The revolutionary corruption beat just goes on…

May 14, 2013

The cynicism of the so called revolution never ceases to amaze me. While away, I have been trying to follow the latest corruption scandal unveiled by the the US SEC in which some relatively minor officials in development bank BANDES managed to rip off US$ 66 million by performing artificial trades with bonds owned by BANDES. In one trade, for example, one hundred million dollars in bonds were sold and repurchased on the same day by BANDES, except that by the end of the day, BANDES had lost ten million in commissions, while the bonds still had the same price. The SEC is asking that all the “profits” be returned and has charged the individuals as well as the companies that funneled the kickbacks to a BANDES official.

Some of the transactions were somewhat comical, as the broker had to ask the BANDES official to return to him the money he paid in taxes, as he reported the gains as income. Showing there is little honor among thieves, he actually under reported his gains to his BANDES crony in order to pay her less in kickbacks.

But like so many other corruption cases in the last fourteen years, the Government’ policy is to ignore the case. The Prosecutor has been silent on the case, so has the Minister of Finance, the Minister of Planning who oversaw BANDES at the time and least of all the President. Maduro has said nothing of the money stolen from the people by these so called revolutionaries.

But the Prosecutor is the worst one as she is so quick to prosecute opposition figures for small amounts spent by them arguing obscure irregularities under budgetary laws.

The amazing thing is that these are minor officials who managed to do this scam, but they made off with US$ 66 million just like that. Recall that BANDES is the bank that gets the loans from the Chinese, money that is spent with no transparency or accountability. I dont even want to think what goes on in there!

You have to add this BANDES case to Maletagate, Illaramendi, the check in the hands of an Iranian for 40 million euros, all cases discovered abroad but never investigated or even discussed in Venezuela. But the largest of these cases, all discovered abroad, is “only” half a billion dollars, small scale in revolutionary terms. Nobody knows how much money was made selling the seven billion dollars in Argentinean bonds, or who received over thirty billion dollars in Pdvsa bonds or about twenty more billion in sovereign ones, all of them assigned using ever changing rules and with zero transparency or accountability. To say nothing of the billions fed to the swap market by the Government while it allowed it to exist until 2010.

. Or try to imagine the US$ 100 billion spent by Fonden under the same careless watch of Jorge Giordani! Or the billions stolen in the 2009 banking crisis, whose main Bolivarian actors, including Jesse Chacon’s brother, have now been quietly freed.

But the corruption beat goes unabated under revolutionary watch. While the opposition is blasted for its capitalism, capitalist greed and corruption is alive and doing extremely well under Maduro and inside his Government, slightly better than under Hugo Chavez. And allowing it to go on unpunished simply promotes the audacity of those involved. Billions of dollars have been robbed in the name of the revolution and there is nothing there to stop them.

Poor Venezuela!

32 Responses to “The revolutionary corruption beat just goes on…”

  1. […] Friday went to the Prosecutors office to ask to investigate the bond trading rip off at Bandes, which the SEC had jailed people for. (Edmee Betancourt happened to be President of Bandes when all of that […]

  2. PabloM Says:

    Funny how today’s NYT article uses your language, over a week after you said things like no honor among thieves, etc.

  3. Kepler Says:

    So, they saw the importing monster needs more dollars

    What will this mean, Miguel? Will this make force them to devalue earlier than they expected?

  4. Alex (the other) Says:

    One of many corruption scandals in Venny. This is a small one compared to some I’ve heard about. Unfortunately the really big ones did not involve US entities so they’d be caught as in this case.

  5. Gordo Says:

    I saw a video interview of people waiting in line at a market. They looked frightened!

  6. Mick Says:

    I guess you know the shit is really starting to hit the fan when you run out of toilet paper.

  7. Mick Says:

    There will be food riots when oil slides to $90. If is slides to $80, the government will collapse. Especially when he has been giving away even more barrels.

  8. Pedro Says:

    Miguel, you have to see this:

  9. Kepler Says:

    Pusieron a unos fiscales en Venezuela a averiguar algo sobre el caso, supuestamente:

  10. moctavio Says:

    Have not put lins in because I am travelling, check El universal yesterday and today, as well asbloomberg and Reuters. You can find the SEC accusation in Bloomberg

  11. hgdam Says:

    Miguel, can you post links to the stories you are speaking about? I ‘d like to post the links on my fb account.

