On Mathematical Models of the recall vote and fraud part XI: 3d. Simon Bolivar seminar with a very strong result.

September 25, 2004

The 3d. Simon Bolivar Seminar on statistical analysis of the recall referendum took place  last Thursday with two talks by Jose Huerta and Luis Raul Pericchi on studies that I have discussed here before and a third talk by Carenne Ludeña on looking at the results from a critical point of view. In some sense, I did not learn as much from the talks, since I was aware of the results, but I did learn quite a bit from the progress made by others not only in studies of the results themselves but new avenues that are trying to correlate, for example, those centers that had “anomalous” results, with those that received data during the day on August 15th., but more on that later.


Luis Raul Pericchi et al: Methods to indirectly verify the non-intervention of an election


 


I have mentioned Pericchi’s work earlier since he is the mathematician that has been applying Benford’s law to the recall vote. Basically, Benford’s law allows for the detection of manipulation of data, in this case the results of the recall vote, by looking at either the first or second digit of the sequence of numbers, the frequency of occurrence of these digits may be able to show that the data may have been tampered with.


 


What Pericchi did was to look at the first two digits. This is done because the first digit test may not be the most accurate since, for example, it may be bound in a range such as no voting machine having either Si or No votes above 900. (This is an invented example).


 


The results are similar for the first two digits, but I will convey those for the second digit. What is done, is to compare the expected frequency of the digits and do a statistical test to determine what is the probability of such an occurrence as a simple probability, or to calculate the so called P value, a number which is used to determine whether the data was or not intervened. A P value below 0.05 is considered to be indication that there was intervention of the data. In the case of the second digit I will quote both the P value and the Probability.


 


Second digit results:


 


Manual Centers Si votes P value=0.0032 and Prob~5%. This is inconclusive


 


Automatic Centers Si votes P value=0.02 and Prob~20% Suggests non-intervention


 


Manual Centers No votes P value~0.15 and Prob~ 44% Suggests non-intervention


 


Automatic Centers No votes P value~0.000… Prob~0% Indicates intervention


 


Essentially, the frequency distribution of the No votes in the automated centers was found to be flat, a uniform distribution of digits, not at all what is expected from Benford’s Law and much different from what is found in the No votes in the manual centers.


 


The same result was also found for the total number of votes at each center, that is, the sum of Si plus No votes, also showed the same pattern indicating the manual centers were ok, but the automated centers were intervened. This result is quite strong and can not be dismissed easily as voting records not only usually follow Benford’s law, but in this case the manual centers are shown to behave correctly, suggesting a very strong case for intervention of the data in automated centers.


 


Even more interesting, when Benford’s Law was tested on the No votes in the audited machines, the results were quite different with a P value of 0.24 and a probability of 48%, much different than in the overall results, suggesting the sample had something different about it.


 


For skeptics, I repeat: Similar behavior was found for both the first and second digits in which the No vote numbers and the total numbers indicate intervention since the probabilities of this happening are extremely low. It is going to be extremely difficult to “explain away” this result


 


Recall also that my pedestrian use of Benford’s law to test the Proyecto Venezuela exit poll matches very well what is expected. While I did not perform any statistical tests, the differences in both Si and No numbers from what is expected do not appear to be significant and the frequency distribution is certainly not flat.


 


To close, Pericchi also mentioned that he has obtained results similar to Jimenez on coincidences, using different techniques, in a less detailed study so far.


 


Jose Huerta and Jesus Gonzales: Comparison of the recall vote and other electoral processes


 


He presented a more detailed version of the work I posted earlier in which he compared the vote from the 1999, 2000 and 2004 votes. Huerta finds that there is more predictive correlation at the municipality level between the 200 and the 2004 vote than between the 1999 and 2000 vote. Huerta, who is a social scientist who studies poverty, concludes that this is very surprising not only from a political point of view, given what has happened in the country in those four years, but also from a social point of view, since poverty, unemployment and crime are up.


