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Odebrecht scandal takes down Ecuador’s VP

3 Oct 2017, 1.06 am GMT

Odebrecht scandal takes down Ecuador's VP

Quito, 3 October (Argus) — Ecuador's once-powerful vice president was ordered to be detained today in a wide-ranging corruption investigation tied to Odebrecht, the Brazilian contractor that has admitted to paying bribes to secure major energy and infrastructure projects across Latin America.

The pre-trial detention order of vice president Jorge Glas was granted by a national justice court judge at the request of Ecuador's attorney general.

The move deepens new Ecuadorean president Lenin Moreno's split with his predecessor and political godfather Rafael Correa, who led the country for a decade until Moreno took office in May.

Moreno had already stripped Glas of his duties in August, after which the national assembly voted unanimously to lift his immunity to allow prosecutors to investigate his alleged links with Odebrecht corruption and bribery.

In addition to Glas, who is under investigation for bribery and conspiracy, the attorney general's office is prosecuting 18 other suspects, among them media entrepreneur Ricardo Rivera, Glas' uncle.

The investigation involves five infrastructure projects built by Odebrecht in the last decade, including earthmoving and construction of a water system at the site of the long-delayed 300,000 b/d Pacific refinery (RDP) project, the 60MW Manduriacu hydroelectric plant inaugurated in March 2015, the Daule-Vinces water and irrigation project inaugurated in December 2015, and the Pascuales-Cuenca refined oil products pipeline. The pipeline remains unfinished and has been found to have multiple construction defects.

Glas' defense attorney Eduardo Franco said the vice president will turn himself into the justice system, but he is not considering resigning his post. His legal team will challenge the detention order issued today, Franco said.

On 27 September, Odebrecht's former director in Ecuador, Jose Conceicao Santos, testified at Ecuador's consulate in Sao Paulo that Odebrecht had paid $16mn in bribes to Glas and Rivera.

Some $2mn was allegedly paid to Glas to allow the contractor to return to Ecuador after Correa expelled Odebrecht from the country in 2008, amid a dispute over alleged faulty construction of the San Francisco hydroelectric plant.

The remaining $14mn was allegedly paid as a 1pc bribe requested by Glas for every contract to build a state-owned infrastructure project awarded to Odebrecht, according to Santos.

Odebrecht engaged in corrupt practices mainly in Latin America since the early 2000s, according to an international plea deal reached in December 2016. Among the other affected countries are Brazil, Colombia, Peru and the Dominican Republic.

Moreno announced that the government will hire international auditing firms to investigate five strategic but defective oil projects tied to high-level corruption under the previous government, in which Glas also served as vice president, overseeing strategic sectors such as oil and telecommunications.

The audit targets include the Pascuales-Cuenca pipeline, a $2.2bn faulty upgrade of state-owned PetroEcuador's 110,000 b/d Esmeraldas refinery, the $600mn Monteverde LPG terminal whose dock is at risk of a collapse, the defective $85mn Bajo Alto LNG liquefaction plant, and the earthmoving and construction of a water system at the site of the planned Pacific refinery.

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