Archive for February 14th, 2008

From simple stupidity to revolutionary comic relief

February 14, 2008

There has always been a very bizarre side to Chavez’ revolution. Bizarre in the way Government officials, including the leader himself, say absurd things or accuse the Empire or whatever obscure force they want to in being behind all of the problems the country faces. Then, there are the bombastic accusation such as murder plots, spying via Direct TV boxes or saying the CIA is in every corner of Venezuela sabotaging the actions of the revolution..

But lately, as the popularity of the Government has dropped like a stone and the infighting inside Chavismo has gained strength, things have actually become simply comical. While the whole thing may be too pathetic, one can only laugh at the things being said and the irresponsible behavior of Chavista Government officials and Deputies of the National Assembly as they all try to claim their revolutionary turf and look good in front of the autocrat. But in the end, all the comic relief does is accelerate the demise of the regime, as people are simply tired and find it hard to understand how yesterday’s heroes are today’s enemies. Additionally, people are beginning to blame Chavez and his Government for shortages and inflation, but see Chavez concerned more about international problems, instead of the reality the Venezuelan people are facing every day.

As Venezuela tries to defend itself from the asset freeze ordered by judges in three different countries, Chavismo tries to destroy with one hand what the very expensive lawyers PDVSA has hired are trying to accomplish with the other. Only yesterday, the lawyers were arguing that PDVSA was a serious company that would abide by the arbitration ruling whatever it may be, but then today the Venezuelan National Assembly, the same one that approved the expropriation of ExxonMobil’s stake in the Cerro Negro project, approves a motion encouraging the Government to withdraw from the World Bank.

Talk about being silly! You see, the arbitration panel in the contracts between PDVSA and ExxonMobil is an entity within the World Bank. Thus, by asking the Government to leave he World Bank, these Deputies are trying to prove exactly the opposite of what the Government’s lawyers are trying to show in Court. Even worse, when last year Chavez threatened to withdraw from the multilateral organizations such as the World Bank and the Interamerican Development Bank, the idea was set aside when Government authorities realized that some of the country’s sovereign bonds would enter in default if Venezuela stopped being a member of these organization, something included in the prospectus of the bonds, mostly issued under Chavez, so you can’t blame the IVth. Republic for it. But the Deputies appear to have a short attention span and have already forgotten this important detail.

Then, of course, there is Minister of Energy and Oil Ramirez, who must be in Chavez’ doghouse, because he finds the need to speak daily on the subject of the freeze of assets by the international Courts. This can only hurt you, particularly when you speak as a revolutionary radical trying to make amends with your boss or addressing the populist gallery of Chavismo.

Ramirez first said that PDVSA needs to be as radical as possible with ExxonMobil. How silly can you be? You are trying to sell yourself in Court abroad as a serious oil company that will honor the results of the arbitration and then you say your should be as radical as possible. How stupid can you really be? It would be much better to just shut up. But the revolution as no control over itself.

Even worse, Ramirez makes statements that strictly speaking would get him into trouble, if there was rule of law in Venezuela. First he says that PDVSA owes at most US$ 750 million for its stake in Cerro Negro, the book value of the enterprise. This is stupid. First of all, book value would never be acceptable in any negotiation. But even worse, Venezuelan law would never allow him to pay more than what he said, so that if the arbitration panel said PDVSA has to pay more or if he negotiates a settlement which is higher, he could be jailed for paying more than it was worth it.

Even worse, Ramirez also made statements suggesting an agreement with ConocoPhillips was close, which may be the case, but it is clear PDVSA wold like to close the negotiation just to show the Courts it is willing to do it and it is ExxonMobil which is the bad guy. But until your agreement is final, all you are doing is giving an edge to your adversary in the negotiations. You never negotiate in public!

But the most comic relief was supplied by the Governor of Miranda State
Diosdado Cabello, who once had a positive image but is looking more and
more clownish with time. You see Cabello’s brother replaced Tax
Superintendent Vielma Mora recently. Vielma Mora, who is supposed to be
a good manager and very efficient, was suddenly replaced ostensibly to run
for Mayor of the Metropolitan area of Caracas. Apparently, this was
just an excuse and he was replaced because of some sort of monkey
business he was associated with.

No sooner was Cabellos’ brother appointed to the position, that Deputy
Luis Tascon, of fascist list fame, and one of the symbols of the
revolution, accused him of paying 50% more for some vehicles in his previous position at the Ministry of Infrastructure. But the robolution has yet to figure out how to deal with corruption after nine years in power, so the Head of the Comptrolling Commission of the National Assembly did not accept the evidence.

But even worse, Cabello decided to attack Tascon publicly today accusing him, please don’t laugh, of being an “instrument of the Empire”, that old worn out excuse for everything that goes wrong in the country. But just as I started laughing about tis, Cabello added: “That Deputy (Tascon) recently went and spent one month at Bill Gates’ office, the man that has the most money from informatics in the US. It must be that the injected him with a chip in his blood”

Jeez, this from the man that is supposed to be the smartest one around Chavez, the IT expert of the revolution, defending his brother at any cost with the silliest statement anyone could come up with. This is the guy that wants to succeed Chavez! No wonder this country is in such bad shape!

But by now, the whole thing is funny, as Chavez and his buddies try to be radical, when polls suggest people are tired of that. But there is nothing funny about rampant corruption, runaway inflation and shortages. But we have gone from the bizarre to the theatrical and the revolution seems simply to be striking a pose, a la Maddona, as if it were in charge, but it is clear it is in a disarray as everyone jockeys for position to survive a possible implosion of the revolution.

And there is nothing comic about that!!!

Federal Judge ratifies freeze of PDVSA assets

February 14, 2008

A Federal Judge in Manhattan ratified the freeze of over US$ 300 million ordered by a lower Court in the Sourthern District of New York in late December.

PDVSA’s “dream team” of lawyers tried to argue that the measure should be suspended because there was no ruling against PDVSA by the arbitration panel and the only requirement for PDVSA was to subject the case to arbitration. They argued that if PDVSA were to lose, it would abide by the decision and it made no sense to assume that ExxonMobil would receive no compensation.

Of course, the lawyers arguments contradicted most of the statements made by PDVSA and Venezulan Government officials this week who have been trying to argue the case publicly, threatening to cut off oil exports to the US if any of PDVSA’s property is frozen (will they announce it tomorrow?), arguing they will not pay if they lose in arbitration because tis is a sovereign issue and this is all a part of an economic boycott by the US Government. (I am sure the judge did not like this part). Moreover, PDVSA did not wait long to announce that it was stopping exports to Exxon, which while only a boast, given that contracts will be respected, is an announcement that had no place at this time given that it was Venezuela that expropriated ExxonMobil’s share of the heavy crude Cerro Negro plant without compensation. Thus, the Venezuelan authorities did not help their cause and the judge did not buy the arguments by the great team of PDVSA lawyers who have to carry the weight of Chavez and Ramirez around in their legal arguments.