The Guillermo Lasso administration is facing its fourth alleged corruption scandal and this one involves his brother-in-law.
As a result of a series of leaks of recordings that involve former officials, servants and people close to the Lasso government, the State Attorney General’s Office (FGE) opened a new investigation called ‘Caso Encuentro.’
The name of the inquiry coincides with what had been the slogan of the government administration since the beginning of its administration: ‘Gobierno del Encuentro.’ But, after the Prosecutor’s Office used that name, the government stopped using the motto.
Currently, the particulars of the case are not being made public since it remains in the preliminary investigation phase. However, the Prosecutor’s Office has called 10 people to offer a statement, freely and voluntarily. On the political side, the Assembly created a commission to investigate the case.
Below we’ve attempted to outline the case, its beginnings, its progress and what is to come.
Suspicions about an alleged corruption structure which worked within the Government of Guillermo Lasso, were born on January 9, 2023.
That day, the digital media La Posta released an audio of statements being made by Leonardo Cortázar, a Guayaquil businessman. Cortázar is heard on the recording talking about the existence of an alleged corruption network that managed the electricity sector contracts during the Lenín Moreno government and which continues in the Lasso administration.
“I had a hundred and the man said, brother here are sixty, and how much are you going to give us and take twenty, he told H (Hernán Luque),” says Cortázar in the transcription of the audio made by La Posta.
The next day, another excerpt from the recording was released and involved Ronny Aleaga, a correísmo assemblyman. On this part of the recording, Cortázar identifies the legislator as his contact in the corruption scheme.
In a photo released by La Posta, Cortázar and Aleaga were seen in a pool at the Miami house of Xavier Jordán, who was allegedly involved in hospital corruption that broke out during the Moreno period and who is also being investigated for links to Leandro Norero, a former financier of drug gangs.
On January 11th, another audio was leaked. This was an alleged conversation between Rubén Chérrez, the general manager of Inmobirealstate SA and Agricolasas SAS, and Hernán Luque, former president of the board of the Empresa Coordinadora de Empresas Públicas (EMCO) in the Lasso government. In the dialogue, Danilo Carrera, Lasso’s brother-in-law, is mentioned.
The next leak occurred on January 16, 2023. That day, an audio was revealed in which Luque is allegedly heard asking for his “share” of $150,000 and that it be deposited in an account in Andorra.
The last audio was released on January 23rd. This was a new conversation (which allegedly happened in March 2022) in which Chérrez and Danilo Carrera are having a discussion, and Chérrez says that they will meet with Foreign Minister Juan Carlos Holguín at Carrera’s house.
Carrera is mentioned in the audios as the head of the alleged corruption. Through his lawyer, Carrera responded to La Posta, denying the accusations. He later sued the portal’s journalist, Andersson Boscán, for alleged defamation, and requested half a million dollars in compensation.
The government’s reaction
The Government’s first response to this case was given on January 10, 2023. Through an official statement, but without mentioning the leaks, the Presidency ratified “its principle of fighting corruption.”
A day later, in an interview with Juan Carlos Calderón, Lasso was asked directly about the audios. The President said that “there is no trace of corruption” in his government and that Danilo Carrera is an “impeccable man.”
On January 16th, after the new audio in which Luque was supposedly heard asking for $150,000, Lasso asked the National Police to locate Chérrez and Luque. Four days later it was confirmed that Luque had left for Argentina. Chérrez has also fled Ecuador, but his whereabouts are unknown at this time.
In the letter sent to the Prosecutor’s Office, Lasso suggests that he will use international cooperation to locate them.
On January 22, 2023, in an interview with Milton Pérez, Lasso said that his brother-in-law, Danilo Carrera, must assume his responsibilities. He also said that Luque left the government for being “clumsy.”
One day after that statement, Luis Verdesoto, former Anti-Corruption Secretary, delivered a report on possible corruption scenarios at EMCO. Verdesoto presented seven hypotheses about the scheme.
However, minutes after the document was released, Verdesoto resigned. Iván Correa, Secretary of Public Administration, described the report as “generic” speculation.
The Prosecutor’s Office raid
The response from the Prosecutor’s Office came 14 days after the first leak. On Friday, January 20, 2023, the Public Ministry led eight raids in Guayaquil and one in Quito. During these proceedings, the Prosecutor’s Office labeled the investigation as ‘Caso Encuentro.’
