Archive for November, 2010

The Chavez revolution does not even have the people to mind the store.

November 18, 2010

Many years ago (about 30), when I worked for the Government, I was supposed to get reimbursed for US$ 120 for some books I had purchased. Except that there was an error and I got one check, and one week later a second check arrived. I went to the cashiers office, where I worked, to return it and the lady (had to be a trusted employee given her position) told me literally: “Why don’t you keep it, if you don’t, somebody else will”

Having recently come back from studying abroad at the time, I was absolutely appalled by the response and it is still one of the most memorable memories I have of the culture shock I had upon returning to my own country. In fact, there was no procedure for returning money, apparently nobody ever did that, so I had to talk to a big shot in the administration of the institute in order to at least, have someone accept the returned check and give me a receipt for it.

It was the first of many lessons on how Venezuelans feel that somehow money is there to be grabbed, not be earned, and if somebody has money, it is likely to be because they got there first to grab it.

Which leads to the large quantity of graft and corruption levels we have. Unless somebody is watching, workers will try to grab what they think is there and there seems to be no moral dilemma in doing it. The only way to stop this is better education and better oversight. (And then some more education) Unless both are in place, people will not learn to separate what is ethical and what is unethical and in any case you need somebody to be watching, as the “honor” system simply does not work. Somebody has to be minding the store.

This has been the case for decades, which is what taught me that the less Government we have, the better. Not only is is difficult to be watching over everyone, but Venezuela simply did not have the people to run all of the things the Government wanted to run.

And then came Chavez promoting his so called XXIst. Century Revolution, which in order to run more things, needs more people. But the revolution also removed checks and balances, which allowed people to run amok, taking personal advantage of their positions and leading to the perverse misuse of Government funds as in the case of Maletagate, Pudreval and so may others.

In some sense, the basic precepts of Chavez revolution seem to be designed for a society whose citizens are different than the common citizen of Venezuela. Over the years, whether in the public sector or the private sector I have seen this pattern repeat, which is why I simply gasp at Chavez’ beliefs that people will run something honestly and efficiently just because they are good citizens. Remove the cops enforcing stop signs in the US and people will start running through them. Unfortunately it’s human nature.

These ruminations come to mind, because in the last two days we have had two scandals involving corruption in two of the most symbolic programs started by Hugo Chavez: Mercal and his Socialist Arepera.

The Arepera Socialista is the best case study, as it was announced with pomposity by Hugo Chavez, he promised he would build hundreds of them, but you can count them all with one hand. The project served its purpose, it has been forgotten. These areperas, are supposed to be a fairly symbolic project, because it is subsidized and attempts to sell a popular staple, competing with the “capitalist” establishments that supposedly rip people off.

Except that six of the workers of the arepera, were caught with their hand in the till, stealing money at the end of every day from the cash register, which was recorded in videos and they were arrested yesterday. Perhaps the most amazing thing is that it was not one or two workers but six. I have no idea how many people work there, but it seems to be a large number of unethical workers for a project so emblematic that I am sure would only hire “Rojo, rojito” workers who are rank and file members of Chavez’ PSUV.

The next day, a very similar event took place, when the human resources manager of Mercal, another emblematic project of the revolution and six workers were detained for running a parallel payroll to that of the Mision Mercal, which is supposed to sell cheap food to the people.  Besides this, they were handing out food stamps to people who do not work for Mercal and even travel expenses.

Unfortunately, what this shows is that the Chavez revolution can’t find the people to run or mind the store. From way at the bottom, arepera employees, or the bosses at Pudreval, Mercal and PDVSA, revolutionary ideals are set aside whenever money is left out in the open and without anybody watching. And the more the revolution wants, the harder it will become to control. Corruption is even a problem among the cops that are supposed to investigate and control such thievery and unethical behavior.

None of this is rocket  science. This was predicted by many as Chavez began his wildly uncontrolled expansion of the state in which more and more of the private sector is expropriated by the Government or new institutions are set up to compete with it. To make matters even worse, the Government does little to reward hard work and even loyalty. In the last efw days, we have seen protests by both Barrio Adentro and Mercal workers. They have not only not received any salary increases, inflation is up 25% so far in 2010, but they are owed benefits and some of the promised supplies to adequately do their jobs.

While at least in the two cases mentioned above, the police at least caught those involved in the rackets, I am sure that there are hundreds of others that go unnoticed every day. When Government officials are given such a free reign and nobody minds the store, such shenaginans will not only continue to continue, but will likely increase as the Government extends its reach way beyond its most basic capabilities.


