The Devil's Excrement

While the name of the game in Venezuela today was simply denial on the matter of the suitcase with US$ 800,000 in cash which a Venezuelan passenger took to Argentina, the case had a life of its own in Argentina where, despite apparent initial pressure to have the case hushed, hell has broken loose by now, not the least because that country is in the midst of a Presidential campaign that involves the President’s wife as the leading candidate.

First of all, the case has taken such huge proportions in that country that President Kirchner himself felt forced to comment on it, saying that he had no reason to cover up anything because he has fought and is fighting corruption in that country. But note at the end, the comment by the Chief of Kirchner’s Cabinet who says: “There was an abuse of the good faith of the Argentinean officials on the part of the Venezuelan ones”. Note he does not say Venezuelan citizens, but “funcionarios” which I have loosely translated as officials, but you could translate as employees. But he is clearly saying these people were there is some official capacity.

Then of course, we had the first casualty in the case in that country when Claudio Uberti was forced to resign. Uberti who has been described as an adviser to the Ministry of Planning of Argentina, actually held an important position as Head of the “Órgano de Control
de Concesiones Viales” or Organization for the control of road concessions, in charge of all toll roads in that country.

However, Uberti was also an adviser to the Ministry of Planning of that country who had “specialized” in running joint projects between Venezuela and Argentina, signing and negotiating as many as 10 deals between the two countries. In 2003, Uberti was accused of corruption relating to the campaign contributions to Kirchner’s campaign but was never convicted. He was considered to be the right hand of the Minister of Planning and in 2005 was thought to be the sure candidate to become Argentina’s Ambassador to Venezuela, but a woman beat him to the post reportedly at Chavez’ request. Uberti has been a go-between of Argentina in deals with Venezuela, particularly in the oil area. He was on the plane coming back from Venezuela as part of the Enarsa delegation. Enarsa was a special purpose company created for joint oil projects with Venezuela.

Meanwhile, in Argentina today, the case against the Venezuelan man with the suitcase, Guido Antonini, moved forward when it was decided to accuse him of attempt to smuggle the money. Antonini, who is no longer in Argentina, travelled to Uruguay, coincidentally Chavez’ next stop in his trip and has not been seen since. When he was questioned at customs, he simply left the money behind and fled that country. The document signed at customs says Antonini did not try to hide the money, but did not declare it, violating the law

Meanwhile, additional information reported today says that he only has a minor participation in local petrochemical company Venoco, he lives in Florida and his main area of business is in the area of armored and protection vehicles as representative of Armor Holdings.What is known is that Antonini deals a lot with the Government and has business partners who are well known to be important intermediaries of various “businesses” of the robolution.

Meanwhile little has been said about the PDVSA employees who got the free ride in the plane rented by Enarsa. One is the public relations officer for PDVSA, another is the PDVSA representative in Uruguay and the third one was legal counsel to PDVSA. The fourth PDVSA related person was the son of a high level PDVSA executive.

About the only Government official that seems intent in doing his job is the Head of the Tax Office. Jose Vielma Mora, who is in charge of custom offices around the country. He said that the plane had taken off the Charallave airport, known as as Aeropuerto Caracas, a privately run airport about an hour and a half away from Caracas. But tonight the General manager of that airport denied this was the case. He stated that the airplane resides at Government run Maiquetia airport and took off from there. In either case, it is the National Guard and the Minister of Finance who are in charge of the procedures when leaving or arriving in the country and one wonders why Vielma was given the wrong information, which only throws more confusion into the case.

That there has been an attempt to cover up the whole thing has been clear from the beginning. The Venezuelan Ambassador to Argentina initially said there were no Venezuelan officials in the plane, which has been shown not to be the case. Then Chavez claimed this was a media invention. By now, the Prosecutor is skirting the issue and the Vice-President says this is all a smokescreen. Clearly there is no interest in delving deeper in this case because it may involve high level Government officials. Kirchner dealt with the case the smart way by getting rid of Uberti. The robolution doesn’t want to do it in another indication of the presence of high level corruption.

Fortunately, the Argentinean authorities will keep us informed of all the sordid details.

And so will we…

Today, by coincidence, the Prosecutor General had to deliver his annual report to the National Assembly. Just to make sure the readers are all in the same page, I will like to remind everyone what this position entails in Venezuela, since he is more than just a Prosecutor, having a broad mandate given by the Constitution which includes making sure the law is upheld and I have selected some of his responsibilities.

