Exiled Ecuadorean journalist ordered to pay $42 million

September 21, 2011
Exiled Ecuadorean journalist ordered to pay $42 million
By Frances Robles and Jim Wyss | McClatchy Newspapers

QUITO, Ecuador &mfdash; Ecuadorean newspaper columnist Emilio Palacio spends his days at the Cocowalk Starbucks - far from the Guayaquil newsroom where he worked for 14 years.

Palacio, 57, has been writing from this far-flung satellite office - where the Internet is free and the lattes run strong - since August, when he fled Ecuador in a long-running dispute with the president. According to that nation's courts, Palacio and three directors of his former El Universo newspaper owe President Rafael Correa $42 million and three years of their lives for publishing a scathing editorial about him in February.

On Tuesday, El Universo lost its appeal, but vowed to fight the case in national court or seek international arbitration.

If the ruling is upheld, it would likely bankrupt one of the nation's oldest and largest newspapers. It would also make the company a powerful symbol of what some say are deteriorating press freedoms in Ecuador, where the administration has dusted off little-used libel laws to target critics with multimillion-dollar lawsuits and jail terms.

It's only now that he is in Miami - dodging an expected subpoena that would require him to reveal a source - that Palacio said he can write what he really thinks.

"There is no press freedom in Ecuador," he said. "There is self-censorship."

Sitting in a gleaming new building that is the headquarters for Ecuador's state-run media operation, President Correa said Wednesday that the courts were the perfect place to try to instill some ethics in journalists like Palacio - and their media organizations.

The Ecuadorean "press is a right-wing monopoly that has manipulated us for centuries," Correa told The Miami Herald in an interview. "In the name of freedom of speech, they will even defend lies."

The case against El Universo is particularly contentious. In February, Palacio wrote a brief and brutal editorial that referred to Correa as "The Dictator" throughout and accused him of being soft on drug traffickers, land thieves and criminals.

The piece also focused on the events of last September, when Correa was briefly taken hostage by protesting policemen. The government claims the standoff was a failed coup - premeditated and organized by the opposition. The police and government critics, including Palacio, say Correa created the chaos by wading into what was essentially a labor dispute.

Four security officers died when they raided the hospital to free the president. A fifth person died in another location.

In his editorial, Palacio suggested that a future president, "perhaps an enemy," could press criminal charges against Correa for ordering troops to attack a hospital full of innocent civilians.

Correa called the suggestion "absurd," saying that four out of the five people who died that day were simply trying to rescue him and uphold democracy. He filed a lawsuit March 21.

"Why do I have to accept their lies?" Correa said. "Why do I have to allow them to play with my honor?"

Palacio quit El Universo in hopes of appeasing the government and saving the paper.

"I resigned, because I decided I could not be responsible for the paper collapsing and 800 or 1,000 people losing their jobs," Palacio said. "I don't want that on my conscience, in my history or on my resume."

It didn't work. In June, the court ordered Palacio and three directors to cough up $42 million and sentenced them to three years in prison. Correa has pledged the money to support the Yasuni-ITT national park initiative.

On Tuesday, that ruling was upheld by two out of three judges. The dissenting judge thought that only Palacio should be held liable.

El Universo claims that the proceedings were deeply flawed and that the judges were acting on direct orders from Correa, who sat in on Tuesday's verdict.

"They took us to a court where the judges' boss was the plaintiff," El Universo Director Carlos Perez told his own newspaper.

An array of international media groups has lined up to denounce the lawsuit, including the Miami-based Inter-American Press Association, Reporters without Borders and the Committee to Protect Journalists.

Cesar Ricaurte, of the Andean Foundation for Media Observation and Study, has recorded 395 free-press violations during Correa's four years in office. Lawsuits, he said, are increasingly the deterrent of choice.

"There is a dance of millions of dollars and legal processes going on against Ecuadorean media," he said. "There is a marked deterioration in journalism due to the hostilities that are coming from the government."

If the ruling stands in national court, the paper would likely have to be closed or sold, its directors have said. Palacio said the newspaper has assets of about $35 million.

This isn't the first time Correa has targeted the media. In 2008, the government took over three television stations after the courts ordered them seized in court proceedings against a failed bank. The government also took editorial control, firing all three news directors and appointing a government representative.

In 2009, the administration blacklisted a number of newspaper and television stations from receiving government ads - a major source of income in this nation of 15 million. He also leveled a lawsuit against two reporters who wrote a book that claimed he was aware of millions of dollars worth of government contracts being funneled to his brother, Fabricio.

Correa said the book is baseless and is challenging the authors to provide evidence or face a $10 million lawsuit.

Earlier this year, Correa won a referendum that allows the government to create a media regulation board, and would bar media owners from having assets in non-media-related companies. Media groups fear both measures will be used to punish critical journalists.

While those measures may seem harsh when viewed from abroad, Correa said outsiders rarely understand the power of Ecuador's media.

There are six prominent families that control most of the news outlets, and for years they were the ones who helped make and topple presidents, Correa said. Owners shield themselves behind bomb-throwing writers who trash government officials in editorials, while owners dodge liability.

"They don't want a state governed by the rule of law," he said. "They want a state governed by opinion - where they are the ones who decide who's condemned and who's absolved."

Correa has said he is not out to muzzle the press, but rather to simply get journalists to tell the truth.

He has offered to drop the charges against the directors of El Universo, but not Palacio, if the newspaper will apologize for the editorial and admit that it's not factual.

He offered to do the same for the two authors of the book. So far, no one is taking him up on his offer.

Back in Miami, Palacio said he's also only interested in the truth. Sometimes, he said, he asks his wife for forgiveness for getting them into the mess.

But then, he said, "I say, 'No ... I'd be ashamed to be Ecuadorean if I did not raise my voice.' "

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