Takeovers Captivate Ecuador

Government Links Its Seizure of TV Stations to Corruption Case

QUITO, Ecuador, July 18 -- The tip came to the old journalist at midnight about the decision at the presidential palace: The police were on their way.

Lolo Echeverría in turn called his colleagues at Gamavision, one of Ecuador's prominent television stations, who drove to the studio through the deserted streets of Quito under the looming mass of an Andean volcano. They were in time to see police scale the white metal fence, break locks and force their way into the offices, the beginning of a swift government takeover of more than 190 businesses this month that has captivated this small and volatile nation.

Gamavision went blank briefly on the morning of the takeover, Echeverría said. In one of his last acts as vice president of news, he ordered that the word "censored" appear on the screen. Within a few seconds, he said, the warning disappeared.

"We've had dictatorships, governments of ultra-right and ultra-left," said Echeverría, who spent 32 years at two television stations before resigning July 8. "But there has never been a problem between the government and the media like with this administration."

The government of President Rafael Correa has characterized the takeover of those companies, including television stations watched by about 40 percent of the news audience, as a long-overdue strike for justice against corrupt businessmen who owe Ecuador millions. It is a move consistent with the rhetoric of the "citizens revolution" declared by Correa, a former economy minister who refused to move out of his home in a middle-class neighborhood when elected president, and who aligns himself with left-leaning governments in Venezuela and Bolivia.

In Ecuador, "economic power has always prevailed over political power," said Julio César Trujillo, a constitutional law professor in Quito. "In this moment, political power is taking revenge."

Government officials said the companies are all part of the Isaías Group, run by brothers and former Ecuadoran bankers Roberto and William Isaías, who now live in Coral Gables, Fla., and are accused of owing $661 million to the Ecuadoran state and to the customers of Filanbanco, which crashed as part of Ecuador's financial collapse a decade ago.

Attempts to prosecute the brothers on embezzlement charges have dragged on for years, amid charges of judicial corruption and malfeasance. For many in Ecuador, the Isaías brothers have become a symbol of why this country remains mired in poverty.

The government, which wants the United States to extradite the brothers, intends not to nationalize the companies but instead to sell them off to recoup losses, said Fernando Bustamante, Ecuador's minister of government.

"We believe that justice requires that all those people who have defrauded their clients and the state answer with their assets," Bustamante said. "We are defending those who have been robbed.

"For nine years, the Isaías family has had an enormous control over the politics, the authorities, over the judges," Bustamante added. "And this has prevented us from acting until very recently."

Not everyone has gone along happily. There were protests at some companies, as well as claims that the Isaías Group did not actually own some of the businesses. Finance Minister Fausto Ortiz refused to sign off on the takeovers and resigned during a late-night meeting in the presidential palace on July 8, hours before police mobilized to seize the companies, according to government officials.