The Devil's Excrement

I will be going away for the Carnival holidays. I am not sure whether I will have efficient access to the Internet where I am going. In any case, Jorge Arena, star ghost blogger, will be ready to fill in when necessary and hopefully I will have some sort of connection with the world. If not, take care and if you are in Venezuela or any other country that does celebrate Carnival, enjoy yourself, rest, and as we say here, don’t do anything I would not do. This gives you ample room for action!

The distinguished President of the National Assembly’s comittee on the family, women and youth sent the Heads of all public institutions a letter asking that they collect signatures for a petition entitled “For Life and Peace, no to the war in Iraq” demaninding from the US Government that the invasion of Iraq cease. This petition includes the name and ID number of those signing as well as their signature.

The petition is being circulated in earnest in public offices where people are being told, in no uncertain terms taht they are expected to sign this, whether they agree with it or not. The petition will be handed in to the US Ambassador at a demonstration agaisnt the war in Iraq that will take place on March 8th.

Thus, once again teh rights of Venezuelans are being violated by pressuring them into signing something they may not agree with. Moreover, there is an implied threat that if they do not sign it will be notes.

Thus, one wonders whether two new lists will arise from this petition:

One, the list made by the Chavez Government of those that refused to sign against the Empire and Mr Danger.
Two, the list the US Governmnet will have of those that are against it, which according to the Patriots Act may be a reason to not allow you into the US under any circumstances.

Not a pretty picture…

The “People’s”
Defender or Ombudsman German Mundarain continued doing the only thing he has
done since assuming that position: Defend the Government. He said the US is trying to overwhelm Venezuela with a campaign showing that human
rights are not respected in the country and that the US is preparing a campaign against
the Venezuelan Government. All of this in response to the State Department’s human rights report on Venezuela. He appears not to understand yet, that he is an independent
power and should stop spending all his time defending Chavez and his
Government and devoting time to defending the righst of all Venezuelans, which he actually spends very little time doing.

Interestingly
enough, Tal Cual carried today this article in page 2 called “Invisible Rights”, which is quite relevant to the charge by the Ombudsman that the US Human Rights report is simply an unjustified attack on the Chavez Government:

The
Venezuelan Government is upset because of the State Department’s report on
human rights in or country. The same thing happens every time. The same thing
with the media, anytime there is a charge, they are attacked, whether it is
true, or even if it has yet to be processed. It is not the gringo origin that
validates or not the report. It is the Venezuelan reality the one that backs
it. The novelty is that, for the first time, in the case of Venezuela, the USA
gathers an inordinate number of charges against judges, police organizations,
the Prosecutor’s office, deputies, councilmen, parties, unions, gathered from
diverse reports by NGO’s, by Amnesty International always questioned by the Government
and the by the people that appeal to the media. The official bureaucrats
already decided about the report by the US: it is generic, imprecise, out
of context. This is used to avoid the real problem. This is nothing but that
all of what is contained in the document is true.

When was this written? 1997

The
author? Jose Vicente Rangel, the current
Vice-President of Venezuela

The more
things change, the more they are the same.

Bizarro
country continued today as things got more convoluted and asymmetric today than
ever:

-After the Prosecutor General suggested that members of Colombia’s DAS were
involved in the murder of Prosecutor Danilo Anderson, the DAS first said that
they had never had any formal request from Venezuela’s Prosecutor, which was
later followed by
a request for “proof” that there were DAS agents involved. My
recommendation to the DAS: Sit and wait, because you will get nothing. This is
an asymmetric revolution, you accuse but never prove.

-Three cops are
caught in Yaracuy state with almost three kilos of C-4 and some jerk from
the police on TV says that former Governors Enrique Mendoza and Salas Romer
have visited that state too often recently. Wow! Using that logic we would have
hundreds of thousands of suspects, including Chavistas. Of course, they never
explain how come the C-4 which is in the hands of the military ends up in the
hands of the opposition. But I guess for the military everything is for sale at
a price, they are the leaders of this asymmetric robolution.