In the raids, tax agents collected documents, storage devices, cell phones, computers, jewelry, and other items. The owners of the raided sites were not disclosed.
However, the Prosecutor’s investigation may have tipped its hand when it called 10 people to testify ‘freely and voluntarily.’ They are:
- Danilo Carrera, brother-in-law of President Lasso (Carrera’s home was not among those raided by the Prosecutor’s Office).
- Juan Carlos Bermeo, former Minister of Energy.
- Jairón Merchán, Secretary of Planning.
- Oswaldo Medina, Administrator of Corporación Nacional de Electricidad (CNEL)
- Luis García, Special Clients leader, CNEL.
- Mercedes Plaza, widow of César Monge, former Minister of the Government of Lasso.
- Hugo Orellana, former President of EMCO.
- Joaquín Ponce, President of EMCO.
- Xavier Vera, former Minister of Energy.
- Juan Carlos Holguin, Minister of Foreign Affairs and Human Mobility.
On Friday, January 27, 2023, Holguín was the first to appear before the Prosecutor’s Office. Holguín said that he has no relationship with Chérrez, Luque or Danilo Carrera.
The Assembly seeks political leaders
Before the outbreak of the Encuentro Case, the National Assembly created a Multiparty Commission to investigate the alleged corruption plot.
On January 26, 2023, the Commission met for the first time. It chose Viviana Veloz, a legislator from the correísta bench, as its president. Mireya Pazmiño, former Pachakutik, is the vice president.
The multiparty commission will be in charge of carrying out an investigation around the leaked audios that would reveal an alleged corruption network in the Executive, related to appointments in public companies.
The commission has one month to prepare an investigative report on the Encuentro case. To do this, it will call appearances of public and private officials who contribute on this case.
With what has happened so far with the so-called Encuentro case, there are two areas, political and judicial, in which new developments are expected.
The State Attorney General’s Office will continue to gather evidence in the preliminary investigation. In this phase, which can last up to two years, versions can be collected, information requested, monitoring and wiretapping may happen.
When the Public Ministry manages to consolidate a case, the agent in charge will ask the court for a date and time to file charges against the suspects, based on the evidence collected. But there is no tentative date for this to happen.
Once charges have been formulated, the procedural deadlines will begin. The Prosecutor’s Office then has 90 to 120 days to refine its theory of the case and present it before a judge with a formal accusation, prior to a trial.
At the end of February 2023, the Assembly will discuss in plenary the report of the Multiparty Commission on the Encuentro case.
Once the document is approved, it will be the Plenary that decides what to do based on the recommendations of the Commission. For example, political prosecutions may be initiated against current and former officials involved in the case.
In addition, the information collected may be sent to the Prosecutor’s Office to feed the file of its investigation.
Fourth corruption scandal
The Encuentro case is not the first to shake the government of Guillermo Lasso since he took office in May 2021.
The first scandal came in March 2022 and involved the Ministry of Agriculture. The Prosecutor’s Office is investigating the alleged participation of Ernesto Ripalda in the negotiation of a position in the Vice Ministry of Agriculture, for more than $2 million. The case has not passed the reserve stage.
At that time, the Prosecutor’s Office admitted that this was not the only case and that, since September 2021, it officially opened several previous investigations for alleged acts of corruption around various public entities and political actors.
Then came the so-called Danube Case. This case was initiated by an anonymous complaint received on the 1-800-Crime line. Now it is known that the call was made from the office of Carola Ríos, director of the Servicio Nacional de Aduana del Ecuador [National Customs Service of Ecuador] (Senae), who claimed she was offered $3 million in exchange for a position in the Senae.
Although he is not prosecuted, in this case the “lifelong friend” of the President and his former presidential adviser for banana affairs, Juan José Pons, was mentioned. His home was searched. Danilo Carrera and Creo assemblyman Guido Chiriboga were also mentioned.
One of the defendants accepted the commission of the crime and received a reduced sentence through an abbreviated procedure.
After the scandal of the Danubio case, on July 28, 2022, the former manager of Petroecuador, Ítalo Cedeño, filed a complaint with the Prosecutor’s Office regarding the same case.
According to the statement from the state oil company, the complaint was made to find the alleged perpetrators and masterminds of influence peddling in Petroecuador. No further details of the process or the complaint are known because it remains reserved.