The Devil's Excrement

I have repeatedly argued, whenever I have been allowed to say so, that Venezuela needs more democracy in the selection of both party leaders and candidates, because it seems as if most political parties in Venezuela were created to satisfy the ambitions of one person and that there is no common vision for Venezuela, but that of the individual leaders who create and control these parties, in ways that would make Stalin proud.

The usual argument against my idea of more democracy is that any primary-like process to elect party leadership or candidates would cost a lot of money and in the end wear out political figures.

I don’t buy it, I think that rather than “wearing out” what any primary process would do is to “weed out” those that have little acceptance by the voters, despite their personal belief that they are what the country needs. In fact, I think that a primary within a party will get little attention outside of those involved and candidates from various opposition parties could then meet at a run-off election which if held within a short period of time after the party primaries, would not be able to “damage” candidates as many believe would happen.

This all comes to mind because this weekend Chavez’ new party PSUV, held primaries to elect the leadership for the next few years. While you can criticize many things about the process, such as the fact that Government resources were massively used for a party activity, that only candidates that had Chavez’ blessing made it to the final list and the process had close control fromm party authorities, I have to praise the fact that some form of democratic process took place and that in itself is a huge progress to me.

But even more interesting, is the fact that the results were quite different from what everyone expected. The election selected principals and alternates for the party leadership and surprisingly, the man most likely to succeed Chavez if can’t run for a third (or fourth?) period in a row, Diosdado Cabello, failed to make it as a principal to everyone’s surprise. He will have to be happy as an alternate.

And he was not alone, as other leading figures of Chavismo, such as Hector Navarro, Freddy Bernal, Luis
Reyes, Rafael Rami­rez, Willian Lara, Ramon Rodri­guez
Chaci­n and Rodrigo Cabezas, also failed to make the cut as principals, as lesser figures such as Aristobulo Isturiz, Adan Chavez, Mario Silva, Jorge
Rodri­guez, Antonia Munoz and Carlos Escarra did make it, proving that even almighty and seer Chavez can be wrong also about who can get elected or not in Venezuela. In fact, it is relevant to note that in a machista/militaristic Chavista leadership, seven out of the ten women won the election as principals. Similarly, only one, yes just a single one of the five former military in the running made it as principals, sort of the antithesis of the structure of the  Chavez Government.

And while I certainly believe there were orders from above to vote in a certain way, I do not believe that Diosdado Cabello was not among the chosen few, nor do I believe that Aristibulo Isturiz was among those favored by the leader himself.

Which indirectly proves my point about the opposition and the need for more democracy: they should allow the party members to elect candidates and leaders, because those that they see as their “natural” leaders may be nothing more than political mirages, within their own Stalinist structures.

And the PSUV elections show this, despite the strict “controls” and candidate selections, the PSUV party members, however few of them actually voted, silently rebelled in their own way.

Maybe if the opposition allowed the people and their members to shake them up and rebel, Venezuela politics will be irreversibly changed forever.

Just because there was more democracy…

Venezuelan Industrialist Describes Corruption, from today’s Wall Street Journal

(In Spanish here)

In December, Venezuelan multimillionaire Franklin Duran told agents from
the U.S. Federal Bureau of Investigation that he loved traveling to his
mansion on the wealthy island enclave of Key Biscayne to “scuba dive,
swim with the dolphins and have peace of mind.”

Peace of mind for Mr. Duran may be hard to find these days. The owner of
Industrias Venoco CA, a leading Venezuelan petrochemical company and
lubricants manufacturer, is being held without bail in Miami on charges
related to a cash-stuffed suitcase at the center of an international
scandal involving the U.S., Argentina and Venezuela. He could face up to
five years in prison and a $250,000 fine.

After his December arrest, Mr. Duran was interviewed by FBI agents. In
the FBI’s account of the interrogation, a copy of which was reviewed by
The Wall Street Journal, he described widespread corruption in the
Venezuelan government of Hugo Chávez. At one point in the interview,
according to the FBI account, Mr. Duran says his rise as a businessman
was paved by bribing “politicians, government officials, and high ranking
officials.”

