The Devil's Excrement

When he was leaving the Cathedral this morning, the Attorney General Prosecutor Isaias Rodriguez said that
the person being investigated whose inmuminity will need to be removed
is an active General, Gral. Jaime Escanlante the Head of CORE I.
Escalante has been quite visible in large drug busts in the area near
the border with Colombia. Rodriguez also said there were three more
people involved, one from the financial sector, another military and a
third one that “will not surprise anyone.

Rodriguez added that this is the result of a five month investaigation.
Hold it! Did’t he say last Decemeber that the case was “almost solved”.
How about other deatils like Danilos Anderosn’s wealth on a salary of
US$ 1,100 a month? Or the money found in his apartment (US$ 500,000),
his two apartments and ski jets? How about the blocking of streets
prior to the explosion near the site where it took place by the
intelligence police? Or the presence of high ranking authorities like
the Vice-President minutes after the explosion despite the risk implied?

He also said that the explosive device was not made in Venezuela and
that the CIA did not particiapte neither in the explosion, nor in the
activation of the device, only in helping those responsible escape teh
country (But they are here?). There were three meetings, one in
Maracaibo with eight people present, one in Panama with 11 and another
in Miami, no number specified. He closed by saying that the cosnpiracy
was to destabilize and the original goal was Chavez or him, but they
settled on Anderson. This last part is the least plausible and credible
of all the things he said.

The Prosecutor’s Office charged
four people with the murder of Prosecutor Danilo Anderson today. The four are:

-Reporter Patricia Poleo, a well known Chavez critic whose home was raided January by
cops looking for her sources of information. Poleo had said publicly recently
that the Prosecutor will charge her with it and he went as far as holding a
press conference denying
that this was the case, while Poleo insisted that Prosecutor Isaias
Rodriguez ahd told her father, Editor Rafael Poleo about it. Poleo had already
gotten a six month sentence, which she was appealing for defaming the Minister
of Justice Jesse Chacon.

-Banker Nelson Mezerhane, the CEO and majority owner of Banco Federal, which
was mentioned as one of the largest creditors of Refco recently. Mezerhane is
not well known for being involved in politics and has been seen recently at the
Presidential Palace at meetings with Chavez and/r the Vice-President. His name
was mentioned as a possible home to be raided in the days soon after the murder
of Anderson
which was then
denied by the Minister of Justice. He was mentioned in connection with
lawyer Antonio Lopez who was killed days
after the death of Anderson
by local police.

-General Eugenio
Añez, one of
the Generals of Plaza Altamira who was a General in the National Guard.

-Salvador Romani, who is of Cuban origin and has been accused of being a CIA
agent by the Cuban Government.

Note Added: Poleo says
she will not hide, she had nothing to do with it, she knows “of”
Mezerhane but could not identify him if he was in fornt of her and was
not in Panama at the meeting whrere reportedly this was planned. She
says she has never visited that country and was not at a wedding in the
Dominican Republic where this was also planned.

More: Prosecutor says there are more people involved and
one of them will need his/her inmunity to be removed (Active military
and Deputies have inmunity here, Courts have to remove it with evidence
in order for them to be tried)

I was going to write about this,
but Petkoff did it before me and it is hard to improve on what he wrote. I would
only add, that this is done daily by Venezuelan Government officials and in the
case of our current Minister of Finance, he “claimed”  (The money was never found) that he did the
same diversion of public funds to pay salaries that Chacao’s Mayor is being accused
for, except the minister was talking abut US$ 3 billion and not a few million
as in the Mayor’s case. The second curious item, is that Leopoldo  Lopez is not only successful as Mayor, but if
my memory serves me right, he received the highest number of votes, percentage-wise,
than any Mayoral candidate in Venezuelalast
year.  Clearly the Government fears Primero Justicia, first it was
the skeletons, then this story and now today the President of the
Assembly accuses it, without presenting any evidence of receiving support from the US Embassy. Here is Teodoro on Leopolod Lopez.

