Ecuador reaches deal with Repsol over debt

Jose Llangari

QUITO, Feb 25 (Reuters) - Ecuador has agreed with Repsol to settle a pending debt after the government threatened to freeze the Spanish oil company's assets, Spain's Foreign Minister Miguel Angel Moratinos said on Wednesday.

Ecuador earlier on Wednesday softened its tone against the oil major, saying it had not plans to confiscate oil companies' assets after the initial threat.

"Yes, there is an agreement," Moratinos told reporters when asked if both sides had reached an agreement over the debt row.

Moratinos, who was visiting Quito and met President Rafael Correa, declined to give any details on the terms agreed.

Correa, a socialist who often threatens foreign companies to get better contractual terms, had said his government was moving to freeze the assets of Repsol and France's Perenco over $830 million in late taxes.

No government official has confirmed if an agreement was reached with Perenco to settle the late tax row

"In the case that we don't reach an agreement, we could eventually withhold their (companies) funds, but we will not seize or confiscate because in this country we respect the rule of law," Alexis Mera, Correa's top legal adviser, told reporters.

Ecuadorean officials met on Wednesday with Repsol executives, including upstream director Nemesio Fernandez Cuesta, to negotiate a way out of the stalemate.

Executives of both Perenco and Repsol in Quito were not immediately available for comment.

Under Ecuadorean law, the state has the right to temporarily seize assets and freeze bank accounts to force a company to pay debts.

Ecuador alleges that Perenco and Repsol did not pay a windfall tax that companies said makes their business inviable in the OPEC-member nation. Both companies have filed lawsuits over the windfall tax which they say violates their contracts.

Repsol and Perenco own oil installations in Ecuador which include drilling rigs and machinery, and shares in a privately owned pipeline.

Repsol operates three oilfields in the Amazon jungle with a production capacity of 65,000 barrels per day. Perenco produces nearly 30,000 bpd, according to government data.

Ecuador's No. 2 oil pipeline down after rupture

By Alonso Soto

QUITO, Feb 25 (Reuters) - Ecuador's second largest oil pipeline halted pumping Wednesday morning after the line was ruptured, but it had enough stock to cover February export commitments, the line administrator said.

Pedro Lopez, spokesman for the firm that administers the private, 130,000-barrel-per-day OCP pipeline, said the damage was being evaluated to determine when the line could restart operations.

The pipeline carries mostly heavy crude to the Pacific coast from private oil companies operating in the OPEC nation and an affiliate of state oil company Petroecuador.

"We are still evaluating the conditions of the pipeline ... We have no estimates to when the line can restart pumping," said Lopez, adding that the oil spill was contained.

Douglas Beltman, an environmental scientist on the scene, said a a tick layer of crude was covering a nearby river in the Amazonia province of Napo, but it was too early to measure the magnitude of the spill.

"The river was completely covered with oil from bank to bank," said Beltman, who is evaluating oil pollution in the Amazon for indigenous and peasants suing oil major Chevron Corp (CVX.N). "It looked like a bad spill."

The jungle dwellers accuse Chevron of polluting the jungle and damaging their health by dumping 18 billion gallons (68 billion liters) of contaminated water from 1972 and 1992. Chevron denies any wrongdoing.

Repeated oil spills are a threat to rare species of jaguars and river dolphins in the Amazon jungle where most of the country's oil operations are located.

Ecuador's largest pipeline, the state-run 360,000-bpd oil pipeline, was operating normally, an oil company official told Reuters.

Both lines run alongside each other in some areas on their way to a Pacific Ocean port.

Heavy rains across the country have triggered a slew of mudslides in areas where both pipelines travel.

Ecuador, South America's No. 5 oil producer, produces around 500,000 bpd, extracted almost evenly by Petroecuador and foreign oil companies. Most of Ecuador's crude is exported to the United States.

Ecuador Decree Keeps Oil Companies at Bay

Amazon Watch

FOR IMMEDIATE RELEASE

2009-02-24

Joseph Mutti, Communications, 415 487-9600 x 23

Ecuador Decree Keeps Oil Companies at Bay

President Indefinitely Extends Historic Rainforest Protection Proposal

Quito, Ecuador, Feb 24 (AW)--The President of Ecuador, Rafael Correa, recently signed a decree that breathed new life into the country’s pioneer proposal to keep its largest oil field permanently underground in one of the most pristine areas of rainforest in the world.

The Yasuni-ITT initiative, named for Yasuni National Park and the respective Ishpingo, Tampococha, and Tiputini oil reserves that lie underneath, was first launched in June 2007 and seeks international financial support to offset the country’s forgone oil revenues.

Calling the agreement an "emblematic project" of the environmental policies of his government, Correa had originally set a one-year deadline to come up with the funds. However, after several extensions and a new financial model that hopes to use carbon credits to obtain needed funds, the decree is the latest signal that the proposal may just work.

Yasuni National Park is a UNESCO designated World Biosphere Reserve, renown for its high levels of biodiversity and endemic species. The Park is also home to two indigenous groups living in voluntary isolation.

The extension will now keep oil corporations at bay in the second largest area of untapped oil that remains in Ecuador, while the government seeks to raise funds by issuing carbon emission bonds in the European Trading System, obtaining donations from the public and private sector, and via debt cancellation. Oil exploitation in the geologically and geographically challenging ITT block has become less economically viable due to the current price of crude and unfavorable economic outlook.

"This is a great step in both the battle to save Yasuni and to move Ecuador towards a new post-petroleum development model," said Esperanza Martinez of Accion Ecologica, which has been leading the civil society campaign in support of the proposal. "While we believe that ALL of Yasuni National Park should be off limits to oil drilling and that the proposal should consider financial options other than emissions trading, we welcome this development and hope it leads to the permanent protection of what is really the lifeblood of the Amazon."

The decree was also welcomed by Amazon Watch as an important advance in preventing another human and environmental disaster of the magnitude Texaco (now Chevron) left in its wake after drilling in the northern Ecuadorian Amazon rainforest. The oil company now faces an historic $27 billion sentence in an Ecuadorian court for its environmental contamination.

"The Yasuni National Park is an area of thriving, primary rainforest that protects a unique diversity of indigenous communities, animals and plants for the entire planet", said Atossa Soltani, Amazon Watch Executive Director, “This is an important signal from the Correa administration that it is committed to the proposal. It bolsters the proposal’s credibility and inspires confidence with the international community—two things that were lacking and previously hurting the proposal’s chances at success.”

Ecuador says expelled U.S. official was CIA operative

By Alonso Soto

QUITO, Feb 21 (Reuters) - The U.S. Embassy official Ecuador kicked out this week on charges of meddling in national affairs was the head of the CIA in the drug-smuggling route country, President Rafael Correa said on Saturday.

But a U.S. Embassy spokeswoman declined to comment on Correa's account that the expelled official ran CIA operations in the Andean country, which is a crucial drug-smuggling route to drug gangs in neighboring Colombia and Peru.

Correa, a leftist ally of U.S. foe Venezuelan President Hugo Chavez, expelled Mark Sullivan over charges he tried to handpick an officer heading a police unit partly financed by the United States.

"Lets speak bluntly; he was the head of the CIA in Ecuador," Correa said. "The U.S. Embassy was mad because they are used to handpicking police chiefs in exchange for a few computers."

Sullivan's expulsion came a bit over a week after Correa ordered another U.S. official to leave the country on similar charges, fueling tensions with Washington.

