The Devil's Excrement

Here you
will find a document, unfortunately in Spanish, by Roman Duque Corredor, a
former Supreme Court Justice, about the “Manipulation of the rule of law
as an instrument for a political project with the concentration of power in Venezuela”.

In it, Duque describes how the manipulation of the rule of law began in 1999,
when the Supreme Court recognized the legitimacy of the regulations of the
Constituent Assembly, which allowed all powers, including the Court itself to cease its activities. This exceeded the
mandate of the referendum for the Constituent Assembly.

After the new Constitution was approved a new transient regime, with no legal basis, was created, under the
argument that there was a “Constitutional vacuum”. This allowed the elimination of Congress, the naming of a new Supreme Court and the total
intervention of the judicial power
by this transient body with no legal foundation.
All of this was done by the creation of the novel concept of the
“supraconstitutionality” of the deeds of the Constituent Assembly,
which were not limited to the sanctioning of a new Constitution, but to ruling
during this “transient” regime. In fact, this “regime” was
challenged in front of the old Court, but it did not decide, so the
“new” Court was the one to ratify the validity of the
“new” regime. Thus, this allowed the Constituent Assembly to usurp all
powers given to them by the “originating constituent power” of the
people.

By virtue of these decisions, Venezuela
has two Constitutional orders, that one approved in the 1999 Constitution and
the transient regime, which has no approval, but is apparently indefinite.
According to the Court’s decision “it
can project, beyond the installation of the National Assembly“.
Incredible, but true. But there is more, the “new” (and improved?)
Court resolved the unconstitutionality of
its own existence, as well as the requirements needed to be part of it,
going as far as saying that the prerequisite of being a Full Professor of Law,
does not mean you need to have an academic career, but simply that you are a Professor
at any university, even at lower ranks.

The Court itself also approved and ratified that the National Assembly can
approve, by simple majority, the New Supreme Court Bill, extending the number
of Justices from 20 to 32, as well as the ability of the Assembly to remove or
sanction Justices by a simple majority. This was accomplished in part, by the
Court itself ratifying the validity of the new regulations of the National
Assembly, also approved by simple majority. Talk about conflict of interest!

Meanwhile, Duque states, the country and its Courts refuse to acknowledge any
of the decision by the Interamerican Human Rights Court, which has issued
hundreds of injunctions asking the Venezuelan Government to protect reporters
and others against the actions of the Government itself!

Amazingly enough, Duque cites how the National Assembly managed to reform
regulations, such as the land decree, in which the regulations contain articles
identical to those which had been annulled by the Supreme Court from the Land
Bill itself, under the argument that they were unconstitutional.

The Court, Duque points out, has ruled that basic rights, such as freedom of
expression and information are subject to the values and principles of the
State, which contradicts international jurisprudence on the matter. This has
allowed the Assembly to sanction bills which are repressive in nature and which,
according to international human rights organizations, violate the rights of freedom
of speech and the right to information.

Thus, concludes the author in agreement with the Human Rights commission of the
OAS, “there are worrisome signs of
institutional fragility such as the lack of application of the new
Constitution, the lack of independence of power, impunity in the actions of
armed groups, the tendency to confront and disqualify the opposition on the
part of the Government, the militarization of the civil service and the lack of
union rights. All of this is due to the so called “judicial activism” by the
Supreme Court and the manipulation of power by the state in order to support a
militaristic and Stalinist project.”

And they have the indecency to call themselves democrats!

Supreme Court rules against injunction requested by Attorney General agaisnt local newspaper El Universal, saying
it was only an opinion piece and did not constitute defamation as the
AG claimed. Saying otherwise would have been censorship, but I
have to worry about the fact that the Court said the right to
inofmation was not absolute. This is the same argument used by the
People’s Defender yesterday saying
the right to private property is not absolute. Sounds like it is a way
of saying the law is always relative, to guarantee they may use it
differently in the future. The AG should be ashamed at this attmept at
censorship and if he had any decency he should resign. He is after all
the person that is supposed to defend the Law, but all he does is
defend Chavez.

