Mixing Oil and Politics

Ecuador's President, Jose Maria Velasco Ibarra, 78, holds a record of sorts; he has been elected five times since 1934, and has been ousted from power four times (he finished one term of office in the mid-1950s). Recently he called for free elections next June that would bring an end to his two-year dictatorship. But one night last week, the Ecuadorian army quietly deposed Velasco and sent him into exile, replacing him with a junta headed by General Guillermo Rodriguez Lara.

The army was apparently afraid that the winner of the election--and the next President--would be the radical, Syrian-born former mayor of Guayaquil, Assad Bucaram. But the generals may also have been lured by the spoils of office. Ecuador may eventually become Latin America's second largest oil producer (after Venezuela). The Trans-Andean pipeline goes into operation next June. President Velasco had already received $11 million from Texaco-Gulf in advance royalties. He had also signed a secret decree giving the military half the total oil royalties. Now, for the time being at least, the army will control the other half as well.

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