Correa has accused the CIA of having operatives inside his security forces, and aiding neighboring Colombian commandos raid a rebel camp inside Ecuador last year that raised the specter of war in the Andean region.

He said that as part of an unwritten agreement the U.S. embassy approved the naming of officers to head police units they financed.

The popular U.S.-educated economist had generally kept good ties with the United States even as his socialist allies in Bolivia and Venezuela clashed with Washington, including expelling U.S. ambassadors.

Still, Correa went on the offensive this month, declaring he would not bow to pressure from the United States and has now raised complications in establishing his relationship with U.S. President Barack Obama.

Local media has speculated Correa kicked out Sullivan because he was linked to the probe of a former government official arrested for dealing with drug bosses. The police unit that sparked the diplomatic row was investigating the ex-government official. Correa has denied those charges.

Analysts say Correa is trying to get attention away from mounting economic woes caused by plummeting oil revenues and immigrants' remittances that are starting to worry Ecuadoreans who had lived through a series of crippling crises.

The United States is Ecuador's main trading partner and the destination for much of its oil and banana exports.

Chevron Abusing Courts to Delay Judgment In $27 Billion Environmental Suit, Amazon Leaders Say

Amazon Defense Coalition

FOR IMMEDIATE RELEASE

2009-02-20

Karen Hinton/703-798-3109
Karen@hintoncommunications.com

Chevron Abusing Courts to Delay Judgment In $27 Billion Environmental Suit, Amazon Leaders Say

Oil Company Using Fraudulent Tactics to Delay Ecuadorian Trial, say Lawyers

Quito, Ecuador – Trying to make good on its promise of a "lifetime of litigation" for indigenous groups in the Amazon, Chevron is using fraudulent tactics to delay an Ecuadorian trial court from reaching a decision on a record $27 billion in environmental damages, lawyers for local residents say.

"Facing overwhelming evidence that it caused a massive human rights violation, Chevron is engaged in a judicial fraud in Ecuador to avoid paying a judgment," said Pablo Fajardo, the lawyer for 30,000 Amazonian residents filed the case in 1993. "The company has gone rogue and thousands of innocent people are the victims."

"Chevron does not respect the law and refuses to accept the legitimacy of the legal system because it knows it is about to lose the very trial that it fought to have in Ecuador," said Fajardo, referring to the fact Chevron fought for nine years in U.S. federal court to have the case shifted to Ecuador over the objections of the plaintiffs.

The lawsuit seeks damages for the dumping of more than 18 billion gallons of toxic waste into Amazon waterways over a 26-year period when Texaco operated an oil consortium. Five indigenous groups have had their traditional lifestyles decimated and cancer rates in the area have skyrocketed, according to plaintiffs and an independent, court-appointed expert.

The court expert, Professor Richard Cabrera, worked with a team of 14 independent technical experts. They concluded it would take at least $27 billion to remediate the rainforest to safe levels and compensate people for health problems caused by the contamination. The amount would wipe out more than a year of the company's profits.

Saying that Chevron's knows the "game is up" and that if faces a multi-billion dollar judgment, lawyers for the rainforest residents are asking that the trial judge rule based on more than 250,000 pages of evidence and close to 80,000 chemical sampling results generated in the lawsuit. Chevron's top lawyer, Charles James, said recently that the company expects a "significant adverse judgment" in Ecuador.

"Chevron in this case has been granted more due process rights than probably any defendant in the history of civil justice," said Julio Prieto, a lawyer who works with Fajardo. "They have had 15 years to litigate, and they are still looking for new courts that will accept their theories of junk science that posit that known human carcinogens cannot cause harm to people if ingested. Once one court rules against them, they look for another court to start the process all over again.

"The reality is that Chevron will never accept any adverse ruling from an independent court," added Prieto.

Fajardo said Chevron's latest gambit is to seek eight additional field inspections even through the evidentiary phase of the trial ended months ago. Chevron's lawyers refused to schedule the requested inspections for almost three years, holding them back to be used as a vehicle to delay the trial in the eleventh hour.

It is unclear if the trial judge, Juan Nunez, will grant the eight inspections. Fajardo said Chevron will cynically claim its own rights were violated if the judge resists the company's pressure.

Some of Chevron's other abuses of the judicial process include:

· Trying to drown the court with more than 200,000 pages of documents, most of them repetitive. On several occasions, after losing a motion, the company has re-filed the exact same motion and insisted the judge rule in its favor.

· Claiming more field inspections need to be performed, even though the court already has inspected 94 sites over a five-year period – with 100% of the sites found to be contaminated, according to the court expert.

· Chevron continues to buy large advertisements accusing the independent court expert of "fraud" without any supporting evidence – a smear campaign that is intended to destroy the reputation of a respected Ecuadorian scientist, said Fajardo.

· Chevron also has refused to speak out against clear human rights abuses intended to intimidate lawyers for the plaintiffs and court personnel. Lawyers have received death threats, and the office of the court expert was mysteriously robbed of case-related materials.

Fajardo said Chevron's tactics not only violate the due process rights of the plaintiffs, but they also violate international law principles that prohibit parties from abusing the judicial process. The government of Ecuador has made the same charge against Chevron in a related international arbitration.

Ecuador Expels U.S. Diplomats, May Prompt Retaliation

By Viola Gienger and Nathan Gill

Feb. 19 (Bloomberg) -- The U.S. is considering retaliation against Ecuador for expelling two American diplomats, the State Department said, calling the South American government’s actions “very troubling.”

The latest expulsion, of embassy first secretary Mark Sullivan, “raises serious concerns about Ecuador’s desire to maintain a productive relationship,” department spokesman Gordon Duguid told reporters in Washington today. He said American officials are “reviewing our options at the moment.”

Tensions have simmered between the U.S. and Ecuador since the Andean nation in July refused to renew a 10-year lease on a U.S. air base in the Ecuadorean port city of Manta used to conduct anti-drug surveillance in the region.

Ecuadorean President Rafael Correa, a political ally of Venezuela’s President Hugo Chavez, on Feb. 7 ordered the expulsion of Armando Astorga, a U.S. Embassy customs and immigration official stationed in Quito. The action came after the U.S. ended a $340,000 annual police support program to help Ecuador fight smuggling because the two countries couldn’t agree on personnel assignments.

“The United States rejects any suggestion of wrongdoing by embassy staff,” Duguid said.

‘Unacceptable Interference’

Ecuador’s Foreign Minister Fander Falconi yesterday gave Sullivan 48 hours to leave the country because of an “unacceptable interference in Ecuador’s internal affairs,” according to a statement posted on the presidency’s Web site.

“Correa is acting in a very radical way,” Michel Levi, coordinator of the Andean Center of International Studies at the Universidad Andina in Quito, said today in an interview. “This could be a smoke screen to distract the people from stories about his possible links” with Colombian guerrillas.

Correa has denied giving any assistance to the Revolutionary Armed Forces of Colombia, or FARC, as the group is known.

Falconi said he had informed U.S. Ambassador Heather Hodges verbally on Feb. 13 and in writing on Feb. 17 of the government’s decision. Hodges was scheduled to meet with an Ecuadorean vice minister that day to resolve the dispute, Duguid said.

“Regrettably, the government of Ecuador rejected our efforts to resolve this issue through diplomatic channels and instead held a press conference and announced the expulsion of our diplomat,” he said.

Falconi said in the statement that this was a “strong signal” and that Ecuador would not accept interference from any foreign government.

Ecuador gives Repsol, Perenco 3 days to pay debts

QUITO, Feb 19 (Reuters) - Ecuador on Thursday threatened to start freezing the assets of Spanish oil company Repsol and France's Perenco if they fail to pay within three days debts owed to the state.

