Ecuador: Rafael Correa's "Dictatorship Of The Heart"

Correa and kin
Correa and kin
Arlene B. Tickner


BOGOTA â€" The government of Ecuadoran President Rafael Correa released a somewhat Orwellian video last month that tries to turn the concept of dictatorship on its head.

The soundtrack of the video, which touts the administration's various achievements, is a schmaltzy pop song that goes: "If this is a dictatorship, then we've been had. Until recently I thought dictator meant a tyrant... If this is a dictatorship, then let's applaud the dictating heart."

The music is accompanied by pictures of mothers, babies, youth, the disabled and elderly, interspersed with public works and the natural landscape. The video is meant to remind us that Correa's "dictatorship" means progress, education, health and patriotic pride.

But in painting this emotional picture of a "kind" and "loving" state, the leftist government is essentially justifying its increasing crackdown on criticism. Under Correa, the state has impinged more and more press freedoms, even targeting satire. Authorities have also used provisions in the criminal code regarding terrorism, sabotage, rebellion and "incitement to discord" to prosecute indigenous chiefs, peasants, trade unionists and rights activists who oppose the president's environmental or labor policies.

Obscene gesture

Correa's disciplinary actions don't stop there. Earlier this year, he began a program called (we're more) that uses civilian informants to monitor all negative opinions written about the president on social networking sites. A month ago, acting like a neighborhood bully, he stopped his convoy to personally confront a teenager making rude signs at him. The boy was detained and sentenced to 20 hours of community service for "discrediting the president with an obscene gesture."

More recently, massive protests took place in Ecuador against new tax laws (now on hold) targeting inheritances and profit margins. Correa's response was to denounce the demonstrations as a "coup conspiracy," and to challenge the protesters to topple him through a referendum.

Ecuador's "dictatorship of the heart" would like people to think that it is building a citizens' revolution. Instead it is shrinking and suppressing political participation, especially when positions expressed by citizens are at odds with the government's.

For now, the president's high (albeit declining) approval numbers suggest that a good many Ecuadorans are willing to forsake certain liberties and allow the "kindly" state to accumulate power in exchange for social and material benefits and better infrastructure.

But looking ahead, the country's shrinking economy, due to falling oil prices, could make this tutelary model of government unsustainable. An even bigger problem is that the "radical" 21st-century democracies â€" a group to which Ecuador claims to belong â€" are supposed to be based on direct citizen involvement and supervision, and on pluralism and non-coercive consensus building. Sadly, and in spite of Correa's undeniable achievements, none of these seem to be flourishing in Ecuador today.

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Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.

Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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