-Remarkable logic on the part of a Government incapable of building housing
units in sufficient quantities: Let’s expropriate those buildings that have
been rented for over ten years and give the apartments to the owners. That is
certainly an unsustainable model, pay for an already built housing unit in a
country with a shortage of 2 million units. Of course, that one should be used
in infrastructure, decaying hospitals and the like, but these guys have no clue
as to what they are doing anyway. How stupid can they be!

-And as part of its asymmetrical war with the US,
the Venezuelan Government suspends the flights of Delta airlines, Continental
airlines and reduces the number of flights to Venezuela by American Airlines. The
argument? That the US
treats Venezuelan airlines unfairly because they don’t have the required safety
standards and they want reciprocity. Sure, until the next accident by a
Venezuelan airline. In the meantime, screw tourism and make life for
Venezuelans to go abroad really hard. 87% of passengers in US airlines coming to Venezuela are…Venezuelans! And by
now they are 50% boli bourgeois and 50% old oligarchy anyway! Some asymmetry!

-And you have to love the
asymmetry of the testimony in the Assembly by Captain Franklin Castillo
yesterday. Let’s see, among other pearls he said that he cashed a check
under his name for Bs. 27 million, a decision made by the then Head of the
sugar complex Albarran, who was fired as Minister of Agriculture two days ago.
Given the precedent a few months later he cashed a check for Bs. 30 million to
“pay” the workers (no receipts!). He also paid the check for Bs. 55
million to buy a car for Generals’ Parra’s brother. He admitted that there was
no accounting for any expenses, there was never any audit and checks were
issued without any knowledge of what the money was going to be used for,
because he “trusted” his mates. And then in the most asymmetric
moment he was asked: “How do you rate your performance?” His answer:
“Excellent” Obviously these guys have no clue whatsoever about ethics
and proper procedures. Long live the military and their contribution to the
robolution!

The
Government appears to be quite aware of the impact that corruption charges are
having on its popularity as the lack of results is partially blamed on corruption
and scandals seem to be exploding all over the place. It is clear that the
National Assembly wants to make a showcase of the corruption
denounced in the sugar plant in Barinas state to show people that
Government means business about fighting graft in its activities. But there are
so many forces in play that the case gets very confusing at times, as internal
bickering brings the worst out in those involved in the case.

 Yesterday the military seemed to be defending
their own from the corruption charges as some of them tried to exonerate General
Gomez Parra from any responsibility in the case. But then today, the Army’s
investigation council reveals
that Gomez’ brother bought a nice car with money stolen from the sugar plant. Additionally,
in the dance of millions, the brother of a Mayor of the army engineering unit in
charge of the project was paid without actually doing any work, companies did
nothing but got paid and in perhaps the most remarkable charge of all, a
company by the name of Rafarber had the required 5% withholding tax taken out from
the payments it received from the 62^nd. Engineering unit, but the
amount withheld was a little over Bs. 25 million, while the amount turned over
by the regiment to the tax office was only Bs. 9 million. I wonder if they also
stole the toilet paper!

Thus,
there seemed to be no honesty anywhere in this project, as everything was
ripped off, and the military officers involved in the project apparently felt
they were untouchable. And they were, until pro-Chavez paper Ultimas Noticias
broke the story and it could not be held back.

But too
many things remain unexplained in this case. While the investigation continues
to be for a token Bs. 3 billion, it is clear from the fact that the money has now
run out and what
little has been built that the amounts absconded by the military are much
larger than what is being investigated, of at least US$ 200 million. On top of
that, the Minister of Agriculture who covered up the evidence in the case for
electoral reasons was removed today, but so far there has only been one call to
have him prosecuted for this. Shades of the corruption seen in the Bolivar 2000
project, where none of the Generals removed on corruption charges, were ever
prosecuted.

Meanwhile,
one hears no complaints from Chavistas about the self-imposed silence by the
media on the blatant cases of corruption all over the country. In one of the
most well known cases, the new “boli bourgeois” want to take over all sorts off
businesses owned today by the private sector. One case is the Puerto Cabello port, the most important for
imports. Relatives of military and Cabinet members are showing up to “take over”
both dock operators and storage companies in the name of the revolution. One
person mentioned is Admiral Turchio, who apparently is behind the decision by
the port authority to unilaterally and without explanation cancel licenses and
concessions.