Mr. Duran’s statements also provide a fascinating glimpse into
Venezuela’s “Boli-burgueses,” or Bolivarian bourgeoisie, a class of newly
rich businessmen who share an extravagant lifestyle, boast close ties
with Mr. Chavez’s government and its self-proclaimed “Bolivarian
Revolution,” and make Miami their playground of choice.

According to the FBI account of the interrogation, Mr. Duran says the
only thing he is guilty of is “having lots of money, successful
businesses, many lady admirers and expensive cars.”

The case against Mr. Duran, 40 years old, and three co-defendants stems
from the August discovery at the Buenos Aires airport of a suitcase
stuffed with $800,000 in cash flown in on a private jet from Venezuela.
U.S. prosecutors say the money came from the Venezuelan government and
was destined for the presidential campaign of Argentina’s Cristina
Fernández de Kirchner. Ms. Fernández, now president, denies the
accusation.

Mr. Duran wasn’t on the plane. But the U.S. government says that he and
four other men flew to Miami in the months after the discovery to
pressure the man caught with the suitcase, a Venezuelan-American named
Guido Antonini, to cover up the source and destination of the money. The
men are accused of acting as unregistered agents of the Venezuelan
government in the U.S.

Edward Shohat, Mr. Duran’s lawyer, says his client is innocent. In court
filings, he said the prosecution is an attempt by the U.S. to smear
Venezuela’s government. In the filings, the lawyer says Mr. Duran was
merely giving advice to Mr. Antonini.

Two of Mr. Duran’s co-defendants, including his business partner in
Venoco, Carlos Kauffmann, have pleaded guilty to the charges in the case,
which in Latin America has been dubbed “Maleta-gate,” or “Suitcase-gate.”

A former auto mechanic from a lower-class family, Mr. Duran has tried his
hand at all kinds of businesses, including selling weapons and
riot-control equipment to Venezuela’s government. He won control of
Venoco after its former chief executive took part in a 2002 coup attempt
against Mr. Chávez.

During his talk with the FBI, Mr. Duran was nonchalant — and chatty. He
even waived his right to counsel. When FBI agents warned him it was a
crime to lie to federal officials, he disagreed. “Former President
Clinton and President Bush didn’t get into trouble for lying,” Mr. Duran
told the agents, according to the FBI’s account.

Like many of the Bolivarian bourgeoisie, the young businessman flaunts
his wealth and fast-paced lifestyle. He owns a $4.6 million waterfront
mansion in Key Biscayne, just a few miles from the downtown Miami
detention center where he now spends his days. Last year, Mr. Duran
totaled a $600,000 Porsche Carrera GT in the Gumball 3000 millionaires’
road rally in Europe. His driving partner was Mr. Antonini, the man
caught with the suitcase. Also taking part in the rally was the Venoco
co-owner, Mr. Kauffmann, driving a $500,000 McLaren Mercedes SLR.

Mr. Duran, Mr. Kauffmann and Mr. Antonini were all close friends and
partners. Mr. Antonini acted as Mr. Duran’s “CEO in the U.S.,” according
to the FBI document. The three shared a love for fancy cars. Mr. Antonini
even drove a Porsche Boxster with a bumper sticker that extolled Mr.
Chávez’s socialist revolution. “Venezuela is now for everyone,” it said.

Mr. Duran’s fortunes soared after Mr. Chávez came to power in 1999. In
2002, Messrs. Duran and Kauffmann bought Venoco from its owners shortly
after the company’s chief executive, Pedro Carmona, took a lead role in a
failed coup attempt against Mr. Chávez. During the coup, Mr. Carmona
named himself “interim president” until Mr. Chávez retook power two days
later. Mr. Carmona is still jokingly called “Pedro the Brief.”

After Mr. Chávez regained power, his government cut off supplies to
Venoco of oil derivatives that it needed to make its lubricants, and hit
the firm with surprise tax audits, making the company’s owners eager to
sell. “[It was] practically being given away,” recalled Mr. Duran to his
FBI interviewers, explaining his purchase.