 


Huerta made a couple of comments that I found t be quite interesting and inconsistent with what is known: One, that the growth in the electoral registry is larger in the rural areas than in the urban areas by 18% to 14%, inconsistent with statistical data from the Government and from the fact that the is no evidence of a reversal of the migration trend of the last forty years. But the second comment was perhaps the most surprising: Huerta finds that the largest proportion of changes in the electoral registry were from urban areas to rural areas, which makes no sense whatsoever. His suggestion is that this was done on purpose to have manual centers match the national automated vote.


 


Carenne Ludeña: A critical view at the models used to study the recall vote.


 


Ludeña basically tried to point out where bias or assumptions may affect the results leading to a conclusion that may suggest fraud, but the conclusion is model based. The talk had some interesting points and considerations, but I found nothing compelling about it. She pointed out, for example, how the Hausmann and Rigobon model of errors may be flawed by proposing an alternative, but I found the alternative less compelling than the real model. Essentially she said that the Exit polls and the signatures for the recall may have had a correlation factor due to external pressures. However, in my mind these correlations did not exist as the two processes were different.


 


In the signatures, they were going to be public, which meant that those that wanted to sign did not, for fear of retaliation. In the exit polls the situation is different, whether you are pressured into lying depends in where you are voting, not how. Essentially in a Si-dominated center people may feel pressured to say they voted Si, but the opposite is true if the center is dominated by No voters. If it was true that the No won by 60-40%, then there should not be the correlation that she points put, or should not be important.


 


Other comments:


 


1) There are many people working on this problem and are now getting into the details of how the intervention may have been implemented. Perhaps the most interesting comment I heard was about communications between the voting machines and the servers. Essentially, the machines were not supposed to communicate during the day at all and the data was not supposed to be bidirectional in the sense that while handshakes are to be expected, more data should not flow from the servers to the voting machines. This did not happen. The data transmission record exists in detail for all machines and the data is quite interesting:


 


-Not all machines had communications during the day


-There were two types of ways in which calls were terminated, either by the server or by the voting machine. In one of the two (Don’t remember which) the amount of data transmitted to the machine was larger than from the machine to the server. There appears to be a correlation between this and the “anomalous” centers with funny vote distributions.


 


 This work is still in progress.


 


2) In the work of Isbelia Martin et al that I reported earlier, a peculiarity was observed that the dispersion of votes by machine size showed two “clouds” if one looks at the Si or No votes, instead of only one in some states. Some have wanted to explain away this behavior by saying it reflects two geographic or social populations. The problem is that the mathematical properties of each “cloud” have inconsistencies, such as the fact that if you do a fit to only one cloud, the intercept is not zero.


 


The above result could be explained away by artificialities in the data. But what can not be explained away is that the intercept is the same for the Si and No votes. There can be no correlation between the two! If anything should no be correlated is these two populations. There can be no justification for this coincidence state after state where the two clouds are observed!


 


If this last result is found in a few of the states where the binomial distribution is “chopped up”, in my mind there is no doubt mathematically that the data was intervened. This work is also in progress


 


3) One last conclusion to me is that the recall vote data shows quite a number of “strange” results. As someone said, the probability of a person winning the lotto is very low, however the fact that a person does win every week is not strange. In the recall vote, mathematical studies show quiet a number of strange results; this is as if the same person wins the lotto week after week. In fact, few of this statistical studies show results for which the data is reasonable or normal and that may represent the biggest abnormality or anomaly.

Posted in Uncategorized | Leave a Comment »

On Mathematical Models of the recall vote and fraud part XI: 3d. Simon Bolivar seminar with a very strong result.

September 25, 2004

The 3d. Simon Bolivar Seminar on statistical analysis of the recall referendum took place  last Thursday with two talks by Jose Huerta and Luis Raul Pericchi on studies that I have discussed here before and a third talk by Carenne Ludeña on looking at the results from a critical point of view. In some sense, I did not learn as much from the talks, since I was aware of the results, but I did learn quite a bit from the progress made by others not only in studies of the results themselves but new avenues that are trying to correlate, for example, those centers that had “anomalous” results, with those that received data during the day on August 15th., but more on that later.


Luis Raul Pericchi et al: Methods to indirectly verify the non-intervention of an election


 


I have mentioned Pericchi’s work earlier since he is the mathematician that has been applying Benford’s law to the recall vote. Basically, Benford’s law allows for the detection of manipulation of data, in this case the results of the recall vote, by looking at either the first or second digit of the sequence of numbers, the frequency of occurrence of these digits may be able to show that the data may have been tampered with.


