The Fonden Papers-Chapter I

August 10, 2011

You all know about Fonden, the “development” Fund that Chavez created and uses as his sort of petty cash fund for immediate needs. I was reading something or other the other day and found that Deputy Carlos Ramos had sent Minister Giordani a questionnaire about Fonden.

Naive that I am, I looked up this Deputy who I don’t know, and lo and behold, I found out he is an Economist, has a masters in Political Science, has been a Deputy before and has been budget Director of Merida State and General Manager of the Alcaldia Libertador. Better yet, he even has a webpage.

Naive that I am, I believe in democracy, open information and stuff like that, I got Deputy’s Ramos’ email from his website and wrote to him telling him I am interested in Fonden, saw his press conference and was wondering if he could send me the material he talked about, promising I would let him know if I found anything interesting. (And that I would write about it in my blog, of course)

Within a couple of hours, I had a response and a promise that the material would be sent to me. The next day, his Assistant sent me all but the Minister’s response, which I am promised would be sent soon.

I really haven’t found anything earth shaking yet. Certainly nothing as significant as the US$ 29 billion discrepancy between what the fund has assigned to projects and what has been disbursed to 140 projects, but the Fund certainly does not have such a large amount of money today. That’s Chavista math for you, a US$ 29 billion discrepancy.

So, as I await for Giordani’s response on this “small” US$ 29 billion discrepancy, I find that 12% of the development investments have gone to Defense, essentially buying weapons, 11.6% to projects of the IXth. “Mixed Cuban-Venezuelan Commission”, 19% in PDVSA projects* and half a billion Bolivars to Bandes projects and drinkable water around the Nation.

Now, I really don’t know, or understand, what that “mixed” Cuban-Venezuelan Commission has to do with Venezuelan Development, or why there is this circular relationship in which PDVSA gives money to Fonden and then part of it gets sent back to PDVSA for unnamed projects. It sounds to me as illogical as most things Chavismo does.

To say nothing of fancy weapons being part of “development”, but I guess you have to keep the military happy and satisfied with new toys like Russian Jet fighters (US$ 2.5 billion) or a bunch of helicopters (Only US$ 483 million).

But the juicy story seems to be in the “missing” US$ 29 billion, equal to the country’s international reserves, for which I will have to wait for the Minister’s response and hope there is a Chapter II to this story.

And, of course, thanks Deputy Ramos!

49 Responses to “The Fonden Papers-Chapter I”

  1. […] for all practical purposes. It sort of started when Congressman Carlos Ramos revealed there was a $29 billion fiscal hole in FONDEN, which is basically an out-of-budget fund that Hugo Chavez uses with absolute discretion to fund […]

  2. […] from state oil company PDVSA’s pension fund earlier this year, it emerged last month that no less than $29bn has been mislaid from state development fund Fonden. What is remarkable, in both cases, is the total absence of […]

  3. […] two weeks ago I told the story of Deputy Carlos Ramos of the National assembly who provided us with an excel spreadsheet of the […]

  4. […] for Venezuela, whose government rather remarkably seems to be capable of “losing” $29bn, $5bn is small […]

  5. […] Avioneta” captured in Western VenezuelaChavez’ evidence that Venezuela is immune to the crisisThe Fonden Papers-Chapter IClueless in Caracas: A Tale of Two MinistersHugo Chavez Defines His Tired, Failed Presidency And […]

  6. CharlesC Says:

    Another subject. Is Chavez laundering money for communists?
    I know Chavez is laundering money for himself-but it seems
    maybe he is doing lot for Chinese and of course, CUbans.
    Have you heard of “Reds” –communist laundered money.