A number
of well known companies have been affected by this according to Veneconomia. Conacentro
(Maersk) suffered a forced expropriation, Transgar is being pressured to give up
its areas at the docks and DISA had its license unilaterally revoked. All
requests for injunctions in these cases have received no replies from the
judicial system as “Bolivarian” companies owned by military, former military
and relatives of civilians in Government take over.

Meanwhile,
other sides of the Bolivarian family acquire three banks, the La Tele TV
station and manufacturing companies and a preserves company, also according to
Veneconomia. All of this is run by none other than Jesse Chacon’s (the Minister
of Justice) brother who we have written
about before. His name is Arne, a former Lieutenant that participated in the
1992 coup with Chavez and has now gone from rag to riches becoming a banker. Chacon
is President and majority owner of investment bank Baninvest; last we heard,
the Superintendent of banks said he would check this transaction carefully. As
usual in the robolution, that was the last we heard of this over six months ago.
Nothing else ahs been said.

Couple
that with the stories from complinet of the last week in vcrisis and this blog,
where the Chavez agribusiness arm is revealed buying companies in Mexico and
holidng doznes of offshore bank accounts and what we have is an amazing wealth transfer
from the private sector to the boli bourgeois all in the name of the robolution.

Meanwhile,
the poor are doing as well or as badly as when Chavez took over, despite the
huge oil windfall.

Such a
pretty revolution!

In the “old”
and much maligned PDVSA a project like the Trans Amazonia pipeline would
require feasibility studies, its public discussion and its approval by
Congress. In this autocracy, Chavez has already committed to it, Venezuela
is apparently the only country that has money to finance it and it appears to be
unprofitable, unnecessary and an environmental threat. But Chavez wants it, so much for PDVSA belongs to everyone.

From what is
understood, the project will ship between 3 and 4 billion cubic feet of gas per
day. Venezuelan gas reserves are 15 trillion cubic feet of free gas (150 trillion cft. total), thus it looks extremely  iffy to spend so much money on a project
with such a short life. Moreover, these markets have controlled process which
are much lower than what would be required to build and make the pipeline
profitable. But let’s have Gustavo tell us his take:

The Trans-Amazonian Gas Line:Project or Deal? By Gustavo Coronel

The gas
line proposed by Hugo Chavez to carry Venezuelan gas to Argentina across the
Amazon basin will face four main problems: (1), there are no gas reserves in
Venezuela that can sustain the delivery of this product for the number of
years, 20 or more, that would be required to justify the construction of the
line; (2), there are no likely sources of financing for the US$25 billion or
more required to build the line, except Venezuela. Brazil and Argentina will be
very reluctant to supply their share of the money; (3) the environmental impact
of the line is potentially so disastrous that environmentalists will vigorously
resist its construction; (4), the delivery price of the gas will have to be so high,
between $110 and $130 per barrel of oil equivalent, that clients will refuse to
accept it, unless heavily subsidized. There are other, smaller, problems
involved such as the Venezuelan popular reaction against a project that would
drain much of the financial resources required to solve the urgent demands for
housing, infrastructure, education and health in the country.

Apart from
these “small” problems the gas line proposed by Chávez is reported to
be the object of great interest in certain circles. Mr. Jorge Luis Sanchez,
representative of Venezuelan state agency Enagas, recently announced (La
Verdad, Maracaibo, 02-15-2006), that
government representatives from Brazil,
Argentina and Venezuela would meet in Rio in order to analyze
the project and that “Brazil
would like to accelerate the construction of the line.” Sanchez added that
in March they could announce the initiation of the project.

In a
related information (AFP, Moscow, February 15, 2006) Vladislav Tsygankov,
representative of Russian company Gazprom is reported to have met with
executives from the Venezuelan state owned petroleum company, PDVSA, to examine
the possibilities of cooperation in the construction of this line that would
cost “some US$20 billion and take 5-7 years to construct.”

