Archive for the 'Venezuela' Category

New Government telco (or folly?): Great news for CANTV

September 13, 2004

The Government confirmed today that it was launching a new Government owned Telecommunications Company financed by CVG and Edelca. The company will offer residential local, national and international telephone service as well as Internet services.


This is great news for CANTV. In the days prior to the recall vote the Government accused CANTV of conspiring against the recall vote and that it will nationalize it if necessary. Vice-President Rangel even said that the privatization of the company should be reversed, because this was a strategic sector for the Government. With the start of this company, the Government will have no more reason to use this argument and CANTV should be safe for the time being.


 


Moreover, CANTV’s business should also be safe. CANTV is a fairly efficient company at this time, with mobile and Internet being the growth drivers. We doubt the Government will devote the resources required to provide adequate Internet service, while residential service is regulated and not the best business in the sector. Curiously, the company will not go into the wireless business, the growth engine of CANTV. Talk about a dumb business plan! If on top of that the new telephone company is run as inefficiently as the Government, we suspect the new company will only survive in an environment of high oil prices, if at all.


 


This is truly a misguided idea, the Government should use resources to provide basic necessities and services to people, and this is not one of them anymore. When CANTV was partially privatized in 1990, it would take three or four times to even get a dial tone, public phones did not work, it would take up to five years to get a line and the company was a great source of corruption. What could be done differently this time given the badly managed Government we have? How much does the Government have to invest even to begin competing with CANTV and the other private telcos? Where will they get the talent to run it? What possible competitive advantage will they have?


 


To top it all off, the telecom sector has been opened to competition since 2001 and curiously the one that ahs attracted the least attention ahs been residential service, while there are some struggling companies competing in data and long distance. There are five cellp hone providers. This is about a silly an idea as I have heard from this Government. It will become another wasteful sink for funds and a new source of corruption, I am sure many are already lobbying to be named as Presidents of this company or to its Board of Directors.

New Government telco (or folly?): Great news for CANTV

September 13, 2004

The Government confirmed today that it was launching a new Government owned Telecommunications Company financed by CVG and Edelca. The company will offer residential local, national and international telephone service as well as Internet services.


This is great news for CANTV. In the days prior to the recall vote the Government accused CANTV of conspiring against the recall vote and that it will nationalize it if necessary. Vice-President Rangel even said that the privatization of the company should be reversed, because this was a strategic sector for the Government. With the start of this company, the Government will have no more reason to use this argument and CANTV should be safe for the time being.


 


Moreover, CANTV’s business should also be safe. CANTV is a fairly efficient company at this time, with mobile and Internet being the growth drivers. We doubt the Government will devote the resources required to provide adequate Internet service, while residential service is regulated and not the best business in the sector. Curiously, the company will not go into the wireless business, the growth engine of CANTV. Talk about a dumb business plan! If on top of that the new telephone company is run as inefficiently as the Government, we suspect the new company will only survive in an environment of high oil prices, if at all.


 


This is truly a misguided idea, the Government should use resources to provide basic necessities and services to people, and this is not one of them anymore. When CANTV was partially privatized in 1990, it would take three or four times to even get a dial tone, public phones did not work, it would take up to five years to get a line and the company was a great source of corruption. What could be done differently this time given the badly managed Government we have? How much does the Government have to invest even to begin competing with CANTV and the other private telcos? Where will they get the talent to run it? What possible competitive advantage will they have?


 


To top it all off, the telecom sector has been opened to competition since 2001 and curiously the one that ahs attracted the least attention ahs been residential service, while there are some struggling companies competing in data and long distance. There are five cellp hone providers. This is about a silly an idea as I have heard from this Government. It will become another wasteful sink for funds and a new source of corruption, I am sure many are already lobbying to be named as Presidents of this company or to its Board of Directors.

