The power amassed by a group of political operatives within Rafael Correa’s government extends from negotiating the Pacific Bank in Panama and Miami, receiving substantial commissions for state insurance contracts, to making arrangements for a multimillion-dollar ruling. Two prominent names within this privileged group are Fernando Mantilla and Antonio Elizalde Pulley. “Just to confirm what was agreed a few minutes ago, please reply with your ‘approved’ regarding the agreed figures, once the pending payments by Senagua are made: US 500,000 net transferred to my account or to whomever I delegate as an agent’s commission…”, reads one of the intercepted communications, serving as evidence of the shady dealings.
To start, Fernando Mantilla, a 53-year-old Ecuadorian, holds no public office and is currently the president of Deportivo Quito, a football team drowned in economic debts. He is accused of embezzling one of Ecuador’s most recognized insurance companies. He acts as a bridge between political power and major businesses. Paradoxically, Mantilla is seen as a successful businessman. Since he doesn’t hold any government position, he is not linked to the murky practices of Rafael Correa’s administration. His most notable period was when he headed Seguros Colonial, one of the country’s largest insurers. He joined the firm on May 11, 2006, when he was appointed executive president for a three-year term.
Due to his apparent good management, the shareholders of Seguros Colonial re-elected him twice consecutively—first on March 24, 2009, and again on January 4, 2012. However, this is where problems began. Serious allegations within the company led to his resignation on June 7, 2012. Immediately, the insurer appointed Diego Sosa as his successor, who conducted a thorough audit. The most severe findings he uncovered were millions in diverted funds into personal accounts. Seguros Colonial filed a lawsuit against Mantilla, which was received on January 31 of this year by the Tenth Civil Court of Pichincha.
At its core, the lawsuit details that in 2006, Mantilla opened an account at Helm Bank in the United States under Seguros Colonial’s name. This account was never recorded in the company’s accounting, leaving its transactions without backing or shareholder authorization. But that’s not all. Seguros Colonial calculated that since 2010 alone, the embezzlement through that account reached 6,977,871 dollars, allegedly intended for employees of the company but instead funneled to third parties with no ties to it. The complaint revealed that Mantilla provided cash guarantees to individuals or companies unrelated to Seguros Colonial. The most illustrative case was that of Deportivo Quito, one of the biggest beneficiaries of this irregularity.
Due to these and other anomalies, the company estimated the loss at 20 million dollars. The case is currently under Ecuadorian justice. However, there are other incidents surrounding this character.
The previous report made it clear that Mantilla actively operates for the sale of the Pacific National Bank, a financial entity based in Miami, Florida, owned by the Ecuadorian state. This sale process has been seriously questioned due to constant irregularities. What wasn’t known is that Mantilla also manages the sale of the Pacific Bank’s office in Panama, in coordination with Mercedes Ríos de Elizalde and Camilo Samán, president of the board of the National Financial Corporation (CFN) and a former treasurer and friend of Rafael Correa.
Proof is at hand. On June 20 this year, Mercedes Ríos de Elizalde wrote a letter to Mantilla warning him about a key fact in the negotiations for the Panama office.
“Dear Fernando: I hereby submit for your consideration the NON-BINDING LETTER OF INTENT (sic) issued by CREDICORP BANK S.A. (sic), a banking institution based in Panama, expressing their interest in purchasing the ASSETS AND LIABILITIES OF BANCO DEL PACÍFICO S.A. (Panama). I would appreciate it if you request written authorization from the NATIONAL FINANCIAL CORPORATION (sic) to implement the materialization of the DUE DILIGENCE (sic).”
Mantilla’s response came just minutes later: “Hi Mercedes, thanks, I will print it and hand it to Camilo Samán.”
Camilo Samán, as president of the CFN board, is the government official responsible for managing the Pacific Bank in Panama. He has held this power since Rafael Correa transferred his shares to the agency he leads. In other words, Correa gave his friend Samán the authority to decide the future of this financial institution.
