Chronology
Filanbanco sank in government hands and not because of the mismanagement of its original owners, the Isaías
Now, those that took the bank during its last years of operation to its demise intentionally play on confusion and obscurity. They do not want a transparent case. They would rather confuse public opinion with worthless suits and documents created ad hoc which are unjust in a state of law.
The motives are clear; these nefarious managers never abandoned their positions of institutional responsibility and/or years later they have returned to politics. That is why they all want to conceal the rogueries and illegalities they committed a decade ago, all of which are documented in this site. At stake is their public image, their employment and significant personal and economic benefits that they and those around them enjoy while they continue to confuse the Ecuadorean people.
It is necessary to avoid this confusion. This is a story of what happened, the chronology of an abuse.
1994 Antecedents of a crisis
In 1994 electrical blackouts lasting up to eight hours daily prohibited normal business activities. This decreased corporate production and sales. That in turn caused the delay of debt payments to the banks. A year later, war broke out with Peru. The political crisis caused financial instability and high interest rates.
1998 Cruel economic crisis
Disasters like El Nino, international market crisis and the reduction in the price of petroleum made an unsustainable equation for Ecuador, which in fact, is an exporter of crude oil. The crisis, which began at the end of 1997 and the beginning of 1998, also affected Brazil, Russia and Asia. It caused a decrease in exports and international banks to close their lines of credits for Ecuador. The financial system collapsed. Twenty banks resort to obtain credit from the BCE to solve their liquidity problems. The owners of Filanbanco handed the bank over to the AGD.
1999 Filanbanco: a smoke screen
The crisis was so great and its management utterly disastrous that some key characters in this case decided to create a smoke screen in order to conceal their responsibility in the banking scandals of: Cofiec, Popular, Pacifico and La Previsora, in addition to others that stunned the Ecuadorean people at that time. The plan was simple: use Filanbanco’s money along with some public funding to rescue four banks that had failed due to bizarre management but, had ties to the presidential administration of the day. Once the banks were rescued, the former-proprietors would be held out as the scapegoats of this enormous disaster. The Government froze all deposits in the financial system this year.
2000 The persecution of the shareholders
In March of this year, after a spectacular devaluation, the Sucre was abandoned as the country’s currency only to be replaced by the US dollar. In June, before the official bankruptcy of Filanbanco in 2002, the prosecutorial ministry initiates a case for embezzlement (improper use of public funds) without any evidence against the shareholders of Filanbanco. Laws are written and modified with the sole intention of applying them retroactively in order to persecute them. At the end of this year, the evidence presented by the defense allows the president of the Supreme Court to dismiss the charges against the government employees but, not those from the private sector. There were two rulings in December that permitted this to occur.