Electoral Registry Anomalies in the recall vote

September 13, 2004

While it is difficult to “prove” there was fraud in the recent recall vote, the team studying the Electoral Registry has detected quite a few anomalies that should be of concern as they seem to be quite implausible from any perspective. There can be few explanations to any of the following numbers, more so when you consider that the census population includes all inhabitants in these towns from babies to the elderly. The first column shows the census populations of those towns in 2001, then the populations of the same towns according to INE (Instituto Nacional de Estadistica), finally it shows the number of people registered to vote in those towns. In some cases it is more than the ENTIRE population of the towns!:


 


                 2001 Census  2004 INE Registered Voters Percentage


Amazonas State


Maroa              1,731            1,821             2,112                 118%


Rio Negro         2,348            2,515             1,960                   81%


Anzoategui State  


Libertad         13,980           14,301          12.088                   80%


Aragua State


Santos Michelena     39,371 41,941          63,518                 153%


Ocumare de la Costa  8,418  9,016            7,449                    84%


Falcon State


Sucre                          5,400   5,243            5,164                    90%


Tocopero                     4,688   4,971           4,654                     93%


Monagas State


Acosta                       17,568 17,973         22,490                   118%


Aguasay                    10,786 11,988           9,452                     80%


A total of 100 towns were found to have problems like those above. You be the judge.

New category: RR Studies

September 12, 2004

I have created a new category on the studies of the recall referendum which you can see on the left column of categories as RR studies. I have placed there all of the articles and posts on the studies from my page, so that they are at a single location. Will not post there articles from other sources. Hope it helps.

Dave Barry and electronic voting

September 12, 2004

Don’t forget to read Dave Barry´s article today on electronic voting. At least it may give you a laugh about our problems.

Dave Barry and electronic voting

September 12, 2004

Don’t forget to read Dave Barry´s article today on electronic voting. At least it may give you a laugh about our problems.

The land the Government works on by Carlos Machado Allison

September 12, 2004

Carlos Machado Allison is a retired Professor from Universidad Central de Venezuela who now Works at IESA. Carlos’s specialty is land use. Personally, I have never heard anyone in Venezuela talk about land use with Carlos’ knowledge, so I thought I would translate parts of his article this week in El Universal on the issue:


 


The land the Government works on by Carlos Machado Allison


 


Agricultural producers know agrarian demagoguery, with its vote capture potential and international sympathy at the expense of destroying trust. Its goal is not to improve production, productivity or the capability to feed the population, after all, powerful and with a good flow of US dollars, the state can continue importing and selling at a loss as long as it creates sympathies among the poor. It is a matter of perpetuating itself in power, Maduro dixit, increasing the size of the bureaucracy and imposing a state capitalism using the style of Mexico in the pre- war


 


In the revolutionary Mexico, General “Tata” Cardenas created the pro-Government Confederacion Campesina (Peasant Federation) (CNC), converted the Mexican Confederation of Workers in to an arm of the Government (1937) and threatened the industrials sector with handing the factories over to the workers, it distributed 19 million Hectares, without forgetting a piece for the revolutionary politicians and generals, created the mega bureaucracy of Pemex, managing to have it lose money for more than 40 years and also reduced agricultural production   by 7%.


 


But the Partido de la Revolucion Mexicana with its sector, workers, peasants, military and popular, rebaptized in 1946 as PRI, remained in power until five years ago. The peasants, like here, lacked title to their property and depended, financially, commercially and technically on the bureaucratic apparatchik. Velasco in Peru and the Sandinistas in Nicaragua did even worse, killing agricultural production, increasing agricultural imports and creating programs and state companies to administer foodstuffs. Poverty and unemployment grew, but the revolutionaries in the unions, bureaucratic positions and mayors and Governors got wealthy: a new oligarchy arose. Much like it is happening here.


 


If the purpose were to give away land, with all of the demagoguery, bureaucratic expense and inefficiency that it implies, there are between 15 and 20 million unproductive hectares in the hands of the state. The truth is that they don’t even know how much they have. Then, why an instantaneous militia census of private land with no technical basis? Why threaten everyone, if the little blue book (the Constitution) clearly says that the Government can expropriate for the public good with a sentence from a Court and payment of fair value. Could it be to threaten the Government’s adversaries while obtaining applauses from the “poor” beneficiaries? There will be some success, some will abandon the business, others will hold on hoping for better times and there will be others who will try to sell, if this Government, full of foreign currency decides to purchase the land, even if it does not know what for.


 


In another early surprise, the President will say that the militia has discovered thousands of unproductive hectares, that people are fattening the land and not the cattle. He will not say that there is unproductive land because consumption has been eroded, because there is unemployment and no personal or judicial security. He will not say either that there is not trustable census of land use and that in six years; agricultural productivity has been the worse in the continent. He will say that the land belongs to those that work it, that is, as long as it does not belong to that large real estate company, the state, which he presides.

