Who is Pedro Delgado Campaña?

London, 15.01.2013 - The paragraph above has been taken from a profile of Pedro Delgado, still visible (as of January 15, 2013) on the Central Bank of Ecuador's 

In the context of the paragraph above, the term "obtuvo" means having gained or completed, an Master's Degree in Business Finance, and post graduate studies in Banking Administration at Costa Rica's INCAE. How could Mr Delgado dupe Ecuador's Central Bank? How could President Rafael Correa not know that Mr Delgado, his cousin, never really obtained any of the academic degrees he claimed to have finished? How come no one from President Correa's government or entourage took the trouble of making sure that Mr Delgado's claimed academic credentials were legitimate?

 

Mr Delgado is a good exhibit of the way in which political appointments are made across Latin America, where credentials for the job are totally irrelevant and often sacrificed at the altar of political expediency.

 

Pedro Delgado Campaña's career has been controversial, and did not start with cousin Rafael Correa's assumption of Ecuador's presidency. In 1999, in the middle of Ecuador's banking crisis, Mr Delgado was Credit Risk Manager of Ecuador's National Finance Corporation (CFN). In a report commissioned in 2007 by President Correa, entitled "CFN's Financial Crisis", published by La Vanguardia, it is claimed that Mr Delgado redacted a memo (dated March 19, 1998, ref. RI 0003736) that modified banks's credit-risk assessment criteria. The said reform allowed for "increased flexibility in acceptable credit terms and guarantees", with the resulting effect of CFN granting funds to financial institutions that were in dire shape. The report states that Mr. Delgado's reform undermined CFN's supervision and credit recovery mechanisms. Following Mr Delgado's memo, credit limits for troubled financial institutions were also lifted. This resulted in CFN granting "more than $1 billion worth of credits." CFN's total losses were estimated at $1.178 billion [p. 15 or report].

 

After his position at CFN, Mr Delgado was Manager of Financial Institutions of Ecuador's Superintendency of Banks (Superintendencia de Bancos). Mr Delgado is believed to have also been one of the key figures behind the fusion of banks Filanbanco and La Previsora, which ended up costing millions of dollars in losses to thousands of Ecuadorians. Mr Delgado also fabricated evidence, and authored at the time biased financial reports regarding Filanbanco, Banco Popular and Banco Progreso, which prompted intervention, assets confiscation and expropriation by the Ecuadorian State.

 

Nicolas Landes, owner of Banco Popular, subsequently sued Mr Delgado for falsification of public documents. A judge from Quito ordered the arrest of Mr Delgado in September 2000, after which he escaped to Miami, where he lived in self-imposed exile for a number of years.

 

Then in 2007, his cousin Rafael Correa won Ecuador's presidency on a platform of sweeping reforms, including promises in the financial sector. Amazingly, despite the huge cost of previous actions, illegal activities and his association to Jamil Mahuad's administration (object of much criticism by Correa), Pedro Delgado became President Correa's trusted advisor in financial matters. So much for a break with the corrupt past...

 

As previously mentioned, a report about financial irregularities in which Mr Delgado had been involved, sent to the office of President Correa and to the Attorney General's Office, appeared in the Ecuadorian press. President Correa decided to ignore the findings, though, and rewarded the Delgado family with a series of important appointments. Mrs Delgado was made Ecuador's Consul in Miami, and her brother, Francisco Endara, was first appointed as Manager of Bank Deposits Guarantee Agency (AGD) and then as Secretary of CFN-AGD's No Más Impunidad Trust. Mr Delgado himself, while in exile in Miami, first coordinated Ecuador's Bank Commission (Junta Bancaria), before going on to have a meteoric ascent in Correa's administration.

 

In 2008, Carl Wolf, at the time President and CEO of Miami's Pacific National Bank (PNB), wholly owned by Banco del Pacifico, which is in turn controlled by the Ecuadorian government through Ecuador's Central Bank (BCE), sued PNB for unfair dismissal. The terms of the lawsuit revolved around Mr Wolf's refusal to: 

 

1- make illegal payments to Andres Baquerizo (PNB's board member and CEO of PNB's parent Banco del Pacifico);

2- hire through third parties "a known embezzler from Ecuador" (Luis Wilfrido Villacis Guillen, convicted felon involved in misappropriation of public funds related to Filanbanco);

3- reopen bank accounts that had been closed in observance to U.S. Bank Secrecy Act, Patriot Act and other federal and anti money laundering directives;

4- ignore U.S. Banking and anti money laundering regulations.

