreign investment banks and ex-government officials responsible, but fell short of declaring a default.

An audit made public Thursday advises Correa's government to default on $3.9 billion in three types of bonds issued as part of a debt restructuring in 2000. It says the negotiations lacked transparency and caused "incalculable" damage to Ecuador's economy.

The report also accuses former Ecuadorean officials and investment banks including U.S.-based J.P. Morgan and Salomon Smith Barney, now part of Citigroup, of profiting from the restructuring.

More:
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/20/AR2008112003715.html

[Judi Lynn]

1. For interested DU'ers, here are photos taken of Democratic Rep. Jim McGovern's November Ecuador trip

Nov 14 Back from Ecuador

Relations with Ecuador, U.S. Congress, Beyond Colombia

We returned last night from our visit to Ecuador with Rep. Jim McGovern (D-Massachusetts). The delegation spent three days in Ecuador’s eastern Amazon basin region, near the border with Colombia. We visited sites that had been badly contaminated by oil production, the subject of ongoing litigation between U.S. oil company Chevron and thousands of citizens from the region. We visited towns bordering Colombia where local populations were dealing with continued high refugee flows, threats from illegal armed groups, and violence from a narco-economy that continues to flourish. And we spent a day in Quito meeting with officials.



Rep. Jim McGovern (D-MA) at Yuca 5 oil well site, November 9



38 Oil Well Site, November 10

More:
http://www.cipcol.org/?cat=7

Additional pages of photos to study:
McGovern Ecuador Delegation
http://flickr.com/photos/56949428@N00/sets/72157609051737118/detail/
http://www.flickr.com/photos/abigailpoe/sets/72157609064612914/detail/