The land the Government works on by Carlos Machado Allison

September 12, 2004

Carlos Machado Allison is a retired Professor from Universidad Central de Venezuela who now Works at IESA. Carlos’s specialty is land use. Personally, I have never heard anyone in Venezuela talk about land use with Carlos’ knowledge, so I thought I would translate parts of his article this week in El Universal on the issue:


 


The land the Government works on by Carlos Machado Allison


 


Agricultural producers know agrarian demagoguery, with its vote capture potential and international sympathy at the expense of destroying trust. Its goal is not to improve production, productivity or the capability to feed the population, after all, powerful and with a good flow of US dollars, the state can continue importing and selling at a loss as long as it creates sympathies among the poor. It is a matter of perpetuating itself in power, Maduro dixit, increasing the size of the bureaucracy and imposing a state capitalism using the style of Mexico in the pre- war


 


In the revolutionary Mexico, General “Tata” Cardenas created the pro-Government Confederacion Campesina (Peasant Federation) (CNC), converted the Mexican Confederation of Workers in to an arm of the Government (1937) and threatened the industrials sector with handing the factories over to the workers, it distributed 19 million Hectares, without forgetting a piece for the revolutionary politicians and generals, created the mega bureaucracy of Pemex, managing to have it lose money for more than 40 years and also reduced agricultural production   by 7%.


 


But the Partido de la Revolucion Mexicana with its sector, workers, peasants, military and popular, rebaptized in 1946 as PRI, remained in power until five years ago. The peasants, like here, lacked title to their property and depended, financially, commercially and technically on the bureaucratic apparatchik. Velasco in Peru and the Sandinistas in Nicaragua did even worse, killing agricultural production, increasing agricultural imports and creating programs and state companies to administer foodstuffs. Poverty and unemployment grew, but the revolutionaries in the unions, bureaucratic positions and mayors and Governors got wealthy: a new oligarchy arose. Much like it is happening here.


 


If the purpose were to give away land, with all of the demagoguery, bureaucratic expense and inefficiency that it implies, there are between 15 and 20 million unproductive hectares in the hands of the state. The truth is that they don’t even know how much they have. Then, why an instantaneous militia census of private land with no technical basis? Why threaten everyone, if the little blue book (the Constitution) clearly says that the Government can expropriate for the public good with a sentence from a Court and payment of fair value. Could it be to threaten the Government’s adversaries while obtaining applauses from the “poor” beneficiaries? There will be some success, some will abandon the business, others will hold on hoping for better times and there will be others who will try to sell, if this Government, full of foreign currency decides to purchase the land, even if it does not know what for.


 


In another early surprise, the President will say that the militia has discovered thousands of unproductive hectares, that people are fattening the land and not the cattle. He will not say that there is unproductive land because consumption has been eroded, because there is unemployment and no personal or judicial security. He will not say either that there is not trustable census of land use and that in six years; agricultural productivity has been the worse in the continent. He will say that the land belongs to those that work it, that is, as long as it does not belong to that large real estate company, the state, which he presides.

Conned in Caracas from the WSJ

September 9, 2004

An opinion piece on the fraud in the Wall Street Journal:


CONNED IN CARACAS


 

New evidence that Jimmy Carter got fooled in Venezuela.

Thursday, September 9, 2004 12:01 a.m. EDT

Both the Bush Administration and former President Jimmy Carter were quick to bless the results of last month’s Venezuelan recall vote, but it now looks like they were had. A statistical analysis by a pair of economists suggests that the random-sample “audit” results that the Americans trusted weren’t random at all.

This is no small matter. The imprimatur of Mr. Carter and his Carter Center election observers is being used by Venezuelan President Hugo Chavez to claim a mandate. The anti-American strongman has been steering his country toward dictatorship and is stirring up trouble throughout Latin America. If the recall election wasn’t fair, why would Americans want to endorse it?

The new study was released this week by economists Ricardo Hausmann of Harvard and Roberto Rigobon of MIT. They zeroed in on a key problem with the August 18 vote audit that was run by the government’s electoral council (CNE): In choosing which polling stations would be audited, the CNE refused to use the random number generator recommended by the Carter Center. Instead, the CNE insisted on its own program, run on its own computer. Mr. Carter’s team acquiesced, and Messrs. Hausmann and Rigobon conclude that, in controlling this software, the government had the means to cheat.

