William y Roberto Isaías, anteriores directivos de Filanbanco que constan entre los hombres más ricos de Ecuador, huyeron del país en 1999 luego de ocultar más de $100 millones en fondos del Estado. Ellos usaron su mal-habida fortuna para comprar su salida segura del Ecuador y más tarde presionar a sus acusadores para reducir los cargos criminales en su contra.
Las mismas prácticas de presión resultaron en paquetes de extradición preparados por el Gobierno de Ecuador –GOE- que fueron insustanciales y no viables para el Departamento de Justicia. Sus maniobras financieras fueron suficientes, sin embargo, para permitir que el Departamento de Estado revoque sus visas por cargos de lavado de dinero en el 2003.
La presencia de los Isaías en los Estados Unidos ha provocado una irritación bilateral por casi seis años. Los medios del Ecuador, indignados, nos acusan de acoger a fugitivos y solamente hablar en nuestros compromisos anti-corrupción con la OEA. Y el ex Presidente Lucio Gutiérrez eligió parcialmente una plataforma basada en “traigan a los banqueros a casa” para demandar regularmente el retorno de ellos y otros como condición indispensable para apoyar las políticas de Estados Unidos. Desde el sur de la Florida, los hermanos recientemente incentivaron una corrida bancaria aquí, perjudicando los esfuerzos de Estados Unidos para ayudar a fomentar el crecimiento económico del Ecuador, una misión clave.
El Acta de Inmigración y Nacionalidad Sección 212 (a) (3) (C) declara inadmisible a cualquier “extranjero cuyo ingreso o actividades propuestas en los Estados Unidos en que el Secretario de Estado tenga suficientes motivos para creer que tendría serias y adversas consecuencias en política extrajera para el Gobierno de los Estados Unidos.Comprendiendo que el 3C puede también ser utilizado para deportar extranjeros, la Embajada busca el apoyo del Departamento para expulsar en forma expedita a estos individuos por motivos de política extranjera.
date: 5/2/2005 23:21
origin: Embassy Quito
This record is a partial extract of the original cable. The full text of the original cable is not available.
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C O N F I D E N T I A L SECTION 01 OF 04 QUITO 001000
DEPARTMENT FOR WHA/AND, WHA/PPC, CA/VO/L/C, L/LEI, L/WHA,
INL/C/CP, P, COUNSELOR
E.O. 12958: DECL: 04/19/2015
TAGS: PGOV, CVIS, EFIN, KCOR, EC
SUBJECT: EMBASSY RECOMMENDS 3C FINDINGS FOR ISAIAS BROTHERS
REF: A. QUITO 839
B. QUITO 623
C. 04 QUITO 3206
D. 04 QUITO 1745
E. 03 QUITO 2349
F. STATE 262132
G. STATE 262205
Classified By: Ambassador Kristie A. Kenney, Reasons 1.4 (b)
1. (C) SUMMARY: William and Roberto Isaias, former chiefs
of Filanbanco bank and among Ecuador's richest men, fled
Ecuador in 1999 after absconding with over $100 million in
government bailout funds. They used their ill-gotten wealth
to buy safe passage from Ecuador and later pressured
prosecutors to reduce criminal charges against them. Similar
pressure tactics resulted in GoE-prepared extradition
packages that were insubstantial and non-actionable by the
Department of Justice. Proof of their financial shenanigans
was sufficient, however, to permit the State Department to
revoke their visas on money-laundering charges in 2003.
2. (C) The Isaiases' presence in the United States has
proven a bilateral irritant for nearly six years. Ecuador's
rabid media accuse us of harboring fugitives and paying lip
service to our anti-corruption OAS commitments, and former
President Lucio Gutierrez, elected partly on a "bring the
bankers home" platform, regularly demanded their and others'
return as quid pro quo for supporting U.S. policies. From
south Florida the brothers recently spurred a bank run here,
hurting U.S. efforts to help foment Ecuadorian economic
growth, a key Mission goal.
3. (C) The Immigration and Nationality Act's Section 212
(a)(3)(C) renders inadmissible any "alien whose entry or
proposed activities in the United States the Secretary of
State has reasonable grounds to believe would have serious,
adverse foreign policy consequences for the United States
Government." Understanding 3C can be utilized to deport
aliens as well, the Embassy seeks Department support in
expeditiously expelling these individuals on foreign policy
grounds. END SUMMARY.