 

Although Mr Wolf's lawsuit may seem unrelated, it also leads back to Mr Delgado, who, as Director of BCE, instructed Wolf to "reconstitute trade financing and lending operations". According to the lawsuit this was "in contravention to the agreed upon risk profile that PNB was obligated to follow pursuant to an applicable Consent Order entered into the United States Office of the Comptroller of Currency (OCC) and PNB." Mr Delgado basically threatened to fire Wolf immediately should he refuse to implement instructions.

 

One of the accounts at PNB that Wolf ordered closed belonged Cassia Delgado, Secretary of President Correa, and cousin of both President Correa and Mr Delgado. Mrs Delgado failed to disclose the source of thousands of U.S. dollars paid into her account.

 

By this time, though, Mr Delgado had well and truly established himself as a power broker in the nepotistic regime of Rafael Correa. Assets worth billions of dollars that belonged to the banks that had been intervened and expropriated in the early noughties -in great part owing to Mr Delgado's decisions- were now back in his hands, as he became Director of CFN-AGD No Más Impunidad, a vehicle created to administer and dispose of said assets.

 

Mr Delgado enlisted his brother in law, Francisco Endara, who was identified as responsible for a $800,000 credit -without collateral- given to Argentinian Gastón Duzac, via a financial institution (COFIEC) under Mr Delgado's and Mr Endara's control. Shortly after disbursement to Duzac, Mr Delgado made a $200,000 payment for a house in Miami. Media and journalists covering these issues received death threats.

 

As Head of Ecuador's Central Bank Mr Delgado was also in charge of establishing triangulation mechanisms that -using Ecuador's banking system and USD-denominated currency market- would have allowed Iran to circumvent OFAC and other international sanctions. Press reports indicate that Mr Delgado "arrived on April 3 to the Khomeini airport in Tehran, with a delegation which included his brother-in-law Francisco Endara, who was coordinator of the Technical Secretariat of the Trust and now adviser of COFIEC bank (currently a fugitive due to the irregular loan granted to DUZAC)."

 

The purpose of the trip is believed to have been to sell to Iran companies and assets seized by the government of Ecuador.

 

The press further reports that "Seven months after his visit to Iran, Delgado intervened to facilitate the deposit of the Iranian Embassy, of USD 1.8 million in cash in COFIEC. On November 15 and 24, 2011, the deposits were made in a savings account of the Iranian Embassy, USD 112,834, 500,000 and 1'360.000."

 

In another trip, Mr Delgado met with representatives of Pasargad Bank, Export Development Bank (EDBI), Saman Bank and Parsian Bank, to discuss the sale of COFIEC. Mr Delgado also met with OFAC-sanctioned representatives of Iran's Bank Melli in Moscow. Reports claim that, while in Moscow, Mr Delgado stashed $500,000 in cash in a security box.

 

All these revelations have had consequences back in Ecuador. While President Correa had no initial qualms at strongly supporting his cousins [Pedro and Cassia], evidence kept mounting and finally his nepotism was exposed. Spurred by a Congressman's denunciations, Ecuador's Attorney General's Office has launched four investigations into Mr Delgado for:

 

1- illegal expropriation of companies and money transfers to Switzerland, 

2- doubts about his estate, 

3- responsibility in banking crisis during his tenure at CFN, 

4- and illegal purchase of a house in Quito.

 

In addition, Ecuador requested the United States to revoke Mr Delgado's visa, which was promptly granted. Statements from Ecuador's Foreign Secretary though, Ricardo Patiño, referring to Mr Delgado as a traitor, however this may well be simple posturing.

 

Whatever the future holds for Mr Delgado though, it remains troubling that a fully aware President Rafael Correa, put Delgado at the helm of Ecuador's Central Bank, and then protected him, even after he was publicly revealed to be a fraudster, a money launderer. Mr Delgado is a man who has abused the law and his positions to steal private property. He is an individual whose entire life and record is based on lies and fabrications, and accordingly has such a dysfunctional moral compass that he deals with Islamic fundamentalists and terrorists. But, perhaps most importantly, he is an individual whose actions in public office have caused billions of dollars in losses to thousands of Ecuador's citizens.
 

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The "Who Is?" series is a new type of article I shall be posting on a regular basis.  Given that this blog has become a source for journalists, bankers performing KYC, prosecutors, immigration authorities, public policy analysts, intelligence agencies, and concerned citizens, I have decided to publish research in a simpler and more comprehensive way.  The "Who Is" series is an attempt to provide accurate, factual snapshots of some of the more "colorful" members of the fauna inside corrupt governments and enabling societies. Readers' suggestions for a "Who Is?" profile can email me at alek dot boyd at gmail dot com.