  7. CharlesC Says:

    Cuba owes Venezuela over 11 billion dollars and Chavez says
    “Cuba is paying-with Sucre”-which I call “kisses”
    So, this is why Chavez is going to Cuba -to “get paid”
    Anyway-long time back I was reading an Economics book-(please note-Kepler)
    and this was maybe from 1930…-anyway-the subject- wages-and
    a comparison- Mexican workers -received 1/8 the wage of americans
    and Chinese workers -received 1/8 the salary of the Mexican worker.
    Now- I know Chavez “talks about” living without money-socialismo”blah,blah, blah. But- truth is- Venzezuelans would not like to be receiving wages
    comparable to Cuban wages- I KNOW this is true.
    So-why do Venezuelans -even listen to Chavez talk this garbage?
    Truth is- nobody will “make money” under Chavez -except -we know who..
    Every label–even Socialismo -is a front-
    Alo Presidente– is a front -to make Military Dicatator Chavez
    “look like” a benevolent, friendly, patriot-when in reality
    EVERYBODY KNOWS -he is not. He is a traitor. He is a dictator.
    He has robbed country.-He likes to be called “miCommandanete”
    and ‘el pueblo’ -gladly calls him that
    I urge everyone to STOP DOING THAT. GET OFF YOUR KNEES.

  8. Kepler Says:


    All that information you can get by checking out a couple of newspapers, preferably – very preferably – if they are from different language communities and points of view. And a little bit of knowledge of history, to put things in perspective. You can ask a couple of friends from the region and then use common sense and remember a lot of people are nationalistic.

    90% of intelligence officers should do something useful, like clean streets, til the land, feed the chicken or help elderly people.
    We should only keep 10% of the staff…just to pretend we have James Bonds.

  9. m_astera Says:

    As they say in the US, “crooked as a dog’s hind leg”. I mean the DEA and intelligence agencies, of course. And the politicians. And the cops. And the courts. And the bankers who launder the money.

    Seems to be an occupational disease.

  10. firepigette Says:

    My name is Bond, James Bond 🙂

  11. Kepler Says:

    Just for the record:
    I don’t see a big all-comprising complot about the Russians. I see a lot of mafiosi, most at the top being connected, some protecting others at one given time or moment. And some of them have played a part in dirty businesses, be it the illegal cocaine deals or the “legal” ones through the weapons industry (mind: there are similar subjects in the weapons industry on the US part, also pressurizing their government to “convince” the clients or doing that directly).

    Another thing: that video serves mostly to show how mafias work in autoritarian regimes and some tids and bits of Russian recent history.

    The “intelligence services” in Venezuela try to do similar stuff, even if they are incredibly sloppy, incapable and so far not as lethal: plant illegal stuff, cajol, threaten families.

  12. Gringo Says:

    Interesting between GWEH and Kepler. A side benefit of reading blogs.

  13. GWEH Says:

    I’m guessing there’s going to be some rush shipments of small arms and light weapons (SALW). Also lethal and non-lethal riot control gear. Whatever the russians make or can supply. Chavez needs a lot of this fast.

  14. GWEH Says:

    I see Giordani is flying to moscow asap to sign the loans. It’s on… the ruskies are supporting adan and the cubans. the election is another diversion

  15. GWEH Says:


    los rusos estan traficando en armas y drogas y estos negocias van hasta la cupula. caracas is intricately involved.

    • Kepler Says:

      “los rusos estan traficando en armas y drogas y estos negocias van hasta la cupula. ”
      Well, and Venezuelans are corrupt and superficial. 🙂

      If you want some more details, you can watch Nekrasov documentary (in English) about who killed Litvinenko.

      • GWEH Says:

        the radiation poisoning? is there a venezuela link?

        • Kepler Says:

          No, don’t exagerate. You are always trying to create a sensation “something big is going to blow up now”.

          This is just an interesting documentary that shows the Litvinenko case
          and – this is what I am going to – the kind of people at work in
          Russian politics

          There is, on the last third, some mention of a German (forgot his name) who has investigated a little bit more about Putin-Colombia.
          This is all fuzzy…these guys are not all in every piece of the cake. They are just very unethical and are more or less connected in one or the other deal, not in every one of them.

          • GWEH Says:

            Kepler, this is the big one… I’m telling you man, this time it’s for real! Gonna watch the video now… thanks.

  16. GWEH Says:

    picture of a not-too-happy Bout after extradition… all possible thanks to chavez. I dont think Bout is wishing chavez to get well.