The letter from Credicorp Bank referred to by Mercedes Ríos de Elizalde is dated June 20 this year and signed by Francisco Dawson Allen and Juan Ramón Quintero, both Panama natives and representatives of the institution. In the document, Credicorp Bank executives explain that “we require essential information from the company to conduct a valuation and verification study (Due diligence) and gather all necessary documentation to carry out the possible purchase process of the ASSETS AND LIABILITIES of BANCO DEL PACÍFICO (PANAMA) S.A.”.
Almost a week later, the response for Mercedes Ríos de Elizalde came. On June 26, Mantilla wrote to her:
“Hi Mercedes, yesterday Camilo mentioned that the board of Banco Pacífico Panama will inform Credicorp that they are not selling the assets and liabilities, only that they are selling the whole bank. The other letter needs to be sent urgently (sic). Hugs, Fernando.”
Mantilla serves as a bridge between Mercedes Ríos de Elizalde and Camilo Samán. Their good relations are evident. As mentioned earlier, Mantilla does not hold any position in the entity directed by Samán and is not even a public official. However, his successful business streak is reflected in his tax contributions to the Ecuadorian state. From paying less than six thousand dollars in 2007, to over one hundred thousand last year, according to data from the Ecuadorian Internal Revenue Service (SRI) (left photo).
Additionally, Credicorp Bank is the entity managing the creation of a trust in Panama for the construction of Deportivo Quito’s stadium, with the help of Germánico Maya, another old acquaintance of Correa’s government and operator for Pedro Delgado Campaña, the president’s cousin, who is currently a fugitive from justice.
But Mantilla’s good contacts don’t end there. For instance, he maintains cordial communication with Pedro Solines, the current Superintendent of Banks and Insurance of Ecuador.
“I hope you are well and that the recent assistance has been helpful,” begins a letter from Solines addressed to Mantilla, dated June 8 of this year. In it, the official mentions a concerning matter from the latest cabinet meeting in Correa’s government. According to Solines, the Minister of the Interior sought explanations from the Energy Minister regarding an audit report indicating a lack of reinsurance at a hydroelectric plant, a very serious issue that could lead to sanctions. Solines suggested speaking with the Interior Minister, given their good relations.
In another letter marked “CONFIDENTIAL News Cabinet Hydroelectric Plants,” written by Ricardo Villagómez and addressed to Mantilla, with copies to Juan Manuel Vela and Paúl Reyes, it states: “Fer: I now have the documents. I will review them today and get back to JM and PR with corrections tomorrow. They confirmed the increase. They just need to speak with you on Monday about the conditions before I hand over the corrected documents. I’ll coordinate a meeting with the minister. A hug.”
Ricardo Villagómez is the main executive of InterRe, a private intermediary of reinsurers. Juan Manuel Vela acts as Samán’s operator in such businesses, while Paúl Reyes is the manager of Seguros Sucre, Ecuador’s largest state insurer, responsible for the most crucial public sector accounts and supervised by Camilo Samán through the CFN.
Similar negotiations involving Mantilla and his team of operators are taking place in other state entities, such as the state airline Tame. In the next delivery of this series, those contacts will come to light.
Meanwhile, in the case of lawyer Antonio Elizalde Pulley, there are also pressing matters. He is the husband of Mercedes Ríos and, as several emails show, a partner of Fernando Mantilla in securing contracts for Ecuadorian state entities. As a lawyer, he was also involved in a controversial case. He represented over a thousand retired workers from a cement company, despite having previously served as their lawyer.
This case dates back to the late 1980s when Ecuador enacted special regulations for employees of the state-owned Cemento Nacional, mandating that two cents per kilo of cement sold be set aside to create a retirement fund for these individuals. After several years, Cemento Nacional was sold to a subsidiary of the Swiss multinational Holcim, which inherited this obligation. However, by the early 2000s, over a thousand retired employees found that the company had never fulfilled its obligation. Consequently, they banded together and filed a lawsuit against the multinational as its successor.
