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Monday Memo: Ecuador Amendments — P&G Tax Fraud — Brazil Solar Parks — U.S. Midterm Elections – Colombia Paramilitary Sentenced

This week's likely top stories: Ecuador's National Assembly dismisses referendum on controversial constitutional amendments; Argentina suspends Proctor & Gamble for fiscal fraud; Brazil grants contracts for 31 new solar parks; U.S. gears up for midterm elections and immigration reform; Colombian court sentences AUC paramilitary leader to 8 years.

Ecuador’s National Assembly Strikes Down Referendum on Amendments: On Friday, the Ecuadorian Constitutional Court dismissed the proposal for a referendum on a package of constitutional amendments sponsored by President Rafael Correa’s ruling party, Alianza País (Country Alliance—AP). Instead, the decision will be passed on to the National Assembly, where parliamentary approval of the amendments is virtually guaranteed given the AP’s two-thirds majority. The most contentious of the reforms would allow for the indefinite re-election of public officials, which would effectively permit Correa, who is currently serving his third and last term as president, to run again in 2017. Despite Correa’s high approval rating, a September poll found that 73 percent of Ecuadorians supported the referendum, which was called by Guillermo Lasso, a former presidential candidate and leader of the opposition party Creando Oportunidades (Creating Opportunities—CREO).

Argentina Bars P&G from Business for Tax Fraud: The Argentinian tax bureau, Administración Federal de Ingresos Públicos (Federal Administration of Public Revenue—AFIP), announced on Sunday that it has suspended the operations of multinational consumer products corporation Proctor & Gamble for alleged fiscal fraud and capital flight. AFIP stripped P&G of its importers/exporters registration upon discovering that the company evaded paying duties totaling up to $138 million on hygiene products imported from Brazil by billing through a Swiss subsidiary. P&G, which has been operating in Argentina since 1991, will be allowed to resume business once it has paid its tax bill and fines accordingly. In asking Argentine courts to place travel restrictions on top officials at the local P&G affiliate, AFIP chief Ricardo Echegaray commented, “Our main goal is for P&G to repay the Central Bank the stolen currency as well as the customs sanctions and the income tax that has been evaded.” P&G responded by announcing that it is working to understand and resolve the allegations. 

Brazil Grants Contracts for 31 New Solar Parks: As the output from key hydroelectric plants in Brazil has decreased substantially amidst the worst drought in 80 years, the country has kickstarted the solar power industry by granting contracts for the construction of 31 solar parks on Friday. Brazil’s energy regulator brought the country’s first solar energy auction to a lucrative close on Friday by signing 20-year energy supply contacts with companies to invest $1.67 billion to begin powering the national grid by 2017.  The parks, which are the first large-scale projects of their kind in Brazil, will have a combined capacity of 1,048 megawatts (MW), and at a price of $89 per megawatt-hour, the Brazilian government has earned itself one of the lowest rates in world.  Brasília has been a latecomer to the photovoltaic industry—which currently supplies a meager 1 percent of the country’s electricity—because the government levies high tariffs on imported solar panels.

U.S. Midterm Elections and Immigration: U.S. voters will go to the polls on Tuesday in midterm elections that will be crucial for the future of immigration reform in the United States. Recent polls suggest that the Republican candidates are outperforming Democrats in several key states, and thus the GOP could pick up six new seats to take control of the Senate. Former Republican presidential candidate Mitt Romney said on Sunday that if Republicans win the Senate, comprehensive immigration reform will be a top priority. Last year, House Speaker John Boehner (R-Ohio) refused to bring a bipartisan immigration bill passed in the Senate to a vote. Meanwhile, President Barack Obama is expected to use his executive authority to overhaul immigration rules shortly after Tuesday’s elections.

Sentenced AUC Leader Says Colombian Military Collaborated: In sentencing Colombian paramilitary leader Salvatore Mancuso to a maximum sentence of eight years on Friday, Judge Alexandra Valencia said that “the military and the army were institutionally responsible” for the deaths of hundreds of civilians in northern Colombia. Mancuso, who led the Colombian paramilitary Autodefensas Unidas de Colombia (United Self-Defence Forces of Colombia—AUC) between 2004 and 2006 and was later extradited to the U.S., said that the Colombian army was complicit in the AUC’s military offensives in the late 1990s that led to the deaths of hundreds of civilians. As part of a plea bargain with Colombia’s special Justice and Peace prosecution unit, Mancuso admitted to leading four massacres and committing hundreds of crimes. According to Mancuso, the Colombian military gave him special access, trained paramilitaries, and had informants in both the police force and the regional prosecutor’s office to warn paramilitaries of investigations or raids. “Without the action or inaction of the State, we wouldn’t have been able to grow the way we did,” he said.

Any opinions expressed in this piece do not necessarily reflect those of Americas Quarterly or its publishers.
Tags: Midterm Elections, Rafael Correa, Alternative energy and renewables

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