 


What Pericchi did was to look at the first two digits. This is done because the first digit test may not be the most accurate since, for example, it may be bound in a range such as no voting machine having either Si or No votes above 900. (This is an invented example).


 


The results are similar for the first two digits, but I will convey those for the second digit. What is done, is to compare the expected frequency of the digits and do a statistical test to determine what is the probability of such an occurrence as a simple probability, or to calculate the so called P value, a number which is used to determine whether the data was or not intervened. A P value below 0.05 is considered to be indication that there was intervention of the data. In the case of the second digit I will quote both the P value and the Probability.


 


Second digit results:


 


Manual Centers Si votes P value=0.0032 and Prob~5%. This is inconclusive


 


Automatic Centers Si votes P value=0.02 and Prob~20% Suggests non-intervention


 


Manual Centers No votes P value~0.15 and Prob~ 44% Suggests non-intervention


 


Automatic Centers No votes P value~0.000… Prob~0% Indicates intervention


 


Essentially, the frequency distribution of the No votes in the automated centers was found to be flat, a uniform distribution of digits, not at all what is expected from Benford’s Law and much different from what is found in the No votes in the manual centers.


 


The same result was also found for the total number of votes at each center, that is, the sum of Si plus No votes, also showed the same pattern indicating the manual centers were ok, but the automated centers were intervened. This result is quite strong and can not be dismissed easily as voting records not only usually follow Benford’s law, but in this case the manual centers are shown to behave correctly, suggesting a very strong case for intervention of the data in automated centers.


 


Even more interesting, when Benford’s Law was tested on the No votes in the audited machines, the results were quite different with a P value of 0.24 and a probability of 48%, much different than in the overall results, suggesting the sample had something different about it.


 


For skeptics, I repeat: Similar behavior was found for both the first and second digits in which the No vote numbers and the total numbers indicate intervention since the probabilities of this happening are extremely low. It is going to be extremely difficult to “explain away” this result


 


Recall also that my pedestrian use of Benford’s law to test the Proyecto Venezuela exit poll matches very well what is expected. While I did not perform any statistical tests, the differences in both Si and No numbers from what is expected do not appear to be significant and the frequency distribution is certainly not flat.


 


To close, Pericchi also mentioned that he has obtained results similar to Jimenez on coincidences, using different techniques, in a less detailed study so far.


 


Jose Huerta and Jesus Gonzales: Comparison of the recall vote and other electoral processes


 


He presented a more detailed version of the work I posted earlier in which he compared the vote from the 1999, 2000 and 2004 votes. Huerta finds that there is more predictive correlation at the municipality level between the 200 and the 2004 vote than between the 1999 and 2000 vote. Huerta, who is a social scientist who studies poverty, concludes that this is very surprising not only from a political point of view, given what has happened in the country in those four years, but also from a social point of view, since poverty, unemployment and crime are up.


 


Huerta made a couple of comments that I found t be quite interesting and inconsistent with what is known: One, that the growth in the electoral registry is larger in the rural areas than in the urban areas by 18% to 14%, inconsistent with statistical data from the Government and from the fact that the is no evidence of a reversal of the migration trend of the last forty years. But the second comment was perhaps the most surprising: Huerta finds that the largest proportion of changes in the electoral registry were from urban areas to rural areas, which makes no sense whatsoever. His suggestion is that this was done on purpose to have manual centers match the national automated vote.


 


Carenne Ludeña: A critical view at the models used to study the recall vote.


 


Ludeña basically tried to point out where bias or assumptions may affect the results leading to a conclusion that may suggest fraud, but the conclusion is model based. The talk had some interesting points and considerations, but I found nothing compelling about it. She pointed out, for example, how the Hausmann and Rigobon model of errors may be flawed by proposing an alternative, but I found the alternative less compelling than the real model. Essentially she said that the Exit polls and the signatures for the recall may have had a correlation factor due to external pressures. However, in my mind these correlations did not exist as the two processes were different.