Clodo
draws the sword by Teodoro Petkoff in Tal Cual

This small reporter asks himself if Clodosbaldo Russian, when he looks
at himself in the mirror, is capable of looking at himself without looking
down. This guy, that has played dumb in the face of tons of cases of
corruption, that has seen hundreds of payment orders for works never built,
that can not ignore the scandalous proportions that administrative corruption
has reached, that when the Bolivar Plan was investigated, after he killed the
tiger he s… in his pants when he faced the skin and left it at that, without ever
producing a “second report”; this grotesque personality of the oficialist
troupe, found, at last, a “corrupt one” to punish. Yesterday he announced
triumphally, that he had caught Leopoldo Lopez, Mayor of Chacao, in an administrative
crime. I do not know the details of the case but it makes me suspicious given
Russians record that the only corrupt person that he has found happens to be an
opposition Mayor. What a coincidence! And it is also a coincidence that he
banned him politically staring in 2008 (when his terms ends), when young Lopez,
obviously, could aspire to other public positions. Well, the truth is that
after the sentence about the morochas, in the officialist circus, even the hens
are beginning to crow like cocks.

Bandes is the Development Bank of the Government. It owns companies, it manages
money such as the social fund for PDVSA, and it owns bonds, invests and
performs financial operations that are required for the promotion of
development. Ever since it was created as the Venezuelan Investment Fund (Fondo
de Inversiones), it has played an important role in buying and selling the
country’s sovereign debt.

And this makes a lot of sense, a treasury rich, Venezuelan Government
institution should play those markets since the risk is its owner and those
sovereign bonds have some of the highest yields in the world’s emerging
markets. More importantly, the Bandes funds can be used in the Government’s own
strategy to repurchase its own debt, support it and why not, even
manipulate it. After all, who else has such deep pockets and the interest in Venezuela’s
sovereign bonds being strong? Truly nobody. No fund or institution other than
Bandes and maybe now the new Treasury Fund, Foden, has such deep pockets that
can be invested in the Venezuela’s
securities.

Unfortunately, the creativity of corruption knows no bounds and can sidestep
the logic and even the appearance of propriety as in the case and others. As in
the case I reported
last year in which Bandes sold to private groups its portfolio of bonds,
only to have the Republic announce soon after that, the repurchase of
coincidentally the same bonds that had been sold by Bandes a couple of months
earlier. Some of these groups the bonds were sold to, would qualify as what is coarsely
qualified in Venezuela as “Con que culo se sienta la cucaracha” or
“On what ass does that cockroach sit” in terms of the size of the
financial transaction, but everything was structured in such a way that it
could be done by them, without transparency and, of course, no investigation
was ever called on the matter. (And the size of the ass of the cockroach
increased significantly as profits in that transaction alone were in the dozens
of millions of dollars)

Which brings us to today. For quite a while the market has been hearing that
mysterious purchasers had bought structured notes on Venezuelan sovereign bonds
in big sizes from various Wall Street firms. We are talking US$ 100 million at
a time, too big a size for regular investors. But let me explain what this
structured notes entail. Suppose that you are not willing to buy Venezuela’s
2027 bond because it is too risky in terms of maturing in 22 years. But the
yield is attractive. So, you ask a Wall Street firm to issue a structured note
for let’s say three years, in which the Wall Street firm guarantees that you
will receive a certain fixed interest rate lower than the one those bonds offer
over 22 years but still attractive, as long as the country does not default.
Thus, you sacrifice some of the yield for security in the short term. You know
exactly how much you will be paid and at the end of the three years of this
example, you get your capital back.

Now, it does not make sense for Bandes to ask for someone to structure notes.
First of all, with the notes you add another risk to the Venezuela risk,
the risk of the “issuer”, the financial firm that issues the
structured note. There is also the custody risk, as in the recent and fresh
case of Refco, which will show up again at the end of this story. (Actually
Refco could also issue the notes up to recently so the risk is quite real)

Issuing these notes is great business for the issuer, who charges hefty commissions
to the buyer, as well as making money in the trading of the underlying
securities. A few months ago, an acquaintance told me that he had gotten huge
orders for these notes from “unusual” countries, where he did not
think there were investors who woke up in the morning with a strong desire to purchase
say US$ 100 million in Venezuelan sovereign bonds structured notes. He thought
there was something “fishy” about these and his suggestion was some
intermediary or Government official was making a lot of money on these deals
and the end client had to be the Government.

