Archive for June 13th, 2013

At Bandes, Wasting Money Is Just Their Way Of Doing Business

June 13, 2013


When Hugo Chavez started using the oil windfall to generate friends abroad, he thought Venezuela had infinite money. From coops to joint ventures with questionable partners, like Iran to Petrocaribe, money was thrown at many bottomless pits.

But the worst part is that there was no accountability, either before, during or after these ventures were carried out. Even more incredible, is how immune some of these organizations that have been in the middle of these deals seem to be to any investigation or accusation. But none more incredible that the two “development” related organizations, Fonden and Bandes. Fonden has been mentioned before, a billion dollar sink hole protected by Ch√°vez and Giordani, but Bandes, which was actually in charge of many of the loans by the Chinese Government, including the oil for money credit lines, seems to be absolutely shielded and protected. In fact, its most recent President, has now been promoted to President of the Venezuelan Central Bank.

Way to go Maduro!

A few weeks ago, I reported on the US$ 66 million ripped off by Bandes officials via the trading of bonds, with as much as US$ 10 million lost in a single trade (world record?). Weeks have gone by and despite a sixth person jailed in the US yesterday and the opposition requesting an investigation, absolutely nothing has happened. Not a single investigation or question raised or asked. And the same people keep on running Bandes…

Who protects Bandes and its officials, past and present? It can’t be Chavez, he is no longer around. But the immunity continues.

I know US$ 66 million is pocket change for the bottomless pit of the revolution, but it just keeps adding up and Bandes seems to be always in the middle of things.

Take Bandes-Uruguay. In 2006, Bandes Venezuela purchased Bandes-Uruguay, which was bankrupt, for a scant US$ 10 million as reported in these same pages then. I was not too positive on the transaction:

“I like the business plan: Take over a bankrupt financial institution in a country you have no experience with and have it run by people with no financial experience. A recipe for financial disaster for spreading the goodwill of the revolution! More losses in the name of solidarity! Less money for Venezuelans!”

Wasn’t too far off the mark, no?

Even worse, the genius behind this investment is none other that then (and current!) Bank Superintendent Hernandez Behrens, the same guy who presided over the mini banking crisis of 2009 unscathed.

Bandes Uruguay lost money in 2007, 2008, 2009 and every year after that. So much, that it lost all of its capital. In 2010, I wrote a post again on the subject, this time because Venezuela was considering recapitalizing  Bandes Uruguay. Or Uruguay wanted Venezuela to throw some good money after bad. Which apparently was done once or twice, but now Chavez is dead. In the meantime, Bandes-Uruguay went from 35 branches to 24 and then to nine, as Bandes-Uruguay paid off hundreds of Uruguayans to take their severances and leave.

And Venezuela and Venezuelans (The people!) paid for this whole boondoggle…And Uruguay laughed all the way to the bank.

Well, it seems as this chapter has been at last closed, as oil went down and Venezuela did not want to capitalize Bandes-Uruguay any more.. So much for goodwill created in the name of the revolution.

The Uruguayan Senate approved now the absorption of 146 employees of Bandes-Uruguay to State owned banks, as well as absorbing nine branches of Bandes-Uruguay.

Meanwhile in Venezuela, Bandes gets away with not submitting financial statements, while handling billions in Chinese loans with no accountability. And any accusation against Bandes or its leaders is just ducked by the Prosecutor, the National Assembly or Maduro for that matter.

Which makes you wonder who used to protect those in Bandes? Who protects them now?

As a good friend (JG) said to me last week: Giordani is like a Catholic Archbishop, saying, yes I know that Bishop is a pedophile, but I am not.

Arrogant till the end…

Meanwhile at Bandes, wasting money is just their way of doing business, with OUR money.