The mystery of the sudden fall from grace of a leading bolibourgeois magnate

November 19, 2009

(In Spanish here)

(Rayma: Do you feel like eating another bank?)

It is a story typical of the revolution and we have now seen it a few times: The sudden rise of an unknown businessman in the last few years, protected by invisible forces and wheeling and dealing without any limitation. And just when you begin asking yourself whether there is a limit, the new bolibourgeois magnate is stopped on his tracks by an equally invisible hand and without explanation.

Yesterday, Descifrado reported that Conatel, the telecom regulator, had not allowed the sale of cellular operator to Ricardo Fernandez Barrueco. Then today the Superintendency of Banks asked that the sale of Banco Canarias to the same man be reverted. And then today, the Government officially (and earlier unofficially) announces the intervention of Fernandez’ four banks Bolivar, Banpro, Confederado and Canarias.

Fernandez Barrueco’s rise was as sudden as his apparent demise. According to Caracas Gringo, he has seen documents before the purchase of the these banks which gave him an audited value of US$ 1.6 billion in 2005. Then, he appears purchasing a bunch of banks, not precisely the darlings of the banking system. And it is not clear how he purchased them.But nothing happened.

Then, a few weeks ago, he purchases Banco Canarias for an absurd amount and Digitel for a high, but not a totally absurd price.

And through it all, everyone wondered where the money was coming from. It was clear that the banks were being purchased with depositors money, but how about Digitel? The company was reportedly being bought for US$ 700 million, how could someone amass so much money so fast? Hey! This is supposed to be a Socialist, not a Capitalist revolution.

And even then, why make so much noise? Why the need to spend the money so fast? Why buy into a sector where Chavez, the ultimate decision maker, had an interest in? Why buy a bunch of mediocre banks, rather than a good one all at once? Why buy Digitel which competes with CANTV?

And there was lots of speculation: They would one day flip the banks to the Government. They would flip them to someone else. They were planning for AH (After Hugo). They were accumulating wealth for the “process”. They were representing people close to Hugo. Take your pick.

And Fernandez was not alone, other groups were creating similar empires. Perhaps smaller ones. Or they started later. But Fernandez has (had?) at least three competitors in all of this. Descifrado claims all of them will be blocked. They are all in the doghouse. The problem is source of funds, where was all this money coming from? Have to see it to believe it. Maybe this is simply envy. A fight between groups. Bolivarian Mafia Wars in Facebook terminology.

To me, it is all very mysterious and I write about it today, because I don’t think it will be clearer three months from now. Like Fernandez’ rise, his fall is a story that will remain veiled in mystery and secrecy.

24 Responses to “The mystery of the sudden fall from grace of a leading bolibourgeois magnate”

  1. […] The news came only days after Diosdado Cabello’s front man saw the regime strip him of an ill acquired fortune. Needless to say that this is but another example that things aren’t well in Venezuelan […]

  2. Lance Says:

    The most crucial advantage of physical exercise turns for six plurality
    abs is crybaby, fish, or dairy merchandises.
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  3. Tea Party Says:

    Greetings, I go over all your articles, keep them coming.

  4. […] Ricardo Fernandez Barrueco fell from grace three weeks ago, we were wondering what the reason was and whether this was a fight between groups or simply Chavez cleaning up the […]

  5. Mousqueton Says:


    I believe in the laws of Physics and in my experience they seem to apply as well to money. In this case it would seem to me that the law of “communicating vessels” (vasos comunicantes) could explain what is going on. Let’s set up the experiment:
    1) The US discovers a number of accounts from Venezuelan citizens holding suspicious funds in Andorra banks.
    2) Information about the bust is leaked to the press but no names are mentioned
    3) It would be perfectly logical that the US authorities would start negotiating with account holders in order to get a deeper knowledge as to the source of funds and end beneficiaries.
    4) Maybe some account holders decide that negotiating with the US is a better option than becoming a world pariah and/or being faithful to a crazy leader and a lost cause.
    5) Crazy leader finds out or someone close to crazy leader feeds his paranoia for personal gain
    6) Crazy leader reacts
    The more I think about it the more it makes sense.

  6. AnonIII Says:


    Would you cut the bullshit? We are sick and tired of your “inside knowledge.” You have not been right once. Stop the self-importance/CIA /FBI trip and give as something that Miguel Octavio through his knowledge of economics and really doing his research has not.


  7. GWEH Says:

    Barruecos was untouchable until a few days ago. This has been brewing since at least Monday because he cancelled important meetings.

  8. geha714 Says:

    He’s already been detained by DISIP:

    The faster they rise, the harder they fall. The robolution eat its own.