 


In the signatures, they were going to be public, which meant that those that wanted to sign did not, for fear of retaliation. In the exit polls the situation is different, whether you are pressured into lying depends in where you are voting, not how. Essentially in a Si-dominated center people may feel pressured to say they voted Si, but the opposite is true if the center is dominated by No voters. If it was true that the No won by 60-40%, then there should not be the correlation that she points put, or should not be important.


 


Other comments:


 


1) There are many people working on this problem and are now getting into the details of how the intervention may have been implemented. Perhaps the most interesting comment I heard was about communications between the voting machines and the servers. Essentially, the machines were not supposed to communicate during the day at all and the data was not supposed to be bidirectional in the sense that while handshakes are to be expected, more data should not flow from the servers to the voting machines. This did not happen. The data transmission record exists in detail for all machines and the data is quite interesting:


 


-Not all machines had communications during the day


-There were two types of ways in which calls were terminated, either by the server or by the voting machine. In one of the two (Don’t remember which) the amount of data transmitted to the machine was larger than from the machine to the server. There appears to be a correlation between this and the “anomalous” centers with funny vote distributions.


 


 This work is still in progress.


 


2) In the work of Isbelia Martin et al that I reported earlier, a peculiarity was observed that the dispersion of votes by machine size showed two “clouds” if one looks at the Si or No votes, instead of only one in some states. Some have wanted to explain away this behavior by saying it reflects two geographic or social populations. The problem is that the mathematical properties of each “cloud” have inconsistencies, such as the fact that if you do a fit to only one cloud, the intercept is not zero.


 


The above result could be explained away by artificialities in the data. But what can not be explained away is that the intercept is the same for the Si and No votes. There can be no correlation between the two! If anything should no be correlated is these two populations. There can be no justification for this coincidence state after state where the two clouds are observed!


 


If this last result is found in a few of the states where the binomial distribution is “chopped up”, in my mind there is no doubt mathematically that the data was intervened. This work is also in progress


 


3) One last conclusion to me is that the recall vote data shows quite a number of “strange” results. As someone said, the probability of a person winning the lotto is very low, however the fact that a person does win every week is not strange. In the recall vote, mathematical studies show quiet a number of strange results; this is as if the same person wins the lotto week after week. In fact, few of this statistical studies show results for which the data is reasonable or normal and that may represent the biggest abnormality or anomaly.

Posted in Uncategorized | 1 Comment »

On Mathematical Models of the recall vote and fraud part XI: 3d. Simon Bolivar seminar with a very strong result.

September 25, 2004

The 3d. Simon Bolivar Seminar on statistical analysis of the recall referendum took place  last Thursday with two talks by Jose Huerta and Luis Raul Pericchi on studies that I have discussed here before and a third talk by Carenne Ludeña on looking at the results from a critical point of view. In some sense, I did not learn as much from the talks, since I was aware of the results, but I did learn quite a bit from the progress made by others not only in studies of the results themselves but new avenues that are trying to correlate, for example, those centers that had “anomalous” results, with those that received data during the day on August 15th., but more on that later.


Luis Raul Pericchi et al: Methods to indirectly verify the non-intervention of an election


 


I have mentioned Pericchi’s work earlier since he is the mathematician that has been applying Benford’s law to the recall vote. Basically, Benford’s law allows for the detection of manipulation of data, in this case the results of the recall vote, by looking at either the first or second digit of the sequence of numbers, the frequency of occurrence of these digits may be able to show that the data may have been tampered with.


 


What Pericchi did was to look at the first two digits. This is done because the first digit test may not be the most accurate since, for example, it may be bound in a range such as no voting machine having either Si or No votes above 900. (This is an invented example).


 


The results are similar for the first two digits, but I will convey those for the second digit. What is done, is to compare the expected frequency of the digits and do a statistical test to determine what is the probability of such an occurrence as a simple probability, or to calculate the so called P value, a number which is used to determine whether the data was or not intervened. A P value below 0.05 is considered to be indication that there was intervention of the data. In the case of the second digit I will quote both the P value and the Probability.


