Comptroller determined eight irregularities in debt management

Ecuadornews:

The audit had indications of criminal liability against former President Rafael Correa and other authorities for carrying out unsupported financial transactions and regulatory changes between January 2012 and May 2017. Evidence of criminal liability established the Office of the Comptroller General of the State (CGE) against the former president Rafael Correa, the former finance ministers, Patricio Rivera and Fausto Herrera, and other former officials, for the handling of the public debt.

On Monday, April 9, the surrogate controller, Pablo Celi, presented the Final Report DNA3-0007-2018 that contains the special examination of the legality, sources and uses of public debt, internal and external, between January 1, 2012 and on May 24, 2017. The conclusions of the audit suggest that Correa decreased the level of indebtedness, when it approached the allowed limit (40% of GDP), using Executive Decree 1218. Ministers are also appointed for that action of Economy and Finance, which during the time evaluated were Patricio Rivera and Fausto Herrera; the undersecretaries of public financing, among other authorities.

On them, the Comptroller’s Office also determined administrative responsibility with a fine and dismissal. The special examination analyzed the Ministry of Economy and Finance (MEF), the Central Bank of Ecuador (BCE), the National Secretariat of Planning and Development (Senplades) and other entities related to the contracting and use of public resources from domestic debt and external

The recommendations of the audit are numerous and are mostly directed to the MEF. Among them is the willingness to publish the aggregated debt statements, which are not available since January 2017. This information includes the total headings of the internal and external debt as a whole. As of January 2018, according to the MEF, the sum of both results in $ 49,602 million.

That figure, without counting the pre-sale of crude oil and other domestic obligations, already exceeds the legal limit of indebtedness. However, when Decree 1218 continues to apply, the consolidated debt is taken into account, which to date accumulates $ 35,709 million, remaining within the permitted range.

In this regard, the Comptroller’s Office also arranges the reconciliation of debt securities between the undersecretaries of financing and government accounting. The audit process was accompanied by a Citizens’ Oversight Office consisting of 11 people, including former public officials, analysts and business leaders.

Everyone attended the reading of the final report. Roberto Aspiazu, executive director of the Ecuadorian Business Committee (CEE), commented that the conclusions on Decree 1218 constitute a message of “sincere the real amount of the debt”. “We know that the debt is above 40% of GDP and with problems.

The debt derived from oil pre-sale contracts is not accounted for, nor is the State’s debt with the IESS, “said Aspiazu. He added that for this reason the Ministry of Finance must submit an economic stabilization plan to the National Assembly.

Academic Pablo Dávalos confirmed that the Comptroller’s Office forwarded the report with indications of criminal responsibility to the Attorney General’s Office. He supported that Finance propose to the Legislative a stabilization program in order to obtain approval to cover the existing financing needs. “This brings us to the determination of the debt. The Government must change the fiscal framework of 40% because the new debt issues run the risk of being qualified by the Comptroller’s Office as outside the legal limit, “explained Dávalos.

Correa went ahead with the accusations by expressing himself first in social networks, where he wrote that “if you do not want to measure debt, but liabilities would have to measure assets and that only in investment there were $ 90,000 million in 10 years.” In a radio interview, the former president disqualified the Comptroller, whom he described as “impostor and instrument of persecution.”

It was ratified in the legality of its actions, since the decree applies criteria of the International Monetary Fund (IMF). “Suppose we passed the debt limit. Where is a criminal responsibility? For there to be criminal liability there must be fraud, benefits of third parties. Who has made a profit, what damage has been done? “Correa replied. Finally, he said that the Economy Minister, María Elsa Viteri, acknowledged that the public debt is below 40%.

The official spoke on the subject on Sunday, in a television interview, where she said that “there is a discrepancy in terms of the debt figure,” but clarified that, although the liabilities are “quite high,” has exceeded the ceiling.

Newspaper El Telegrafo tried, without success, to communicate with former ministers Rivera and Herrera. The last one wrote on Twitter that “the Comptroller’s Office became a tool of political persecution, which does not measure the consequences of its actions”. (I)

Source: https://www.eltelegrafo.com.ec/noticias/economia/4/contraloria-irregularidades-deudapublica-ecuador