Latin America-wide corruption scandal now threatens Ecuador's leftists

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Ecuador's Vice-President has been stripped of his duties and will face investigation on corruption charges, the highest-profile target yet in a simmering scandal that threatens political stability at a critical time for the country.

Jorge Glas stands accused of taking bribes to facilitate Ecuadoran infrastructure contracts for the Brazilian construction giant Odebrecht S.A. He maintains his innocence.

But Brazilian prosecutors allege he took millions of dollars in kickbacks, a practice they say they uncovered while investigating the giant scandal known as Lava Jato that has been playing out in Brazil for the past three years.

The Brazilians sent Ecuador's chief prosecutor evidence back in January – but the case sat cold for more than six months, because that prosecutor is a close ally of former president Rafael Correa, an ally of Mr. Glas.

Read more: Corruption beyond Brazil: Where the 'Car Wash' scandal has splashed across Latin America

It wasn't until a Brazilian television-channel broadcast leaked recordings of damning conversations that allegedly implicate Mr. Glas in asking for bribes that the prosecutor in Ecuador reluctantly took action.

It's a tangled political drama, and much of it has been playing out on social media, where Mr. Correa, who finished a second five-year term in May, has launched an all-out attack on his successor, Lenin Moreno, even though the two men are from the same party and were ostensible allies.

The presidential fighting comes at a critical moment: Ecuador has a debt that swelled to an estimated 40 per cent of GDP under Mr. Correa and an economy hobbled by low oil prices – and it calls into question whether the leftist political project he launched, which focused on spending on social inclusion and big infrastructure projects, will survive the end of his autocratic, cult-of-personality rule.

Mr. Correa was prohibited by term limits from running for president this year. Mr. Moreno ran as the candidate for their "new socialist" Alianza Pais coalition, and squeaked into office with a narrow win in a runoff vote.

The former president insisted that Mr. Glas be the vice-presidential candidate. But Mr. Glas is unpopular, because he was already the target of corruption allegations while Mr. Correa was in power, and cost Mr. Moreno at the ballot box, said Gonzalo Ortiz, a historian and political analyst.

But these days it's increasingly clear why Mr. Correa wanted him there anyway. "Correa was adamant about imposing Glas on the ticket because he was the dam that was supposed to stop the flow [of leaks and evidence]," Mr. Ortiz said.

Mr. Correa has not been directly accused of corruption, but the Brazilian probe threatens many of his political cronies. Mr. Glas's uncle, Ricardo Rivera, and the former minister of electricity, are already in jail, while former state comptroller Carlos Polit is under investigation and has left the country. "It's impossible that Correa as head of state did not know about all this corruption," said Mr. Ortiz. In a plea bargain in the United States struck last December, Odebrecht executives said they paid $33.5-million (U.S.) in bribes in Ecuador.

Mr. Correa has not taken any of these developments well. He has ostensibly left public life and is meant to be relaxing in Belgium, his wife's home country. Instead, he frequently takes to Twitter, launching fusillades at Mr. Moreno, whom he denounces as a right-wing sellout and a traitor, and exhorting Ecuadoreans to defend the "Citizens' Revolution" he began.

Mr. Moreno, meanwhile, is showing a streak of autonomy that no one, particularly Mr. Correa, seems to have expected. He came into office with a low profile, best known as a motivational speaker, and seems to have been widely underestimated. (That may have to do with simple discrimination: Mr. Moreno uses a wheelchair, which makes him a rare public figure with a disability in the region.)

"As soon as Moreno came in he urged the press to investigate – Correa expected him not to be so independent," said Monica Almeida, one of the country's top investigative reporters who co-authored a recent biography of Mr. Correa.

"The new President would like more transparency – it seems he does not want the press, the prosecutor or judges impeded. Now, I don't know up to what point that will continue to be true – but [for now] he's talking about corruption by the previous government, which was also from his party, and that would never have happened before, never."

Mr. Moreno's push for increased transparency – and willingness to let prosecutions go ahead – may well be born of pragmatism. Mr. Correa ran an effective propaganda machine, including a whole stable of television channels and newspapers that touted his achievements, and it has fallen to the new President to reveal some unpleasant truths about the state of the economy. (Mr. Correa viciously disputes these revelations on Twitter.) To push through austerity measures and new privatizations, Mr. Moreno needs to distance himself from his predecessor. "Lenin will have to do unpopular reforms and he will need legitimacy to do them – Correa has convinced everyone that everything was perfect," Mr. Ortiz said.

Mr. Moreno and Mr. Glas both served as vice-president under Mr. Correa, but their rift reflects a larger split – which could open new political space, after more than a decade of domination by the leftist coalition.

Mr. Correa, meanwhile, remains the centre of the country's political debate, as divisive as he was while in office. Even his critics acknowledge his achievements: he inherited a country where more than half the people lived in poverty and there was mass migration to the U.S., and delivered stability and years of economic growth. He embraced socialism, but struck a free-trade deal with Europe, leased oil fields to multinationals and privatized parastatals – winning Ecuador foreign praise from across the political spectrum. However, he also went to war with Indigenous peoples who opposed drilling and mining on their land – jailing more than 100 Indigenous leaders – and with journalists, whom he also targeted with repressive laws.

Ecuador's Congress, dominated by the Alianza Pais, has authorized the Attorney-General to investigate Mr. Glas and file charges if they are supported. Ms. Almeida noted that the Brazilian Lava Jato prosecutors, who have travelled across Latin America to propel criminal investigations based on their probe, were frustrated at how slowly the cases were moving in Ecuador, and may well send along more leaks. Senior Ecuadorean political figures who believed they could swat away the Odebrecht case as easily as they have past allegations have been alarmed to learn there is audio and visual evidence, staples of the Lava Jato process, she said.

But there are significant obstacles in the way of total transparency on the Odebrecht case, or other deals made during the Correa years, Ms. Almeida said – particularly the fact that Mr. Correa's administration made thousands of key appointments to the judiciary. "The party doesn't want this investigated, and they control justice," she said.