An important government official, a controversial lawyer and his wife, a sports leader, and even the lawyers of President Rafael Correa are secretly directing the sale of the Pacific National Bank (PNB), according to several emails. This might explain the silence regarding the sale of the controversial financial entity, which just two years ago received a hefty fine for violating anti-money laundering regulations. Information suggests that close collaborators of the correísmo will earn juicy commissions at the expense of misappropriating a state asset.
“We’re talking about a return of 10% for the legal and financial advice to achieve this goal. (…) The aim is for the price to be competitive but not controversial. It makes no sense to carry out an operation that is not well viewed, although it’s desirable for the price to be as low as possible, within acceptable limits…,” say the personal communications of Correa’s political operatives regarding the PNB.
To understand the issue, some notes are necessary. The PNB was the Miami, Florida (United States) subsidiary of Banco del Pacífico, the second largest bank in Ecuador. Its office is located at 1390 Brickell Avenue, one of the most exclusive areas of that city. Additionally, this bank has a subsidiary in Panama.
Its founder, Guayaquil native Marcel Laniado de Wind, opened the institution in 1972, always linking it with the prevailing political power and positioning it as one of the most modern in Latin America. However, after his death in 1998, things began to change. The following year, 1999, a severe economic crisis hit Ecuador, dragging down much of the financial system in the country. Banco del Pacífico collapsed, revealing its poor administrative management. It had to be absorbed by the Ecuadorian state, along with the PNB. This rescue is estimated to have cost the South American nation around $800 million.
While it was viewed as a prestigious institution, problems always surrounded Banco del Pacífico. For instance, through a branch in Colombia, it became embroiled with former president Andrés Pastrana and several high-ranking officials from his government in a possible corruption case. But the strongest scandals occurred under the current government: that of Rafael Correa.
In 2007, Banco del Pacífico’s Miami branch, the PNB, was at the center of serious corruption allegations involving two direct relatives of Correa, his aunt Cassia Delgado, who served as his personal secretary, and his cousin Pedro Delgado, who was his financial advisor and is now a fugitive from justice. Frequent and large unjustified transactions were reported.
The most recent incident occurred in 2011. On March 23 of that year, the Office of the Comptroller of the Currency (OCC) issued a report determining that the PNB failed to establish mechanisms to control money laundering. Transfers were detected from two private accounts in its Ecuadorian headquarters, exceeding $45 million monthly. It was also found that the PNB arbitrarily raised the threshold for daily reports from $5,000 to $50,000 for those same accounts. Additionally, incomplete reports were found, as well as others submitted eight to 12 months late. As a result, the regulatory body imposed a fine of $7 million on the Miami branch and additional amounts on its executives.
But a key event also occurred in 2011. At the end of that year, Rafael Correa decided to transfer the shares of Banco del Pacífico and its subsidiaries to the National Financial Corporation (CFN), a state entity whose board is chaired by Camilo Samán Salem, one of his key collaborators and friends. However, concerning the PNB, this transfer was deemed inconsistent by U.S. authorities, resulting in the order to establish a trust for the sale of its shares. In other words, due to Correa’s decision, Banco del Pacífico lost its Miami subsidiary. It’s now just a matter of finding out who the buyer will be. And that’s where high political and economic interests are at play.
Samán is a trusted man of Correa. He was the treasurer of his 2006 campaign, which brought him to power. The day after his inauguration, Correa appointed him as governor of Guayas province, the largest in the country. He did so despite the fact that his friend Samán had to answer for a debt of nearly $40,000, a fact that was hurriedly attempted to be covered up. A day before taking the governor’s office, Samán sought to pay that debt with money from companies owned by Enrique Cadena, a man recently linked to oil dealings and under investigation by Ecuadorian and U.S. authorities. The payment was not processed, and Samán took office without resolving that debt, which is prohibited by Ecuadorian law.
Nonetheless, Samán remained in the governor’s office for just over seven months. He was removed when the Electoral Supreme Tribunal, which oversaw elections in Ecuador at the time, detected irregularities in the management of campaign funds for Correa. In fact, it imposed a penalty of almost a million dollars on the Alianza País movement (of Correa), which a year later, when the government had already controlled the institution, was reduced to only $44,000.
Samán has faced various legal issues in recent years, mainly due to debts. Following the 1999 economic crisis, his family business was on the verge of bankruptcy. Due to his precarious financial situation, he began selling sandwiches in a populous area of Guayaquil. His lawyer in several legal processes was Gutemberg Vera, who along with his son Alembert gained fame as the controversial defender of Rafael Correa in the lawsuit brought by the newspaper El Universo for $80 million.
It is likely that the closeness between Samán and Gutemberg Vera led to their becoming operators for the sale of the PNB, all under absolute secrecy.