A Tangled Web of Corruption
4. (C) Filanbanco, Ecuador's largest bank, began
experiencing severe liquidity problems in 1998, owing to the
poor quality of its loan portfolio. The Central Bank
extended a $440 million liquidity support loan on the
condition the bank undertake no new lending activity. As
Filanbanco's health worsened, President Roberto Isaias and
Executive Vice President William Isaias orally instructed the
bank's head accountant to begin a series of transfers to an
offshore trust in the Caymans. On December 3, 1998, with
Filanbanco perilously close to running out of liquidity, the
GoE intervened in the bank's operation, ceding control to the
AGD, Ecuador's Resolution Trust Corporation-equivalent. The
Isaias brothers were removed as directors. Subsequent
bailouts totaling over $1 billion were unable to restore
financial health, and in June 2001 the GoE shuttered
Filanbanco, freezing over 350,000 individual accounts in the
process (Ref E).
5. (C) Throughout 1999, allegations surfaced regarding
William and Roberto Isaias' negligent, even criminal
management of Filanbanco. Feeling the heat, they left
Ecuador for Florida in late December 1999, where they remain
today. From Coral Gables, the brothers continue to
administer a business empire which includes Ecuador's sole
cable television operator, seventy radio stations, three
television stations, Ecuador's largest sugar processor, and a
yogurt brand; not one firm is registered in their names.
Among Ecuador's wealthiest expats, they also wield political
power, with strong ties to Coast-based parties the PSC
(center-right) and PRE (populist).
Their Power Over the Judicial System
6. (C) No records exist in Ecuador's migration system to
document the brothers' December 1999 exit. The Attorney
General's Office began investigating the brothers shortly
thereafter, and eventually recommended bank fraud charges in
a report presented to Attorney General Mariana Yepez. Yepez,
whose PSC ties were widely known, immediately departed on an
unannounced trip to Bogota where she allegedly met with PSC
stalwart Xavier Neira (confidential Embassy sources claim
Neira paid her a $2 million bribe). On her return from
Colombia, Yepez refused to sign the indictment and disbanded
the financial crimes investigative unit. An indictment
eventually came two months later, but much of the evidence
earlier uncovered had disappeared.
7. (C) A year passed between the indictment's issuance and
its June 2001 delivery to the USG as part of a GoE
extradition request. Upon receipt, it was apparent the
charging document and supporting files were insufficient to
bring the Isaiases' case before a U.S. extradition judge.
Following up, DoJ attorneys visited Ecuador in 2003 for
meetings with Embassy staff, financial investigators, and
government officials (the latter refused to engage). They
concluded that the lack of evidence showing the Isaias
brothers had benefited personally from the illegal transfers
would prevent the extradition case from progressing (we since
learned the Isaises' domestic employee, in the Caymans,
signed for the $107 million wire transfer). Yepez
subsequently insulated the brothers further, reducing bank
fraud charges to civil fraud, a non-extraditable offense
(Ecuador's then-Supreme Court president later overturned her
ruling, however). Bank fraud changes remain active against
Why Self-Flagellate When You Can Gringo-bash?
8. (C) The United States Government did not bankroll the
Isaises, co-sign their bad loans, embezzle government bailout
funds, smuggle them across the border in a car trunk, bury
evidence, or pressure prosecutors to reduce charges against
them. Yet by reading the press in Ecuador you would think it
had. As news of the brothers' thievery went public,
headlines like "U.S. Lays Out Welcome Mat to Pension Fund
Robbers" and "Bush's Words, Actions Differ on Corruption"
became commonplace. Local temperatures peaked in 2003, when
Ecuadorian media carried Miami society pages' coverage of
Roberto's daughter's wedding, a million-dollar affair held at
the Versace Mansion.
9. (C) Media indignation fed public discontent and
eventually drove GoE policy. Lucio Gutierrez, a former Army
colonel and 2000 coup leader, won Ecuador's presidency in
November 2002 by rallying the underclasses with a populist,
far-left platform; a key plank was his promise to "bring the
'corruptos' home to face justice." In early meetings with
USG officials, a Washington call on President Bush included,
he reiterated his interest in successful banker
repatriations. Subsequently, Gutierrez linked the return of
the Isaiases and others of their ilk to Ecuadorian support
for key U.S. initiatives, from Article 98 to hemispheric free
10. (C) Physical separation from Ecuador has not blunted the
Isaises' influence nor their capacity to do harm. In
September 2004, TeleAmazonas TV, owned by the Egas family,
financial rivals of the Isaiases, broadcast a series of
reports on Ecuador's 1999-2000 bank collapse. One segment
concerned Roberto Isaias and his activities during the
period. TeleAmazonas officials claimed that Roberto
contacted them before the show aired, threatening retaliation
if it did. In retaliation, the Isaias-owned TV TC broadcast
a piece alleging the insolvency of Egas-owned Banco de
Pichincha, the nation's largest bank. Contacts told us that
a dangerous bank run ensued, threatening the Ecuadorian
financial system's solvency. Only after Church leaders
brokered a "truce" did depositors begin to re-invest their
savings in Banco de Pichincha, hitherto Ecuador's most solid
USG Not Standing Still
11. (C) In 2003, prospects for extraditing the Isaias
brothers looked hopeless -- whether from intimidation or
subornment, Ecuadorian officials simply were unable/unwilling
to provide the necessary supporting documentation. A
politically weak Gutierrez had turned for support to the PSC,
whose leaders, many with business ties to the Isaises and
fearing implication in future trials, wanted the brothers as
far from Ecuador as possible. Regardless of the president's
overtures to his former political enemies and his
administration's sub-par extradition performance, his public
commentary remained unchanged, promising he would move heaven
and earth in delivering the bankers to Ecuadorian courts.