Then, as if to complicate matters, last Saturday the President of Bandes acknowledged
that his institution had sold US$ 662 million of the US$ 1.6 billion in such
notes Bandes owned to none other than the Ministry of Finance. Thus, the mystery of the notes
was unveiled and indeed they were purchased by the Venezuelan Development Bank
and the amount was huge for those markets: US$ 1.6 billion!
Moreover think about it, US$ 1.6 billion in structured notes, where commissions
are of the order of let’s say a couple of percent (US$ 32 million!), versus
buying the bonds outright, where commissions could be as low as 1/16 of a
percent. (Only US$ 1 million). If you are an intermediary there is a huge
difference!

But it actually gets even worse. The Ministry of Finance turned around and sold
those notes (denominated in US$) to “four local banks” at the
official exchange rate in a process that lacked any transparency. Imagine,
just for being one of the “chosen” four banks you were able to
purchase, in bolivars and at the official exchange rate, these notes, which you could then
turn around and sell in US$, get dollars and bring the funds back at a rate
much higher ( 27.9% to be precise!) than that! Nice deal! And then the VP says that local businessmen lack
competitiveness! Why be competitive when life can be so easy? And who
promotes it? None other than the Government itslef!

The case smells so bad, that there
are suggestions that the statements last Friday by the President of Bandes
were simply a way of saying:” I had nothing to do with the placement of the
notes in local currency”. However, the reporter apparently was not knowledgeable
enough to ask why Bandes used these structured notes rather than buying the
bonds outright. Descifrado suggests
today (Subscription area) that the Government may have gotten wind of this
too and the President of Bandes may not last long in his position. But I have
to wonder given the next post, where is Comptroller Russian in all this?

Finally, where does Refco come in all this, you may wonder?
Well, reportedly some of the money and securities that got stuck in the
bankrupt company from Venezuela
is in the form of these same structured notes. And there may be another new story
in that part in the future, as this country never ceases to amaze everyone!

Extermination in Falcon by Teodoro
Petkoff in Tal Cual

Once again the country is shaken up by the brutal news of the murder
of young people, apparently in the hands of the police. In Falcon state the sinister figure of
“extermination” groups has reappeared. Five boys were massacred by bullies
encrusted in the police corps. Once again an investigation is announced “to the
utmost consequences” and “no matter who falls”. We have heard this song so many
times! The ineffable “utmost consequences” are always the impunity of those
accused. Whatever happened to the investigation about the crimes committed by
the Guarico police? Lots of noise and few nuts (sic). Whatever happened to the
trial of the cops of the first “Extermination” group detected in Portuguesa
state? It also ended in the freedom of those accused.

Whatever happened to the investigation opened in Anzoategui State?
Nothing ever came out of it. How many cops are in prison in Aragua state, the
state with perhaps the worst registry in police assassinations? None. The assassins
act with their faces uncovered, there are witnesses of the crimes and
nevertheless, there is never a sentence condemning the accused. Absolute
impunity protects these state criminals.

State Criminals? Yes. The actions by these “extermination “ groups, which
is not recent but that during the last years has acquired the character of an
epidemic, is associated with an unwritten conception and only commented in low
voices among the police headquarters, that the fight against criminals passes
by the execution of supposed and true criminals. The State and the Government
play dumb in the face of these actions and only when the scandal overflows all
borders, as in the Kennedy barrio case, do they pay attention. The rest of the
time, they let it be. Because the assassins have carte blanche and are at the same time judges and executioners and
decide on their own and by their will who should face the weapons, the result
has been an orgy of blood in which presumed criminals and other people have
fallen, young in general, which have nothing to do with crime. More than five
thousand assassinations of this type have occurred in the last five years.
Official tolerance in the face of these “extermination” groups drives
inexorably to the decomposition of police corps, to the putrefaction of the ethical
and moral values that one would think they should be imbued as public servants
and transforms them into criminal groups which are much worse and pernicious
than the common criminal gangs.

