Seizing the Assets of the Isaias Group as a Political Strategy

Seizing the Assets of the Isaias Group as a Political Strategy

On July 8, 2008, Rafael Correa ordered the confiscation of all assets belonging to the Isaias Group.

The police and military action for the confiscation was commanded by the AGD (Guarantee and Deposit Agency of Ecuador), who seized more than 900 companies, additionally they took all the personal assets of this family. Assets that the family and the Isaias Group had achieved over 80 years of work, investments and constantly innovating in many business areas.

That AGD (Guarantee of Deposits Agency of Ecuador) is the same one, that 10 years before, had stayed Filanbanco: the largest bank in Ecuador, that belonged to the Isaias family for more than 40 years.

The Government’s Ruse

Filanbanco became the strongest and most important bank in Ecuador, after the Isaias Group acquired it in 1958 in its beginnings. That was the bank, which focused on giving credits to Ecuadorians, to grow their businesses, agribusiness, the fishing sector, and the shrimp industry. It is estimated that there were one million clients in their credit portfolio.

The bank, during the presidency of Roberto Isaias and William Isaias as vice-president, also became one of the most important financial entities for world markets, since Filanbanco was assigned to handle most of the international credit operations.

In 1998, after a long crisis in the country as a result of the climate phenomenon “El Niño”, the “White Spot”, the lack of public services, political instability, and the devastating Asian crisis; customers who had grown up with Filanbanco, and now had lost everything, began to stop paying the loans granted by the bank.

The bank thus suffered a momentary lack of liquidity, which could surely be overcome in a short time and with the help of the government. But that was not the case, although the Central Bank of Ecuador provided financial assistance as established by law, this assistance was granted under restrictions, obstacles and deceptions, which the government planned in collusion with powerful economic groups that despised the Isaias. Filanbanco remained under an unrecoverable situation, at least for the time being.

Filanbanco in the Hands of the Ecuadorian Government

Irremediably, the Isaias Group handed over the bank to the “Guarantee of Deposits Agency of Ecuador” (AGD) on December 2, 1998. At this time, all the assets belonging to the bank were handed over to the government, and all the prior commitments acquired by Filanbanco were fulfilled until that day. All of Filanbanco’s clients received their deposits in full, and all creditor debts were completely payed.  Likewise, all the money previously handed over by the Central Bank of Ecuador – as part of the financial aid packet –was accounted for.

The bank thus passed into the hands of the government, and became insolvent in 2001. The reason for the bankruptcy has been recorded in many documents, and it has been clearly showed that there was corruption in the AGD (Guarantee of Deposits Agency of Ecuador), as well as lack of transparency in the administration of the bank. Ultimately, the government used   Filanbanco as the “petty cash” for institutions with solvency problems that conveniently belonged to economic groups who were favored by the government.

The AGD has been questioned for its trajectory of corruption, and mishandling of all its operations. It has also been accused of being responsible for the so called “bank holiday”, which caused great economic loss and suffering to the Ecuadorian people.

Political Persecution

However, the AGD has never recognized before the law that Roberto and William Isaias fulfilled all their commitments and that they owe nothing to the savers or the nation. On the contrary, the AGD began a persecution sponsored by politicians and economic powers to take them to a “rigged” trial that jeopardized the integrity of the Isaias brothers.

In the year 2000, the mismanagement by the Ecuadorian justice forced the Isaias brothers to leave their country as victims of political persecution leaving their possessions, and a history of 100 years.

When Rafael Correa came to power in 2007, with a social resentment disguised as justice that accompanies the so-called “21st century socialism” regimes, the persecution against the Isaias increased fiercely. They were then accused of “peculate” and of all the evils that happened in the country. Correa resorted to legal proceedings to obtain his extradition but was always denied for not presenting convictions and much less proven causes.

Confiscation of the Isaias’ Group Assets

On July 8, 2008, Correa, still unable to act judicially against the Isaias Group decides to take an unprecedented action in the country, he issues an illegal order to confiscate all assets of Roberto and William Isaias.

Police and military personnel raided offices, factories, warehouses, sugar industries, hotels, telecommunications companies, television plants and radio stations that all belonged to the Isaias family.

The action commanded by the agents of the “AGD” was disproportionate, reaching out from their workplaces all employees who opposed the different companies of the Isaias Group. Even today, evidence can be found in journalistic reviews.

The confiscation of Isaias Group’ assets, according to accounting records, totals almost a $1 billion, which went to the hands of Correa and his government team. Today many of these goods were destroyed, many companies have gone bankrupt and the few items sold, were carried out under fraudulent negotiations and with losses for the nation. What is clear is that it is not known where the sales money went.

Correa’s power over the Ecuadorian justice

The day after the confiscation of the Isaias Group, just 24 hours later, Rafael Correa ordered the Constituent Assembly to include an article called Constituent Mandate 13.

The mandate clearly expresses the impediment that the Isaias family had to introduce a plea in their defense to claim their property. Likewise, it makes it impossible for the country’s judges to act on this case, under penalty of being dismissed or taken to jail. This mandate is considered by many legal scholars, as a “legal aberration” only devised by a “mind” like Rafael Correa’s.

The Isaias Group & Communication Media

The confiscation of all assets had a supreme motive for Correa: to take over and use all the means of communication that belonged to the Isaias Group to ensure their permanence in power and control dissenting voices.

By that time, beginning of July 2008, Correa had dropped several points in the polls. His popularity was declining, according to CEDETOS. Correísmo needed to climb urgently to win the referendum, which sought to change the Ecuadorian constitution.

The media of the Isaias: Gamavision, TC television, Cablevision, TC radio, Super k 800, Carousel radio, among others, would put it at the head of TV channels and radio stations with a greater audience and more appreciated by the Ecuadorian public. That control would ensure a powerful communication platform to encourage from there the vote for the “YES” and feed the hate of classes that benefited so many.

What Ecuador lost

The Isaias family were robbed of everything, but the country lost much more. It lost thousands of jobs generated by the Isaias Group. It lost the possibility of having new world-class products and services generated by the ventures and investments that the brothers Roberto and William dreamed of continuing when they returned to their country. Ecuador also lost a greater number of foreign investments, since the legal uncertainty of Correa’s government meant being on the economic tightrope.

The requirements to repair everything to the Isaias

The UN Human Rights Committee ruled in favor of the Isaias brothers in 2016, demanding that the Ecuadorian state handle total repair of all confiscated property and otherwise the full return of the money from the sale.

It also demanded the reparation of all moral damage caused to Roberto and William Isaias, his entire family and the Isaias group. For this, the state would have to duly communicate the truth of the events and deny all the accusations and annul all the judicial processes to which they were exposed. The “Correista” government did not abide by the UN ruling against it. Today, it is expected that this measure will be fully fulfilled by the Ecuadorian state.

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