Archive for April 3rd, 2015

1001 Chavista Rip-Offs

April 3, 2015


While the media in Venezuela barely reports corruption scandals, let alone investigate them, thanks to the press abroad and the Chavista crooks that get caught, we have learned 1000 ways in which Chavismo has ripped off and arbitraged the Government for their own personal profit. From Argentinean bonds, to contracts, to Illaramendi, to Maletagate, to Andorra, there have been a myriad ways to make money. By now the numbers are so scandalous that even a former Minister of Planning that oversaw over much of the time how these rip-offs took place, claims that there were US$ 22 billion in fake import orders in 2012 alone.

But details are hard to get, as even in the Andorra case we have only scratched the surface. But now we get a picture of the 1001th. Chavista rip-off thanks to investigative reporters from Argentina’s Clarin.

In 2005, the Venezuelan Government set up a trust at UBS to fund transactions between Argentinean and Venezuelan companies in the oil sector, apparently with emphasis in trading finished products. Money was supposedly put into this trust and as transactions took place, people got paid from it.

But according to a cable by Argentina’s Ambassador to Venezuela, the money was also used for personal profit. According to the Ambassador, someone borrowed US$ 90 million from the trust, exchanged it for Bolívars in the swap market and then repurchased the dollars at the official rate of exchange at the time which was about 14.5% lower than the parallel rate. The result? They obtained US$ 13 million more which they kept and returned the US$ 90 million to the UBS account.

Just think, the crooks that controlled the trust on both sides had sufficient weight in PDVSA and the Government that they could show up with Bolívars, which had nothing to do with the purpose of the trust or the Argentinean-Venezuelan cooperation since trading was in dollars, and buy dollars again. In theory, they could do this operation over and over, except they got caught by an honest Ambassador. (He was actually removed from his post due to the cable)

Remarkably, the man on Argentina’s side that scolded the Ambasasdor was none other than Claudio Uberti of Maletagate fame, who has been accused of quite a number of scandals and accusations. Uberti was the high ranking Argentinean official who supposedly asked Antonini to bring in the suitcases which arrived in Buenos Aires in a plane rented by PDVSA.

Of course, the Argentineans are interested in it, because the money may have ended up in an account in which Cristina Kirchner’s son has signature.

Think about it, at the time the difference between the official rate and the parallel rate was “only” 15%, imagine the deals, “guisos” and rip-offs that went one when the difference was like last year up to 3,800%.

No wonder the Government does not want to remove the Bs. 6.3 per US$ rates, with that rate, anyone with access to it, can make the same US$ 13 million, by selling 336,000 dollars in the parallel market and buying 13.36 million dollars at Bs. 6.3 per US$.

It is arbitrage on steroids…