A police unit that acts on the side of the law, violating codes and
ordinances, is a danger to society. And it turns even more dangerous when the
Government’s failure in decreasing the social crisis derived from unemployment
and informal subemployemnt, with the consequent expansion in personal insecurity,
leads a portion of the people to assume with indifference, if not with
approval, the episodes of extermination. The conclusion is unavoidable: there
is no true policy for public safety. This Government does not know what to do
to guarantee the safety of Venezuelans. The police, the courts and the prisons
are a disaster. How can we be surprised that our criminality indices are among
the highest in the world.

In the so called Venezuelan democracy these days you are not even allowed to use any form of protest that may have a chance of being successful. As reported here earlier, a group called “Cambio” plastered Caracas a few weeks ago with paper skeletons, which the Government tried to say were poisonous, as a way of classifying the protesters as some form of terrorists. Alexandra Belandia Ruiz Pineda at some point was the spokesperson for the group, which cost her some harassment by the investigative police which called her to testify about this protest. (By the way, there is an interview with her in yesterday’s El Universal)

Then on Sunday Hugo Chavez bothered to talk against the celebration of Halloween as not part of our heritage. Some laughed at this, but I didn’t it was simply a way of attempting to disqualify this form of protest, by turning it into something anti-Venezuelan. Well, this reached the ridiculous level that the intelligence police detained seven young activists of the Primero Justicia party for “promoting hate”, using “illegal campaign material” and the Vice-Minister of Justice says these activist “may be connected” to that other placement of skeletons, as if that was a crime.

And then the Prosecutor’s office, the same one that can not figure out hundreds of murders and injuries says that these charges should go in the same case file as that of the previous skeletons, which so far nobody has managed to tell us what is the crime that that is being investigated unless it is Government stupidity.

But of course it isn’t. A Government that has all of the resources at its services, where the separation between party and state is no longer visible, uses the intelligence police to intimidate and stop a clever way of raising doubts about the Government and its abilities. This is typical autocratic behavior; stop the opposition form even attempting to gain any on you and if it does, simply squash it. We saw it two years ago when pot banging became such a popular and powerful way of protesting against the Government that it was criminalized and since has disappeared as a form of protest.

Of course, the skeletons may backfire if they become too common. This is what the Primero Justicia activists had in mind when they began using them as a form of pretest and in some sense their protest went beyond their plans. But will others dare use the same form of protest?

Of course, this does not even include asking questions such as whether the role of the political police or the Prosecutor’s office in defining what is legal or illegal campaign material. Thus, adding to the overwhelming advantages of financing and power that the Government has, we now have to add the fact that they can use any police body to block, spin and mutilate any form of electoral campaign or protest, while the Electoral Board fails to stop the President for making use of his beloved “cadenas” to unfairly campaign for his party’s candidates.

Of course, Chavez will later boast of Venezuelan being a full democracy, where everyone can do and say whatever they want and where races are decided on the ballot box. Of course, we know they are decided in the Electoral Registry, the voting machines, the redistricting, the intimidation of the opposition and the absurd rulings of a servile Supreme Court, the balot boxes being almost incidental to the process.

For myself, I am ordering a gross of paper skeletons by mail, which I plan to shamelessly flaunt at electoral events, in front of the police and the National Guard. I am still not sure if I will use the Primero Justicia model below on your left or the one with the two scary figures below on the right. And I am not talking about the kids in the picture

Yes, I went away for a few days taking advantage that Monday was a
holiday for certain parts of the Venezuelan economy. It was
just as well, probably as I was leaving the Supreme Court made its
ridiculous ruling which is really not worth commenting on as it was
simply a way of looking for an excuse to rule in favor of the morochas
using absurd argument. You want absurd:

–The decision only talked about candidacies, not how the vote is
applied to determine winners, so it concluded that the Constitution
does not talk about the proportional representation of minorities or
majorities. Huh?

–One Chavista group argued that no relationship could be proven between UVE and Chavez party MVR. Huh?

–Statements made by the President of the Electoral Board saying the
morochas were illegal but he could not do anything about it, were not
part of the arguments.