    The question now is: Who will be next?

  9. dillis Says:

    Barrueco obviously didn’t take the hint to leave immediately! i guess with the footbridges dynamited it is more difficult! ha ha

    No Chavista can feel confident now that they won’t be next to take the fall for all their opportunism and corruption. Chavez will throw anyone under the bus if he needs to.

  10. GWEH Says:

    one of those bankers lives right in front of me… hmmmmmm.


    En venezuela, un niño regresa de la escuela hambriento y le pregunta asu mamá: -mamá, ¿qué hay de comer? -nada, mijo. el niño mira hacia el loro y pregunta: – mamá, ¿por qué no nos comemos al loro con arroz? -no hay arroz. – ¿y loro al horno? – no hay gas. – ¿y loro en la parrilla eléctrica? – no hay electricidad. – ¿y loro frito? – no hay aceite. el loro contentísimo gritó: -¡¡¡”viva” chávez… nojooooodaaaaa!!!

  11. luigimenx Says:

    Rafael Poleo was speculating in his last article (1 week ago or so) that Godgiven has fallen from grace and is on his way down. Now this…….


  12. karl Says:

    Well, I believe that this banks where “milked” out of depositors money with structured notes backed by shady assets. One of several special purpose vehicles was used to purchase government dollar denominated debt until the banks where worthless.This was not a random fact, I believe it was planned and executed perfectly. The government gets the banks, the croonies get the dough… Still what about Banco Real, Helm, Mibanco and Banivest? are they next?

  13. Go-sho Says:

    Well, Confederado was a dead bank walking… But it is strange to have all of the deals rolled back, specially when Godgiven has been named to a bunch of public posts (Conatel being the last one) …

    Maybe all of it was a huge money laundering rig, and some documents could have been shown to the reds … and remember that the Fernandez guy will take the fall, not Godgiven….

  14. moctavio Says:

    Well, they have about 50% people deposits and about 50% Government institution deposits, you can bet the administrators of these institutions will run today to collect a second commission on the same deposit and move it to a different bank. I think the funny stuff was in the money used to buy the banks and capitalize them.

  15. Alek Boyd Says:

    So do these banks actually have real people’s deposits? I would have thought these were simply money laundering joints.

  16. moctavio Says:

    jsb: That is what I mean, the “d” word.

  17. moctavio Says:

    Alek, the problem is these banks will become shells in the next few days as depositors take their money out. Intervention of a bank like this can be quite destructive.

  18. jsb Says:

    Whenever anyone asks “Where’s the money coming from?”, I usually suspect money laundering. It’s not necessarily his, but he’s trying to make someone else’s money legit. And where’s their money coming from? Drugs? Military contract bribes?

  19. moctavio Says:

    My feeling is this guys were doing something very dirty, which was not part of the equation.

  20. Rene Says:

    Miguel, what I heard was this is a fight between the boliburgueses and the ideological faction (probably led by Rodriguez Araque). The Diosdado fall from grace theory doesn’t quite fit since he was recently named head of Conatel.

  21. Alek Boyd Says:

    Or is it that the English marxist that said in Ultimas Noticias that the revolution has not touched the financial sector got Chavez’s ear?

  22. amateur kremlinologist Says:

    Could this be fallout from Mr Pretty Eyes very public dressing down? Could it be that Mr Pretty Eyes is another Chavista patriot on his way down? I hear he’s going to another Ministry soon, somewhere he does not have as much access to the action like what was available at MOPVI.

    This is a super novela, we must all keep our eyes peeled!

  23. Alek Boyd Says:

    Miguel, why would Chavez punish Diosdado? For that’s what Fernandez Barrrueco is, Diosdado’s testaferro, no more no less, as you know. Is the financial situation THAT BAD? Mind you, is the revolution so strapped for cash that is taking assets from its own henchmen in order to survive the shit storm? I don’t buy from one minute that Fernandez Barrueco has fallen from grace, for that would be akin to saying that Diosdado is no longer Chavez’s favourite man. I could call this a loan, a temporary and friendly transfer of ownership, a scheme of putting in ‘nationalised banks’ people that have demonstrated an ability of making money out of nothing, but I would never take this as punishment to Diosdado, unless of course we see some evidence of that somewhere else.

    This reminds me of the video of the lady in Petare telling La Hojilla crew to fuck off and insulting Mario Silva and Chavez. People in the opposition are meant to rejoice at it, without realising that it’s a chavista way of saying “look, there is freedom of expression in this country and VTV cameras are open to whoever feels like insulting Chavez”.

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