Ecuador’s highest court on Saturday issued a jail order for former Finance Minister Carlos Julio Emanuel, who is accused of mismanaging state funds in a corruption scandal that has rocked this Andean nation.

Emanuel, who quit in June after the president fired several members of his staff for allegedly running a bribery ring, is at the heart of a broad corruption scandal that erupted amid key talks for a $240 million IMF loan accord.

The jail order — requested by state prosecutors to keep Emanuel from fleeing — comes two days after the state auditor reported the former minister had doled out cash to local governments in 2002 while charging it to the 2001 budget.

“I have ordered, among other measures of caution, preventive prison for Carlos Julio Emanuel,” said the order issued by the Supreme Court’s president-in-charge, Alfredo Contreras. He also ordered the detention of one of Emanuel’s closest advisers, former Finance Undersecretary Jorge Moran.

The state auditor’s report said the Finance Ministry under Emanuel authorized payments for some $108 million to local governments during 2002, but stuck them in last year’s budget in an improper accounting exercise.

The report is the latest in a series of accusations that surged after a local mayor said in June officials close to the Finance Ministry had tried to make him pay a bribe to disburse state funds for a vital development project in his city.

The scandal has highlighted Ecuadoreans’ fears that their government has failed to weed out widespread corruption, which has marked each of the five administrations to govern the country in the past decade.

Ecuador is scheduled to hold elections for a new president and 100-member Congress on Oct. 20. The government continues to negotiate a credit accord with the International Monetary Fund, but has yet to sign a deal.

Reuters, August 24, 2002