The Devil's Excrement

Sumate presented
today its analysis of the impact of the CNE illegally allowing Chavez’ MVR to
field “unrelated” parties for the slate and nominal candidates in
August’s regional elections, the so called “morochas” or twins The
full report can be found here.

As a remainder, Venezuelan legislation allows parties to field both nominal and
slate candidates, but in order to preserve the rights of minority
representation, guaranteed by the Constitution;
the number of candidates elected under their own name is subtracted from the
number of candidates elected under the slate. In the last election, Chavez’ MVR
registered an unknown new political party (UVE) to field nominal candidates, using
MVR to field the slate, this was used to bypass the law, under the consenting
approval of the Electoral Board. Opposition Governor Manuel Rosales of Zulia
state did the same sneaky trick. This only works if you have a majority, as it
allows you to grab more positions than the law would assign you.

What Sumate did was to assume that MVR and UVE were the same party and
recalculate the number of candidates elected. The results are astonishing, not
only did Chavez’ party rip off the opposition, but it also fraudulently took a
large number of positions from the minority parties that support Chavez himself!

Basically, Chavez’ party MVR obtained 35.1% of the total vote, which according
to the rules would have given them 42.8% of the seats up for grabs. However,
the illegal use of the “morochas” or twins allowed Chavez’ party to
grab a total of 58% of all positions!

According to Sumate’s analysis, minority parties that support Chavez obtained
19.4% of the votes, which entitled them to 14.4% of the seats, but because of
the illegal and unfair advantage of Chavez’ party they only got 9.3% of the
total number of seats. The opposition on the other hand got 18.8% of the vote, which
should have given them 21.6% of the seats, but because of the
“morochas” was reduced to only 14.9%. Finally, local regional parties received
22.2% of the vote, which should have given them 18.6% of the positions, but
only gave them 15.2% of the seats.

What is most remarkable about this analysis is that it was actually those
that backed Chavez that were affected the most by the treachery. Minority
parties that support Chavez saw their votes (19.4%) reduced to half the
positions, despite the Constitutional guarantee for proportional representation.
Some loyalty, no? In contrast opposition parties had their representation
reduced by roughly 30% close to that of small local parties.

The details are remarkable. Basically, the Chavista trick gained them 363
additional positions, out of 584 total positions obtained by this unholy
alliance called the “morochas” or twins. The same was true in Zulia state
where Governor Rosales’ “morochas” gave him 27 additional seats out
of only 56 obtained. Shame on him too!

Some parties were absolutely ripped off by the trick. The infamous
“Tupamaros” that have supported Chavez unequivocally during the
last seven years, lost nine of the twelve seats they should have received, a
staggering 75% of the total they would have obtained. With friends like Chavez,
who needs enemies?

The analysis goes on in detail to show the level of abuse and illegalities
committed by Chavez’ majority with the unconditional and biased backing and
help of the Consejo Nacional Electoral (CNE), which should not have only
stopped the “morochas”, but even allowed UVE to register past the deadline
for registration of new parties and certified the signatures backing that party
only six days before the regional elections took place. These guys are professional crooks!

These are the type of abuses that Chavez and his cronies are committing under the
eyes of the world, that later allows them to claim this is a democracy. By
eliminating the necessary checks and balances of any functional democracy,
Chavez can not only use all of the resources of the State for the benefit of
his own party, but can turn the rules and the law to his advantage without
anyone saying or being capable of doing anything about it or even defending the
rights of the “people” that are being violated by his actions as well as
those of his party.

A very confusing situation surrounding international reserves. The same Central
Bank Director that said on the weekend that the transfer of reserves to Europe and Euros had not been authorized by the
Venezuelan Central Bank, now says
in today’s El Nacional that they were approved. To make matters even worse,
he says that the reason was that the euro has been appreciating with respect to
the US dollar, which has not been the case over the last few months. Since
March the euro is down from a high of 1.37 to the UDS$ to about 1.19 today. He
also says that they transferred US$ 20 billion, while Chavez says it was US$ 4
billion. Chavez said they converted into euros.

There are a number of things that contradict the reasons given. First of all,
you don’t need to change the funds into euros in order to transfer money to the
Bank for International Settlements, a sort of
Bank of Central Banks that can hold just about any currency in custody. Second,
the US
is a powerful influence in that Bank anyway, so if Chavez is really trying to
keep the money at arms length, there is really not that much difference. After
all, the banks charter is to help maintain financial stability. Finally and
more important, it makes little sense in terms of profitability as euro
denominated bonds yield today less than similar US bonds. In terms of real
numbers if US$ 20 billion were converted to euros, we are talking about the
country losing between US$ 300-500 million.

It certainly would make sense to diversify the portfolio of the Central Bank,
having a portfolio that represents the commerce of the country. That is, Venezuela
should have a portfolio that reflects its international commerce so that
currency fluctuations are essentially “neutral” over the course of
the year. In addition to this one should take into account the yield so that the
portfolio should be overweight US$ which have a higher yield.

But of course, given the lack of transparency in Venezuela these days, we really
have no clue as to what is true or not. Why did Maza change his tune? Was he
pressured? Was the money moved without the consent of the Central Bank? Why was
the money converted to Euros if the only point was to take away from the US? Why was it
deposited at the Bank for International Settlements if it was to keep it at
arms lengths from the US?
Why did Chávez announce it if Central Bank is independent? How much is in each
currency?

We might never find out.

Note Added: Today the story changed once again and the funds were supposedly moved four months ago!