  17. GWEH Says:

    OT: Rusky update (Kepler!)… word is the russians are going to retaliate against washington over Victor Bout and Konstantin Yaroshenko. Bout was captured in Tailand by the americans… selling arms to farc. Bout’s capture was possible because of the inardventent help of caracas… chavez’ people confirmed to the ruskies the “buyer” was legit (porq son pendejos). This confirmation was key in allowing Bout to leave moscow for tailand and the fateful meeting. Bout is probably singing to the feds and the americans know well under who’s orders he operated.

    Yaroshenko was ferrying large cocaine loads from venezuela to liberia using big Boeing jets. He was also captured by the americans and has been tried and convicted.

    The russian kingpin is Igor Sechin thus Moscow is in a tough situation. This is why I have been hinting at rusky support for adan and the cubans b/c they are in too deep.

  18. Carolina Says:

    I guess my question is how make this information available and UNDERSTANDABLE to the humble, simple campesino conuquero that can’t hardly read – if so – and the only thing he knows is Chavez face and the promise that he will give him something one day? That promise is all he ever had, and that is why they vote for him.
    Is it as simple as to make a simple pamphlet and distribute it massively somehow in the inland? Nothing else comes to my mind.

  19. firepigette Says:

    Charles C,

    This trait of reaping rewards from the Venezuelan immoral, criminal element has existed big time since I can recall( late 60’s) .I imagine it was present before, but I was not a witness.The difference I see now is that it is worse, partly because it is hard to make any money without cuddling up to those who hold the power.

    One example from my own personal life: In 1988, we bought some property from a respected Judge in Los Teques.This property valued slightly over 100,000 $ at the time.I took one look at the Judge and opposed the deal as I saw, and smelled a CROOK.My husband took his friends (who were all professionals, lawyers, real estate experts, engineers etc) ,and they all agreed that the property was a good buy.This was a source of great anger for me, because I could see it spelled a significant money loss for us.

    Turns out the Judge did not own the property: he simply paid off the documents registration, to put the property in his name and continually sell it.The judge was a total mafioso.It was dangerous to appeal.

    The moral of the story is that all mafiosos depend on a significant quantity of people to carry out their evil.Some are equally mafioso, and some are incredibly and irresponsibly naive.But if people do not learn after this Chavez experiment….it won’t make any difference who comes next…it will be bad.

    • CharlesC Says:

      What a strange dude? I am beyond bored with this nutjob.
      I am not a woman-but, I say he’s gross-he NEEDS to go.
      I really think he doesn’t know right from wrong.
      How can el pueblo and chavistas “love ” this clown?
      Somebody, sometimes should say “I am not happy.
      I don’t think Chavez is “cool”, Look into my eyes,
      I am not lying. Chavez must go.”

    • CharlesC Says:

      So, we seek a temporary replacement President. Our President robbed us, betrayed us, even betrayed our flag, jilted us,ran off and married
      Cuban President.
      We seek a trustwrorthy competent President until we hold our elections
      which will be debateful and democratic.
      Personally I have asked Yulia Tymoshenko if she would
      fill-in for our derelict Chavez who skipped out on us.
      If any of you have anyone else you feel that
      could help us through this leadership crisis-please
      contact them immediately. Signed Concerned Venezuelans
      for Democratic Happy Safe Future.

  20. CharlesC Says:

    Albie- that is certainly true. Everyone around Chavezz
    has this “guilty smile” and share a common gluttonous
    fulfillment. Rewards for friendship with a dictator.
    They gladly obey without morals.

  21. albionoldboy Says:

    Simple, each time the money is parked someone gets parking fees, Banks owned by friends of the revolution pay handsome commissions..

    Stock brokers call this churning, buying and selling stocks to collect brokers fees, for supposed anti capitalists the the revolution is adept at using capitalists tools.

  22. CharlesC Says:

    On the trail of Chavez spending money-
    I don’t think any of the money went to any women-ha?
    (Oh, Christina-forgot about her..)Otherwise,
    Moslems, ALBA, Africans?, Russians,
    Swiss Bank accounts- I don’t think so.
    US Businesses- no, but lobbying -yes.
    Don’t think Chavez spent any money in Brazil-except
    for importing food-so-most of missing money-
    must be in Latin American countries??