Article 285. The responsibilities ascribed to the Prosecutor are:

2. To guarantee the speed and good order of the administration of Justice, prior trials and due process.
3. To order and direct the penal investigations when a punishable crime has been committed to record that they were committed with all of the circumstances that could influence in determining the crime and responsibilities of the authors and other participants, as well as taking care of the active and passive objects relating to the perpetration.
5. To attempt the actions that could be valid to determine the civil, labor, military, penal, administrative or disciplinarian responsibility in which public workers may have incurred in the exercise of their functions.

Now, today the General Prosecutor, Isaias Rodriguez, the same one of the Anderson crime which was “solved” (Whatever happened to that?) said during his speech in the National Assembly:

“I will not yet open an investigation because the supposed crime was committed there (In Argentina)”

Now, I am no lawyer, but let’s look at the basics of the case:

A man carrying a Venezuelan passport is caught arriving in Buenos Aires with US$ 800,000 in cash in an airplane which originated in Venezuela. Public statements from Argentinean sources say that some PDVSA employees and the son of an high PDVSA executive were on the plane because they asked for, and received, a ride from the Argentinean oil company which chartered the airplane.

I can see, at least, the following possible illegalities involved:

a) The man clearly left Venezuela with more than $10,000 in cash which is forbidden by the “Ley de Ilicitos Cambiarios”� (Foreign Exchange Illegalities Bill*).
b) The man may have committed a crime in acquiring those US$ 800,000, since under the current exchange controls acquiring more than US$ 10,000 per year is illegal and there is no legal way to obtain such an amount in cash in Venezuela.
c) The man may have also entered Venezuela with such an amount, instead of acquiring it locally, which would have also been a crime.
d) There may have been a crime committed by the PDVSA employees in receiving a ride to Argentina of it was for personal reasons. The son of a VP obviously was not there for business, so that his father may have committed a crime in asking for the favor using his position and/or influence.
e) Why wasn’t the luggage searched upon his departure from the private airport? Did someone use his/her influence so that procedures would not e followed?

But in the eyes of our esteemed Prosecutor, “the crime was committed there” and apparently not much happened in Venezuela, so who cares?

The truth is that this shows, once again and I am being very repetitive, how the country is being run by the crooks. How the General prosecutor has obviously been told from above not to do anything, because who knows how high up this thing goes, based on some of the players involved. And none other than the infamous Vice President Jorge Rodriguez, who used to run “fair” and “impartial” elections in Venezuela, claimed once again that this was a “media smokescreen, designed to diminish the impact of Chavez’s trip to South America”.

How cynical can you really be?

In contrast, Argentine justice is moving forward and a powerful man in the Kirchner administration already had to resign because of the case. But more on that in the next post.

*I have never felt comfortable with any of the translations I have seen for the name of this Law.

No sooner had Hugo Chavez screamed ‘media manipulation” or “plot against Venezuela” when referring to the mysterious man that showed up last Saturday in an airport in Buenos Aires with a suitcase filled with $800,000 in cash, that names began to come out and the furthest thing it looked like, was that there was any manipulation at all.

In fact, what the case did show is that clearly Argentina has a much freer press and independent judiciary than Venezuela. If it were not for the slew of news and leaks coming out of that country, we would know very little about the case.

To make a long story short, a private plane arrives from Caracas in the wee hours of the night last Saturday. One of the passengers is stopped and asked what he has in his suitcase and he responds books. They ask him to open the suitcase and they find US$ 800,000 in cash. He says the money is not his and he is part of the Chavez contingent in his official visit to that country. The Venezuelan Ambassador to Argentina denies this is the case saying it is a plot to blemish Chavez’ visit and the infamous program La Hojilla even dares say that the man being accused actually voted against Chavez, which he checked in the same Tascon/Chavez database that Chavista fanatics claim is not being used and has never been used by the Government against its enemies.

But it turns out that even that was a lie and the guy is one of the owners of petrochemical company Venoco, a well known supporter of the Government who acquired a majority stake in that company two years ago.