I have never belived or paid attention to those that say that after
Chavez controls the National Assembly in December Cuba he will have
Cuba become part of Venezeula, but I have to give some credibiliy to it
after hearing Chavez and the Cuban Vice-President in Caracas today:

Chavez:
“Our destinies are sealed…these two nations are deep inside
essentially one, marching with our own peculiarities and each with its
own nuances”

Vice-President of Cuba: “They say Cuba is not a democracy. It is the
most democratic country in the world. We are the most democratic
country, because we have two Presidents: Fidel Castro and Hugo Chavez”

Sumate presented
today its analysis of the impact of the CNE illegally allowing Chavez’ MVR to
field “unrelated” parties for the slate and nominal candidates in
August’s regional elections, the so called “morochas” or twins The
full report can be found here.

As a remainder, Venezuelan legislation allows parties to field both nominal and
slate candidates, but in order to preserve the rights of minority
representation, guaranteed by the Constitution;
the number of candidates elected under their own name is subtracted from the
number of candidates elected under the slate. In the last election, Chavez’ MVR
registered an unknown new political party (UVE) to field nominal candidates, using
MVR to field the slate, this was used to bypass the law, under the consenting
approval of the Electoral Board. Opposition Governor Manuel Rosales of Zulia
state did the same sneaky trick. This only works if you have a majority, as it
allows you to grab more positions than the law would assign you.

What Sumate did was to assume that MVR and UVE were the same party and
recalculate the number of candidates elected. The results are astonishing, not
only did Chavez’ party rip off the opposition, but it also fraudulently took a
large number of positions from the minority parties that support Chavez himself!

Basically, Chavez’ party MVR obtained 35.1% of the total vote, which according
to the rules would have given them 42.8% of the seats up for grabs. However,
the illegal use of the “morochas” or twins allowed Chavez’ party to
grab a total of 58% of all positions!

According to Sumate’s analysis, minority parties that support Chavez obtained
19.4% of the votes, which entitled them to 14.4% of the seats, but because of
the illegal and unfair advantage of Chavez’ party they only got 9.3% of the
total number of seats. The opposition on the other hand got 18.8% of the vote, which
should have given them 21.6% of the seats, but because of the
“morochas” was reduced to only 14.9%. Finally, local regional parties received
22.2% of the vote, which should have given them 18.6% of the positions, but
only gave them 15.2% of the seats.

What is most remarkable about this analysis is that it was actually those
that backed Chavez that were affected the most by the treachery. Minority
parties that support Chavez saw their votes (19.4%) reduced to half the
positions, despite the Constitutional guarantee for proportional representation.
Some loyalty, no? In contrast opposition parties had their representation
reduced by roughly 30% close to that of small local parties.

The details are remarkable. Basically, the Chavista trick gained them 363
additional positions, out of 584 total positions obtained by this unholy
alliance called the “morochas” or twins. The same was true in Zulia state
where Governor Rosales’ “morochas” gave him 27 additional seats out
of only 56 obtained. Shame on him too!

Some parties were absolutely ripped off by the trick. The infamous
“Tupamaros” that have supported Chavez unequivocally during the
last seven years, lost nine of the twelve seats they should have received, a
staggering 75% of the total they would have obtained. With friends like Chavez,
who needs enemies?

The analysis goes on in detail to show the level of abuse and illegalities
committed by Chavez’ majority with the unconditional and biased backing and
help of the Consejo Nacional Electoral (CNE), which should not have only
stopped the “morochas”, but even allowed UVE to register past the deadline
for registration of new parties and certified the signatures backing that party
only six days before the regional elections took place. These guys are professional crooks!

These are the type of abuses that Chavez and his cronies are committing under the
eyes of the world, that later allows them to claim this is a democracy. By
eliminating the necessary checks and balances of any functional democracy,
Chavez can not only use all of the resources of the State for the benefit of
his own party, but can turn the rules and the law to his advantage without
anyone saying or being capable of doing anything about it or even defending the
rights of the “people” that are being violated by his actions as well as
those of his party.

A very confusing situation surrounding international reserves. The same Central
Bank Director that said on the weekend that the transfer of reserves to Europe and Euros had not been authorized by the
Venezuelan Central Bank, now says
in today’s El Nacional that they were approved. To make matters even worse,
he says that the reason was that the euro has been appreciating with respect to
the US dollar, which has not been the case over the last few months. Since
March the euro is down from a high of 1.37 to the UDS$ to about 1.19 today. He
also says that they transferred US$ 20 billion, while Chavez says it was US$ 4
billion. Chavez said they converted into euros.