In the FBI’s account of the interview, Mr. Duran said that his company’s
value has tripled since the purchase thanks to his government contacts
and an almost “symbiotic” relationship with state oil company Petroleos
de Venezuela SA, or PDVSA. Last year, Venoco bought a concession to
supply 49 service stations in the country from Exxon Mobil Corp. after
the Texas company decided to leave Venezuela over Mr. Chávez’s
nationalistic oil policy.

Mr. Duran said his business is helped by an intimate relationship with
Venezuela’s intelligence services, where he knows “everybody.” According
to the interrogation account, he told agents that another key to his
success is his habit of paying off important Venezuelan officials,
including “politicians, government officials, and high-ranking
officials.” Mr. Duran didn’t want to name names because of “fear of
retaliation,” the statement said.

A spokeswoman at Venezuela’s embassy in Washington said that she wasn’t
authorized to comment on Mr. Duran’s allegations of generalized
corruption within the Venezuelan government.

Despite his rise, Mr. Duran showed disdain for Venezuela’s political
masters — and his benefactors. “Venezuela is being governed by ignorant
and uneducated people,” he told the agents, according to the statement.

Mr. Duran’s lawyer, Mr. Shohat, wouldn’t confirm that Mr. Duran had made
those statements to the FBI, saying, “It’s what the FBI said he said.”
Mr. Shohat added: “I don’t see the post-arrest statement as problematic.”

Mr. Duran has come under scrutiny by law enforcement before. A decade
ago, U.S. and Venezuelan authorities investigated him for drug-money
laundering, records show. Two federal grand juries in the U.S. heard
testimony concerning Mr. Duran’s alleged money-laundering activities,
according to three people with knowledge of the matter and a review by
The Wall Street Journal of extensive legal correspondence. U.S.
authorities received detailed information on at least $13 million of
suspicious financial transactions made by Mr. Duran and his associates
from 1998 to 2001, according to the documents.

Mr. Duran was never charged, says Mr. Shohat, who declined to discuss the
substance of the money-laundering allegations. Grand-jury proceedings are
secret, and it wasn’t possible to determine the outcome of the
investigation.

In trying to persuade the judge in his current case to allow him bail,
Mr. Duran offered to hire a reputable security company to monitor
himself. The judge ruled that Mr. Duran, who owns a private jet, is a
flight risk, and denied him bail.

—
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While Correa was talking about “coordinating” strategy with Venezuela, for the reestablishment of diplomatic relations with Colombia, Venezuela went ahead tonight and announced that the relations had been normalized and the embassies would be reopened, which left the President of Ecuador once again holding Chavez’ bag for about the third time this week. The truth is that the obvious winner was the President of the Dominican Republic Leonel Hernandez, who appeared to handle things quite elegantly, even if his influence was not decisive. Uribe also seemed to come out ahead, as he never backed down from his right to defeat the FARC into oblivion.

Meanwhile, as some naive members of the foreign press were suggesting this was a triumph for Chavez’s diplomatic abilities, some were not as simplistic, suggesting a number of possibilities for the sudden turn of events on Friday afternoon at the Group of Rio Summit. Clearly, the suggestion that Chavez defused the crisis seemd somewhat abusrd as he seemd to eb the only one that ignited it. Among the favorites being mentioned about Caracas:

—Uribe did indeed have more information that was revealed in public, showing Chavez’ and Correa’s involvement in the affair, including information on Minister Larrea’s close ties to the FARc that Correa did not know. An agreement was reched not to reveal the evidence.

—Fidel Castro intervened, telling Chavez a conflict with Colombia was a lose-lose proposition for him, diverting attention from his internal problems and creating the risk that in the end he would be the loser anyway, further driving down his popularity. (The surprise visi to Cuba is taken both as evidence in favor and against of this theory)

—Despites Chavez’ intention to raise nationalistic spirits with the crisis, polls indicate that this was not the case. At least two polls, one public, indicate 90% rejection levels for an armed conflict with Colombia, 70% rejection levels for the FARC, 70% rejection levels for closing the border with Colombia and one poll shows a 66% majority do not believe Chavez when he says the FARC holds no Venezuelan hostages.