President Rafael Correa, a leftist who often threatens foreign companies to pressure them into better contract terms, has said his government was moving to freeze the assets of both companies over unpayed duties stemming from a 2007 windfall tax.

"Both companies have been notified that they have 72 hours to pay. If they fail to do so, evidently we will have to take coercive measures in accordance to the law," said Luis Jaramillo, the head of state oil company Petroecuador.

Under Ecuadorean law, the state has the right to temporarily seize assets and freeze bank accounts to force a company to pay debts.

Repsol and Perenco officials in Quito were not imediatly available for comments.

Repsol and Perenco own oil installations in Ecuador that include drilling rigs, machinery and shares in a privately owned pipeline.

Repsol operates three oilfields in the Amazon jungle with a production capacity of 65,000 barrels per day. Perenco produces nearly 30,000 bpd, according to government data.

Ecuador expels U.S. diplomat

[Granma] QUITO, February 18.- The Ecuadorian government today expelled Max Sullivan, first secretary of the U.S. embassy in Quito, for interfering in the country’s internal affairs, PL reported.

Ecuadorian Foreign Secretary Fander Falconí made the announcement after the Police Command presented its report at a meeting of the National Security Council (COSENA).

The decision was adopted after confirming U.S. diplomat’s meddling in the Special Investigations Unit (UIESS), he underlined.

Sullivan worked in the office of regional affairs at the U.S. embassy in Quito.

The measure occurred 11 days after Ecuadorian President Rafael Correa ordered the expulsion of the embassy’s attaché, Armando Astorga, for trying to condition economic aid to the National Police.

Correa reported that a section of the U.S. embassy awarded funding to the police conditioned on qualifying certain agents, which he considered inadmissible and unacceptable.

Ecuador’s Correa expels second US official in a month

Mercopress, 19 Feb 2009

The State Department Wednesday called Ecuador's expulsion of a U.S. diplomat unjustified and said the United States will respond appropriately. The expulsion was the second of its kind this month.

Ecuador`s Foreign Minister Fander Falconi, announces his government expelled Mark Sullivan

Zoom

The State Department is expressing regret over the latest expulsion and suggesting the United States will respond in kind. But it is also says the Obama administration wants good relations with the South American country and hopes to continue working with it to curb regional drug trafficking.

Officials here identified the U.S. diplomat ordered to leave Ecuador within 48 hours as Mark Sullivan, first secretary in the embassy's regional affairs office. A senior Ecuadoran official told reporters in Quito the American diplomat had been meddling in the country's police affairs.

In a talk with reporters, State Department Deputy Spokesman Gordon Duguid said the United States will comply with the expulsion order but denied Sullivan had been involved in any improper activities:

"We regret this decision by the government of Ecuador," said Gordon Duguid. "We also reject any suggestion of wrongdoing by the embassy staff. Despite the government of Ecuador's unjustified action, we remain committed to working collaboratively with Ecuador to confront narcotics trafficking."

Spokesman Duguid said the United States will respond to the expulsion in an appropriate way, diplomatic language suggesting an Ecuadoran diplomat in Washington may be asked to leave. However, he did not elaborate and said the matter is still under discussion.

Earlier this month, an employee of the U.S. Department of Homeland Security at the Quito embassy, Armando Astorga, was also ordered to leave the country under similar circumstances, with officials in Quito accusing him of using U.S. economic aid to try to influence the leadership of an Ecuadoran police unit.

A senior official here said in both cases, Ecuadoran authorities apparently objected to efforts by the U.S. diplomats to select among potential candidates in the Ecuadoran security forces for U.S.-sponsored anti-narcotics training.

The official said Ecuadoran authorities did not like the vetting, but that the selection process is required by U.S. law to root out potentially corrupt officers or those with other problem issues.

The United State has had a difficult relationship with the left-leaning government of Ecuadoran President Rafael Correa, who was a persistent critic of the former Bush administration's Latin American policy.

President Correa has said his government will not renew an agreement that expires in November allowing U.S. Air Force planes to use Ecuador's Manta air base for anti-drug surveillance flights.

Chevron Misleads SEC Over Ecuador Lawsuit, Assert Rainforest Residents

Amazon Defense Coalition

FOR IMMEDIATE RELEASE

2009-02-17

Amazon Defense Coalition: Chevron Misleads SEC Over Ecuador Lawsuit, Assert Rainforest Residents

Information in 10-Q Called "Dishonest" and "Misleading"

QUITO, Ecuador, Feb 17, 2009 (BUSINESS WIRE) -- Chevron is deceiving shareholders and the financial markets by filing misleading information with the Securities and Exchange Commission (SEC) to downplay its $27 billion potential liability in a environmental lawsuit in Ecuador, representatives for the plaintiffs in that case asserted today.

"We believe Chevron is distorting information in its public filings and thumbing its nose at SEC regulators," said Pablo Fajardo, the lead lawyer for 30,000 rainforest residents, a CNN "Hero Award" winner. "The company's information is dishonest and misleading."

Texaco has admitted it dumped more than 18 billion gallons of toxic waste water into Ecuador's Amazon waterways when it was the exclusive operator of an oil consortium from 1964 to 1990. The waste included carcinogens such as benzene, and five indigenous groups assert their traditional lifestyles have been decimated by the contamination.

Chevron bought Texaco in 2001 and will bear any liability in the case. A final decision is expected later this year.

A court-appointed expert, Professor Richard Cabrera, determined that 1,041 cancer deaths in an area the size of Rhode Island could be attributed to Texaco's sub-standard operational practices. The Cabrera report - based on the work of 14 independent scientists - concluded that damages could rise to $27 billion to cover environmental clean-up and compensation for cancers and other health problems.

In its November 10-Q filing with the SEC, Chevron included four assertions that are easily proved false simply by examining the court record, said Fajardo.
He said the four primary distortions in the 10-Q are:

-- Chevron falsely claims that the Ecuador court lacks jurisdiction over the company. In reality, Texaco stipulated before U.S. federal judge Jed Rakoff in 2002 that it would submit to jurisdiction in Ecuador as a condition of the court granting its motion to have the case transferred.

-- Chevron misleadingly asserts that the lawsuit is barred by the statute of limitations. Yet before Judge Rakoff, Texaco waived all defenses based on the statute of limitations as a condition of having its motion granted to move the case to Ecuador.

-- Chevron claims it was "released" from liability by Ecuador's government after a partial remediation in the mid-1990s. In reality, the language of Chevron's purported release expressly excludes the claims of the private individuals bringing the lawsuit. Chevron also fails to disclose that two of its lawyers are under indictment in Ecuador for lying to secure the release.

-- Chevron claims that the use of Ecuador's 1999 environmental law to bring the case is wrong because the law cannot be applied to environmental damage that occurred years earlier. In reality, as confirmed by the lawsuit, the plaintiffs are bringing their claims based on a statute that dates to 1861.

Fajardo said other obvious distortions in Chevron's SEC filing include:

-- Chevron tries to diminish the court expert, Richard Cabrera, by calling him a "mining engineer". Chevron fails to disclose that Cabrera is also a respected environmental scientist and university professor and that he worked on the expert report with 14 independent scientists. In fact, Chevron was so impressed with Cabrera's expertise that it paid him to work in an earlier part of the case.

-- Chevron says in the 10-Q that it cannot estimate a possible loss in the case, despite the fact the expert report identifies specific damage amounts in 4,000 pages of data that includes 64,000 chemical sampling results from dozens of oil production sites.