There are a number of things that contradict the reasons given. First of all,
you don’t need to change the funds into euros in order to transfer money to the
Bank for International Settlements, a sort of
Bank of Central Banks that can hold just about any currency in custody. Second,
the US
is a powerful influence in that Bank anyway, so if Chavez is really trying to
keep the money at arms length, there is really not that much difference. After
all, the banks charter is to help maintain financial stability. Finally and
more important, it makes little sense in terms of profitability as euro
denominated bonds yield today less than similar US bonds. In terms of real
numbers if US$ 20 billion were converted to euros, we are talking about the
country losing between US$ 300-500 million.

It certainly would make sense to diversify the portfolio of the Central Bank,
having a portfolio that represents the commerce of the country. That is, Venezuela
should have a portfolio that reflects its international commerce so that
currency fluctuations are essentially “neutral” over the course of
the year. In addition to this one should take into account the yield so that the
portfolio should be overweight US$ which have a higher yield.

But of course, given the lack of transparency in Venezuela these days, we really
have no clue as to what is true or not. Why did Maza change his tune? Was he
pressured? Was the money moved without the consent of the Central Bank? Why was
the money converted to Euros if the only point was to take away from the US? Why was it
deposited at the Bank for International Settlements if it was to keep it at
arms lengths from the US?
Why did Chávez announce it if Central Bank is independent? How much is in each
currency?

We might never find out.

Note Added: Today the story changed once again and the funds were supposedly moved four months ago!

Over a week ago, Hugo Chavez went to Ciudad Guayan, where some of the
major State indsutries are and had to be helicoptered into the
Headquarters of the Corporacion Venezolana de Guayana (CVG) due to the
fact that as many of four protests were taking place simultaneously and
blocking the way into CVG. Chavez was mad, particularly when he found
out that the pro-Chavez leader of the steelworkers union Ramon Machuca
participated in the protest. In his speech that day, Chavez made his
now controversial statement “The working class should not want to live
like the rich”, which led many of the steel workers to wonder whether
they will ever get their money. What money? Here is the story and the
origin of the problem:

In 1997, the Caldera administration proceeded to privatize steelworks
Sidor to a consortia of Argentinian, Brazilain, Mexican and Venezuelan
companies created for that end specifically under the name Consorcio
Amazonia. The state gave the workers 20% of the company, which included
some 13 thosuand workers. In 2004 Sidor’s debt was restructured and the
company gave CVG US$ 188 millions in earnings to distribute to the
workers . CVG used the money for something else and the workers have
yet to recieve any of that money.

Thanks to high steel prices, on August 15th. of this year, once again
Sidor handed over US$57 million  to CVG to give to the workers.
The Comptroller’s Office stopped the payment to the workers. To this
day, the workers have yet to receive their money, despite the fact that
indvidual accounts were open for that purpose

Such is life in Chavez’ workers paradise where he wants people to be
poor and he decides everything. I wonder why the steel workers are so
mad?. 

Very cool to see Imakinaria pick up the album by my friend and faithful reader Maruja, entitled “Dreaming in Caracas”. You can actually listen to it at cdbaby.com (and even order it!). Yes, it is still possible to have dreams in Caracas.

Hugo Chavez’ concept of “democracy” during yesterday’s Alo Presidente:

“Tascon, no compadre, that is not the way to go. You are part of a
revolutionary process. There is a leader who is Hugo Chavez, there is
cohesion, unity”

What did Tascon say?

That those that had two apartments would have to give one to someone that does not have one.

According to Chavez: “This does not reflect the criteria that I
am managing as leader of the process…nobody can make decisions on
their own, it has to do with the political moment that we are
managing…We can not get carried away, please calm down, particularly
these days that we are in the middle of an electoral campaign.”

Get it? First this is not a democracy, this is an autocracy with Hugo
Chavez as its leader. Second, this is not the time to reveal what they
plan to do, they can do it later. But it is the autocrat that is the
manager of the timing, not anyone else. Calm down for now, later they
will do what they plan to do, but not now, they have to win the
election first, without telling the people what their plans are. If they
did, they may lose, so please be quiet and be obedient of the autocrat says.

Some democracy, no? Can it be clearer than this?

Today President Chavez once again
told foreign oil companies that are part of the service agreements that if
they don’t convert before the end of the year to a partnership, they can leave
the country.