In
parallel, additional information (The Daily Journal, Caracas, February
18, 2006) coming from Petrobas, the Brazilian petroleum company, indicates that
the extension of the line would be 6,200 miles, a figure that seems far too
precise if one considers that no feasibility studies have yet been made. The
Gas and Energy Director of the company, Mr. Ildo Sauer, added that the volumes
to be transported would be the equivalent of one million barrels of oil per
day, a volume that, translated into gas terms would represent almost half of
the current Venezuelan gas production, an obvious impossibility. Mr. Sauer also
says that such a line would save Brazil US$11 billion per year, due
to the “lower costs” of the Venezuelan gas (?). The report mentions
US$40 billion as a possible cost for the line, estimate which suggests that no
one really knows what this line would cost. Hugo Chávez has said that the
financing will come from his government and the other Latin American
governments involved in the project, as well as “other nontraditional
sources.” One of this nontraditional sources could be Gazprom, says from
Moscow Mr. Denis Ignatyev, a spokesperson for the company.

Mr. Sauer,
from Petrobras, also believes that the construction of the line will generate
520,000 jobs in Brazil.
It would be very interesting to know how he arrived to this estimate, since the
construction of a pipeline is not particularly labor intensive. Most equipment
would be built abroad, engineering studies take little manpower and the actual
laying of the line would involve a few thousand people.

Although I
do not doubt the good intentions of the technical and managerial staff engaged
in the early conceptual stages of the project, my concern is that, thanks to
crooked and irresponsible politicians, the idea of a trans-Amazonian gas line
will be imposed on our peoples, an idea which is looking less and less like a
feasible project and more and more like a “deal.” Latin American
hyper-corruption has been largely fueled by projects which are not a priority
for the countries, not economically justifiable, not rewarding for the peoples
of the region but very good for some companies, lawyers, politicians, brokers
and other members of the fauna that has grown very rich in the region, while
the population stays largely ignorant, hungry and sick. Many of the large
projects attempted or actually built in Latin America
during the last 50 years belong into this category. There is an anecdote in Venezuela that illustrates this mechanism: a
major outbreak of food poisoning takes place in Caracas. They trace the problem to several
restaurants having served rotten fish. They identify the captain of the boat
who sold this fish who, under interrogation, exclaims: “You mean the
restaurants actually served the fish? How stupid of them! This fish was
not meant for eating. It was meant for deals!”

Well, I
smell rotten fish in connection with this gas line. Imagine the amount of money
and dealings involved in the acquisition of 500,000 pieces of pipe, about a
hundred compressor stations, thousands of kilometers of road building and the
drilling of hundreds of new gas wells, in a hurried and unprofessional effort
to increase Venezuelan non-associated gas production. Most of the contracting
will be done directly, without bidding, as it has become the custom in the
Chávez government. Much will be given to friendly companies and individuals,
who will, in turn, sub-contract acquisitions and services, after pocketing a
healthy portion of the money. There will be billions of dollars running around
in a relatively closed and small circuit of people and organizations. One of
the most frustrating aspects of my experience as an specialist in the
Inter-American Development Bank, during the 1980’s, was to witness how much of
the money dedicated by the Bank to development projects ended up in the hands
of greedy politicians and corrupt business people. There was a corrupt system
in place, one that could not be uprooted by the dismissal of one or more
individuals. As it happens in the world of terrorists (did you see the movie Munich?), when one
is eliminated another one takes his, her place. The solution is to minimize the
incentives for the system to continue operating. In the case of the gas line
proposed by Chávez, the solution is to combat this pretension now, while there
is time.

I am
writing to Transparency
International in this regard since I believe they can apply the
required pressures to keep international public opinion alert in connection
with this “project.”

Ken Rijock from complinet treats us to more charges on the financial shenaginans of the Chavez robolution as reported by vcrisis. These are serious charegs indeed, but billions are already missing and nothing is done.

CHAVEZ MOVES VENEZUELA’S
WEALTH OFFSHORE by Kenneth
Rijock

The Venezuelan government is engaged in a massive money
laundering operation, the object of which is obvious: to set up a pipeline with
which to transfer’s Venezuela’s
billions of dollars of oil profits overseas for Chavez and corrupt members of
the “Bolivarian Elite.” Chavez has a
good model for thie endeavor; Cuba’s
Fidel Castro and senior Cuban officials are reputed to have millions of dollars in accounts in Panama, Brazil,
Canada, the United Kingdom
and other countries. Castro himself is believed to be a billionaire.