Venezuela’s People’s Ombuds(wo)man seems to understand her job backwards

November 16, 2010

When the first People’s Ombudsman, known in Spanish as the “People’s Defender”, German Mundarain ended his term, I could not believe that his replacement could be any worse than he was. Essentially Mundarain spent his time defending the Government and seldom seemed to remember that his role was to defend the “people”.

His replacement Gabriela Ramirez has simply followed in his steps. Today, Ms. Ramirez with her characteristic clairvoyance, simply refuted all of the accusations of accused drug dealer Walid Makled. Clairvoyance, because given that there has been no investigation of the case and Makled’s accusations, she would need to have special powers to say like she did:

“No Venezuelan officials are related to the drug dealer” and “Justice will be made in this case”

Ms. Prieto added: “If we were to believe a person being processed for drug trafficking, more than we would believe the representatives of the State, we would live in a backwards world”

Well, Dear Gabriela, if we follow your logic, explain to us why, if there was an investigation of Mr. Makled already in 2004 for drug trafficking, he managed to be assigned: 1) The storage for the most important port in Venezuela 2) The distribution of urea for all of Venezuela and 3) The Government approved his purchase of what was then the largest local commercial airline in Venezuela?

Can you explain Gabriela, just as an example, why it was Makled had a credential of the Venezuelan Supreme Court signed by none other than Justice Eladio Aponte^2, who just happened to be a former Military Prosecutor?

And can you explain Gabriela, how Makled managed to evade the manhunt against him by the  police, escape the country and he claims that he did so under the protection of Generals? Do you know Gabriela in whose house in La Lagunita was Makled staying at during this time?

And have you checked Gabriela whether Makled paid or not Bs. 880 million to General Marin Leal, who just happens to be in charge of Chavez’ transportation?

And how about the quarterly payment of US$ 150,000 to the same General Marin Leal? Have you really looked into this and whether it took place or not? Let’s make it simple: Have you Gabriela Ramirez, the People’s Ombudswoman, checked General Marin Leal’s lifestyle and assets?

And have you checked whether is true or not that the current Commander of the Navy, General Carlos Aniasi Turchio, was the person that signed off on the Puerto Cabello port concession for five years in 2006? And can you also checked wif the General who laughed at the Constitution and classified as a drug kingpin by the US DEA signed off on that deal?

And have you Gabriela, informed yourself whether the son of former Vice-President Ramon Carrizales was or not an employee of Makled, while Carrizales was Vice President?

Don’t you think Gabriela Ramirez that it is these questions that make us wonder whether it is you that lives in the backwards world, failing to do even the most basic due diligence on Makled before you go and defend Hugo Chavez and his corrupt cronies?

These are just some questions and before you ended then you had to go and assure us that the rights of the subway protesters were not violated. Have you read their testimonies? Have you read how they say that the police stole even the food that their relatives left for them? How about the fact that the charges of terrorism did not hold water? How about the fact that both Chavez and the Vice President spoke of them as being guilty and they were let go?

When you don’t even have the decency to defend pregnant and lactating women who are unfairly jailed for exercising their Constitutional right to protest, then I have to ask you Gabriela Ramirez?

Who lives in the backwards world? Who understand her job backwards? Just read your job title and your mandate and you may understand. Can you?

Or simply read Article 280 of the Constitution:

The People’s Ombudsman is in charge of the promotion, defense and vigilance of the righst and guarantees establsihed in the Cnstitution and international treaties on Human Rights, besides the legitimate, collective and diffuse interests of the citizens”

Gabriela, in none of what you did and say today or do and usually say you do that. YOU have it backwards!

Will someone ever tell Chavez he is out of touch with reality?

November 14, 2010

(If you invent the wheel, I will invent communism and take the wheel away from you. Get it?)

Chavez comments today in his Alo Presidente simply show how out of touch he is these days. The man who used to walk the streets, no longer even rides the subway, limiting himself to making statements of what he is told and clearly, he is not being told the truth. He rides in helicopters accompanied by more helicopters. He is simply out of touch:

–“It would be good for Polar workers to determine who exploits them if it is Chavez or Mendoza?

Well, let’s see: Polar pays higher. Polar will pay tomorrow four months year and bonus, while Chavez will pay three in three installments. Polar pays severance when your leave. Polar does not force its workers to go to political rallies or wear any t-shirts. Polar gives each worker two cases of beer every month.

Should I go on Hugo?

