Gustavo Garcia is an Economist, who was the first Head of the Economic Office of the National Assembly, and who is always digging for financial information and probably is one of the best people in terms of understanding the numbers of PDVSA and the country. Garcia yesterday’s El Universal wrote the Op-Ed article below about the lack of transparency in the Government’s financial numbers. Today in an interview, he points out the billion dollar size discrepancies in the Government’s numbers and in the case of Bandes he asks: If a development bank imports, what is the sense of having it? What is it developing? The question is more than rhetoric, the implications of the Bandes not selling its foreign currency to the Central Bank is not only one of legality, but one of a possible huge source of corruption and manipulation. We are talking about US$ 2 billion managed outside of the country’s regular institutions. Why? What are they using these funds for? What are they hiding? Are they in US$? Were they changed into local currency via the parallel market? Too many unanswered questions about accountability and transparency are raised by this.
For those that don’t know the story of the Gallo Pelon is a story that always goes back to the beginning, no matter what you may say, which Garcia says is like the web page of the Finance Ministry:
A Government which is not auditable and the story of the Gallo Pelon by Gustavo Garcia
It should not surprise us that we will likely never know the amount of funds invested in Vargas after the 1999 tragedy: this is a Government that does not provide accounting and more recently, does not publish information about the amount of funds available and effectively spent, despite the legal and constitutional mandate to do so. Although this practice has been occurring for a few years, since 2003 it has aggravated to extremes. For example, the ministries are obligated to present their yearly memoirs, which by tradition in Venezuela, would include all of the statistics relevant to the sector, as well as the funds received from the national budget and the amounts spent from each budget item.
Many ministries have abandoned this practice for a few years and the few that still do it, have excluded the statistical information for each sector and the data about the resources assigned. The autonomous institutes and state companies are equally obligated to do the same. Nevertheless, PDVSA stopped publishing its financial statements since 2002 and the Ministry of Energy and Oil has done the same thing with respect to the statistical information refereeing to the hydrocarbons sector.
Previously, the web page of these two institutions contained abundant and relevant financial and statistical informationabout the sector, which has been completely eliminated. This impossibility is still attributed to the strike. Then one may ask: What type of recovery of PDVSA is the Government speaking of when they are not even capable of collecting and publishing statistical and financial information about the sector which can be trusted?
The Government has not published its financials since 2003. The Onapre (National Budget Office) has not published numbers about expenditures agreed upon in 2004 and its respective financial execution. The Central Bank has not published the details about the composition of the monetary base since the end of 2004, which it used to do regularly in its bulletin of weekly indicators. I have been able to find out, that at the end of 2004 there was a sizable movement of funds in the Treasury account in the Central Bank towards various public organizations with the objective of using them in 2005 outside of the formal budget. That is why the publication of the monetary base shows every week empty columns and there will surely leave an empty space in the weekly sequence of that information.
By the way, the Central Bank reports in the movements of foreign currency in 2004, that it bought and sold very small amounts of US dollars from Bandes, while PDVSA and the Executive branch point out that the oil company transferred to that institution some US$ 2 billion. Where are they or what have they spent these dollars on, that did not go through the Central Bank? Bandes has not published financial information since 2003.
The best monument to the lack of transparency is earned by the Ministry of Finance, which has not published any information about the financial execution of the budget and the state of public debt since 2004. That statistical information used to be in the recent past in its web page. Why don’t you test it dear reader. Open http://www.mf.gov.ve and try to find the statistical information about the budget or public debt that is offered in that page and you will play with your computer the old story of the “gallo pelón”, since when you attempt to open the information it will simply bring you back, once again, to the home page.
The Devil's Excrement 
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