But it also turns out that in the same flight was a high official from the Argentinean planning Ministry, the same one that appeared on the steps of the Miraflores Palace a year or so ago talking about the exchange of calves for oil and how the two countries would progress together. And just then, Argentinean oil company Enarsa (which chartered the plane) comes out and denies that any of its employees were involved, saying that the plane was full of PDVSA employees. That these people boarded the plane at the request of PDVSA people and it included some PDVSA executives, the son of a PDVSA executive and a “friend”, who just so happens to be the one carrying the US$ 800,000.

But besides the large amount of cash, which would make it suspicious in any case, since that is not precisely the custom in large transactions which are legal, little has been said about the fact that carrying such amounts of cash in foreign currency in Venezuela is simply illegal. In fact, you can’t have more than US$ 10,000 and the foreign exchange office only gives you US$ 600 per year in cash. The rest, you have to spend with your credit card when you travel and you only get something like US$ 5,500.

So, besides the interest in what the money would be used for, the Venezuelan Government has to explain how the money managed to get on board the plane and what airport it was boarded on. And the person detained in Buenos Aires will have to explain where in Venezuela he managed to get such a large amount of cash at a time that it is precisely foreign currency in cash which is banned in the country. Just a week ago I wrote about the fact that despite the ban on ANY flights to or from the La Carlota airport in Caracas, a couple of dozen or so flights carrying the members and friends of the robolution land and take off daily from that airport. Want to bet this is where that flight originated?

And it is perhaps ironic that today two people who claim to support the Government, showed up at the National Assembly to present proofs for their accusations of corruption in PDVSA. They were not greeted with much happiness by Deputy Tascon who said that people could just not show up any time they wanted to present such material, after it was him that challenged them to provide such proof. In the words of the two denouncers, it was time for the Assembly and the Comptroller to stop acting like Chinese ornaments and so something about their accusations.

But this all simply reveals the depths of corruption and the flow of money that surrounds the robolution. Slowly it is leaking out as the lack of checks and balances has allowed Government officials at all levels to skim all over the place and move around without control. And the cesspool is overflowing. Only two years ago, a former Vice-Minister of Finance was caught also in a private airplane landing in Florida, carrying some US$ 60,000 to buy “Christmas presents” in his own words. Only a few months earlier he had been at the center of all major financial operations of the country on the side of the Government.

This blogger suspects that the funds being carried by this friend of the robolution came from close to the top and represented some form of political aid to either Argentinean political groups or directly to help in he campaign of Presidential candidate Cristina Kirchner. This probably explains the silence and cooperation out of that country initially to cover up the details of what happened at that country’s customs.

While we may learn a lot from the Argentinean side in the upcoming days, we are also certain that the details on this side will be clouded in the same veil of mystery as all major corruptions scandals have in the last eight years.

Let’s forget about the current Government if we may for a few minutes or for the full post if you may. How do you even start to solve Venezuela’s problems?

Well, I have always believed that you start with education, follow it up with investments for job creation, so that those that you have educated can be employed.

Somehow in Venezuela, people always want to start backwards, they want to put more money into higher education than elementary school education. Why? I truly don’t know, it may just be that in 1958 there were only 10,000 university students and the “leaders” of the country have always been either envious or those that have those degrees or they believe they could be much better if they had them. Who knows? But if you want democracy, you emphasize education from the bottom up, give everyone as much of an equal chance as possible and build it from there.

To me, the educational problem can be reduced to three aspects: Extending schooling to the highest number of students possible, reducing school desertion and increasing the quality of education.

Unfortunately, politicians tend to think only of the first factor, how to extend to schooling to the largest segment of the population. However, as has been shown before in this blog the levels of school registration in Venezuela are adequate and the problems of desertion and the quality of education are more important. In fact, at one point in my life I collaborated with Cenamec, an institution I don’t even know if it even exists today which, worked on improving the quality of science teaching by working on the teachers of science to improve the quality and organize the various science olympiads in Venezuela.

This criticism is not aimed at the current administration, this has been the case for at last 29 years, but the thinking has changed little, the Chavez administration appears ready now to create a whole bunch of new universities (17?) without having a clear idea of why they are needed or what they will do with them. It appears to be simply an effort to develop new infrastructure without having a clear idea of what they will do with it, what careers to emphasize or even who is going to teach in these new universities. It’s as if they were building sports stadiums, without having an idea of what they will do with them.