 


Second digit results:


 


Manual Centers Si votes P value=0.0032 and Prob~5%. This is inconclusive


 


Automatic Centers Si votes P value=0.02 and Prob~20% Suggests non-intervention


 


Manual Centers No votes P value~0.15 and Prob~ 44% Suggests non-intervention


 


Automatic Centers No votes P value~0.000… Prob~0% Indicates intervention


 


Essentially, the frequency distribution of the No votes in the automated centers was found to be flat, a uniform distribution of digits, not at all what is expected from Benford’s Law and much different from what is found in the No votes in the manual centers.


 


The same result was also found for the total number of votes at each center, that is, the sum of Si plus No votes, also showed the same pattern indicating the manual centers were ok, but the automated centers were intervened. This result is quite strong and can not be dismissed easily as voting records not only usually follow Benford’s law, but in this case the manual centers are shown to behave correctly, suggesting a very strong case for intervention of the data in automated centers.


 


Even more interesting, when Benford’s Law was tested on the No votes in the audited machines, the results were quite different with a P value of 0.24 and a probability of 48%, much different than in the overall results, suggesting the sample had something different about it.


 


For skeptics, I repeat: Similar behavior was found for both the first and second digits in which the No vote numbers and the total numbers indicate intervention since the probabilities of this happening are extremely low. It is going to be extremely difficult to “explain away” this result


 


Recall also that my pedestrian use of Benford’s law to test the Proyecto Venezuela exit poll matches very well what is expected. While I did not perform any statistical tests, the differences in both Si and No numbers from what is expected do not appear to be significant and the frequency distribution is certainly not flat.


 


To close, Pericchi also mentioned that he has obtained results similar to Jimenez on coincidences, using different techniques, in a less detailed study so far.


 


Jose Huerta and Jesus Gonzales: Comparison of the recall vote and other electoral processes


 


He presented a more detailed version of the work I posted earlier in which he compared the vote from the 1999, 2000 and 2004 votes. Huerta finds that there is more predictive correlation at the municipality level between the 200 and the 2004 vote than between the 1999 and 2000 vote. Huerta, who is a social scientist who studies poverty, concludes that this is very surprising not only from a political point of view, given what has happened in the country in those four years, but also from a social point of view, since poverty, unemployment and crime are up.


 


Huerta made a couple of comments that I found t be quite interesting and inconsistent with what is known: One, that the growth in the electoral registry is larger in the rural areas than in the urban areas by 18% to 14%, inconsistent with statistical data from the Government and from the fact that the is no evidence of a reversal of the migration trend of the last forty years. But the second comment was perhaps the most surprising: Huerta finds that the largest proportion of changes in the electoral registry were from urban areas to rural areas, which makes no sense whatsoever. His suggestion is that this was done on purpose to have manual centers match the national automated vote.


 


Carenne Ludeña: A critical view at the models used to study the recall vote.


 


Ludeña basically tried to point out where bias or assumptions may affect the results leading to a conclusion that may suggest fraud, but the conclusion is model based. The talk had some interesting points and considerations, but I found nothing compelling about it. She pointed out, for example, how the Hausmann and Rigobon model of errors may be flawed by proposing an alternative, but I found the alternative less compelling than the real model. Essentially she said that the Exit polls and the signatures for the recall may have had a correlation factor due to external pressures. However, in my mind these correlations did not exist as the two processes were different.


 


In the signatures, they were going to be public, which meant that those that wanted to sign did not, for fear of retaliation. In the exit polls the situation is different, whether you are pressured into lying depends in where you are voting, not how. Essentially in a Si-dominated center people may feel pressured to say they voted Si, but the opposite is true if the center is dominated by No voters. If it was true that the No won by 60-40%, then there should not be the correlation that she points put, or should not be important.


 


Other comments:


 


1) There are many people working on this problem and are now getting into the details of how the intervention may have been implemented. Perhaps the most interesting comment I heard was about communications between the voting machines and the servers. Essentially, the machines were not supposed to communicate during the day at all and the data was not supposed to be bidirectional in the sense that while handshakes are to be expected, more data should not flow from the servers to the voting machines. This did not happen. The data transmission record exists in detail for all machines and the data is quite interesting:


 


-Not all machines had communications during the day


-There were two types of ways in which calls were terminated, either by the server or by the voting machine. In one of the two (Don’t remember which) the amount of data transmitted to the machine was larger than from the machine to the server. There appears to be a correlation between this and the “anomalous” centers with funny vote distributions.


