The Devil's Excrement

While Hugo Chávez received as part of his Presidential campaign over a million dollars from the Spanish bank BBVA, which was absolutely illegal because he never reported it and nobody knows where the money went to and nothing ever happened, today Leonardo Carvajal was indicted for conspiracy for receiving funds for his NGO whose purpose is to promote private education. Carvajal received contributions of less than 30,000 dollars for his NGO. The illegal contributions to Chavez’ campaign were proven by Judge Sebastian Garzon in Spain (the same one who became famous for indicting Chilean Dictator Pinochet for his crimes), but the same shameless Attorney General who allows this conspiracy charge to go forward stopped the accusation against Chavez. The double standard of the pretty revolution!!

We have seen many bizarre tales in the last few years of the Bolivarian revolution. In the end, never had politics ruled above everything else in Venezuela like during the Chavez administration. Never have there been so many cases of obvious use of information for profit like in the last few years. But when we think we have heard enough, a new case appears to opaque the old ones and give new meaning to the words bizarre and Byzantine. Such is the case of the PDVSA bond buyback announced today.

But let’s step back a couple of weeks: PDVSA has had about US$ 2.7 billion outstanding in bonds denominated in foreign currency. Not that long ago, these bonds were yielding more than the country’s sovereign bonds, which was somewhat non-sensical since the fortunes of Venezuela are tied so strongly to the fortunes of PDVSA, the country’s oil exploration and production company. PDVSA’s bonds trade thinly in the international markets, that is, if a foreign fund wants to build a significant position in one of them, it has to do so slowly, so as not to prices higher. The company has bonds mostly in US currency, from maturity dates from 2006 until 2028.

Two weeks ago, something strange began happening to the company’s bonds. Demand began increasing and prices followed, with some international brokers looking for fairly large amounts. Within days, most issues were up significantly with those with longer maturity increasing the most. But what made the increase strange was not only the price increase, but that the daily volume being traded rose dramatically. So dramatic, that it simply made no sense. According to investment bank UBS on June 15^th. alone, more than US$ 300 million were traded in PDVSA bonds, an incredible 12% of the total amount outstanding. At the time, the explanation was that the company itself was taking advantage of the high oil prices to buy back the company’s bonds, particularly those that had the sharpest discounts. Within days the rumor became that the company was ready to announce a buyback of some of its bonds.

Last Friday, the Financial Times was even more precise, saying the company would announce today the buyback of as much as US$ 1 billion in the bonds, even naming the underwriters for the buyback. If true, the early rise in prices would indicate a leak of information that someone took advantage of in style, given that the price of some bonds had risen by as much as 9% during the ten day period.

Well, today PDVSA announced the buyback plan not of US$ 1 billion, but of all of its outstanding debt. Moreover, the premiums paid are such that anyone purchasing the bonds in mid-June could have made profits of as much as 20% in the bonds with the longest maturity. Clearly, somebody profited from the information and the amounts and margins were simply huge and obscene. Another case for the annals of this “pretty” revolution. Will we ever know who profited from it? I doubt it, but I also doubt they are part of the opposition.

But the largest question is why would PDVSA do this? From a financial point of view, there seems to be very little rationale for buying back these bonds at such prices. PDVSA would have a difficult time placing new bonds in the international markets at such low interest rates. Additionally, at this point in time, PDVSA needs financing for its future projects and despite the high oil prices, it can not go at it only with its own resources. Margins in the oil business are such that it will always be advantageous for a properly run oil company to borrow at current interest rates to invest in new projects. If not, witness Exxon/Mobil, a US$ 290 billion company, with US$ 80 billion in debt.

Thus, it would seem to make little sense for the company to do this buyback, except that the company has been having problems completing its financial statements. Since most of these bonds are registered abroad the company has to submit its financials to the SEC. The deadline for such a submission is June 30^th. with an extension being possible. The June 30^th deadline seems almost impossible to meet since the company has not even held its shareholders meeting to approve its financials. But if the PDVSA Board asked for an extension and then bought back all of the bonds, then the requirement that it submit its financial statements to the SEC would simply disappear. Ingenious and bizarre: eliminate all of the foreign currency denominated debt so as to avoid possible violations of the law abroad. They could care less about Venezuelan laws or the health of PDVSA; after all, according to local regulations the financial statements should have been presented by March 30^th. which did  not happen, but this has no relevance in a country without laws.