—Chavez negotiated with Uribe via OAS General Secretary Insulza cooling the conflict off, as long as Uribe agreed not to take the case to the international Penal Court.

I still place my bets on the first option. Uribe seemed to sure of himself and his position, even as te discussions were quite heated and in the end all he did was apologize and suggest he would not do it again, but he held fast to the fact that Colombia has a right to resolve the conflicts how it sees fit within ts borders. And he is clearly doing it.

Chavez asked Marulanda to release Ingrid Betancourt, which he now needs in terms of credibility. However, the FARC are clearly on the run as so many of its leaders have been killed an their communications problems increase as they do not know if this is what is giving them away.

Meanwhile, Chavez’ PSUV party was holding elections today, using Government resources and few visible lines. Not even 10% of the supposed 5 million members of the party seemed to have participated.

Maybe they were still walking back from the border…

Anyone watching the proceedings this afternoon at the Group of Rio summit at the Dominican Republic had to wonder what changed the tone at a certain critical point during the afternoon.

It all started quite tense, Uribe began speaking and started making charges against Ecuador attempting to explain why it was that he did not warn that country’s Government of the raid on the FARC camp a mile within the Ecuadorian Government. He read from the same emails we have seen, but he also read from letters or emails we have yet to see. At one point, Uribe said that to those that say it was not possible for a computer to survive such an attack, that the Colombian Armed Forces had actually recovered not one, but four computers from the camp. Uribe made many charges, avoiding mentioning Venezuela most of the time and concentrating on the problems with Ecuador, past and present. Uribe said he was handing over a folder with all of the material to te President of Ecuador and showed a thick folder, which he said would be brought also to the Penal Court in The Hague.

The President of Ecuador Rafael Correa replied to Uribe and was quite forceful even asking Uribe to shut up at one point and calling him a liar. Correa said his hands were clean and that Uribe did not even have to call him, that a military contact should have been sufficient. Then each of the various Presidents from the region spoke, except the Foreign Minister of Brazil, since Lula was not present. When Hugo Chavez spoke I was expecting something fiery and forceful, instead we got a bunch of meandering anecdotes which had nothing to do with the conflict, spiked with historical tales like if he does regularly on his Sunday program Alo Presidente (He also sang a merengue). I could not believe it, here was the man that raised the bar and the tension in the conflict and he was not even addressing the issues.

(In the middle of all these guys speaking the, news carried two items almost in sequence: 1) That the Colombian Government had killed the number 5 man at the FARC, 2) That the same Minister that Uribe had criticized earlier as lying to Uribe and having contacts with the FARC, was announcing in Ecuador that Ingrid Betancourt was going to be released with 11 other hostages.)

As Chavez was talking he asked Correa if the rumor was true, Correa said this was not the case. Then Uribe made a point by point rebuttal of everything that had been said and supported statements made by the Presidents of Argentina and Chile. But his tone was much softer than before, he was using examples and history more than rebuttals. He was quite forceful in saying that he could care less about Ecuador’s definition of terrorism or its policies, but he would not accept that Correa refer to the FARC’s leader Marulanda as a hero or a friend. (I am doing this from memory, so the words may have been different)

Then, Uribe who had earlier said that he would apologize whenever he thought it was appropriate, got up and shook hands with Correa, Correa accepted the apology, Nicaragua reestablished relations with Colombia, Chavez said he never broke them formally and he only “moved a few soldiers to reinforce the usual ones at the border”. Immediately afterwards, Uribe said he would not take Chavez to the World Court and everybody was happy.