"Chevron's strategy in Ecuador has been to deceive the authorities and then try to cover it up when caught," said Fajardo. "Courts in both countries are being defrauded and thousands of innocent people are the victims."

Fajardo said lawyers for the plaintiffs were providing the SEC with more detailed information from the court record documenting Chevron's deception. Even though Chevron has faced a multi-billion dollar liability for several years in Ecuador, the company did not disclose it to the SEC until the middle of 2008 and even then refused to estimate the amount of potential loss despite the $27 billion liability cited in the Cabrera report.

For the last two years Chevron has suffered a series of setbacks in the case, which was originally filed in 1993 in U.S. federal court. Ecuador's trial court denied a Chevron motion to dismiss the case, Ecuador's national prosecutor indicted two Chevron lawyers and seven former government officials for lying about the purported clean-up, and the U.S. Congress extended trade benefits to Ecuador despite protests by Chevron.

A U.S. federal judge recently denied Chevron's attempt to force Ecuador's government into a binding arbitration over who should pay for further clean-up.

Ecuador expels second U.S. embassy official

QUITO, Feb. 18 (Xinhua) -- Ecuador on Wednesday expelled a U.S. embassy official for allegedly interfering with internal national police matters.

Mark Sullivan, the first secretary in the embassy's office of regional affairs, was the second U.S. embassy official expelled this month by President Rafael Correa, who has accused the American officials of "insolence" for conditioning aid on the right to veto personnel choices.

Foreign Minister Fander Falconi said Sullivan was ordered to leave after a police report mentioning his alleged interference with the Special Investigation Unit (Uies) came out.

Sullivan must leave the country within 48 hours because of his "unacceptable meddling," Falconi said.

The Uies, whose activities center on drug trafficking and political security, worked closely with the U.S. embassy.

Ninety-nine Uies police officers and agents have run out of money to continue their operations since the withdrawal of U.S. aid.

On Feb. 7, President Correa ordered the expulsion of Armando Astorga, a U.S. Immigration and Customs Enforcement attache, for allegedly suspending 340,000 U.S. dollars in annual aid because Ecuador would not allow the U.S. to veto appointments to the anti-smuggling police.

Ecuador expels second US diplomat

Foreign minister Falconi gave Mr Sullivan 48 hours to leave the country BBC News Ecuador has expelled a second American diplomat in just over a week, accusing both officials of interfering in its internal affairs. Foreign Minister Fander Falconi said Mark Sullivan, the first secretary at the US embassy in Quito, had 48 hours to leave the country. Both US officials were accused of meddling with police appointments in a US-funded anti-narcotics programme. Washington has rejected the charges and called the expulsions unjustified. Aid dispute Last week, Ecuadorian President Rafael Correa ordered US customs attache Armando Astorga to leave on similar charges. It accused Mr Astorga of being "insolent and foolish" and said he had treated Ecuador like a colony by trying to dictate the Ecuadoran police's choice of a commander for an anti-smuggling unit in return for $340,000 in US aid. The Ecuadoran government accused Mr Sullivan of trying to do the same thing. "Following the Astorga affair, Sullivan also placed conditions on logistics cooperation with the police," Mr Falconi said. An unnamed US state department official told AFP news agency that the US is required by law to vet candidates for US-funded training programmes. "We regret this decision by the government of Ecuador. We also reject any suggestion of wrongdoing by embassy staff," said state department spokesman Gordon Duguid. "Despite the government of Ecuador's unjustified action, we remain committed to working collaboratively with Ecuador to confront narcotics trafficking," he added. Electioneering A BBC correspondent in the region says the president is in full campaign mode ahead of elections in April. Candace Piette says Mr Correa is extremely popular at the moment, and the message of strong Ecuadorian sovereignty and intolerance of American interference goes down well with the public. President Correa has clashed with Washington over several issues - most notably refusing to renew the lease on airbases used by US forces to mount anti-narcotics missions. But compared with other left-wing governments in Latin America, the rows between Quito and Washington have been low key.

Ecuador expels second U.S. diplomat this month

By Jose Llangari

QUITO (Reuters) - Ecuador's President Rafael Correa expelled on Wednesday a second U.S. diplomat this month in a dispute over an aid program, fueling tensions between the OPEC member and its most important trade partner during his re-election campaign.

Ecuador said the diplomat -- like the previous ejected official -- meddled with police officer appointments in a program receiving U.S. aid, but Washington rejected the accusation.

"We are declaring Mr. Mark Sullivan persona-non-grata, he is the first secretary of the embassy and we are giving him 48 hours to leave the country," Foreign Affairs Minister Fander Falconi told reporters.

The U.S. State Department called the expulsion unjustified and said it would "respond as appropriate."

After coming to office in 2007, Correa told the United States it would have to stop using an Ecuadorean air base for anti-drugs surveillance when its lease ends this year.

But otherwise, the popular leftist had generally kept good ties with the United States even as his socialist allies in Bolivia and Venezuela clashed with Washington, including expelling U.S. ambassadors.

Still, Correa went on the offensive this month, declaring he would not bow to pressure from the United States and has now raised complications in establishing his relationship with U.S. President Barack Obama.

Campaigning for an April election, Correa has stressed his credentials as a leader who can stand up to foreign influence, whether from governments or multinational companies.

"We regret this decision by the government of Ecuador. We also reject any suggestion of wrongdoing by embassy staff," said State Department spokesman Gordon Duguid.

"Despite the government of Ecuador's unjustified actions we remain committed to working collaboratively with Ecuador to confront narcotics trafficking," he added.

Paulina Recalde, a pollster with Perfiles de Opinion in Quito, saw an electoral motive in the diplomatic move.

"This has a big political element as Correa reinforces his tough position that is very popular among the every day people in this country," she said. "But this could cost him greatly in the diplomatic field."

Economic troubles due to plummeting oil revenues and immigrants' remittances are starting to worry Ecuadoreans who lived through a crippling financial crisis in 1999 that left thousands without their bank deposits and jobs.

The United States is Ecuador's main trading partner and the destination for much of its oil and banana exports.

Senior Ecuador Police Officers Under Investigation for U.S. Embassy Contacts

QUITO -- Four senior officers of Ecuador's national police are under investigation for the unauthorized sharing of confidential national security information with U.S. diplomats, Interior Minister Gustavo Jalkh told a press conference here.

He identified the officers involved as Maj. Eduardo Silva and Capts. Guido Nuñez, Jorge Antonio Adati and Francisco Saavedra.

Also present for the press conference was police commander Jaime Hurtado, who said he decided last Friday to begin an administrative review of the officers' conduct and to relay to judges a preliminary report regarding the possible unauthorized disclosures.

He said the report was to be delivered to the four men under scrutiny "so they can exercise their legitimate defense."

Jalkh said the current probe will serve as a springboard for restructuring the special investigative units within the national police, especially given suspicions of U.S. interference in the operations of those units.

Ecuador expelled a U.S. diplomat responsible for overseeing funding of Ecuador police forces a little over a week ago.

Ecuador’s Borja Vows to ‘Defend’ Use of U.S. Dollar

By Nathan Gill

Feb. 17 (Bloomberg) -- Ecuador’s Economic Policy Minister, Diego Borja, defended the country’s use of the U.S. dollar and said President Rafael Correa wasn’t planning to abandon the system.