 


 This work is still in progress.


 


2) In the work of Isbelia Martin et al that I reported earlier, a peculiarity was observed that the dispersion of votes by machine size showed two “clouds” if one looks at the Si or No votes, instead of only one in some states. Some have wanted to explain away this behavior by saying it reflects two geographic or social populations. The problem is that the mathematical properties of each “cloud” have inconsistencies, such as the fact that if you do a fit to only one cloud, the intercept is not zero.


 


The above result could be explained away by artificialities in the data. But what can not be explained away is that the intercept is the same for the Si and No votes. There can be no correlation between the two! If anything should no be correlated is these two populations. There can be no justification for this coincidence state after state where the two clouds are observed!


 


If this last result is found in a few of the states where the binomial distribution is “chopped up”, in my mind there is no doubt mathematically that the data was intervened. This work is also in progress


 


3) One last conclusion to me is that the recall vote data shows quite a number of “strange” results. As someone said, the probability of a person winning the lotto is very low, however the fact that a person does win every week is not strange. In the recall vote, mathematical studies show quiet a number of strange results; this is as if the same person wins the lotto week after week. In fact, few of this statistical studies show results for which the data is reasonable or normal and that may represent the biggest abnormality or anomaly.

Posted in Uncategorized | Leave a Comment »

Superficial and abusive response to recall challenge by CNE Director Rodriguez

September 25, 2004

In a nationwide TV address yesterday CNE Director Jorge Rodriguez “explained” why there was no fraud, saying no proof had been submitted by the opposition and that the Electoral Registry did not have the problems denounced by the opposition. E said the phenomenon of more voters than inhabitants had occurred in other elections and that in nay case the number was very small with only 32,000 voters involved. The latter is, of course, a silly argument since he is only taking into account those towns where the number of voters exceeded the number of inhabitants, but its says nothing of those where the number is exorbitant without exceeding the number of inhabitants.


Rodríguez also denied a lot of things that were not part of the accusations by the opposition such as rumors of Russian hackers or interference of the communications using satellites which were not part of the documents presented by the opposition. This part I found offensive and abusive on the part of the CNE Director, using superficial accusations which were not part of the challenge to laugh at the possibility of fraud.


 


He was superficial, referring to caps and mentioning Hausmann and Rigobon in that instance, but failed to note the coincidence problem where, as noted here, there are calculations that suggest the impossibility of what was observed. The cap problem once again, was not mentioned in the oppositions challenge but was used irresponsible by Rodriguez in his nationwide address.


 


He mentioned that pro-Chávez exit polls said the opposite of opposition exit polls, but nobody has been able to get their hands on that data while opposition exit polls from at least three institutions (Sumate, Primero Justicia and Proyecto Venezuela) have been distributed generously to be studied by anyone that has requested it. Moreover, the only pro-Chávez exit polls that have been publicly quoted yielded results that have too much error with the final results of the recall vote, given the size of the samples made.


 


He mentioned the “cold’ audit of August 18th. but failed to mention the failed “hot” audit of Aug. 15rh. And results that remain mysterious to date.


 


Rodriguez closed by threatening to take to court anyone that continues making accusations of fraud against the CNE. All in all, I found Rodríguez to be strident, superficial and consider his use of a forced nationwide TV address to broadcast his point of view and abuse of power since the opposition has not been given the same ability to present its case to the nation and explain its suspicions as to what happened on Aug. 15th.


 


Today Tulio Alvarez, the lawyer who prepared the case responded to Rodriguez saying that eh had not responded to any of the reasons why the CD challenged the results of August 15th. , suggesting that Rodriguez had not even read the request. He reiterated the accusations and said that Rodriguez’s arguments about the Electoral Registry in no way address the massive and fraudulent issuing of ID cards without control that took place.


 


Alvarez said the Electoral Board continued its abuse of power by denying the challenge presented by the customary three to two vote, without any discussion or presentation of a study of the allegations. He called on the two opposition Directors to resign from the CNE.