Well, sorry, I just don’t buy it. There had to be something more. The sharp tone disappeared suddenly as if by magic, everyone backed down. (while in Caracas the Minister of Finance was making the stupid claim that in one month Venezuela would replace all imports from Colombia, a laughable statement. Meanwhile, the new People’s Ombudsman was saying that Colombia should give the FARC political recognition, which Uribe was ratifying he would not do)

My theory? Easy, Uribe a master politician, had only leaked earlier some of the information gathered at the guerrilla camp and there was much more than they had released to the press two days ago. Either the additional material was being passed on to the various Governments as Uribe spoke, or it was handed over at that point to Correa and Chavez. Chavez was simply too timid, talking about peace, religion, God, even calling for a mass (how cynical can he be?). My further guess is that the Colombian Government uncovered financial information compromising both Ecuador and Venezuela. In fact, Uribe read at one point a letter from a FARC leader mentioning a specific amount of aid to the FARC from the Ecuadorian Government. Recall also that reportedly information gathered from the guerrilla camp was used by Interpol to capture a Russian arms leader that was on the run in Thailand, far from all this.

Thus, Ecuador and Venezuela blinked and it is all fine and dandy all of a sudden. I am sure we will hear more details slowly as in Latin America secrets are not meant to be kept. Meanwhile, Uribe in my mind scored a huge victory, deflating the crisis. It is my belief that Chavez wanted to inflate it for his own political purposes, but his attitude today showed to me that he was rebuked and he will have to wait for another chance to generate another artificial crisis.

And today a group of Argentinean reporters were detained and clashed with the Military Police as they deviated from the program and attempted to go and tape and interview protesters right outside the Miraflores Presidential Palace. According to the reports, the police got violent with them and actually blocked their path so that they could not get to the protesters. They also attempted to take away their equipment but were helped by other reporters. They were later detained and are being investigated. You can hear the sound from an interview with the reporter here, clipped from Argentinean TV.

Of course, Chavez denied this was true and even laughed at it, pointing to the “lie” in the Argentinean newspaper that published it this morning. Fortunately, the press is able to say things openly in Argentina, Venezuelans found out about this protest from the Argentinean report, as local news media regularly fail to report these events for fear of reprisal by the Government.

Chavez threatened tonight to nationalize all Colombian companies in Venezuela, “rescuing” some of them and shutting down the gas pipeline from the Perija peninsula. He also said he would start looking at alternatives for the imports that come from Colombia. He asked his Ministers to make a “list” of all the companies and put them on a map.

Let’s analyze the irrationality of it all:

—First and foremost, this is all over the Colombian Government murdering a terrorist member of guerrilla group FARC, which ahs been trying to overthrow the Colombian Government for decades. Moreover, the man was a murderer.

—Second, recall there is a judge in the UK deciding tonight whether to freeze or not PDVSA’s assets worldwide. ExxonMobil’s argument has been that PDVSA and the Venezuelan Government acted in bad faith. PDVSA’s lawyers argued that PDVSA and Venezuela had acted in good faith and intended to honor the debt, which they fix at their own preconceived value. How do you think this judge is going to react to a vague threat of nationalization of all private Colombian companies by the President of Venezuela?

—Third, a Government which can barely provide food for its inhabitants after controlling borders, foreign exchange, imports, exports, will now start looking for replacements for all those imports from Colombian as if the almost US$ 1 billion in auto parts that comes from Colombian was not associated at established business relationships. To begin with, most auto factories in Venezuela will shut down in three or four days. As simple as that.

—Fourth, while we really do not import as much food from Colombia, recall there are widespread shortages of foodstuffs already. This will not help.

—Five, these incompetent Ministers will now waste their time making an inventory and by the time they give it to Chavez he is likely to have forgotten about it, much like so many of his “live” improvised ideas over the last nine years.

—Six, the gas pipeline from Colombia is minor in terms of the country’s gas volume used (10%), but the city of Maracaibo depends on this. Cut it off and it will have to be replaced with expensive diesel or fuel oil.

Clearly, the main man is losing it and very fast. In the end he will hurt his constituents the most at a time that he can least afford it.
The whole thing is so nutty that I am starting to get optimistic…things will unravel very fast at this pace, as predicted.