“The president has been clear, we are going to defend dollarization,” Borja said today in an interview broadcast on Quito-based television station TeleAmazonas. The government won’t change its currency system because it would “strongly hit sectors with the lowest incomes,” he said.

Ecuador joined Panama and El Salvador in adopting the dollar in 2000 to help curb inflation after the sucre tumbled 73 percent against the dollar and the government defaulted on $6.5 billion of foreign debt.

Latin America economists, including Alberto Ramos at Goldman Sachs Group, Inc. in New York and Alberto Bernal, head of fixed- income research at Bulltick Securities Inc., have said that Ecuador’s use of the dollar gives Correa no outlet for providing credit to the economy as access to foreign financing dries up and revenue from sales of oil, the nation’s biggest export, tumbles.

‘Extremely Delicate’

Borja today defended the decision to use a grace period to decide whether to make an interest payment on its 2030 bonds that was due Feb. 15.

Asked if not paying the external debt would hurt the South American country’s credibility abroad, Borja said, “On the contrary, because Ecuador has been coherent with the management of its commercial debt policy all along.”

In December, Correa skipped a $30.6 million payment for the country’s 12 percent bonds due in 2012.

Last month, Ecuador made a payment on its 9.375 percent bonds due in 2015 after invoking a 30-day grace period. The government views that bond’s legality differently than that of its notes due 2012 and 2030, Finance Minister Maria Elsa Viteri said last month.

To contact the reporter on this story: Nathan Gill in Quito at ngill4@bloomberg.net

Chevron Blasted For Misconduct and Corruption in Ecuador Trial

Amazon Defense Coalition

FOR IMMEDIATE RELEASE

2009-02-13

Karen Hinton
703-798-3109
Karen@hintoncommunications.com

Chevron Blasted For Misconduct and Corruption in Ecuador Trial

Accused of Using Political Pressure and Junk Science to Evade Court Judgment Over "Amazon Chernobyl"

Quito, Ecuador (February 13, 2009) - Chevron's legal department was blasted today by the leaders of indigenous groups in the Amazon for engaging in misconduct in an effort to sabotage a lawsuit in Ecuador over environmental contamination where the company faces a potential $27 billion liability.

Chevron has admitted that Texaco dumped billions of gallons of toxic waste into Amazon waterways, decimating five indigenous tribes and causing an outbreak of cancer. The court-appointed expert, who worked with a team of 14 other scientists, determined that 1,041 cancer deaths in an area the size of Rhode Island could be attributed to Chevron's sub-standard operational practices.

Chevron bought Texaco in 2001 and will bear any liability for clean-up of the area, which some experts call the "Amazon Chernobyl".

Pablo Fajardo, the lawyer for the indigenous groups, said Chevron General Counsel Charles James has orchestrated "a pattern of deception and misconduct shocking for a high official from a public company." Fajardo said he had evidence Chevron engaged in several corrupt acts intended to intimidate the judge and damages expert into abandoning the trial, which is expected to end later this year.

Fajardo added that comments made by James today in a Chevron press release, alleging without proof that an independent court expert was cooperating with the plaintiffs, were "false and defamatory" and could expose Chevron shareholders to additional liability.

Among Chevron's misconduct in the Ecuador trial, said Fajardo:

• Chevron's lawyers in Ecuador have tried to intimidate and harass the court-appointed expert, Richard Cabrera, by stalking him while collecting soil and water samples that would prove the existence of unsafe levels of toxic contaminants. The impediments were so significant that the presiding judge was forced to order police protection for Cabrera to enable him to carry out his court mandate.


• Chevron insisted that Cabrera take "blind" soil samples to ensure that the laboratory equipment was working properly, an expensive practice that was undertaken with the understanding that the company would pay for it. Chevron subsequently refused to pay for the processing of the samples, presumably out of fear that the testing would provide additional proof of contamination.


• Chevron's engaged in the manufacture of junk science. The company ignored sound scientific practices by taking water and soil samples at higher elevations than the sources of contamination. Chevron also faked its laboratory results by using an inappropriate test.


• James is intentionally distorting facts by alleging that Cabrera is "cooperating" with the plaintiffs. The reality is that Cabrera - as is standard in legal cases in Ecuador and around the world - consulted with both parties in order to fulfill his court-ordered mandate. The report prepared by Cabrera relied substantially more on evidence provided by Chevron's than that provided by the plaintiffs.


• Chevron has consistently tried to politicize the trial by pressuring Ecuador President Rafael Correa to extinguish the legal claims of the plaintiffs. When he resisted, Chevron has repeatedly lobbied the U.S. Congress to cancel successful foreign trade pacts with Ecuador to "punish" the country for letting its citizens exercise their legal rights against Chevron.


• Chevron has consistently tried to obstruct and delay the trial by violating the due process rights of the plaintiffs. Employees of the company interfered with evidence gathering by fabricating a security threat to delay a critical inspection on indigenous territory. Lawyers for the plaintiffs have received death threats, the court expert's office was mysteriously robbed of case materials, and a press spokesperson for the plaintiffs was assaulted.
  

James, Chevron's General Counsel, is a former disciple of Attorney General John Ashcroft and is a practitioner of Karl Rove-style politics, according to Karen Hinton, the U.S. spokesperson for the indigenous groups in Ecuador. He has employed a number of Bush-administration loyalists in his legal department, including infamous author of the Pentagon "torture memos," lawyer William J. Haynes.

"Charles James needs to adapt to the demands of the modern energy industry where working in an environmentally sustainable way is seen by investors to be as important as making profits," she said.

Ecuador Says China Will Finance $2 Billion HydroElectric Plant

Latin American Herald Tribune, February 15, 2009

QUITO -- The Ecuadorian government hopes to receive nearly $2 billion from China to finance the construction of the country's largest hydroelectrical plant, Coca-Codo-Sinclaire, in the Amazon region.

President Rafael Correa said that on Friday he met in Quito with Chinese Vice Premier Hui Liangyu, who is on an official trip to Ecuador.

Beijing wants "to invest a lot in the country," said Correa in his regular weekly report broadcast Saturday on radio and television, in which he emphasized the presence in Ecuador of several Chinese firms.

"They're ready to give us $1.7 billion in financing for Coca-Codo-Sinclaire. This is extraordinary news, it's almost assured," although some details still remain to be worked out, Correa added.

In addition, the president said that China is ready to take part in the construction of the Pacific Refinery in the coastal province of Manabi, a project that state-run oil firm Petroecuador and Venezuela's corresponding company, PDVSA, are carrying out.

He also said that the Chinese cooperation offer includes other sectors, like the nation's roadways, and he emphasized Liangyu's visit because the latter is the highest-ranking Chinese official to come to Quito.

"It's impressive that in these two years Chinese cooperation and investment have increased" in Ecuador, said Correa, who came to power in January 2007.

Remittances to Ecuador Down 22% in 4th Quarter of 2008 as World Economic Crisis Begins to Bite

Latin American Herald Tribune, February 15, 2009

QUITO -- Remittances sent home by Ecuadorians living abroad fell 22 percent in the fourth quarter of last year relative to the same period of 2007, the Central Bank said.

The total value of money transfers to Ecuador between October and December 2008 came in at $643.9 million, $181.7 million less than the amount registered in the fourth quarter of the previous year.

Remittances in the fourth quarter were also down with respect to the third quarter (July-September 2008), when they totaled $700.6 million, according to the Central Bank's report released Friday.

The decline was due in large part to the global financial crisis and especially the economic slowdown in the United States, where an estimated 1.5 million Ecuadorians - half of that nation's total emigrant population - reside.

