MANHATTAN (CN) - Five Virgin Islands corporations sued Ecuador for $1 billion, claiming its government illegally expropriated more than 200 businesses in a campaign of intimidation against political opponents and media.
Plaintiffs Arch Trading Corp., Arvin Properties, Hezer Holdings, Madec Limited, and Osis International Corp. sued Ecuador and two of its agencies, in Federal Court.
The plaintiffs, all British Virgin Islands corporations, claim they owned several hundred companies that were seized by Ecuador.
"Ecuador has been under the political leadership of its current president, Rafael Correa Delgado ('Mr. Correa'), since 2007," the complaint states. "Mr. Correa is the leader of the Alianza País Party of Ecuador, which at all times relevant to this controversy has advanced a series of policies commonly referred to by Mr. Correa as a 'citizens' revolution' and '21st century socialism.'
"These policies have been characterized by pervasive coercion of private commercial interests, intimidation of political opponents and subversion of the rule of law in Ecuador.
"During Mr. Correa's administration, the Ecuadorian government has:
"(i) effectuated a coerced re-writing of the nation's Constitution;
"(ii) undertaken large-scale expropriations of private assets in violation of Ecuadorian and international law;
"(iii) misused regulatory powers of state agencies and instrumentalities;
"(iv) punished political opponents through judicial and extrajudicial means;
"(v) infringed upon the right of free expression;
"(vi) attacked independent and opposition media outlets through contrived judicial proceedings; and
"(vii) subverted the rule of law by politicizing the Ecuadorian judiciary and stripping it of its capacity to act independently of the political objectives of the Ecuadorian government."
Correa's government created a trust, defendant Fideocomiso AGD-CFN No Mas Impunidad, [No More Impunity] to hold and manage seized assets for the government. UGEDEP, an administrative agency of the Ecuadorian government created in 2010, is the sole beneficiary of the trust, according to the complaint.
The final defendant is the trustee Corporacion Financiera Nacional (CFN), a government agency whose president is appointed by Correa.
"Pedro Delgado, a cousin of President Correa, served as UGEDEP's president until December 2012," the complaint states. "Mr. Delgado also served as president of the Banco Central del Ecuador during the same time. Mr. Delgado was forced to resign from both positions after he admitted that he had falsified an undergraduate degree in order to gain acceptance to the INCAE Business School in Costa Rica. Mr. Delgado, who currently resides in Miami, is being prosecuted by the Ecuadorian government for falsification of public records."
The plaintiffs claim Ecuador seized their assets without compensation in 2008, and handed them over to the trust, which still holds and manages them.
They claim the move was part of Correa's agenda to weaken opponents and sabotage the independent media.
"Since his entry into office in early 2007, Mr. Correa has consistently and aggressively advanced an agenda of debilitating competing interests and of concentrating power in himself and his allies," the complaint states.
"To this end, Ecuador's Constitution has been forcibly restructured and the country's legal system has been undermined and systematically politicized. Private business interests have been assailed and independent media interests - including some owned by the plaintiffs which form part of the seized assets - have been subjected to persistent aggressive attacks and confiscation.