–“Opposition parties want to make the subway chaotic

Did you even see the people that were jailed? Did you ask where they live? They all live on your once stronghold of the West of Caracas. These “politicians” included a lactating woman, also a pregnant one, this all happened in Pro-Patria, once your enclave, not in fancy neighborhoods, very far from the oligarchs. The bald guy who was prominent on the pictures said: I am just a user of the subway, all we ask is that the Government respond and fixed the subway”

Hugo why don’t you jail those that gave the maintenance contract to the Spaniards, who now have no clue how to fix things? Take a ride in the subway, but don’t call in advance. Look at the pictures.

–“Per capita income in Venezuela is among the highest, the problem is that we spend it all

Hugo, Hugo. You should read the book how to lies with statistics. If you calculate the same per capita income using the SITME exchange rate, it is no longer among the highest. And if those that suck up to you did not fake numbers so much, you would realize that it is impossible to save money to anyone earning even two or three times minimum wage. Do you know how much salaries have gone up this year in the public sector? 6.5% when inflation, so far in the year is 23%. You have all your expenses paid for, go out, try to buy something even in your Bolivarian supermarkets.

–“Real State crooks should go to jail

Unfortunately Hugo, if you apply the same criteria, then you are the biggest crook of them all. You have promised housing over and over again and have been unable to build more houses than Caldera did in any given year in any of your long and tiring eleven years in Government. Why don’t you measure yourself against the same criteria?

If you did, you and your urban planners would all be in jail. Same if you jail those that do not complete housing projects.And please don’t make empty promises again that sound so fake like you did today: “Now we really are going to build housing”


With that sentence you admit you have failed and you are once again promising what you can’t deliver.

–“Public Employees should not spend it all, they should invest in the Public Stock Market…if they buy CANTV shares, this would allow CANTV to invest

Hugo, Hugo. If you barely understand socialism and hate capitalism, why do you even want to play being capitalist? When someone buys a share of CANTV (Of which you own 95%) CANTV gets nothing, the owner of the shares does. So, when shares trade hand, the company that issued the shares gets absolutely nothing. Only when you do an IPO (Initial Public Offering) does the company get something. And Hugo, let me tell you, in your long eleven years in power, there was only ONE, yes, just “UNO” IPO’s in the local exchange and I don’t want to say the name, because you hate that company.

But going back to CANTV, you own the shares. You removed the possibility of Venezuelans buying CANTV shares, because you monopolized them all. In fact, so far in 2010 a total of 170,000 shares of CANTV have traded in the Caracas Stock Exchange that you want to compete with. At Bs. 3.35 per share average, that is about Bs. 565,000 total for the whole year (About $120,000 at the Bs. 4.3 rate). At Bs. 10,000 per worker like you suggested today, the whole of CANTV trading would acommodate about 56 (five six) of your three million public workers. Not simple Hugo.

Think about it, at 0.5% commission, all of CANTV would generate in all of 2010 about Bs. 2,000 in commissions for your public exchange (About 500 bucks ta the higher rate of Bs. 4.3). That does not even pay the daily lunch of the President of that new Exchange.

You better ask your advisers about these numbers, you are about to create a whole bureaucracy and subsidy…for nothing.

But again, you are a socialist, why your interest in developing capitalism?

–Finally Hugo, just a suggestion, why don’t you say you will jail any of your collaborators that offers you something and fails by say 20%. Thus, if next year GDP grows by less than 1.6%, there goes Giordani to jail. If inflation is more than 27%, uups.., there goes Giordani again to jail. If oil production falls, uups, there goes Ramirez.

It may just work better than the current system.

Just a thought! Get in touch with your reality!

An increasingly intollerant Venezuelan Government criminalizes protest

November 13, 2010

Headlines since yesterday have been dominated by the detention of thirty three people who began protesting in Caracas’ subway system when a subway train was suddenly take out of service. The Government accuses the protesters of planning the action (??) blaming Leopoldo Lopez’ Voluntaf Popular movement of the action, claiming that it was planned ahead of time, simply because the movement has been distributing leaflets like the ones above, in order to exploit politically (why not?) the people’s frustration with the increasing bad service at Caracas’s subway system.

The subway has indeed become one of the Government’s Achilles Heel’s as it seems to break down almost daily, like I wrote about before. But clearly, the Government is getting increasingly sensitive and and intolerant on the issue. First it began kicking those that took pictures of the subways problems and Tweeted them, this time around it arrested the protesters, has now held them for two days and it plans to accuse them of terrorism, organizing to commit a crime and altering public order. Clearly the first two charges are exaggerated, but the Chavez Government wants to stop protests in any way it can.