–The People’s Ombudsman argued that because AD fielded “morochas” for
the upcoming elections it was tacitly accepting the concept. Huh? He
also stated that what is not forbidden is not allowed and the morochas
were not forbidden by law. Using that logic, few things are actually
forbidden in Venezuela.

–But perhaps the highlights fo the day were the hugs between Lian Ron
and the Attorney General and the latter and the People’s Ombudsman
going to the Chavista celebration and even dancing in it.

And in the joy of the moment, the President of the National Assembly
tried to tell us how wonderful it will be not to limit terms for
anyone, suggesting that in the Constitutional reform if Chavismo gets 66%
of the Deputies, everyone will be eligible for unlimited reelection,
not only Chavez, but also great leaders, like the former bank robber
turned Mayor, or the crooks and hoods who run some of the states today.
Oh well!

In the end, it would appear if the Court admitting the case was just a
distraction. It will be a tall order to stop the Chavistas from getting
66% of the Deputies of the National Assembly. Ony low abstention on the
part of the opposition combined with a hig one on the part of the
Chavistas will make it happen, the latter will happen, but it is
difficult to envision the former.

Matt wrote this in the comments, I thought it was worth making it a post:

I grew up in Venezuela, my parents worked with New Tribes
Mission. I also went back under NTM and worked for 18 year in Venezuela
with the Ye’cwana. I grew up playing soccer, hunting and fishing with
them. I speak their language and know their customes. As do my wife
and children, (Three of them born in Venezuela)
I was disapointed in your lack of information on the mission. I have
lived in Tamatama since 1964 and know ALL the Indians, Piaroa, Yanomamo
& Ye’cwana. I’ve played soccer with all and the big division amonst
the tribes
is political. Don’t blame missions.
Also the Ye’cwana have not tried to oust the mission. The tribe as a
whole is very supportive. Look at Ayacucho last Friday.
The Guardia Nacional have had a presence in Tamatama since 1980. I live
two houses from the comando for years. If I was mining why didn’t they
know? The GN always used my boat motor to patrol the Orinoco river as
they don’t have one. They were in my house lots.
In Parima also where the mission has worked for years among the
Yanomamo the Ergesito have had a comando for about 13 years. Can we as
a nation (Venezuela) not trust our Fuerzas Armadas to pick out groups
that are a threat to our nation? So what is this about illegal planes?
We as a mission flew GN in and out of the Jungle.
I have liked you blogging but felt you were under informed in this area.
SALUDOS

Note: I did not claim to “know” about the issue, I just told what I
knew about it and I thought it should be the natives, not Chavez, that
should say whether they like or not the New Tribes near them.I also
said that Chavez should not (did not) have the power for such a
decision. Additionally, it is interesting than in the end, nothing has
happened, the Governor of Amazonas did not issue the decree and Chavez
has done nothing either, for the simple reason that he had no legal
instrument to do so. In fact, the tribes defended the New Tribes and
some Venezuelan missionaries started asking: Am I going to be kicked
out of my own country? Comments and posts that will enlighten us on the
subject are welcome (pro or agaisnt)

I tried to write about this the other day, a friend sends this to make sure I don’t miss the idea:

According to this report,

Venezuela
purchased $300 MM of the $572 MM in bonds placed by the Argentine Govt.
last week. As you report, the debt was placed at an extremely low
interest rate for Argentina, 8.75%, which was arguably 1 full point
lower than comparable Argentina debt which you can purchase in the
marketplace. In other words, Venezuela not only has lent money to
Argentina once again (it has effectively done so in the past by
purchasing outstanding debt) but this time does it under conditions
highly unfavorable for Venezuela, and very favorable for the Argentine
Govt. The conditions were so preposterous that only Banco Nacion and
other local banks were the buyers. It is incredible to me how the
Venezuelan people don’t make a big deal out of this. Who is getting
rich behind the scenes? I don’t know. But if Venezuela wants to invest
in other countries’ debt (they are also rumored to be the buyers of
$300 MM of Ecuador debt to be issued soon, a country that is on the
verge of economic co! llapse), they should at least do so at market
rates, and not with heavy subsidies, don’t you think?

