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Key Issues of Innocence

A lie never lives to be old – Sophocles

For more than ten years, the Filanbanco case has been put together by circles of power and some key players. It is a sequence of lies fabricated for the sole purpose of concealing the truth, the bankruptcy of a solid bank at the hands of various governmental administrations. They should have supported (the bank) so that it could continue being the economic engine that it had always been. But they used it to rescue banks friendly to the powers that be of that time. They should have confronted the responsibility of the various banking scandals. But they created a smoke screen using the Isaias Group as scapegoats.

1. It has been said that, Filanbanco was bankrupt before it was administered by the Government. That is false. The evidence shows, for example, the Officiate of the Superintendent of Banks to the Central Bank on the Financial Situation of the Filanbanco Financial Group, dated November 25, 1998, that certifies the solvency of Filanbanco before it was administered by the Government. It was the Government that took it under. Filanbanco was a solid and solvent bank.

2. It has been said that, it improperly used the credit from the BCE. It’s false. There were various documents demonstrating that the Central Bank of Ecuador monitored the proper use of the funds, at all times. A report by this bank, called, “Operations with Filanbanco” shows that they used the borrowed funds properly. The Central Bank of Ecuador, itself, pointed out the proper use of the credit on June 12, 2000. Filanbanco, itself, administered by the AGD certified the proper use (of the credit) to the President of the Supreme Court of Justice in its officiate dated December 5, 2000. After being appointed by the maximum judicial authority, the expert auditors Fernando Castillo and Elvira Pino did so as well. It is in the face of such proof that the Prosecutorial Ministry acknowledges its error in accusing the bank of abusing public funds. Filanbanco properly used the credit granted by and supervised by the CBE.

3. It has been said that, they diverted those monies to other companies including some pertaining to their Group. That is false. On three occasions, the courts asked the Superintendent of Banks to prove, expand and clarify their accusations but, the organism never did so. The courts asked the American banks, previously mentioned, about the diversion of such funds from the BCE. However, the United States banks responded to the courts that funds were never diverted to those beneficiaries at those entities. At first, the Isaias brothers were accused of taking the money. Afterwards, it was proven not to be so. Then, in a perverse game of test errors, they are accused of other motives.

The following expands on the information of these three key issues necessary to understanding what is being judged and what the true reality is.

PROVEN AND DOCUMENTED SOLIDITY

Filanbanco had a half a million clients which made it one of the engines of development of not only the coast but, the entire country. Filanbanco was and acted as a committed ally of the Ecuadoreans. It came to manage 500 million US dollars in international credit. It managed 40% of the country’s foreign commerce. Industries such as floriculture, bananas [...]

PROPER USE OF THE CREDIT

The reports by the Central Bank of Ecuador indicate that the bank’s administrators made proper use of the credit from the CBE. The liquidity loans granted by the Central Bank were designed to address the withdrawal of deposits by clients, payment of contingent transactions, payment to national and foreign banks and affiliates and for personnel and interest expenses of the [...]

LOANS? YES, LEGAL AND PRIOR TO ‘98

As it exists in other countries, Ecuador had laws that regulated the granting of credit linked to companies within the same group. It is a generalized practice in modern economies. The Bank was turned over on December 2, 1998 and until then linked loans were permissible up to a patrimonial percentage held by the shareholders. In fact, loans to businesses [...]