Obviously, none of this makes any sense from a financial point of view. PDVSA should be increasing its debt so as to embark in the type of investment programs that it needs to maintain the country’s oil production. It needs to invest as much as US 40 billion in the next five years, which would make no sense to have it financed from its own resources, more so when production has declined significantly in the last year and a half. But in the Bolivarian revolution politics is above rationality, long term planning and sensible management. It is more important to save the rear ends of the irresponsible heads of the oil industry that have been running the industry like a greasy diner for the last year and half.

Of course, there may be an even more bizarre explanation: The Government will turn around and issue the same amount in dollar denominated PDVSA bonds to local investors to be paid in local currency. In this manner, the coupons may be even lower than those that are currently outstanding and if issued under Reg. “S” will require no registration and filings in the US. Furthermore, issuing such a bond would push the parallel dollar exchange rate dramatically lower.  Thus, the law would be skirted and PDVSA would have its cake and would have eaten it too.

No matter which of the two option takes place, in the end one thing is clear: Transparency will simply disappear from the company’s operations. Once there is no requirement for filing, Venezuelans will simply not be able to see or know what is going on within the industry that represents the lifeblood of the country. This from a Government that got to power asking for more transparency from PDVSA and complaining about the lack of decision power by the citizens in their most important industry. Bizarre indeed!

We have seen many bizarre tales in the last few years of the Bolivarian revolution. In the end, never had politics ruled above everything else in Venezuela like during the Chavez administration. Never have there been so many cases of obvious use of information for profit like in the last few years. But when we think we have heard enough, a new case appears to opaque the old ones and give new meaning to the words bizarre and Byzantine. Such is the case of the PDVSA bond buyback announced today.

But let’s step back a couple of weeks: PDVSA has had about US$ 2.7 billion outstanding in bonds denominated in foreign currency. Not that long ago, these bonds were yielding more than the country’s sovereign bonds, which was somewhat non-sensical since the fortunes of Venezuela are tied so strongly to the fortunes of PDVSA, the country’s oil exploration and production company. PDVSA’s bonds trade thinly in the international markets, that is, if a foreign fund wants to build a significant position in one of them, it has to do so slowly, so as not to prices higher. The company has bonds mostly in US currency, from maturity dates from 2006 until 2028.

Two weeks ago, something strange began happening to the company’s bonds. Demand began increasing and prices followed, with some international brokers looking for fairly large amounts. Within days, most issues were up significantly with those with longer maturity increasing the most. But what made the increase strange was not only the price increase, but that the daily volume being traded rose dramatically. So dramatic, that it simply made no sense. According to investment bank UBS on June 15^th. alone, more than US$ 300 million were traded in PDVSA bonds, an incredible 12% of the total amount outstanding. At the time, the explanation was that the company itself was taking advantage of the high oil prices to buy back the company’s bonds, particularly those that had the sharpest discounts. Within days the rumor became that the company was ready to announce a buyback of some of its bonds.

Last Friday, the Financial Times was even more precise, saying the company would announce today the buyback of as much as US$ 1 billion in the bonds, even naming the underwriters for the buyback. If true, the early rise in prices would indicate a leak of information that someone took advantage of in style, given that the price of some bonds had risen by as much as 9% during the ten day period.

Well, today PDVSA announced the buyback plan not of US$ 1 billion, but of all of its outstanding debt. Moreover, the premiums paid are such that anyone purchasing the bonds in mid-June could have made profits of as much as 20% in the bonds with the longest maturity. Clearly, somebody profited from the information and the amounts and margins were simply huge and obscene. Another case for the annals of this “pretty” revolution. Will we ever know who profited from it? I doubt it, but I also doubt they are part of the opposition.

But the largest question is why would PDVSA do this? From a financial point of view, there seems to be very little rationale for buying back these bonds at such prices. PDVSA would have a difficult time placing new bonds in the international markets at such low interest rates. Additionally, at this point in time, PDVSA needs financing for its future projects and despite the high oil prices, it can not go at it only with its own resources. Margins in the oil business are such that it will always be advantageous for a properly run oil company to borrow at current interest rates to invest in new projects. If not, witness Exxon/Mobil, a US$ 290 billion company, with US$ 80 billion in debt.

