Archive for May 26th, 2006

Despite the Bank of the Treasury, the financial corruption beat lives on

May 26, 2006

I still find it amazing that many Chavez supporters still are in denial
about the depth and scale of corruption in the revolution. After the
confession by the corruption Czar Eliecer Otaiza, that of Chavez himself saying
that the Caracas corruption stops everything from moving forward where has he
been in the last seven years) and now the charges by the once trusted
Magistrate Velasquez Alvaray, I still get e-mails telling me that there is no
proof, that this is all hearsay and the revolution is pure and honest.

Well, let me, once again, challenge these people who only want to write
anonymously to explain to me something that was supposed to have disappeared by
now with the creation of the Bank of the Treasury and is likely to be a billion
dollar size source of corruption. I will be brief, since I gave a long

When Chávez got to power official deposits, that is funds by Government
institutions in the commercial banking system, were 1% of all deposits. Today
they are around
US$ 10 billion or 27.7% of the monetary liquidity in the
country. This makes no sense. Why borrow money to give to Government
institutions if all they do is keep it in the bank? Something is rotten

Now, this has been going on for some years now, as the funds move according
to commissions that are making a bunch of people very rich: the Government
officials that get paid by the banks to divert their money their way and the “new”
bankers who pay the commissions and have seen their banks grow in obscene
fashion. So have their profits.

Last year, I actually applauded the decision to create the Bank of the
Treasury to manage these excesses. I said: “I was quite pleased to hear that
the Government was going to start a “Banco del Tesoro”. “ Well, once again I
was wrong in my praise of the revolution.

You see, the idea was that funds would flow to the Bank of the Treasury
and the corruption racket would disappear. Well, it has been almost a year. The
Bank of the Treasury is fully functional and official deposits have gone down
by less than 1% (It was 28.5% last August).

Why? Money, money, money.

There is absolutely no justification for this. As Ochoa says in
his interview today
, if the Treasury were to be managed efficiently, the
Government would not even have to issue new debt. Imagine that! But of course,
commissions would disappear.

The worst part is that for this to continue to happen, it has to be
known all the way to the top. Maybe Chávez does not know it, but the layer
below does. Without their collaboration it could simply not happen.

That is how bad corruption in the Vth. Republic
is, the so called pretty revolution that has become a “robolution”. In my
earlier post, my calculation was that commissions were way over a billion so
far, around US$ 500 million last year alone.

This does not include, Argentinean bond corruption, inside information
about debt buybacks, “special sales” to friends and the like. This is ONE
specific case that has no other explanation or justification. So, open your
eyes my friends, the country is being pilfered and raped by these crooks in the
name of the revolution and the poor and one day we will all have to pay for it.
Will you still be in denial?