The Central Bank, citing official U.S. figures, said the U.S. economy shrank by 3.8 percent in the fourth quarter, "the biggest (contraction) in the past 26 years."

The U.S. unemployment rate has jumped to more than 7.6 percent in recent months, with the manufacturing and construction sectors - which employ a large number of immigrant workers - among the hardest hit.

Meanwhile, employment was down 3 percent in the fourth quarter in Spain - where 600,000 Ecuadorians live, making it the second-leading destination for emigrants from that country - due to nearly across-the-board declines in economic activity.

Spain's unemployment rate rose in the fourth quarter of 2008 to 13.9 percent and is now at its highest level in almost nine years, Ecuador's Central Bank reported, citing figures from the Iberian nation's National Statistics Institute.

Despite the crisis in those two countries, they still remained the source for the vast majority of remittances sent back to Ecuador.

In the fourth quarter of last year, 46.4 percent of the remittances to Ecuador were sent from the United States, while Spain accounted for 40.7 percent and Italy for 7.7 percent, the Central Bank said.

Remittances to Ecuador totaled an estimated $4 billion last year and are the Andean nation's second-leading source of foreign currency after oil export revenues, which between January and November of last year brought in $10.26 billion.

Ecuador defers (“illegitimate) bonds’ interest payments

Mercopress, February 15, 2009

Ecuador won't pay bondholders 135 million US dollars in interest while it decides whether to default on a significant percentage of its foreign debt, deemed "illegitimate" by in audit, said on Saturday Finance minister Maria Elisa Viteri.

The administration of President Rafael Correa will take advantage of a 30-day grace period that allows it to defer payment on 2.7 billion in so-called Global 2030 bonds while it works to find "an integral solution to the issue of the debt" said the minister confirming the information advanced on Friday on the Executive’s site.

"When we have a defined proposal ready, Ecuador will contact bondholders" she told reporters.

Last December President Correa suspended a 30.6 million US dollars interest payment on 510 million in bonds due in 2012, declaring a moratorium on those and the 2030 bonds after a commission recommended he default on 3.9 billion USD in foreign debt.

The commission's audit accused former officials and bankers of profiting irresponsibly from three bond issues (2012, 2015 and 2030) amid a 2000 and 2005 debt restructuring, making the contracts "illegitimate." Officials involved in the deals have denied wrongdoing.

Ms Viteri did not give details but admitted that some of the alternatives considered are restructuring, repurchase, renegotiation or swapping for new bonds.

Lazard Freres from France and Clifford Chance from Britain are currently in negotiations on the possible alternatives which seek a substantial discount on the bonds, President Correa was earlier quoted

Ecuador has invited EMTA, an emerging markets trading association of debt holders, based in New York to the table in order to discuss the default on the 2012 global bonds and payments due on a 2030 bond, reported Reuters which disclosed a letter sent to EMTA members.

"Convinced that a better understanding of the creditors' views and expectations can help both parties to reach a suitable solution in forthcoming discussions, the Ministry of Finance, assisted by its financial and legal advisors, respectively Lazard Freres and Clifford Chance, wishes to better identify its 2012 and 2030 bondholders" the letter to EMTA said.

The decision to forego December's interest payments soured international investors, forcing Ecuador to turn to its Social Security Institute to buy 1.2 billion US dollars in bonds issued since December to finance its 2009 budget.

Before his landslide election win in 2006, Correa promised he would seek to slash foreign debt payments to free up money for social programs.

Ecuador: Correa expels US official

Duroyan Fertl

Green Left Weekly, 13 February 2009

As Ecuadorians prepare for their first general elections under the progressive new constitution adopted in a referendum last year, tensions with the United States continue to rise with the government expelling a key US diplomat.

In his February 7 weekly radio program, Ecuador’s left-wing president Rafael Correa officially expelled the US official Armando Astorga, accusing him of bribery, suspending aid worth US$340,000 and meddling in police affairs.

“Mr Astorga, keep your dirty money, we don’t need it. We have dignity in this country”, Correa said. “We’re not going to let anyone treat us as if we were a colony here.”

Astorga, who has left the country, is accused of taking computers and sensitive anti-drug police information with him.

Correa also said that Astorga will be sent a final letter proposing that Ecuador donate to the US $160,000 annually towards eliminating torture in the US. Correa explained that “torture is being practiced in prisons like Guantanamo”.

Correa, elected in 2006 promising to rewrite the constitution and begin a “citizen’s revolution”, has been especially critical of US influence in Ecuador, where poverty reached more than 50% and the economy collapsed in 2000 due to economic policies promoted by the US.

Since 1999, the US has had control of the Manta Air Force base on Ecuador’s coast. In a victory for the social and indigenous movements, the new constitution bans foreign military bases on Ecuador’s soil.

A new round of elections will be held under the new constitution in April, in which every elected official from the president down must stand for re-election.

While eight candidates registered to run for the presidency, most of Ecuador’s right-wing opposition — led by the Social Christian Party — remains in disarray, however, and failed on a technicality to register.

Correa faces more of a challenge from the left, where CONAIE — representing Ecuador’s 40% indigenous population — and a number of environmental groups remain critical of the Correa government’s mining policies, claiming they breach the new constitution.

While the new constitution guarantees legal rights for nature and indigenous communities, new mining laws — and Ecuador’s dependence on oil export revenue — have put Correa at loggerheads with a number of the country’s social movements.

How Correa and these movements interact will be vital for the struggle to transform Ecuador as part of the Latin America-wide struggle for change continues in the coming year.

From: International News, Green Left Weekly issue #783 18 February 2009.

Ecuador's Correa considers firing finance minister

QUITO, Feb 14 (Reuters) - Ecuadorean President Rafael Correa said on Saturday he is considering whether to dismiss Finance Minister Elsa Viteri after her ministry gave him wrong data on public salaries, causing him public embarrassment.

Correa had accused state universities of refusing to participate in a new joint-account arrangement aimed at providing transparency to spending, and named some professors he said were paid more than $10,000 a month.

It turned out the professors mentioned on state television made less than that. The finance ministry later admitted it had miscalculated their salaries.

"The (finance) minister has placed her post at my disposal and I have to seriously consider it. My apologies to my fellow professors," Correa said during his weekly media address. "I'm really mad about this. How can the finance ministry make this sort of mistake?"

Staff and students at public universities are demanding that the government return money taken from their original, individual accounts and abandon the joint system.

Earlier this week, Viteri, who has been key in the government's decision to default on $3.2 billion in foreign debt, repeated that she held her position at Correa's discretion.

Viteri, who is one of Correa's most loyal cabinet members and like him a former economics professor, said she has not handed in her resignation, but was taking responsibility for her ministry's mistake.

She is drafting a plan with foreign advisers to negotiate a restructuring of bonds the government has refused to repay, saying they were issued illegally by previous administrations.

Ecuador to freeze Repsol, Perenco assets over tax

By Alonso Soto

QUITO, Feb 14 (Reuters) - Ecuadorean President Rafael Correa said on Saturday his government will freeze the assets of Spanish oil company Repsol (REP.MC) and France's Perenco over demands for taxes owed.

Correa, who often threatens foreign companies to pressure them into better contract terms, said Repsol and Perenco owe hundreds of millions of dollars stemming from a windfall tax imposed in 2007.

"Because they have not paid their taxes, I have ordered coercive measures against Repsol and Perenco," Correa said in his weekly media address. "They are trying to treat us like a colony."

Correa did not specify which assets his government could seize. The government has said in the past that Repsol owes around $500 million in taxes.