Thus, it would seem to make little sense for the company to do this buyback, except that the company has been having problems completing its financial statements. Since most of these bonds are registered abroad the company has to submit its financials to the SEC. The deadline for such a submission is June 30^th. with an extension being possible. The June 30^th deadline seems almost impossible to meet since the company has not even held its shareholders meeting to approve its financials. But if the PDVSA Board asked for an extension and then bought back all of the bonds, then the requirement that it submit its financial statements to the SEC would simply disappear. Ingenious and bizarre: eliminate all of the foreign currency denominated debt so as to avoid possible violations of the law abroad. They could care less about Venezuelan laws or the health of PDVSA; after all, according to local regulations the financial statements should have been presented by March 30^th. which did  not happen, but this has no relevance in a country without laws.

Obviously, none of this makes any sense from a financial point of view. PDVSA should be increasing its debt so as to embark in the type of investment programs that it needs to maintain the country’s oil production. It needs to invest as much as US 40 billion in the next five years, which would make no sense to have it financed from its own resources, more so when production has declined significantly in the last year and a half. But in the Bolivarian revolution politics is above rationality, long term planning and sensible management. It is more important to save the rear ends of the irresponsible heads of the oil industry that have been running the industry like a greasy diner for the last year and half.

Of course, there may be an even more bizarre explanation: The Government will turn around and issue the same amount in dollar denominated PDVSA bonds to local investors to be paid in local currency. In this manner, the coupons may be even lower than those that are currently outstanding and if issued under Reg. “S” will require no registration and filings in the US. Furthermore, issuing such a bond would push the parallel dollar exchange rate dramatically lower.  Thus, the law would be skirted and PDVSA would have its cake and would have eaten it too.

No matter which of the two option takes place, in the end one thing is clear: Transparency will simply disappear from the company’s operations. Once there is no requirement for filing, Venezuelans will simply not be able to see or know what is going on within the industry that represents the lifeblood of the country. This from a Government that got to power asking for more transparency from PDVSA and complaining about the lack of decision power by the citizens in their most important industry. Bizarre indeed!

Usually, if Daniel or Caracas Chronicles has an article that I was planning to post, I don’t since I am aware that our readerships overlap strongly. However, I was planning to post this article from the Wall Street Journal on Friday, which was also posted today in Caracas Chronicles. The article is too popwerful to pass up and it has to be part of the record of ths miserable administration:

A Caracas Mayor Pays
Dearly for Opposing Chavez

By ROBERT A. SIRICO
June 25, 2004; Page A11

Caracas

Pastoral work has taken me to many prisons over the years. But none has left an impression quite like the one I visited here on June 13.

Residents call it the Helicoide, or the Helix in English, because of its twisting, maze-like structure. It looks like New York‘s Guggenheim Museum but more brittle and fractured. Filled with criminals and political prisoners, and serving as the headquarters of the secret police, it is located in the center of the capital, in the Libertador district of Caracas, an urban jungle with five mayors for its 5 million residents.

One of those mayors, Henrique Capriles, is currently serving time here for “public intimidation,” “abuse of power,” and other such trumped up political accusations following a protest in front of the Cuban Embassy in 2002. He has not been charged with a crime, and has been denied bail. A kept court upheld his detention last month.

Everyone here, however, understands that Mr. Capriles is being jailed for political reasons. He is a well-known opponent of President Hugo Chavez and his regime, which is notorious throughout the region for its dangerous blend of political populism, domestic socialism, and protectionist and nationalist foreign relations. To defend it all Mr. Chavez has militarized the civilian government.

Because I was here to address a conference on globalization, and Mr. Capriles’ case interests me, I was hopeful of visiting him. In a Catholic country where the Church is still held in high esteem, in part for its heroic resistance to the Chavez regime, it may have been my Roman collar that gained me entrance. Deep within the Helicoide, I found a pleasant, intelligent and affable young man who emanates a sense of inner strength.

These days Mr. Capriles sports a beard, which symbolizes his protest of the detention. He is the youngest man ever to be elected to Venezuela‘s Congress, and his political experience, including a stint as speaker of the House, predates the present regime of Castro-wannabe Chavez. Mr. Capriles was active in the formation of a new party, Primero Justicia (Justice First), which is trying to form a new political consensus here. He describes himself as a moderate and jokes that his friends say that he is sometimes too progressive.