Dear Mr. Chavez:

I have been opposing you for some years now. I confess that I have been
a critical ghost blogger writing essays against you and your government.
Until yesterday I truly believed that that was my mission, but that is
no longer the case.

You may wonder what happened. Well, a few days ago, the BBC prepared a
program to invite you to answer some questions that the public sent for
you . I was
one of those Internet geeks that sent tough questions that were never
chosen and I was quite mad reading the praises from people around the
world that think that know you better. Then I saw your BBC interview and
it totally changed my perception of who Hugo Chavez really is. I have
been wrong and the thousands of non-Venezuelans that wrote to the BBC
praising you and your acts have been right.

You were wonderful, Mr. Chavez. The President of Venezuela in
international prime time! You were the essence of the discreet, elegant
man, all smiles, well prepared, knowing what you were going to say and
what to answer. Telling the people of the world exactly what they wanted
to hear, the way they wanted to hear it. A real diplomat. A gentleman.
Nothing to do with the vulgar character that appears on Sundays on Alo
President to trash his foes in front of the camera, abusing his power.
But I now know, my dear president, that that character is only for local
Venezuelan consumption. The real Chavez is the one I saw on the BBC.

Your answers were absolutely charming. You stand for justice and
democracy. You do not pass any laws restricting the press or those that
criticize you. You do not persecute those that dissent with you and, in
particular, there is no blacklisting in Venezuela. Those are stories
invented by your enemies.

Now I am in total agreement with your views, Mr. Chavez. That BBC
interview made me see the light. You are a victim. You have been the one
persecuted by that oligarchy opposition of yours. They are really
working hard, helped of course by the CIA, to perpetuate a false image
of Hugo Chavez.

Even on the Internet, those despicable and persistent bloggers dedicate
their lives to portray you in a bad light. I confess that I was one of
them, Mr. Chavez, I acknowledge my past faults. But I have seen the
truth. I repent. From now on, I will cherish every word you say and, as
a token of my appreciation and my admiration I am volunteering to run
your 2006 campaign, Mr. Chavez.

Yes, you read it right, your 2006 Campaign…

No, not the 2006 campaign for the Presidency of Venezuela!

You wouldn’t want that, would you?

Why Venezuela? Mr. Chavez, Venezuela is already too small for you!

You are bound to bigger, larger horizons. You are destined to be the
Liberator of Latin America, just like Bolivar, or even better, the
unifier of the Americas, or even better, the world, or even better, the
Liberator of Human kind. The great leader of the 21^st century!

So, Mr. Chavez. Since there is no such a job yet. You have to start with
something that will give you more international visibility….

No, not the President of Venezuela again… Forget that job….that is a
good job while oil prices are high, but if they go down the people of
the world will not pay as much attention to you and you will get in
trouble again in Venezuela. No, Mr. Chavez, you need a more permanent
visible and secure position that will allow you to jump into higher and
more important endeavors….

I have been thinking of running your campaign to be the Secretary
General of the United Nations.

You see, Mr. Chavez, Kofi Annan will finish his term on December 31^st
2006. The timing is perfect for you.

I know, I know, the people of Venezuela will ask you to run again, to
stay in power…but, Mr. Chavez, you have already made so many sacrifices
for them. They will understand, they will gladly let you pass your turn
as president so that the rest of the world enjoys your charms, your
diligence and your intelligence.

Venezuelans are generous people and they will be so proud when they see
you as the leader of the world.

Besides, once you are Secretary-General you will have more opportunities
to directly fight against the US while spreading peace around you. I am
sure that that panel in Norway will finally see the light themselves and
will end up begging you to please accept the Nobel Peace Prize.

So please, Mr. President, allow me to be involved in this important step
in the development of human kind.

I have already opened a site to initiate the campaign. And, if you
agree, I promise that I will try to convince my fellow opposition
bloggers to see the light as well and put all their energy into this new
important challenge. So we will all be one, current dissident and
chavista bloggers, Venezuelans and non-Venezuelans, finally reunited to
work as one for the enterprise of our lives:

Hugo Chavez for the UN!

Yours truly,
Jorge Arena
Repentant Ghost Blogger.