While all the
details remain unknown, the facts to date demonstrate a concerted effort to
establish a secret financial structure to hold funds looted from PDVSA
receipts, and the national treasury. What is known so far:

+ Ricardo Fernandez Barrueco, a known front for the Chavez
family, has opened dozens of offshore accounts in the tax havens of the world,
both in the Caribbean and in Europe. His
business organization, the Proarepa Group, is in truth and in fact owned by
Chavez and his immediate family.

+ The Swiss private bank, Vontobel, which operates an
unlicensed facility in Caracas,
has seen senior Venezuelan military officers depositing large sums lately. When contacted by a prospective depositor using
Fernandez Barrueco as a reference, the bank manager advised that Fernandez was a valued customer.
Curiously enough, the bank does not list Venezuela as one of its branch locations. Vontobel is the designated recipient for
“commissions” diverted from lawful Venezuelan commerce by the Bolivarian elite
for their own use.

+ Miami-based expatriate Venezuelan financial planners are
actively seeking to purchase a Swiss bank for Chavez. These individuals have
close personal ties to the Swiss banking industry.

+ There is an unconfirmed report that Chavez has already
bought a bank in Lebanon.
Whether this is further evidence of a relationship between the Chavez regime
and Hezbollah, a designated terrorist organization, remains for further proof,
but cash flows from Venezuela
into Hezbollah’s accounts in the Middle East.
This cannot be occurring without governmental knowledge.

+ The Chavez government has recruited former intelligence
agents experienced in covert financial
operations to assist in meeting
its economic goals. These individuals, from Cuba,
the US, the UK, Spain
and Latin America, have sufficient skills to
achieve the desired goals.

As additional
information surfaces on the money laundering operation, it shall be analyzed
and circulated.

Yesterday,
President Hugo Chavez, using the perverse logic that has characterized him
during the last seven years, proposed that if the opposition refuses to
participate in the December Presidential elections because “conditions are not
adequate”, then he would hold a referendum to allow him to be a candidate in
2013 (The Constitution only allows two six year terms) and “people could decide
I should stay as President until 2031”. This would essentially fulfill Chavez’ autocratic ambition of perpetuating himself in power.

This is a
clear example of the type of circular logic Chavez uses regularly: Conditions
for elections have been quite negative for the opposition as the Government has
controlled and absolutely controls the Electoral Board as well as the conditions for all
electoral processes. In the last four elections, the Chávez-controlled Electoral
Board has refused to manually count all the ballots at every single instance
and “graciously” allowed for an audit of 47% of the ballot boxes in the
December Parliamentary elections. But the “audit” was not live, but rather votes
were tallied manually and the Electoral Board had promised to reveal the
results of the audit five weeks after the election. It has now been twelve
weeks and we have yet to see the final results of the election, let alone that
of the audits. So much for spending US$ 200 million in “the most perfect
automatic voting system in the world”. The opposition withdrew from that
election when it was discovered a week before it was to take place that it was
possible to identify who casted each vote, despite denials in the last four
electoral processes that this was even remotely possible.

Thus,
Chavez threatens to hold a referendum if electoral conditions are not agreeable
to the opposition that would perpetuate him in power a la Fidel Castro. Thus, it
is to his advantage not provide adequate conditions, which he absolutely controls,
because he can then get his wish of
becoming King or Emperor of Venezuela, which has always been his dream.

There is
one problem though with this strategy, which to me clearly indicates this is
nothing but a bluff: According
to article 71-74 of the Venezuelan Constitution, 40% of registered voters would
have to vote in favor of such a referendum if it were a law or he would require a majority iof at least 25% of the people showing up. Given the 70% plus abstention of
the last three electoral processes, it is an extremely dangerous and risky
strategy for the President Chavez. Not only he risks not getting the required
40% or majority, but this would be one vote where opposition forces would be highly
motivated to attend, while the same can not be said of his own supporters, who are growing increasingly frustrated with the Government’s incompetence and lack of accomplishments.

Thus, if I
were an opposition candidate today I would be challenging the man who wants to
be King to actually go ahead and do it. But I would add one element to the challenge: But if
you lose, you would withdraw your candidacy from the December Presidential
election too. It would should how weak Chavez’ hand is and call his bluff.