Neither Mr. Capriles, who holds two law degrees, nor his lawyers fully understand the detention order against him. The authorities claim that he was involved in a conspiracy to assassinate Fidel Castro. The incident at the root of this claim is caught on film. It shows the mayor calming an agitated crowd that had surrounded the Cuban Embassy, located in his district, to protest against Cuba‘s influence in Venezuela. At the time, the Cuban ambassador thanked Mr. Capriles on television for his efforts. Nevertheless, the videotape showing the protest is the main evidence against him.

Sitting in a small visiting room on a ripped car seat that serves as a couch, one of my companions examines the walls and furnishings and Mr. Capriles gives a wide grin and says, yes, there are microphones everywhere. This should come as no surprise in a building built in the 1950s by dictator Marcos Perez Jimenez and now home to the secret police.

Mr. Chavez paints Mr. Capriles as a radical oligarch who “works for the empire.” Such rhetoric is in style these days. Returning from the prison, we listened to Mr. Chavez booming on the radio. Like his idol Castro, he is given to marathon speech making. Attacking the upcoming referendum on his rule, he asserts that the battle is not against the “white oligarchy” of Venezuela. Instead it is against one enemy alone: George W. Bush! Thunderous applause follows.

If Mr. Chavez thought Mr. Capriles would retreat, he was mistaken; the prisoner remains optimistic both for his case and for his country. When I ask what sustains him, Mr. Capriles, whose grandmother was Jewish, fingers the rosary he wears around his neck and says, “You know, I am a third generation immigrant. My grandmother spent 26 months in the Warsaw ghetto under the Nazis. I have only been here 33 days. By comparison, this is nothing.”

The real issue, he says, is judicial power. Without a strong and independent judiciary, there can be no freedom or stable democracy. Indeed, Human Rights Watch recently issued a 24-page report highlighting recent attempts to stack Venezuela‘s Supreme Court in anticipation of a referendum loss by the government.

This is my third visit to Venezuela, the first under Mr. Chavez. The change is notable. The streets are more violent and the entire atmosphere is politically charged — with neighborhoods maintaining their own independent police forces. The government news channel broadcasts Cuban cartoons telling stories about what happens to those who betray the Revolution. As in Nicaragua, the literacy programs organized by Cuban “advisers” are thoroughly politicized.

In my conversations with a wide variety of Venezuelans — priests and porters, blue-collar workers and journalists — it appears that everyone’s focus is on the Aug. 15 recall referendum. There is a general sense that Mr. Chavez will try anything to remain in power, including imposing martial law to prevent the referendum. Another concern is the vulnerability of voting machines to tampering. (The company that has the service contract for them is partly owned by the Chavez government.)

A venerable former government minister, the oldest living member of Venezuela‘s first democratic government, told me that fraud is the main concern. Unless international organizations are watchful, it is likely Mr. Chavez will steal the referendum votes, and there is already talk from Chavistas of banning international observers.

In many ways, the case of Henrique Capriles symbolizes both the sadness and the hope that is Venezuela‘s. The sadness is that the best and brightest people in this nation should find themselves in this situation. The hope is that even people like Henrique Capriles are optimistic for the future of their country.

Father Sirico is president of the Acton Institute in Grand Rapids, Mich.

Usually, if Daniel or Caracas Chronicles has an article that I was planning to post, I don’t since I am aware that our readerships overlap strongly. However, I was planning to post this article from the Wall Street Journal on Friday, which was also posted today in Caracas Chronicles. The article is too popwerful to pass up and it has to be part of the record of ths miserable administration:

A Caracas Mayor Pays
Dearly for Opposing Chavez

By ROBERT A. SIRICO
June 25, 2004; Page A11

Caracas

Pastoral work has taken me to many prisons over the years. But none has left an impression quite like the one I visited here on June 13.

Residents call it the Helicoide, or the Helix in English, because of its twisting, maze-like structure. It looks like New York‘s Guggenheim Museum but more brittle and fractured. Filled with criminals and political prisoners, and serving as the headquarters of the secret police, it is located in the center of the capital, in the Libertador district of Caracas, an urban jungle with five mayors for its 5 million residents.