  12. Roy Says:

    The way these systems work is that in order to be allowed into the “club”, you have to be corrupt. An honest official would be a threat to the system, since he or she could not be trusted to look the other way at everyone else’s corrupt dealings. Those minor Bandes officials have now padded their resume, and are destined for greatness within Chavismo, having proved their lack of scruples.

  13. Noel Says:

    Who knows, maybe Giordani will be made responsible for many of these scandals as a way to sideline him.

  14. Larry Says:

    I have a 20 year old neighbor up here in South Florida from Maturin. Kid does not speak English, is a steroid user and drives a roughly $370K Ferrari one of five in the world. Tell me he’s not living large!

  15. AlexM Says:

    So what’s the theory as to why the government condones such fraud? Precisely that John Barnard, “condones”, the government hoping that by using them, they will be immune.

  16. Dan O'Leary Says:

    You need to see who was permitted to use the bond’s FMV as collateral for short trading to get a better idea of who was on the side laundering money– and for what…trace out the rat lines, who is using the momentary bailment of the bonds in process of being bought and sold for placement of ill gotten funds, for funding personal corruption through embezzlement of government funds, also subversion and terrorism.

  17. gordo Says:

    Why am I frustrated? Because this stuff just repeats over and over. We already know about the incompetence of Chavism. Loyalty is more important than competence, right? Where there is incompetence, there is a vacuum of management that invites corruption! I guess I’ll just fume a while, and then wait for the next episode.

  18. m_astera Says:

    As Zumbao wrote, they are it. Criminals and psychopaths (5% of the population, one in twenty) have no problem adopting “revolutionary” cant and rhetoric when doing so is the easy path to free money and power. Join the government to facilitate robbery and theft and not worry about being prosecuted. As that is proven profitable, more thieves are encouraged to join government or “work” government contracts, and those already working for the government who might have been honest before see no reason not to join in the looting and bribe-taking themselves.

    However: The Peter Principle is real. In a hierarchy one is promoted until they reach their level of incompetence. Once they have been promoted to a position they are incompetent to fulfill, they will be promoted no further, but, barring really major screw-ups, they will remain in that job.

    Sooner or later a majority of the positions in a hierarchy will be filled with those who are incompetent at their job, but have too much “seniority” to be demoted or fired. Add in that these incompetents are also criminals solely in it for the money and power, and we get what we see in Venezuela today.

  19. Boludo Tejano Says:

    When the Boliburgueses try the same financial flim-flammery in the US that they perform in Chavezuela, they find out to their chagrin that there is rule of law in the US. AT least this time they found out.

  20. LuisF Says:

    The worst part of it all is IMO, that the Chinese, and other creditors will (are) coming in to collect, one way or another, on Venezuela’s liabilities.

    Nos dan la cuerda para que nos ahorquemos, and this cadre of corrupt boligarcs are spending their embezled monies in whores, amantes, apartamentos, carros, joyas, droga y whiskey- some are exceptional refined doing it with purebreeds and television stations..- while venezuela accounts payables keep going through the roof.

    When the orgy is over, and all is left is the guilt, hangover and VD’s, the POOR venezuela will have to clean the mess for its new owners.

  21. Condone? They are in on it. They are it! And to think Chavez ran on an anti-corruption campaign!

  22. John Barnard Says:

    I’ve been hoping you would post on this. What’s your theory as to why the government condones (by ignoring it) such massive fraud schemes? Is it that if these folks were prosecuted, other criminals fearing their demise would try to pull down the regime?

    • moctavio Says:

      No, I think that those involved know too much, higher ups are doing even bigger rackets, prosecuting them would lead to accusations and some of these schemes go way high in Government.

      • Mick Says:

        Way high is an understatement. As rich as Hugo made his cronies, there is no way the mob boss didn’t cut himself the largest piece of the pie. He wasn’t in charge for as long as Gaddafi, but I bet several billion of the trillion petrodollars are now in accounts under his daughters’ names. Just look at what the rest of his family has.

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