This is not new, there has been an increasing level of criminalization of protest. Just last week, it was announced that Miguel Angel Hernandez would be tried for wearing the t-shirt below:

which says “Hugo I shit on your revolution”, which has a picture of Homer Simpson. Mr. Hernandez did this during the Caribbean Baseball Series last February and was detained by the National Guard as he was leaving the stadium. Nobody thought he would be tried for this. The words may be offensive but Mr. Hernandez has the right to do exactly what he says in a democracy.

The Government knows that the proliferation of protest will damage its image. The subway used to be a symbol of something that worked in Venezuela, but now is facing problems that are impossible to resolve in the short term (Only 18 of its 41 trains work today and the Government gave three years ago the maintenance contract to a Spanish company used to working with incompatible equipment, it was a french company that built it originally) Opposition groups are definitely trying to take advantage of the symbolism and reality of the subway, this is what the Government wants to stop.

But accusing these people of terrorism and trying to suggest these are yuppies and oligarchs may backfire, as their relatives protest on live TV and subway users are certainly not your typical Venezuelan yuppie. The subway has indeed become a political testing ground for the incompetence of the Government and any further deterioration of the system, or a major break down, will simply back fire and make this a very hot political issue without the Government having the ability of fixing it in the short term.

Sounds like so many other problems in Venezuela…

And on the fifth day, Chavez promoted General Rangel Silva

November 11, 2010

And on the fifth day after General Rangel Silva said the Armed Forces would not recognize an opposition victory and after national and international outcries to remove General Rangel Silva…

Chavez promoted him to General in Chief…

Drug kingpin, pro-Dictator, fanatic…perfect for the post…

The pretty revolution at work

Makled case gets murkier and murkier for Hugo Chavez

November 10, 2010

When Hugo Chavez held a press conference in Havana broadcast to Venezuela suggesting that the Makled case was an attempt by the US to make him look bad, it was clear that the case was getting murkier and murkier. It simply makes no sense for a President to mention such a case.

But the Makled case is getting more and more complicated as the Government tries to avoid or ignore the case, rather than go after the principals. Unfortunately, the principals in the end involve too many military buddies. Had they been civilians it would have not mattered much.

I have not written much about the case, it has been covered extensively elsewhere. I did write abut his accusations, simply because they were incredible and the Government barely reacted.

But lets look back at the history of the case. The Makled brothers, of Syrian origin, were wholesale and retail sellers of appliances in Valencia when Hugo Chavez became President. The four brothers were close to the revolution. One, Abdala, even became President of the Bolivarian Federation of Businessmen. Slowly the Makled brothers rose in the political and business world. All of a sudden, the three brothers controlled the Puerto Cabello docks, the most important port in the Nation, Aeropostal Airline, the second largest one in the country and the country’s petrochemical company Pequiven gave them the rights to the distribution of urea in the country.

In 2004, the US DEA, in cooperation with Venezuelan drug enforcement officials began investigating the Makled brothers for suspicion of being involved in the drug trade. At that time, the Government captured a shipment of chemicals used in making drugs and they had been purchased by a company owned by the Makleds.

Makled related shipments out of Puerto Cabello became the norm and many were captured abroad. It was impossible for the Venezuelan military not to know about this, it was moving Tons of Colombian cocaine right under their noses. Reportedly, it was Abdala’s launching his candidacy to be Mayor of Valencia which broke the groups’ immunity from Government persecution. In November 2008, a shipment of drugs was captured in the Makled’s farm and three of the brothers were jailed, while a fourth one, Walid, going to Colombia, where he was eventually arrested. Walid wants to be extradited to the US, while Chavez wants him to be sent to Venezuela.

Both the US and Colombia say Makled was one of the biggest drug smugglers in the world. The US wants Walid, but so does Chavez. Chavez even said in his program that President Santos offered to send Makled to Venezuela, something we doubt truly happened. The US has accused General Rangel Silva of being involved with drug smuggling, the same General that said this week that the Armed Forces would not accept and opposition victory in 2012. Makled has also said he bribed the brother of the Minister of the Interior, which the Minister has denied. Makled claims to have proof.

What is remarkable is that until Chavez spoke, there was little discussion from the Government on the case. The Prosecutor certainly has said nothing about it, while she is quick to chat away about less significant subjects.

But anybody’s suspicions have to be aroused when yesterday, the Deputies from Podemos, asked that the National Assembly investigate Makled as well as the words of General Rangel Silva. They both were denied.