One of those mayors, Henrique Capriles, is currently serving time here for “public intimidation,” “abuse of power,” and other such trumped up political accusations following a protest in front of the Cuban Embassy in 2002. He has not been charged with a crime, and has been denied bail. A kept court upheld his detention last month.

Everyone here, however, understands that Mr. Capriles is being jailed for political reasons. He is a well-known opponent of President Hugo Chavez and his regime, which is notorious throughout the region for its dangerous blend of political populism, domestic socialism, and protectionist and nationalist foreign relations. To defend it all Mr. Chavez has militarized the civilian government.

Because I was here to address a conference on globalization, and Mr. Capriles’ case interests me, I was hopeful of visiting him. In a Catholic country where the Church is still held in high esteem, in part for its heroic resistance to the Chavez regime, it may have been my Roman collar that gained me entrance. Deep within the Helicoide, I found a pleasant, intelligent and affable young man who emanates a sense of inner strength.

These days Mr. Capriles sports a beard, which symbolizes his protest of the detention. He is the youngest man ever to be elected to Venezuela‘s Congress, and his political experience, including a stint as speaker of the House, predates the present regime of Castro-wannabe Chavez. Mr. Capriles was active in the formation of a new party, Primero Justicia (Justice First), which is trying to form a new political consensus here. He describes himself as a moderate and jokes that his friends say that he is sometimes too progressive.

Neither Mr. Capriles, who holds two law degrees, nor his lawyers fully understand the detention order against him. The authorities claim that he was involved in a conspiracy to assassinate Fidel Castro. The incident at the root of this claim is caught on film. It shows the mayor calming an agitated crowd that had surrounded the Cuban Embassy, located in his district, to protest against Cuba‘s influence in Venezuela. At the time, the Cuban ambassador thanked Mr. Capriles on television for his efforts. Nevertheless, the videotape showing the protest is the main evidence against him.

Sitting in a small visiting room on a ripped car seat that serves as a couch, one of my companions examines the walls and furnishings and Mr. Capriles gives a wide grin and says, yes, there are microphones everywhere. This should come as no surprise in a building built in the 1950s by dictator Marcos Perez Jimenez and now home to the secret police.

Mr. Chavez paints Mr. Capriles as a radical oligarch who “works for the empire.” Such rhetoric is in style these days. Returning from the prison, we listened to Mr. Chavez booming on the radio. Like his idol Castro, he is given to marathon speech making. Attacking the upcoming referendum on his rule, he asserts that the battle is not against the “white oligarchy” of Venezuela. Instead it is against one enemy alone: George W. Bush! Thunderous applause follows.

If Mr. Chavez thought Mr. Capriles would retreat, he was mistaken; the prisoner remains optimistic both for his case and for his country. When I ask what sustains him, Mr. Capriles, whose grandmother was Jewish, fingers the rosary he wears around his neck and says, “You know, I am a third generation immigrant. My grandmother spent 26 months in the Warsaw ghetto under the Nazis. I have only been here 33 days. By comparison, this is nothing.”

The real issue, he says, is judicial power. Without a strong and independent judiciary, there can be no freedom or stable democracy. Indeed, Human Rights Watch recently issued a 24-page report highlighting recent attempts to stack Venezuela‘s Supreme Court in anticipation of a referendum loss by the government.

This is my third visit to Venezuela, the first under Mr. Chavez. The change is notable. The streets are more violent and the entire atmosphere is politically charged — with neighborhoods maintaining their own independent police forces. The government news channel broadcasts Cuban cartoons telling stories about what happens to those who betray the Revolution. As in Nicaragua, the literacy programs organized by Cuban “advisers” are thoroughly politicized.

In my conversations with a wide variety of Venezuelans — priests and porters, blue-collar workers and journalists — it appears that everyone’s focus is on the Aug. 15 recall referendum. There is a general sense that Mr. Chavez will try anything to remain in power, including imposing martial law to prevent the referendum. Another concern is the vulnerability of voting machines to tampering. (The company that has the service contract for them is partly owned by the Chavez government.)

A venerable former government minister, the oldest living member of Venezuela‘s first democratic government, told me that fraud is the main concern. Unless international organizations are watchful, it is likely Mr. Chavez will steal the referendum votes, and there is already talk from Chavistas of banning international observers.

In many ways, the case of Henrique Capriles symbolizes both the sadness and the hope that is Venezuela‘s. The sadness is that the best and brightest people in this nation should find themselves in this situation. The hope is that even people like Henrique Capriles are optimistic for the future of their country.