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Superficial and abusive response to recall challenge by CNE Director Rodriguez

September 25, 2004

In a nationwide TV address yesterday CNE Director Jorge Rodriguez “explained” why there was no fraud, saying no proof had been submitted by the opposition and that the Electoral Registry did not have the problems denounced by the opposition. E said the phenomenon of more voters than inhabitants had occurred in other elections and that in nay case the number was very small with only 32,000 voters involved. The latter is, of course, a silly argument since he is only taking into account those towns where the number of voters exceeded the number of inhabitants, but its says nothing of those where the number is exorbitant without exceeding the number of inhabitants.


Rodríguez also denied a lot of things that were not part of the accusations by the opposition such as rumors of Russian hackers or interference of the communications using satellites which were not part of the documents presented by the opposition. This part I found offensive and abusive on the part of the CNE Director, using superficial accusations which were not part of the challenge to laugh at the possibility of fraud.


 


He was superficial, referring to caps and mentioning Hausmann and Rigobon in that instance, but failed to note the coincidence problem where, as noted here, there are calculations that suggest the impossibility of what was observed. The cap problem once again, was not mentioned in the oppositions challenge but was used irresponsible by Rodriguez in his nationwide address.


 


He mentioned that pro-Chávez exit polls said the opposite of opposition exit polls, but nobody has been able to get their hands on that data while opposition exit polls from at least three institutions (Sumate, Primero Justicia and Proyecto Venezuela) have been distributed generously to be studied by anyone that has requested it. Moreover, the only pro-Chávez exit polls that have been publicly quoted yielded results that have too much error with the final results of the recall vote, given the size of the samples made.


 


He mentioned the “cold’ audit of August 18th. but failed to mention the failed “hot” audit of Aug. 15rh. And results that remain mysterious to date.


 


Rodriguez closed by threatening to take to court anyone that continues making accusations of fraud against the CNE. All in all, I found Rodríguez to be strident, superficial and consider his use of a forced nationwide TV address to broadcast his point of view and abuse of power since the opposition has not been given the same ability to present its case to the nation and explain its suspicions as to what happened on Aug. 15th.


 


Today Tulio Alvarez, the lawyer who prepared the case responded to Rodriguez saying that eh had not responded to any of the reasons why the CD challenged the results of August 15th. , suggesting that Rodriguez had not even read the request. He reiterated the accusations and said that Rodriguez’s arguments about the Electoral Registry in no way address the massive and fraudulent issuing of ID cards without control that took place.


 


Alvarez said the Electoral Board continued its abuse of power by denying the challenge presented by the customary three to two vote, without any discussion or presentation of a study of the allegations. He called on the two opposition Directors to resign from the CNE.

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A second mystery international financial operation by the Chavez administration in two months

September 24, 2004

This week, the Venezuelan Government announced that it would issue a new ten year bond maturing in 2014. The issue will be for US$ 1.5 billion and will be first be offered as an exchange to holders of the so called Front loaded interest reduction bonds (FLRB’s) and the Debt Conversion Bonds (DCB’s) due in 2007.


Now, a country issues bonds when i) it needs money, ii) when it wants to reduce yearly payments or iii) when it wants to extend debt in time. This case is not straight forward to analyze.


 


The first point i) Is definitely not the case as the outstanding FLRB’s and DCB’s amount to more than US$ 1.5 billion so that the Government certainly does not expect to get any “fresh” money from this issue.


 


Point ii) requires some thought and explanation. Most bonds have a maturity date and make regular interest payments called coupons. The new bond is like that, it will likely have a coupon of 9% payable in two parts every year for the next ten years. But the DCB’s and FLRB’s are different, they were issued as part of the so called Brady bonds, when the future of Venezuela was uncertain (don’t laugh!) so they would not only pay interest, but also make payments of capital regularly.


 


Thus, these bonds which mature in 2007, require that the Government in the next two years pay capital as well as interest. The capital payments are large, but the interest payments are small because these bonds have adjustable coupons of the order of only 2%. In contrast, the new Global 2014 bond will have payments of roughly 9%.


 


Ant that is what is difficult to understand: to avoid making payments of US$ 450 million in capital for the next two years, the Government is going to have to pay 7% more per year in interest or US$ 100 million. This seems to make no sense, because Venezuela currently has ample reserves, so there is no problem with making the capital payments, but you are paying too much in interest in the next three years!