This lawsuit progressed through all judicial levels in Ecuador and was won in June 2010. The ruling was issued by the Constitutional Court of Ecuador, the country’s highest legal authority, requiring Holcim to pay over 89 million dollars to its former employees. However, strangely, this ruling was overturned two years later by the same Constitutional Court. Judges Patricio Pazmiño, Ruht Seni, and Alfonso Luz Yúnez changed their stance, deciding the company should only pay 47 million dollars, a reduction of over 36 million.
The explanation for this change was sought by the retired workers themselves. A recording of a meeting they held with the lawyer who handled their case, Antonio Elizalde Pulley, revealed unknown details. This recording lasts an hour and a half. At the 20-minute mark, Elizalde claims that Patricio Pazmiño, president of the Constitutional Court, told him: “you need to bring the briefcase, you know what’s in it (…) I want it in cash…”. In the following minute, the retired workers ask Elizalde: “let’s be honest Antonio, Patricio Pazmiño has received money from both sides (…) how much did he get? Let’s be honest…”. Elizalde responds: “hundreds of thousands (…) I submitted the project a year and a half ago, the ruling draft was ready four months ago…”.
The workers hired Elizalde Pulley’s services, guided by his strong political connections. Nonetheless, he had previously defended Holcim’s interests. The ruling ultimately harmed the retired employees. There were never any explanations from the lawyer, who apparently promised them a favorable verdict. Money was involved, as the recording indicates. This matter is known to Rafael Correa. On July 30 of this year, opposition assembly member Cléver Jiménez sent a letter to the president informing him of the situation and requesting an investigation. Jiménez has the recording in his possession. This legislator is seen as an adversary of Correa’s government, which has accused him of libel in a trial. Jiménez was sentenced to a year and a half in prison, a ruling he appealed and is still pending in Ecuadorian courts.
However, it’s not the only time the Constitutional Court in Ecuador has been involved in corruption acts. A couple of years ago, a check made out to the secretary of this institution appeared, believed to be the result of a bribe for a verdict favoring Ecuador’s largest brewery. In that instance, the sum involved was half a million dollars.
Regarding insurance matters, lawyer Elizalde Pulley is among the top political operators. Once again, the evidence is overwhelming.
On June 5 of this year, Elizalde Pulley sent a communication to Mantilla. “My dear Fernando, I am attaching a table with the values of the Senagua Insurance Program. The pending amounts are those marked in red on the right, totaling $2,737,743.70, excluding VAT.”
Senagua is the National Water Secretariat, the Ecuadorian state entity responsible for projects and hydroelectric plants in Ecuador. Thus, it is also in charge of securing their insurance contracts.
The letter continues: “Just to confirm what was agreed earlier, I ask you to reply with your ‘approved’ regarding the agreed figures, once the pending payments by Senagua are made: US 500,000 net transferred to my account or to someone I delegate as the agent’s commission; US 50,000 net transferred to Guido Jalil’s account or whoever he delegates for reinsurance mediation; In the event that the premium is paid in two equal parts (I don’t believe it’s going to be that way but just in case), the agreed commissions will also be paid in two parts. A hug and, awaiting your confirmation, I sign, Antonio.”
This reveals the excellent commissions received by this lawyer, who, like Mantilla, does not hold any position in Rafael Correa’s government. It also highlights one of his partners: Guido Jalil Perna, an insurance broker and father of Guido Jalil Ripalda, a politician who markets himself as an opponent to the government and who ran for assembly member with the Ecuadorian Roldosista Party (PRE) in the latest elections. Notably, Antonio Elizalde Pulley is the uncle of Abdalá Bucaram Pulley, the current director of that same party.
In the next installment of this series, details will emerge about the dealings with the state airline Tame and other contracts related to hydroelectric plants. It will also clarify who Juan Manuel Vela is, a key figure in the insurance business, tied to Camilo Samán. Additionally, we will demonstrate that the insurances contracted through these negotiations lack the necessary reinsurance, but do enjoy the hidden complacency and blindness of the Superintendent of Banks and Insurance, the dear friend Pedro Solines, an official appointed by President Rafael Correa.