“This result opens the possibility that the fraud was committed only in a subset of the 4,580 automated centers, say 3,000, and that the audit was successful because it directed the search to the 1,580 unaltered centers. That is why it was so important not to use the Carter Center number generator. If this was the case, Carter could never have figured it out.”


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The authors also suggest that the fraud was centralized. Voting machines were supposed to print tallies before communicating by Internet with the CNE center. But the CNE changed that rule, arranging to have totals sent to the center first and only later printing tally sheets. This increases the potential for fraud because the Smartmatic voting machines suddenly had two-way communication capacity that they weren\’t supposed to have. The economists say this means the CNE center could have sent messages back to polling stations to alter the totals. \

None of this would matter if the auditing process had been open to scrutiny by the Carter observers. But as the economists point out: "After an arduous negotiation, the Electoral Council allowed the OAS [Organization of American States] and the Carter Center to observe all aspects of the election process except for the central computer hub, a place where they also prohibited the presence of any witnesses from the opposition. At the time, this appeared to be an insignificant detail. Now it looks much more meaningful." \

Yes, it does. It would seem that Colin Powell and the Carter Center have some explaining to do. The last thing either would want is for Latins to think that the U.S is now apologizing for governments that steal elections. Back when he was President, Mr. Carter once famously noted that the Afghanistan invasion had finally caused him to see the truth about Leonid Brezhnev. A similar revelation would seem to be in order toward Mr. Chavez. \

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Mr. Hausmann told us that he and Mr. Rigoban also “found very clear trails of fraud in the statistical record” and a probability of less than 1% that the anomalies observed could be pure chance. To put it another way, they think the chance is 99% that there was electoral fraud.



The authors also suggest that the fraud was centralized. Voting machines were supposed to print tallies before communicating by Internet with the CNE center. But the CNE changed that rule, arranging to have totals sent to the center first and only later printing tally sheets. This increases the potential for fraud because the Smartmatic voting machines suddenly had two-way communication capacity that they weren’t supposed to have. The economists say this means the CNE center could have sent messages back to polling stations to alter the totals.

None of this would matter if the auditing process had been open to scrutiny by the Carter observers. But as the economists point out: “After an arduous negotiation, the Electoral Council allowed the OAS [Organization of American States] and the Carter Center to observe all aspects of the election process except for the central computer hub, a place where they also prohibited the presence of any witnesses from the opposition. At the time, this appeared to be an insignificant detail. Now it looks much more meaningful.”

Yes, it does. It would seem that Colin Powell and the Carter Center have some explaining to do. The last thing either would want is for Latins to think that the U.S is now apologizing for governments that steal elections. Back when he was President, Mr. Carter once famously noted that the Afghanistan invasion had finally caused him to see the truth about Leonid Brezhnev. A similar revelation would seem to be in order toward Mr. Chavez.

Opposition presents its preliminay report on fraud

September 9, 2004

The Coordinadora Democratica presented its preliminary report today on the case for fraud. The report is basically divided into three broad parts:


1)      How the Chavez Government controlled institutions and used them to its advantage from 1998 on, including controlling the Electoral powers and the manipulation of processes in the judicial system.


 


2)      The drive to provide foreigners with ID’s as a contribution to fraud in the electoral process


 


3)      Mathematical studies and evidence obtained from the transmission of data that was in violation of the regulations and suggests some form of manipulation may have taken place.


 


4)      Control of the process and the role of observers.


 


Part 1) of the document may be of interest to someone that became aware of the Venezuelan political crisis only recently. But in some respects it is what this blog has been covering for the last two years. Thus, I will highlight only what the report says in the other three broad sections.


 


-The drive to add voters


 


The report describes how the Government began on April 9 2004 a drive to provide ID cards to people over 18. The Government created special offices run by MVR party members and not by the ONIDEX which is in charge of this. They used a system without any type of security and people were given the ID cards without verification of data. The process had no controls and all the people who were giving ID’s were automatically registered to vote.