12. (C) Deportations require less GoE input than
extradition. Convinced the brothers were involved in
financial crimes but unable to gather sufficient information
to prove they had personally benefited -- an imperative for a
successful extradition -- DHS began working to establish
both administrative (misrepresentation) and criminal (money
laundering) grounds for the brothers' removal. Their
investigations on the latter bore fruit, and in September
2003, the Department of State, invoking Immigration and
Nationality Act (INA) Section 212 (a)(2)(I), revoked "any and
all visas issued to or held by William and Roberto Isaias" on
money laundering grounds (Refs F, G). DHS special agents in
Miami assumed responsibility for notifying the brothers.
Not There Yet
13. (C) Possessing a U.S. visa does not guarantee entry into
the United States, nor does losing one mean immediate
removal. Employing the finest attorneys their millions
allow, the Isaises have successfully fought deportation for
years, despite State's revocations of their E-2 and other
visas. In December 2004, however, a deeply-buried section
(5304) of the 2004 Intelligence Reform/Terrorism law made
prior revocation of an alien's nonimmigrant visa a grounds
for removal (the Intel Reform law actually updated the INA's
"Classes of Deportable Aliens" provisions). As State's 2003
revocation had covered "any and all" visas, the brothers
14. (C) Subsequent DHS Miami inquiries revealed, however,
that immigration adjudicators had approved change-of-status
applications for William and Roberto Isaias, from E-2 to
H-1b. It remains unclear whether the processing occurred
before or after the revocation, but in either case, it
appears that State's actions would trump the adjudicators'
(if the DHS changes occurred beforehand, the revocations'
"any/all" provision would take precedent; if the changes
occurred afterward, we imagine the adjudicators' likely
lacked access to system "hits" and feel justified in
requesting review). Despite this, the brothers still enjoy
valid H1-b status in the United States, as the DHS Service
Center has not yet reconsidered the case.
Why We Don't Want Their Kind
15. (C) In November 2004 remarks in San Antonio, U.S.
Permanent Representative to the OAS John Maisto asserted that
corruption was the single biggest inhibitor to economic
growth in the developing world. "At the Monterrey Summit of
the Americas," Maisto explained, "OAS member states, the
United States included, pledged to deny safehaven to corrupt
officials, those who corrupt them, and their assets."
President Bush put force behind the anti-corruption mantra in
Proclamation 7750, which suspends the entry of corrupt
persons into the United States.
16. (C) The gravity of the Isaiases' graft, and the
bilateral damage their U.S. domicile has caused, make the
case more than one of simple corruption, however. Congress
deposed Gutierrez on April 20, citing as justification his
"dictatorial" bent and inability to govern, not the Isaiases.
In the post-mortem, however, former allies and commentators
argued that Gutierrez's abandonment of his base and inability
to meet campaign promises, extraditions included, contributed
greatly to his downfall.
17. (C) "Deepening Democracy's Roots" and "Promoting
Economic Growth" rank one-two on the Embassy Mission
Performance Plan's list of strategic goals (which effectively
translate into U.S. foreign policy objectives in Ecuador).
The Isiases' corruption and influence-peddling compromise our
efforts to reach both. Further, their continued presence in
the U.S. provides grist to Ecuador's yankee-bashers who seek
to drive our nations apart. Despite early, expected
pandering to these ultra-nationalists, Ecuador's new
president, Alfredo Palacio, has expressed desires for close
relations with the United States. Expelling the Isaias
brothers might provide Palacio a useful deliverable and quiet
the restive left, boost rule of law here at a critical
moment, and confirm the USG's anti-corruption bark has bite.
18. (C) We therefore seek Department support in
expeditiously removing these individuals on foreign policy
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