Father Sirico is president of the Acton Institute in Grand Rapids, Mich.

To me, it is quite scary to hear what Gen. Baduell said yesterday in the Carabobo battlefield in the commemoration of the battle that gave Venezuela its independence. While I believe that the country should be concerned on how to insert itself in the global community, these guys are fighting imaginary and irrelevant battles, which really mean nothing to a prosperous future for Venezuela. While I would hate to compare it with what is going on in Iraq, in its essence it is not too different. Extremist in Iraq disliked Saddam Hussein as much as they dislike the US; the solution is to kill people at random as a way of making thier point.

While in Venezuela we have not reached that level of violence, I do not discard it in the future given the views and the ideological nature of what is today the ruling party in Venezuela. One has to wonder what will happen if they should lose control of power when and if Chavez loses the recall referendum. It may sound too pessimistic, but when a former Vice-President is the leading speaker for the radical Tupamaro group, Lina Ron is invoking violence if Chavez is revoked and Chavistas within the Government view Chavez as being too timid, one has to worry.

Baduell has certainly been a disappointment. He is reputed to be the man that brought Chavez to power in the name of institutionality in 2002. As such, he was expected to be an important force behind the scenes in maintaining Constitutional order. Apparently he has played that role to a certain extent, but at the same time he has also allowed for politics, nepotism and friendship to dominate decisions within the military, including the promotion of Gen. Garcia Carneiro to the highest rank ever given to a General in the country’s military history. Garcia Carneiro had a very poor career within the military, but his unconditional loyalty to Chavez helped him into the highest military post in the nation.

Meanwhile Raul Baduell has played a secondary role. Once in a while Baduell has given statements supporting institutionality. But on Thursday, he was given the spotlight as the leading speaker on the grounds of the Carabobo battlefield and rather than sending a message of institutionality, Baduell gave a militaristic speech aligned with the anti-US-globalization paranoia of his supreme boss Hugo Chavez.

As soldiers and armored cars marched to the sound of his speech, Baduell said that the Venezuelan armed forces were ready to confront four types of war, including any aggression coming from abroad, particularly by a multinational force. Coincidentally at that point in his speech a tank broke down right in front of the podium where Baduell was addressing the crowd.

Baduell gave a strong militaristic speech, sounding as if the country was ready to be invaded. He talked about fourth generation wars, in which countries are destabilized, he mentioned coups, subversion, as well as actions by separatists (??) groups promoted by transnational corporations and groups. He mentioned regional conflicts under the disguise of backing against violence. Finally, the General mentioned military interventions under the leadership of the OAS, the UN, or even worse, without the approval of any of these institutions.

Baduell charged the last scenario would be supported by “globalization” backers who consider Venezuela a threat to their interests. According to Baduell the Bolivarian state is against that globalization which promotes anarchy. He said there are groups in the country that are confused between foreign and Venezuelan flags and have turned into instruments of foreign interes.

Baduell’s speech seemed eerie in the context of a country whose economy has failed to move forward to provide the prosperity needed to the poorer classes, despite huge windfall profits from record high oil prices and revenues in the last few years. But it reflected the mindset of the Government. Chavez himself in the same event called the US the biggest enemy of the country, so that it was clear Baduell was simply following his boss’s speech.

The fact is that these men believe that any support for the recall or elections is a threat to their beloved and failed revolution. While Chavez rose to power on the coattails of a democratic revolution, that same revolution now threatens to kill his failed Bolivarian project. Baduell was simply trying to raise the consciousness of the disgruntled armed forces, but instead, stroke a cord that does not resonate with the Venezuelan population. For five years, Venezuelans have heard how the armed forces will help bring prosperity to the masses. In those same five years, the armed force have gone from being the most respected institution to the least respected one, as corruption and ineffectiveness have ruled their leadership.

Unfortunately, men like Baduell remain in important positions with strong personal ambition, under a very simple logic: If Chavez can do it, so can I. Unfortunately he is probably right and while we are worried about Chavez, Gen. Baduell may be planning his own agenda for the time when Chavez’ recall is approved by the Venezuelan people. It may be the only true hope for the survival for this empty and failed revolution.