All of this comes to mind because a report recently came out showing that the Academic Aptitude Test being used to select university students gave frightening results. The test, given every year to decide which students are admitted to the country’s public universities is really not simply an aptitude test, as it looks to measure, at least partially, the knowledge acquired in the five years of high school in the Venezuelan educational system.

The test consists of 70 questions, 30 in the area of reading and comprehension, while 40 were in mathematical reasoning.

Out of the 320,000 students aspiring to enter universities, the averga escore was 8 correct questions out of the 70 asked, a scant 11.4% of the questions answered correctly by the students.

If this were not frightening enough, in three states, the average was not even one correct answer out of the 40 math questions, while in four states students did not manage to answer correctly even 5 of the 30 questions of the language part. Such horrible results are not new. In fact, this year seven different tests were created in order to test whether the problem involved the questions rather than the students. but unfortunately, there was little statistical difference between the results of the seven different tests.

The table in the report in the link has some averages for some states, but the clear statement made that those that administer the test is that the problem lies in the deficiencies the students have and not on the tests. In some of these states, students barely managed to answers 10 out of the 70 questions correctly, a dismal record by any standard.

Like everything in Venezuela, Chavez wants the test to be eliminated, trying to solve the problem at the end result, rather than at the root. Thus, if we combine easier standards, educational deficiencies and few jobs for university graduates, all that is being done is creating a lot of frustrations for the students and not really improving education in Venezuela.

Which is the only thing we really need.

(Thanks G. S. B. for the tip)

While I know most of you read Daniel’s blog anyway, I can’t help but note that his post today on the Doonesbury cartoon calling Venezuela a pariah state, got a lot of attention thanks to Instapundit. The fact that such a well-known cartoonist, not precisely known for his right wing tendencies, classifies Venezuela not only as a pariah, but also in the esteemed company of of fellow pariah states Sudan and North Korea, sends a clear and broad message that people around the world are “getting it” about Chavez.

Of course, Chavez does not help his cause very much, by saying today in Uruguay that “one of the greatest problems facing humanity is the media”.

He is of course very wrong, one of the greatest problems facing humanity is autocrats like him, Mugabe, Putin, Kim Il Sung and friends, who can’t stand the least criticism, disregard the law and checks and balances and could care less about democracy, human rights and the environment.

If one the biggest problems facing humanity was the media, humanity would be in much better shape than it actually is

Last November I published a similar graph to the one below, comparing the “implicit” exchange rate, the ratio of monetary liquidity M2 to international reserves, to the parallel “swap” exchange rate and noted at the time that the Government was printing too much money as measured by the implicit rate and that meant the swap rate was going to move up.

Unfortunately, I was right and the swap rate has moved up sharply. As you can see from the graph below updated to the end of July, the Government managed to control liquidity in the first half issuing bolivar-dollar bonds, which kept the two rates close, but in the last few weeks has accelerated spending and thus the printing and the implicit rate has moved sharply up, way above the swap rate. Note that every time this happens, the swap rate moves up sfast to close the gap and right now the difference is almost Bs. 800. Since the Government has no plans to have the massive issuance of bonds of the first half, then you know the swap rate only has one way to go: UP!, much like the conclusion of that post.

This is a companion post to Daniel’s post on Eva Golinger, where he tells how she showed up in the blogosphere and has made a name for herself by digging documents and accusing with them.

The
Golinger Code by Teodoro Petkoff in Tal Cual

We feel
obligated to bring up once again the episode of the “Committee for
Anti-American Activities” of the US Congress, which was directed by Senator Joseph McCarthy in the 50’s of last century, because it is
impossible not to associate it to what was staged a few days ago by the National
Assembly which resolved calling to testify in front of it 33 reporters “suspicious” of “anti-Venezuelan activities”-a concept already established by
Eva Golinger, a synonym for the macarthist “anti north American” and for whom
to express your opposition to the Government is “anti Venezuelan”. The format
is the same as McCarthy’s. Informers would give him the list of those “suspect
of anti American activities” and his committee would subject them, to brutal
trials, which sent a few North American intellectuals and politicians to jail
and exile. It was a black period in the history of the US which was
overcome thanks to the gigantic democratic reserves of that country, which
managed at the end to defeat the demential senator, who ended up an alcoholic
and subject to scorn.