    • CharlesC Says:

      Chavez couldn’t be investing in
      Chinese and Russian companies. could he?
      I know about some but – maybe –
      there are more-we know nothing about..

  23. moctavio Says:

    Here is the link to the Fonden Spreadsheet sent to me:

  24. Francisco Toro Says:

    But definitely the weirdest thing about that Excel sheet is that $2.4 billion of the 9.6 billion was adjudicated to…the Oil Ministry!

    But that’s where the money came out of in the first place!

    It’s a totally surreal circular flow: PDVSA already spends tons of money off-budget, on its own. But then it has to surrender part of its income stream to Fonden so that Fonden can give it back to the ministry to spend…off-budget, on its own.

    What’s the point of this??!?!

  25. Francisco Toro Says:

    So under “2010” the total tally is $9.6 billion. It doesn’t specify if that’s the sum budgeted for 2010 or the sum spent in 2010, but let’s assume it’s the latter.

    Figured at the official exchange rate, that’s Bs.41 billion. At the Sitme rate, it’s Bs.50 billion. At the black market rate it’s nearer Bs.80 billion.

    Non-Fonden public spending last year came to 228.9 billion bolivars once you’ve added in Créditos Adicionales and parafiscal spending.

    So Fonden in 2010 amounted to 18% of public spending (at the official rate) or 22% (at the Sitme rate) or something like 34% (si now quitamos la careta y usamos la tasa lechuga verde).


  26. Kepler Says:

    Miguel, I posted about that earlier: Venezuela has spent at least 7 billion dollars in weapons with Russia and Russian weapons estimate 2 billion more elsewhere. If I remember well, at least 400 million extra (EXTRA) from FONDEN went to buy 49.9% of shares in one Russian bank that will be used to “oil” arms transaction deals. This comes from business newspaper Kommersant.

  27. An Interested Observer Says:

    Kudos to Sr. Ramos! Did he get elected with a specific party? I notice he has links on his site to basically all of them.

    “Mixed Cuban-Venezuelan Commission” – I wonder if that’s a euphemism for a creative bookkeepping method to account for the oil donations to Cuba, and they use the name “commission” because that’s what the Venezuelans involved all get.

  28. moctavio Says:

    And he replied!!!

  29. Carolina Says:

    I like this guy. He is educated, spent his first years working for his own community, and he is independent (or at least I couldn’t find any ties to any party).

  30. Julio Says:

    I bet some of that money went/goes to Bolivia to the “EVO CUMPLE” program that is finaced with venezuelan money. I think Chavez keeps 90% of all hte money that is sent to Bolivia as “gifts” to the alcaldias municipales. So when one day someone asks Chavez where all the money is he will say that is loaned to Bolivia (but he will never mention that 90% was kept aside), and Bolivia will have to pay 100% of the money Chavez will say gave it to this country. Personaly I do not think all the money that somehow disappears from Venezuela to Bolivia ends up in Chavez’s pockets, my guess is that half of that money goes to Cuba, not Cuba but the CASTROS. Of course, the same applies happens in Argentina and Ecuador.

  31. rev2012 Says:

    probably those 29 billion can be found in chinese or iranian bank accounts…not in the name of fonden of course.

  32. CharlesC Says:

    Who “gave permission” for Chavez to sign a deal with Iran for
    1 billion dollars to build homes in Venezuela?
    Don’t tell me Venezuelans cannot build their own homes.
    All of the ones I have ever slept in were built by Venezuelans
    for Venezuelans. Homebuilders everywhere inVenezuela
    did you you lose your memory? Now- youhve to have
    Cuban and Moslem bosses?
    Give the 1 billion dollar contract to the Venezuelan
    el pueblo, dictatorhead.

  33. Francisco Toro Says:


    You have to post the materials he sent you! (And Giordani’s addendum when it comes)…

  34. CharlesC Says:

    Thank you! Magnifico! In these times this looks like a miracle
    to me.
    Call me crazy- but- I ask anyone to send information-
    anything -about money from Chavez -anywhere in
    Latin America- report what you even “think you might know”.

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