 


This process led to 1.8 million people being given ID’s in only four months, without controls, supervision and in indiscriminate fashion and without any of the Government offices in charge of these processes being involved in it. A large part of these new registered voters were in rural regions, with voters registered in centers where voting was manual.


 


In twenty of the twenty four states the electoral registry had a percentage higher than the historical value of 48% of the population, with only four states having less than 50% and the electoral registry increasing from 48% to 54% of the population in six months.


 


By now, some may be thinking or saying this is just democracy at work and what the Chavez Government did was simply to add people to the electoral rolls. However, there is now a general phenomenon that in towns, cities and municipalities there are now more voters than inhabitants. This strange behavior is concentrated in locations where the vote was manual instead of electronic.


 


–Mathematics and Communications


 


The report cites work done at the level of parishes in which statistical analysis shows anomalies in the final results at the local level. According to this study, that I have not seen in this detail, with 99% confidence it was demonstrated that 26% of the voting machines had statistical values outside of what would be expected from the point of view of the distribution at the parish level. The report also includes the Hausmann, Rigobon study as part of its evidence.


 


What I found most interesting were the parts relating to communications. Most of this I knew little pieces of, but I had not seen such an overview of it:


 


Bidirectionality. CANTV records demonstrate that there was two-way communications between the voting machines and the CNE servers. Recall that the President of Smartmatic stated after the recall vote that such communication was impossible.


 


Types of communications: The report argues that given the nature of the process the type of communications between each voting center and the CNE should be very similar. However, the study revealed three types of endings to the communications: i) Those terminated by the voting machines i)) Those terminated by the server and iii) Those that appeared to arise from a loss of carrier. All three types occur with similar frequency which has no explanation.


 


Traffic Patterns: If all of the machines were transmitting just the results, the volumes of data transmitted by each machine should be similar. This is not the case; there are wide differences in the traffic patterns from different machines and voting centers. This has no plausible explanation.


 


Transmissions out of schedule: There were connections all day beginning at 7AM, the agreement was that there would only be communications after the machines had printed their results. The regulations state that this should be the case.


 


-Control of the process and observers


 


The report is highly critical of the Carter Center, it says these results in part from the superficiality of the Center which acted as if this was a normal voting process and not that of a country with the conflicts it has had in the last few years.


 


The report criticizes the fact that the Carter Center at no time criticized, like the OAS did, the fact that the Government had maintained control over the whole Electoral process with its majority at the Electoral Board.


 


The report repeats what we already know of the hot audit that was supposed to include 199 machines selected at random by a program designed by the CNE. Of these only 27 were audited in the presence of the opposition and in those 27 the SI won 63% to 37%.


 


The report also relates how it was impossible for anyone to enter the totalization room at the CNE. Not even the OAS and the Carter Center were allowed in even though it had been agreed that they could.


 


The report questions why when the opposition was trying to find acceptable terms to the cold audit performed after the RR, they were told that the observers had already “selected” on a procedure with the CNE which would be a random selection of boxes. In a last minute attempt to convince the opposition to accept the results of the audit,  the Carter Center assured the opposition that the program to select the boxes would be under the control of the Carter Center.


 


And it is here that the report is most critical of the Carter Center, calling it inefficient, superficial and even irresponsible. The report says that the Carter Center program was an Excel program which was not used due to “technical reasons” (!!!!)Thus, the same program questioned on Sunday by the opposition and made by the CNE was used. The report is also critical of something that I pointed out here, in that the Carter Center makes a lot of emphasis on the fact that its representative were next to the ballot boxes all the time, but fail to point out that over 60 hours went by between August 15th. and August 18th. when the audit was performed, when the boxes were alone.


 


The report also says that the boxes from Lara state and Bolivar sate took a large number of hours to arrive and despite the fact that there were assurances that all boxes from Caracas were at the Tuna fort in the Southwest of the city, this turned out not be the case. .


 


Conclusions:


 


The report concludes by suggesting that the process be legally challenged, that the Electoral registry be legally challenged, that the Smartmatic system be questioned and that the next election be done with manual counting for the whole country.


 


In an interesting conclusion, the report suggests that the Coordinadora ask the US Government for the application of the Foreign Corrupt Practices Act against Smartmatic and Verizon, the controlling shareholder of CANTV.  This is an interesting twist as it will require that the evidence be presented and the case be tried in US Courts, far from the control of the Chavez Government.