When one observes the behavior of that professional informer, the
super-snitch Eva Golinger, together with her adjunct, that paradigm of decency
and integrity called Mario Silva, it comes to mind the remembrance of that sort
of “political operator” of McCarthy, lawyer Roy Cohn, who fulfilled for him,
the same repulsive role that this little gringa lawyer has assigned herself in
our country-who by the way, seems to have a special licensee to actively get
involved, and not only with opinions, in our affairs. Of course, Tascon, who
not happy with the “merits” accomplished with his nauseating list, now searches
for a new “award” in the calendar of talibanic Chavismo, playing the role of a
tropical McCarthy.

The objective being pursued is the same one that the gringo Senator
was following: to intimidate, to create a generalized atmosphere of
suspicion, stimulate snitching, and in short, to attempt against the fundamental
rights of human beings such as those that can be summarized as the ability to
think with your own head and to live your life without the fear of being
repressed for political reason. The starting point of this persecution is
terrible: Anyone that has received and/or accepted an invitation by North American
political or cultural organizations is forced to prove that he or she is not an
agent of the CIA.

The burden of proof is inverted: It is the reporters who
have to prove that they are innocent. You are guilty until the opposite can be demonstrated.
McCarthy did not invent anything. He copied the procedures of the totalitarians
of the XXth. Century, Nazi-fascists and communists, perfected by the Cuban G-2
and which, apparently, have found disciples among the most rabid and backwards sectors
of Chavismo. Imagine how bad it was that Desiree Santos Amaral, vice-president of
the National Assembly and a reporter, felt obligated to express her
reservations about the pertinence of that “investigation”.

This is a political trial, a witch hunt, directed against reporters in
general. They pretend to disqualify them (“anti-Venezuelans”) and put fear in
them with the stigma, already floating in the air of “Traitors to the Homeland”.
This is a moment of definition.

Taking it lying down is not an option.

—In El Nacional, I read that the Venezuelan Supreme Court in all its screwed up wisdom, ruled that foreigners do not have the same rights as Venezuelans on the economic front. The merits of the case are irrelevant to the decision, the Court simply said that the protection given by the Land Bill to those exploiting land for agriculture does not apply to foreigners. So much for Venezuela being a country of immigrants.

—And speaking of that Court, what was that Venezuelan Justice doing in the Miss Universe contest as part of the jury? Did the Court pay for the trip to that revolutionary event? And is it true that one of the Justices was not born in Venezuela, as required by the Constitution?

—And how about Deputy Iroshima Consolacion Bravo telling us in El Nacional that the new foreign exchange Bill is aimed at “minimizing the existence of the parallel market” because it has been going up so much. Maybe the Deputy should look at this story in El Universal today if she wants to understand why the parallel exchange rate keeps moving up. In the printed version there is a graph and it is absolutely scary. Bs. 5,000 per US$ or more by Xmas? You can bet on it!

—And how about funny man Deputy Julio Moreno, President of the Comptrolling Committee of the National Assembly telling us that there is more control than ever, but later admitting not one person has been sanctioned for corruption in this Government?

—And the cable car has been free since the Government took it over. I think everything in the country should be free from now on. Gas already is, but food, electricity and cellular phone service should all be free too.And we shouldn’t have to pay for RCTV.

—And the Government authorized the import of 500 million eggs, that’s 20 per citizen. Maybe local producers will be undercut in price by the imports, they will go under and next time we will have to import a billion eggs. (BTW, I had fried quail eggs yesterday, not a bad substitute, plenty of them here, but you have to fry a bunch to make a dent!). Will they be free?

—And Chavez’ nose keeps getting bigger and bigger. First he says that his support of Kirchner’s wife as a candidate for the Argentinean Presidency is not an intromission in that country’s affairs. And then he claims he never gave an ultimatum about Venezuela’s entrance to Mercosur. I guess he does not know what intromission or ultimatum means.

—Finally, my brother and others wonder that if it is true, as Chavez says, that Venezuela and Cuba have become one Nation, does that mean that any Venezuelan that steps into US land can stay? The US Coast Guard is going to be busy.

If you are so inclined in this webpage you can find and download the complete Venezuelan Electoral Registry. You need Access to handle the data.

The Internet is cool, because on a Sunday morning I can watch this interesting talk from the comfort of my living room (also below, but there are many more in the link, like this other one by Rosling on Poverty!). And I can stop it. Or watch it again…