On March 20, 2012, when the U.S. government had already announced the obligation to sell the PNB, Venezuelan financial advisor Miguel Méndez wrote an email to lawyer Alembert Vera and to Galo Borja, former deputy minister of foreign trade in Correa’s government, who conducted commercial operations with Iran through his companies during his tenure. Borja is also a current assemblyman for Alianza País.
“We’re talking about a return of 10% for the legal and financial advice to achieve this goal. This should include any obligations arising to successfully conduct the operation…,” Méndez wrote, regarding the PNB.
“The aim is for the price to be competitive but not controversial. It makes no sense to carry out an operation that is looked down upon, though it’s desirable for the price to be as low as possible, within acceptable limits…,” he states in another part of the communication.
“As I understand it, there is a possibility for GV to be the representative of the owners of the bank for the sale. That would be excellent, but in that case we should consider the impacts on the public structure of the Advisory Group. The Financial Group will guide us on the necessary technical aspects…,” Méndez explained.
However, this financial advisor’s actions did not only pertain to the PNB. Also mentioned in this email was the sale of the Panama office to the same economic group, whose name is not disclosed.
“I hope that with this we can continue to progress in this topic. I reiterate the high interest that exists in BOTH (sic) institutions. Nevertheless, if it is only one, we move forward. But I suggest we work on both. Later I will meet with the person, so if there are doubts or questions regarding this, I could convey them immediately,” concluded his letter.
Just a few months later, on June 28, 2012, Méndez reappeared to announce an important meeting. The letter was sent to Alembert Vera, Galo Borja, and to the email address of Gutemberg Vera’s law firm.
Méndez referred to the forced sale of the PNB. To formalize this sale, on March 28, 2012, a Trust Agreement for the Transfer of Certain Shares or Dissolution of the PNB was signed between the representative of Banco del Pacífico, the trustee Robert Barnett, and a representative of the National Financial Corporation, as the sole shareholder of the PNB. The document set forth the conditions for this bank’s sale, including a one-year timeframe for it.
However, the months went by and the sale did not materialize. This is where a new operator enters the scene: Mercedes Ríos Sono de Elizalde.
On November 7, 2012, Ríos copied a letter to Alembert Vera and Antonio Elizalde, her husband. It was the communication in which Rolando G. Echemendía, the principal director of The Wexxon Group, officially announced his interest in purchasing the shares of the PNB. The Wexxon Group is a consortium based in Miami, primarily dedicated to construction. The full name of its top executive is Rolando González Echemendía. Elizalde, on the side, is a jurist under investigation for a controversial corruption case in Ecuador.
However, despite Mercedes Ríos’ efforts, the deadline for the sale expired without success. On March 28, 2013, there was no buyer for the PNB. Although the trust conditions signed for the sale stipulated that once the deadline expired, the institution would be liquidated, that did not happen. Several Ecuadorian media outlets reported that the deadline was extended, although there were no details or an official statement. The media that covered this issue emphasized that Camilo Samán did not comment, arguing that the sale process needed to remain confidential.
Despite the government’s silence, new clues have recently surfaced regarding what is happening with the sale of the PNB.
Just a couple of months ago, on June 25, Mercedes Ríos Sono resurfaced, directing a letter to González Echemendía, copied to Fernando Mantilla and her husband Antonio Elizalde. Mantilla is a controversial sports leader, prosecuted for allegedly misappropriating $25 million from an insurance company where he provided services, and the president of Deportivo Quito, a football team facing serious financial problems.
In the letter, Ríos tells González Echemendía that “in accordance with our conversation, I proceed to present Mr. FERNANDO ESTEBAN MANTILLA (sic), an executive residing in Quito, Ecuador, who will contact you in Miami on Wednesday, June 26, to follow up on the sale of the PACIFIC NATIONAL BANK DE MIAMI (sic), for which I am transmitting your coordinates…”.
Two days later, a new communication from Ríos surfaces, where she mildly reproaches Fernando Mantilla. “Today I contacted Mr. Rolando González, who informed me that you have not called him as we agreed. I am forwarding your coordinates for the necessary purposes…”.
After the gentle reminder, contact was made. So much so that on July 10, Ríos again wrote an email to González Echemendía, stating that “Mr. Fernando Esteban Mantilla informed Antonio today that your proposal to purchase the Pacific National Bank was accepted by the President of the CFN, and that this week the documents you requested will be ready, along with the authorization to conduct Due Diligence at the institution.” Understand that the President of the CFN is none other than Camilo Samán Salem, Rafael Correa’s trusted man.
This way, the sale of the PNB could reach its conclusion. Political operators from the correísmo, led by Samán, would be about to finalize a substantial profit at the cost of a state asset. This bank is estimated to potentially sell for around $300 million.
In the next installment of this series, there will be more information about lawyer Antonio Elizalde, the corruption case surrounding him, and his excellent connections with Correa’s government. More details will also be provided about Fernando Mantilla, the controversial sports leader, who is currently the most successful broker of insurance with Ecuadorian state companies.