Oil Minister Derlis Palacios later told Reuters in an e-mail that both companies will "either pay the debt or their stuff will be seized."

Under Ecuadorean law, the state has the right to temporarily seize assets and freeze bank accounts to force a company to pay debts, said a senior government official, who who asked not to be named.

He added that the companies will have time to settle their debts before the OPEC nation takes action.

Correa, scrambling to finance his socialist government's plans after oil prices crashed, has repeatedly threatened to expel oil companies to put pressure on them to sign new deals that give the state a bigger share of their revenues.

The Repsol spokesman in Quito, Federico Cruz, told Reuters his company has not yet been notified of the measure.

"Negotiations are very advanced and we hope to sign a new contract soon," he said, referring to temporary deals the government wants with companies to gain more control over the key sector.

Local officials from Perenco were not immediately available to comment.

LAST RESORT

"An asset freeze will be the last resort in these cases," said a senior oil ministry official, who asked not to be named. "Companies can offer a repayment plan."

Repsol and Perenco own oil installations in Ecuador that include drilling rigs, machinery and shares in a privately owned pipeline.

Repsol operates three oilfields in the Amazon jungle with a production capacity of 65,000 barrels per day. Perenco produces nearly 30,000 bpd, according to government data.

Correa, who faces reelection on April 26, often opts for a tough stance against foreign interests to rally support among Ecuadoreans. Last week, he expelled a U.S. diplomat for meddling with police affairs.

Repsol and other oil companies have sued Ecuador, saying the government violated their contracts by taking nearly all of their revenues above a benchmark price for each barrel extracted.

The companies say Correa's windfall tax has made their business in Ecuador unprofitable.

Ecuador suspends interest payment to mull default

QUITO, February 14, 2009 (IHT): Ecuador won't pay bondholders $135 million in interest while it decides whether to default on 27 percent of its foreign debt, deemed "illegitimate" by in audit, a top official said Saturday.

The cash-strapped country will take advantage of a 30-day grace period that allows it to defer payment on $2.7 billion in so-called Global 2030 bonds while it works to find "an integral solution to the issue of the debt," Minister Maria Elsa Viteri said.

"When we have a defined proposal ready, Ecuador will contact bondholders," she told reporters.

President Rafael Correa in December suspended a $30.6 million interest payment on $510 million in bonds due in 2012, declaring a moratorium on those and the 2030 bonds after a commission recommended he default on $3.9 billion in foreign debt.

The commission's audit accused former officials and bankers of profiting irresponsibly from three bond issues amid a 2000 and 2005 debt restructuring, making the contracts "illegitimate." Officials involved in the deals have denied wrongdoing.

Analysts warn a default would be risky because it all but severs Ecuador's access to international lending during the global credit crunch, even as plummeting oil prices slash government revenue and force the country into deficit.

Oil is Ecuador's main export and finances 40 percent of Ecuador's federal budget.

The decision to forego December's interest payments soured international investors, forcing Ecuador to turn to its Social Security Institute to buy $1.2 billion in bonds issued since December to finance its 2009 budget.

Before his landslide election win in 2006, Correa promised he would seek to slash foreign debt payments to free up money for social programs.

Ecuador did announce plans last month to meet a $30.9 million interest payment on $650 million in 2015 bonds, which were sold later than the other two issues, under the government of former President Alfredo Palacio when Correa was economic minister.

In all, the $3.9 billion in debt questioned by the government-appointed commission is comprised of 2012, 2015 and 2030 bonds.

Ecuador is considering buying back, restructuring or swapping $4 billion in bonds for other debt instruments, Viteri said last month.

Correa has vowed to seek a major discount in any restructuring.

'Difficult' for Ecuador to pay debt interest: minister

QUITO (AFP) — Ecuador's government suggested Friday it may not make a 135-million-dollar interest payment on its international debt that is due this weekend, as part of a partial moratorium on debt repayments.

Quito has until Sunday to pay the 135-million-dollar interest payment on Global Bonds that mature in 2030, but Economic Minister Diego Borja said it "would be difficult" for the country to make the payment.

Economically-strapped Ecuador announced on December 15 that it was defaulting on its commercial debt.

Borja has said the government would honor debt it deems to have been contracted legally, and not debt it sees as illegally amassed and which it is challenging in court.

The moratorium remains in effect for bonds worth 510 million dollars due in 2012, which is also the subject of negotiations.

Combined the Global 2012 and Global 2030 bonds amount to 3.21 billion dollars, a third of the country's total 9.98 billion dollars in external debt, or 19 percent of gross domestic product.

Cuban Health Official Lauds Co-Op with Ecuador

Quito, Feb 13 (Prensa Latina) Cuban Health Vice Minister Marcia Cobas Ruiz was optimistic with the boost of Cuban aid to Ecuadorian disabled and diseases linked to catastrophes.

In closing the Ecuadorian-Cuban Investigation Workshop and attention to the physically impaired, Cobas voiced satisfaction with the guests' active involvement.

The Cuban official called the four-day meeting first step towards fruitful bilateral work in favor of people, among other, with motor and hearing impairment and invalid.

More than 100 professionals of Ecuadorian ministries working social affairs, members of private institutions and others linked to impaired people learnt of Cuba's experience and methods.

Debates and exposition by Cuban specialists stressed on the social framework of the Cuban health model.

Thorough attention deserved a display on genetic development in Cuba and possible enforcement of several such initiatives in Ecuador.

The Cuban health official and physicians also met with directors and chiefs of service in this capital interested in Cuban treatment and rehab programs.

Cobas and her delegation are expected to visit Cotopaxi and Chimborazo provinces, in la Sierra, to asses the work of foundations assisting physically impaired.

They will also asses Guayas province from Monday to establish the possibilities to develop a pilot research on impairment.

Ecuador Seeks Bondholder Identities for ‘Discussions’

By Lester Pimentel and Nathan Gill

Feb. 13 (Bloomberg) -- Ecuador is asking investors who own the country’s bonds maturing in 2012 and 2030 to identify themselves, according to a letter posted by the Emerging Markets Traders Association.

Bondholders should contact adviser Lazard Freres, according to the letter signed by Finance Minister Maria Elsa Viteri. A spokesman at Ecuador’s Finance Ministry declined to comment on the letter.

Ecuador “wishes to engage in discussions with its private creditors with a view to find appropriate solutions to its Global bonds 2012 and 2030,” Viteri wrote in the letter. Ecuador is “convinced that a better understanding of the creditor’s views and expectations can help both parties to reach a suitable solution,” the letter said.

In December, President Rafael Correa defaulted on a $30.6 million interest payment for the country’s 12 percent bonds due in 2012. Correa has said those securities, along with the country’s 10 percent bonds, are “illegal” and “illegitimate.” Ecuador has a $134 million interest payment due on Feb. 15 for its $2.69 billion of 10 percent notes maturing in 2030, according to Royal Bank of Scotland.

Ecuador hasn’t decided whether it will make that payment, Viteri said yesterday.

The yield on Ecuador’s notes due in 2030 was unchanged at 29.34 percent at 1:54 p.m. in New York, according to JPMorgan Chase & Co. The bond’s price held at 30 cents on the dollar.

Last month, Ecuador decided to honor its 9.375 percent bond due in 2015 after invoking a 30-day grace period. The government views that bond’s legality differently than that of its notes due 2012 and 2030, Viteri said last month.

Ecuador’s 2012 and 2030 notes are restructured securities from the country’s last default in 1999.

