H18856
Headlines : GovernmentEcuador Finds Illegal Debt
Ecuador, you might recall, was the Economic Hitman’s first target economy. It’s where he went to serve in the Peace Corps, he later determined, as an agent of the US National Security Agency.
They later scooped him up and urged him on as he
1. figured out how to systematically mire the world’s naive economies in crushing debt
2. by selling them dinosaur projects guaranteed to never show a return on investment
3. while paying out huge kickbacks to local predators.
Smart guys were bound to come along and pull the rug out from under the scam. And the iron has never been hotter — now that the global economy is collapsing under the pressure of what appears to be US centric fiscal irresponsibility.
[Posted By microdot]Republished from Bloomberg
Ecuador’s debt audit commission said it uncovered “illegality and illegitimacy’‘ in the country’s foreign obligations, findings that may give President Rafael Correa the legal basis he’s sought to halt bond payments.
The growth in Ecuador’s debt over the past three decades “occurred for the benefit of the financial sector and transnational companies and clearly went against the interests of the country,’‘ the commission said in the report.
The report says that much of the debt is illegal because usurious rates were charged; some bonds were issued without proper government authority; some bonds weren’t registered with the Securities and Exchange Commission in the U.S.; and because the Federal Reserve’s interest-rate increases in the late 1970s amounted to a “unilateral raising’‘ of global rates.
Correa called the audit results “truly disastrous’‘ and “conclusive.”
“We’re not talking about the perception of debatable illegitimacy,’‘ he said
Salomon Smith Barney, now a unit of Citigroup Inc., and J.P. Morgan, now known as JPMorgan Chase & Co., were cited in the report for having managed a 2000 debt restructuring without Ecuador’s “formal authorization.’‘
A spokeswoman with JPMorgan in New York, and a spokeswoman for Citigroup in New York, declined to comment.
Posted by microdot
What?
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Posted by microdot on Wednesday, April 25th 2007
Gee, 1 2 3… Just like how the majority of Americans and American businesses are kept in crushing debt by predatory conglomerates (phone plans, mortgages, insurance, car payments, cable bills, ATM fees, insurance, ETC., ETC., ETC....).
Next order of business (currently formulating): remove the oil giants’ gigantic rip-off of Ecuador.
84% of debt is odious
Brazil Recalls Ambassador to Ecuador in Loan Dispute
Nov. 21 (Bloomberg) — Brazil recalled its ambassador to Quito for consultations after Ecuador asked an international arbitration court to suspend a $243 million loan owed to Brazil’s state development bank.
Ecuador didn’t talk to the Brazilian government before asking the Paris-based International Chamber of Commerce to suspend loan payments to the Banco Nacional de Desenvolvimento Economico e Social, according to a Brazilian Foreign Ministry statement today.
“We recalled the ambassador to do a broad review of our cooperation” with Ecuador, Celso Amorim, Brazil’s Foreign Relations Minister, said in a press conference in Sao Paulo. Brazil hasn’t recalled an ambassador in “a long time,” Amorim said.
Brazil’s move deepens a two-month dispute with Ecuador over a hydroelectric power plant built by Rio de Janeiro-based Construtora Norberto Odebrecht SA. Ecuador sent troops Sept. 23 to seize the $338 million power station, which had to be taken offline after a year of construction, and expelled Odebrecht from the country.
The debt owed to the Brazilian development bank, or BNDES, was included in a broad audit of Ecuador’s debt that President Rafael Correa ordered.
Former Ecuador leaders deny profit from bond deals
By JEANNETH VALDIVIESO – 1 day ago
QUITO, Ecuador (AP) — Former Ecuadorean leaders said Friday that President Rafael Correa was playing politics when he accused them of taking bribes during $3.9 billion in debt renegotiations.
Correa said the former officials and two investment banks — U.S.-based J.P. Morgan and Salomon Smith Barney, now part of Citigroup Inc. — should repay debtholders after a government audit found they profited off of the “illegitimate” deals.
Spokesmen for both banks declined to comment on the charges. But former President Sixto Duran-Ballen, who worked with J.P. Morgan to refinance debt in 1994, said a government-appointed audit was full of “lies” and that his negotiating team acted in good faith.
The audit found that Ecuador should never have renegotiated the debt at all because it was unable to make payments for six years after a devastating earthquake, meaning that under U.S. law it should have been wiped from the books.