This afternoon I actually sat down and read the headlines of the newspapers during the whole time I was away. This may sound like masochism to many of you, but I actually think it is the only way of understanding better what may happen in the near future. I don’t want to bore you with what happened since I left, but some things never cease to amaze me, such as the people caught forging the results of the signature ratification process inside the CNE or the fact that the two former Ministers of Finance accused of misuse of funds in the FIEM case are now in charge of the PDVSA fund or the handing over of funds from PDVSA to the Government directly in violation of the Central Bank law which states that PDVSA is obligated to sell all of its dollars directly to the Central Bank. But clearly, anything is possible in the Vth. Republic.

Meanwhile, evidence seems to be mounting that the members of the paramilitary force caught in the outskirts of Caracas a month and a half ago, were indeed part of a Government sponsored plan to create some sort of diversion and blame the opposition. What makes this case even more outrageous is that the Minister of the Interior publicly asks for proofs that the Government knew about it, on the same day that reporter Patricia Poleo publishes a copy of the official letter from the immigration department authorizing the members of the paramilitary force to enter the country. The Minister’s response? Easy, he wants the original letter to be handed over, not a copy, in order to accept that there is proof. Elementary Mr. Watson, or is it Mr. Rincon, if it is a copy it proves nothing, you now need the original so as to make the job of squealers even more difficult, why not a video then?

In more recent news, the National Assembly removes, illegally, a Supreme Court Justice for deciding against the Government, while the “immoral” council decides to investigate the Justices from the Electoral Hall for ruling against Chavismo. The more things change the more they stay the same in the Bolivarian Republic. This immoral decision was reached without hearing the accused, giving a new meaning to the interpretation of due process by these sad clowns of the Vth. Republic.

Meanwhile, the Head of the Exchange control Office announces that he will push the parallel market rate down below Bs. 2,500. Of course, this rate is illegal, this market does not exist and it is irrelevant for economic activity, according to other Government officials. What makes this interesting is that the Head of the Exchange control Office is all of a sudden in charge of monetary policy, while the Central Bank is ignored by the Government. The truth is that corruption appears to be the main reason why the parallel market rate is dropping, but that is another whole story.

Meanwhile former Ambassador Milos Alcalay, who worked in the Foreign Service for 35 years, is denied his pension just because…Such is the new justice of the Vth. Republic. In a similar case, the Venezuelan Supreme Court rules that oil workers enjoy tenure, but obviously a decision by the Supreme Court means nothing in this glorious Government and the 18,000 oil workers illegally fired two years ago will have to wait another day, or month or decade before their rights are recognized and restored.

Meanwhile, Chavistas accuse their own Minister of Energy of corruption and nepotism, something which has been known for over a year, after all, and what do you call it when half your family starts working for the oil industry after you are named Minister? Or when you personally decide contracts with foreign companies without following the procedures established by law? When Chavez was a candidate the few cases in which this happened became his whole campaign, these days this is a way of life in this parody of a Government. The solution to the accusations was simple: remove the Deputy making the accusations from his position as Chairman of the Oil and Energy committee of the National Assembly. This was called fascism in the old days, but now it is called patriotism.

But something is definitely up. Chavez meets with arch-enemy Cisneros in the presence of Jimmy Carter. Corruption charges that had been known for months become daily accusations. The Government is no longer offering a united front. Baduell says the military will respect the results of the referendum and expresses his disapproval of the way the new military promotions are being handled. The polls favor the opposition; the approval rating for the Democratic Coordinator is 50% with political parties a distant second with 13%. Oh yes, something is changing, something is up and the Chavistas don’t like it, but I do.

To those that may have missed it; I recommend you look at Alex Boyd’s work with the material he obtained from the Foreign Agent Registration Act documentation and the Venezuelan Information Office. He has now written five parts on the subject and has posted the original documents too. Very interesting!! As the other Alex, Alexandra Beech put it in her story on the VIO files: Imagine if Fidel Castro had an office in Washington called the Cuban Information Office. Or if Mugabe set up a Zimbabwe Information Office in the nation’s capital. How about an Iran Information Office, or a Lybia Information Office? Wouldn’t someone wonder why a foreign government had an “information” office in the US capital, while at the same time paying lobbyists to disburse “information” to the US Congress, White House, State Department, universities, investors, and so-called “think” tanks? Hard to imagine, no, but where is the traditional press when you need them?