Archive for July 12th, 2008

The Super Racket (Guiso) by Teodoro Petkoff or revisiting the Robbery of the XXIst. Century

July 12, 2008

Given the words of former Minister of Finance Rodrigo Cabezas, Teodoro Petkoff revisits his three articles on the racket with the structured notes which wrote in October 2007 in his newspaper, entitled The Robbery of the XXIst. Century, which were all translated here in this blog. As noted by Petkoff, the man in charge of the Minsitry or the Comptroller never said anything about the issue and now they call this inadequate, unreasonable and they talk about banks being in problems. Long live the robolution! where nobody is ever responsible for anything

The Super Racket (Guiso) by Teodoro Petkoff in Tal Cual

Former Minister of Finance Rodrigo Cabezas admitted that both the sale
of structured notes from foreign banks by Fonden, as well as the
issuance later of structured notes in Bolivars and their placement in
the Venezuelan financial markets had been “inadequate” and as a result
(and of the resolution by the Ministry of Finance that banks get rid of
the notes they have before August 19), “three or four banks could be in
problems”. The problem is not as easy to get rid of and we are facing a
grave problem. So grave that Ali Rodriguez set aside any qualms and
requested the presence of mission from the World Bank and the
International Monetary Fund to evaluate, with the Superintendence of
Banks, as well as the Ministry itself, and the Central Bank, the
situation and explore solutions.

One has to remember that it is not only a matter of an “inadequate”
operation, but of a gigantic case of corruption, a “racket (guis0)”
from the Ministry of Finance, that began with the issuance of
structured notes on the part of the international banks, acquired by
Fonden and place, by simple handpicking, in three or four banks (which
are, obviously, those that Cabezas says are in trouble). Eleazar Diaz
Rangel denounced this in his Sunday column in Ultimas Noticias.
Economists like Orlando Ochoa and Jose Guerra also alerted us to this
shenanigans and Tal Cual dedicated a number of Editorials to explain
and denounce this sordid operation. In the Government nobody suggested
they had noticed all these. Thus, it is not a matter of admitting it is
an error and let’s see how we can “save” some banks, but to establish
responsibilities both for some financial operations-now Cabezas
discovers they entail some “risk”-as well as the racket (guiso) that
they served on the table. Who benefitted from this robbery?
Incidentally, the incorruptible Russian never found “disqualifications”
among the schemers of this operation? The comptroller’s office never
put its eye to these scandalous transactions? But there is more, Fonden
used part of its dollars in the acquisition of Ecuadorian and
Argentinean debt and of structured notes issued by international banks:
it also issued notes denominated in Bolivars (note by author: It did
not! All Fonden notes were in US dollars), that were used by the banks
to acquire cheap dollars which Fonden provided.

It placed dollars in the markets at a price slightly above the one of
CADIVI, but much less than the price of the parallel market. The bounty
divided by the participants was substantial. Who authorized Fonden to
do these operations for which it is not enabled by its by laws? Who and
how established the operation of structured notes with the foreign
banks? There are more questions.

Which way was Trino Alicides Diaz, Superintendent of Banks, looking
towards when these crooked operations were taking place? What is the
responsibility of Nelson Merentes at the Ministry of Finance? What is
that of Rodrigo Cabezas under whom they continued the operations that
he considers now to be risky? What is that of the bankers that
participated in this piñata, that is nothing more than a replay of the
thousand and one treacheries that led the country into the 1994-banking
crisis? Don’t we the clients of the banking system deserve to know
which are the banks that “have problems”; in order to prevent a run
that will make some pay for something they can’t be blamed for? And the
great question to the President of the Republic, who according to the
Constitution, Article 236, number 11, has the attribution of
“administering public finances”, He never knew any of this? Everything
was done behind his back?