An audit commission created by Correa said in a 172-page report in November that Ecuador’s global bonds due in 2012 and 2030 “show serious signs of illegality,” including issuance without proper government authorization.

Ecuador House Debates Electoral Bill

Quito, Feb 12 (Prensa Latina) The Ecuadorian Legislative Commission holds a plenary session Thursday to finish the second debate of the projected Organic Electoral Law or Democracy Code.

The discussion of the legislation restarts this afternoon, after it failed to get the support of the majority for its approval yesterday.

Fernando Salazar, assembly member and head of the Sub-commission for State Reform and Public Management, highlighted about 60 proposals were added to the final text to improve its scope and content.

The bill aims at developing constitutional regulations linked with the electoral system to enable, in line with the principles of proportionality, equal opportunity of vote, equity, parity, and alternation between women and men, he stressed.

It also defines electoral districts in the country and abroad, voters' rights and political-electoral duties, and the organization of the Electoral Function, among others, Salazar noted.

For assembly member Mauro Andino, from Alianza Pais Movement, this legal proposal will help strengthen representative democracy, and consequently, political participation.

Ecuador Defusing US Interference

Quito, Feb 12 (Prensa Latina) Ecuadorian President Rafael Correa demanded immediate government actions against foreign interference in national police.

We cannot allow "foreign powers to interfere in certain units of national police," said Correa in reference to the case of US diplomat Armando Astorga, who allegedly stole computers with classified information of the Police Intelligence Unit.

At the oath-taking ceremony of new ministers on Wednesday, Correa said that the Foreign Ministry is taking appropriate measures, and ordered new Government Minister, Gustavo Jalkh, to investigate those police officers who facilitated the information theft.

"This is inadmissible in the government of the Revolution of the Citizens; here we have a sovereign, honorable homeland and we will not allow it," said Correa in the ceremony at the Carondelet Palace.

He confirmed that members of a foreign embassy (US) withdrew their economic aid, as well as the computers and transportation means they had allegedly donated.

The computers had information from about 15 years of investigation into criminal networks, which "belongs to the State and we will not tolerate it," said Correa.

The Ecuadorian president's remarks come in the wake of his ordering the expulsion from the country of US embassy attache Armando Astorga, for trying to influence the police in appointing chiefs of that body.

According to local media, Astorga had not worked in the embassy since January.

Ecuador Confronts US Interference

Quito, Feb 11 (Prensa Latina) The removal of classified Ecuadorian information by US officials and the expulsion of an attache from that northern country's embassy are stressing links between both countries on Wednesday.

Those happenings show a clear collapse of relations between Quito and Washington, accused of interfering in the nation's internal affairs, local political analysts stated.

President Rafael Correa denounced that US officials took computers, office materials, vehicles and information from the national police.

He said the case will be probed and sanctions applied to those who don't understand they are living in a sovereign country.

Correa ordered Saturday the expulsion from the country of US embassy attache Armando Astorga, for trying to influence the police in appointing chiefs of that body. National media reports Astorga had not worked in the embassy since January.

The Ecuadorian decision to not heed that official's attempt to influence caused Washington in January to suspend aid valued at $340,000 USD to the police anti-smuggling division and froze another outlay for $160,000 USD to fight human trafficking.

This scandal comes to light a year after Correa denounced the infiltration of the US Central Intelligence Agency in the Ecuadorian intelligence services.

Ecuador VP Praises Cuban Health

Quito, Feb 10 (Prensa Latina) Ecuadorian Vicepresident Lenin Moreno highlighted on Tuesday in this capital the development achieved by Cuba in health care, and the solidarity of that Caribbean country with other Latin American peoples.

Opening the Ecuador-Cuba Workshop of Research in the Sphere of Disabilities, Moreno welcomed a delegation of Cuban doctors and said they came to pass on their experience in assisting people with disabilities and catastrophic diseases.

It is a pending task, refused by previous administrations, but the government and the People's Revolution are assuming to render services to a marginalized section of the population, he said.

The vicepresident said 12 percent of this country's inhabitants has problems of disabilities, something that requires a national effort to achieve inclusion of those citizens in society.

With Cuban support and experience, they will guarantee advisory and technical training to government entities and professional institutions involved in this country in the assistance to disabilities and catastrophic diseases, he said.

We hope that through experience exchange, we can build an inclusive society, he said, highlighting the progress made by the Island in health, despite the economic and trade blockade that the United States imposed 50 years ago.

The Cuban delegation is presided over by Health Viceminister Marcia Cobas Ruiz and Doctors Beatriz Marcheco, Mitchel Valdez, Emelia Icart, Niviola Cabrera and Miriam Portuondo.

The doctors will present, in the coming four days, their ideas and plans boosted in Cuba to assist people with disabilities and catastrophic diseases.

Ecuadorian Health Minister Caroline Chang and Cuban ambassador to this country Benigno Perez attended the opening of the workshop, which will conclude on Friday.

Ecuador accuses US official of taking police files

By Maria Eugenia Tello

GUAYAQUIL, Ecuador, Feb 10 (Reuters) - Ecuador's leftist president, Rafael Correa, on Tuesday accused a U.S. diplomat he expelled of taking computers and sensitive police files from the country.

Correa threw out the embassy official on Saturday, saying the low-level diplomat had meddled in police affairs by trying to handpick officers involved in a U.S. aid project.

"A foreign embassy official takes computers with him ... and information from the national police. We won't stand for this. We will investigate and make a complaint," Correa told navy officers in the city of Guayaquil.

"The days of colonialism are behind us," said Correa, an ally of Venezuelan President Hugo Chavez who faces re-election in April.

Correa, a U.S.-trained economist, has generally had good relations with the United States, but political analysts say he could bolster his poll ratings by taking a tough line on what he deems as foreign interference.

U.S. authorities have downplayed the incident, saying the official, Armando Astorga, had already left the Andean nation in January as part of a normal staff rotation.

Carlos Cordova, a pollster with Cedatos-Gallup said, "This shows you that Correa will use every tool to gain votes for his re-election. He wants to inflate the nationalistic spirit and portray himself as a strong leader."

Many Ecuadoreans are critical of U.S. policy in Latin America, particularly Washington's military aid to neighboring Colombia to fight a four-decade guerrilla war that sometimes spills across the border.

The United States is Ecuador's main trading partner and the destination for much of its oil and banana exports.

Eight Ecuadorians Run for President

Quito, Feb 10 (Prensa Latina) Eight of 10 candidates for the State's leadership registered Tuesday for Ecuador's April 26 presidential elections.

The National Electoral Council (CNE) disqualified presidential applicants Social-Christian Luis Fernando Torres, from Movimiento Cambio, and Pablo Guerrero, from Concentration of People's Forces.

CNE president Omar Simon stated that this concern an irrevocable decision because there were some irregularities in one percent of signatures presented.

With the CNE resolution, those two political parties have no possibilities to participate in the coming polls.

The country confirmed the participation in the coming elections of President Rafael Correa for Country Alliance Movement, Diego Delgado for Integration and Social Transformation Movement, Carlos Sagnay for Triunfo Mil Movement, and Martha Roldos for Ethic and Democratic Network and Democratic Pole.

Also on the list are former deputy Carlos Gonzalez for the Just and Solidary Independent group, Lucio Gutierrez for the Patriotic Society Party, Alvaro Novoa for the Renewal Party of National Action, and Melva Jacome for the Tierra Fertil Movement.

Those figures define now strategies to boost and prepare their branch offices in provinces for the electoral campaign starting March 10.