LatinNews Daily - 18 January 2023

ECUADOR: Directors of state companies fired amid corruption scandal

On 17 January, Ecuador’s government fired the CEOs of 13 state companies as part of President Guillermo Lasso’s response to a mounting corruption scandal.


The mass firing of high-ranking public officials is an attempt by President Lasso to restore public trust in his government following allegations of corruption by the CEOs of state companies in a racket allegedly led by Lasso’s own brother-in-law, the businessman Danilo Carrera Drouet. After initially denying the existence of corruption in his government, Lasso changed course and has promised to assist a preliminary investigation by the attorney general’s office. That has not prevented the launch of a parallel investigation in the opposition-controlled national assembly, which could swiftly escalate if more details emerge on Carrera’s alleged activities.

  • Joaquín Ponce Diaz, the president of the holding company which controls Ecuador’s state companies (EMCOEP), yesterday wrote to the CEOs of 13 state companies asking them “to tender your resignation from the leadership of your respective public companies”. Those fired include the directors of Ecuador’s state oil, electricity, mining, water, telecommunications, shipbuilding, postal, munitions, pipeline, and infrastructure companies.
  • Although Ponce did not state the reason for the mass firing, it came as Lasso is making a concerted effort to avoid being tarnished by an escalating scandal triggered by a 9 January report by digital media outlet La Posta, which accused Carrera of running the alleged corruption racket.
  • According to La Posta, a network of public officials has skimmed money from state-owned companies, including the electricity company Corporación Nacional de Electricidad (CNEL), power generation company Corporación Eléctrica del Ecuador (CELEC), and the oil and gas transport firm Flota Petrolera Ecuatoriana (FLOPEC).
  • Lasso had initially denied the allegations of corruption in his government and stood by Carrera, saying on 12 January that his brother-in-law was “an honourable, irreproachable man”. However, on 16 January Lasso said that the attorney general’s office had opened a preliminary investigation into the allegations, and that this investigation would be supported by his government.
  • Carrera has denied the allegations and said on 16 January that he is seeking US$500,000 in damages from La Posta journalist Andersson Boscán.

Looking Ahead: Lasso’s move to distance himself from the scandal will not prevent it from being weaponised in the opposition-controlled national assembly, where the justice commission opened an investigation into the allegations on 11 January.

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