As way of background, in the 90’s PDVSA sold off the rights to exploit certain
oil fields in an auction that brought in over US$ 2 billion to the country.
These agreements, were “service agreements”, the company would produce
oil and sell it to PDVSA. In order to give these companies and incentive to
invest, PDVSA fixed benchmarks above which the service companies would be paid
an extra amount.

Chavez campaigned against this so called “oil opening” claiming that
the country was giving up its sovereignty in the process. In May, the
government called on all these agreements to convert to a partnership under the
new hydrocarbons law. In these partnerships, PDVSA would hold at least 51% of
the company and the company holding the service agreement would have a
percentage based on how much it invested in the field since the original
agreements were signed.

Problem is, PDVSA has no money. So how would PDVSA capitalize its stake in the
company? The amazing answer is that the companies will OWN the reserves
in the field. For the first time since the oil nationalization bill of 1976, a
Government is giving away what that bill says is 100 percent owned by
Venezuela
and the Venezuelans. Talk about sovereignty!

This is only happening to please Chavez’ ego and get rid of the agreements
under the oil opening, as promised in his campaign. But what this represents is
truly giving up sovereignty as these oil companies will be able to register
their reserves in their balance sheets and Venezuelans will lose ownership of
their oil from a Government that claims to defend “their” interests.

So, why is it that these companies don’t want to convert to a partnership?
Easy, in order to convert, you give up your rights to the earlier contract which
the companies won in an auction and paying a bonus which ran in most cases in
the hundred million dollar level, and sign another “interim”
contract, which no longer contains a clause of international arbitration. Then,
you will negotiate with PDVSA how much your investment is worth and the
percentages of the new partnership will be decided. Thus, some companies don’t
want to take the risk of losing arbitration and have PDVSA determine a
percentage of the partnership that would be worse financially than the current
arrangement.

Remarkably, one of the
companies that has refused to sign the agreement is none other than Petrobras,
the oil company of what Chavez considers to be his friendliest state after Cuba.
But more remarkably, is that the law in Venezuela
does not require that you adapt retroactively to a new law, the new law only
applies to events after it is enacted.

In the words of oil expert from
Central University Mazhar Al-Shereida “I do not understand who is the
genius that reached the conclusion that it is better to convert some companies
(..) That have simple service contracts, where you pay them for the work done,
but has to hand over the oil to its owner who is the Venezuelan state, into
partners of 49% of the oil produced. Sovereign control in Saudi Arabia and Kuwait is 100% and we that are
searching for a new form of socialism are facilitating these multinationals
conditions that they can not find anywhere”. Adds Al-Shereida: “What
does the country gain from this? Why isn’t this being debated like it used to
occur in the IVth. Republic. “He also says that Caldera’s oil opening was
preferable, because no sovereignty was given up.

Similar thoughts are given by Heinz
Sonntag, the former Head of the Sociology
Center at Central University,
who questions the “opportunism” of the “brain” behind all
this, Vice-Minister Bernard Mommer. Sonntag claims Mommer told him he changed
nationalities in order to become Vice-Minister and says Sonntag: “If we
have to talk about an assault on the oil industry, which Mommer opposed in the
opening led by Giusti, the current maximum leader of the Bolivarian revolution
appears to be committing one of a more compelling gravity than the one proposed
by Luis Giusti (the former Head of PDVSA)”

Thus,
the revolution, led by Chavez
denationalizes the oil industry for no reason other than fulfill
Chavez’ dream
and promise of getting rid of the oil opening. Of course, how it is
done is
irrelevant, even if it goes against the principles of those that
support
Chavez. That is the way autocracies work, the autocrat does what he
wants, as
long as he can get away with it. Unfortunately for all, he can get away
with it
in this case. And those that follow him, accept it because Chavez
wants it, even if they disagree with it. They will tell us later, they
did not understand. But we do.

On Friday from Brazil, Hugo Chavez said
that Venezuela had withdrawn US$4 billion from the US and moved it to
Europe because of the “threats”. Yesterday Cenbtral Bank Director
Domingo Maza Zavala said they had not approved
that and that it was their resposibility to make such decisions and
Chavez had no say in it. Maza even said that such a decison would be
based on profitability.

Another lie for the ignorant gallery who will never know that Chavez is playing them for fools.