Clearly there is certainly something going on. Makled is no saint, but neither is the circle of virtue that he is being surrounded with. Chavez is clearly protecting lots of people, so he is unwilling to let anyone near the subject. But something is rotten in Miraflores and Makled will make the whole thing blow up, if he goes to the States. There is simply no excuse and no defense for Chavez to be blocking any investigation of this case.

And that is what Chavez wants to stop and Santos is taking advantage of. Given the independence of Colombia’s judiciary, I would bet Makled does not up in Venezuela. And if he does go to the US, the revelations will truly be incredible.

And Makled claims to have proof.

Can it get any better than this?

If you want to understand why Fondur can’t finish housing, look at its website

November 10, 2010

In the previous post I showed unfinished buildings by Fondur, the Government’s urban fund. Reader AIO tried to find information about Fondur on the Internet and found this image on its site which is simply hilarious:


While Hugo Chavez expropriates housing projects his own remain abandoned

November 9, 2010

As the Chavez administration takes over middle class apartment buildings in order to score points with the Venezuelan middle class, the truth is that it has failed to complete ots won projects, such as the picture above of a development in Vargas State, which sits abandoned, buildings already crumbing, despite the sign that hails “Welcome to anew project by the Bolivarian revolution”

The problem is that this project is part of the Vargas Plan 2005, an ambitious development plan for Vargas State, the most pro-Chavez one in the Nation, which was suppose to build some 13,000 apartments for the residents of that State. Only 230 of them have been completed.

This is the same Government that took over apartment complexes that were almost finished as a way of promoting its won image among the middle class. Sadly, they have been partially successful. Because there have indeed been abuses by the private construction sector, some induced by the ban of selling apartments indexed to inflation, but in the end the truth is the Government does even worse than the private sector. not only has the Government not completed these projects in Vargas, losing money and leaving them abandoned, but there are many others all over the place in the same condition. Because in the end the Government has become such a central part of all activities, that it is also failing at being a regulator. Thus, in the end it “intervenes”, “expropriates” and “takes over”, where it should be imposing penalties and regulating.

But it is all a matter of style. “Intervening” sounds threatening and ominous, exactly the image wants to convey. At the same time it sound bold and powerful, exactly what the Government wants the middle class to think. But in the end, it is all a war of words. In six months, the building projects will remain abandoned, forgotten in the same foggy cloud where most bold Chavista projects lie.

But perversely, many will keep a positive image of all these announcements. The image of a Government that cares for the people. A Government ready to step in and defend their rights. Unfortunately, their rights are being trampled once again when they are led to believe this has any meaning in their future.

In the end, it is actually the opposite. The private sector is more efficient than the Government despite all of its problems. But now that it feels and is threatened, it will simply stop building and investing which goes precisely against the goals of all middle class Venezuelans to own their own home.

The perverse thing is that it works in the end. These actions do give the Government popularity despite their overall negative effect. Proving once again, how populism can be successful even after a decade of failures.

For the record and the record books: Complete unconstitutional statement by General Henri Rangel Silva

November 8, 2010

Just for the historical record (and the record books!) I wanted to make sure to include the full text of what General Henri Rangel Silva said today. General Rangel Silva’s statement is unconstitutional and represents a true threat given that he is the General in charge of “Plan Republica” The military plan that protects people and votes on election day. General Rangel Silva should be immediately removed and jailed for what he said.

“The National Armed Forces has no half way loyalties but full ones towards the people, one life project and one Commander in Chief. We are married to this national project,” said the head of the Strategic Operational Command  (CEO), General Henry Rangel Silva, who says that in a hypothetical opposition government starting in 2012 and any attempt to dismantle the military sector would have a reaction from both the military and the people who would feel that they are taking something away from them.

In an interview with Ultimas Noticias, Rangel Silva insisted that the sectors that oppose President Hugo Chavez continue their attacks against the armed forces and some of its leaders. “For many, there are some military leaders who are not convenient to them and they (say) they have to be out of the way,” he said.

“The attacks are on the agenda of the opposition. The Armed Forces element has historically been used to somehow topple governments … They act supported by third countries and that affects nationalism. The hypothesis (of an opposition government) is difficult, it would be selling the country, that’s not going to be accepted by the population, nor the Armed Forces, nor least of all by the people”he said.

The Venezuelan Armed Forces would not accept an opposition Government

November 8, 2010

General Henri Rangel Silva Chief of the Operational Strategic Command said in Ultimas Noticias the following:

The hypothesis (of an opposition Government) would be difficult to sell to the country (??), that would not be accepted by the population, the Armed Forces and least of all the people”

Democracy is clearly meaningless to the General.