 


You could argue that the reason is three iii) that the Government wants to extend the debt profile in time, however, this runs against the type transaction made by PDVSA in July.


 


That transaction had exactly the opposite characteristics of this one, PDVSA spent US$ 2.6 billion to buyback all of its debt at equivalent yields that seemed high for the markets and which reduced international reserves by that amount. In that case, the only possible explanation was that they wanted to remove any possible liability for the Board of Directors of PDVSA since that company still ahs not produced financials for 2003.


 


In this case, in my opinion, there is only one possible explanation: The Government thinks that things are not going to get better than they are and is issuing ten year debt at conditions that will not return. My evidence for this? Easy, despite record high oil prices, Venezuela’s international reserves have not risen at all in the last three months, suggesting any downturn in oil prices will make a dent in the country’s international reserves and force the Government to pay more interest to issue new debt.

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A second mystery international financial operation by the Chavez administration in two months

September 24, 2004

This week, the Venezuelan Government announced that it would issue a new ten year bond maturing in 2014. The issue will be for US$ 1.5 billion and will be first be offered as an exchange to holders of the so called Front loaded interest reduction bonds (FLRB’s) and the Debt Conversion Bonds (DCB’s) due in 2007.


Now, a country issues bonds when i) it needs money, ii) when it wants to reduce yearly payments or iii) when it wants to extend debt in time. This case is not straight forward to analyze.


 


The first point i) Is definitely not the case as the outstanding FLRB’s and DCB’s amount to more than US$ 1.5 billion so that the Government certainly does not expect to get any “fresh” money from this issue.


 


Point ii) requires some thought and explanation. Most bonds have a maturity date and make regular interest payments called coupons. The new bond is like that, it will likely have a coupon of 9% payable in two parts every year for the next ten years. But the DCB’s and FLRB’s are different, they were issued as part of the so called Brady bonds, when the future of Venezuela was uncertain (don’t laugh!) so they would not only pay interest, but also make payments of capital regularly.


 


Thus, these bonds which mature in 2007, require that the Government in the next two years pay capital as well as interest. The capital payments are large, but the interest payments are small because these bonds have adjustable coupons of the order of only 2%. In contrast, the new Global 2014 bond will have payments of roughly 9%.


 


Ant that is what is difficult to understand: to avoid making payments of US$ 450 million in capital for the next two years, the Government is going to have to pay 7% more per year in interest or US$ 100 million. This seems to make no sense, because Venezuela currently has ample reserves, so there is no problem with making the capital payments, but you are paying too much in interest in the next three years!


 


You could argue that the reason is three iii) that the Government wants to extend the debt profile in time, however, this runs against the type transaction made by PDVSA in July.


 


That transaction had exactly the opposite characteristics of this one, PDVSA spent US$ 2.6 billion to buyback all of its debt at equivalent yields that seemed high for the markets and which reduced international reserves by that amount. In that case, the only possible explanation was that they wanted to remove any possible liability for the Board of Directors of PDVSA since that company still ahs not produced financials for 2003.


 


In this case, in my opinion, there is only one possible explanation: The Government thinks that things are not going to get better than they are and is issuing ten year debt at conditions that will not return. My evidence for this? Easy, despite record high oil prices, Venezuela’s international reserves have not risen at all in the last three months, suggesting any downturn in oil prices will make a dent in the country’s international reserves and force the Government to pay more interest to issue new debt.

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Five versions, and counting, of border killings

September 23, 2004

The different Government versions on the killings at the border:


Minister of Defense Garcia Carneiro: “This was done by the paramilitary or drug traffickers”


CIPC (Investigative police) Tachira State Head: “Guerrillas from the tenth front of the FARC were behind the killings”


Vice-President Rangel: “It is difficult to determine the material or intellectual responsibility”.


Deputy (and Chief sucker upper to Chavez) Nicolas Maduro: “It obeyed to a mediatic and international ambush against Hugo Chávez”


Hugo Chavez: “Colombia should assume its responsibility”


 


These guys strength used to be that they will all say the same thing, no matter how outrageous, but this is really confusing.

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CD is gone, CNE the same

September 23, 2004

So, the Coordinadora Democrática (CD) is dead and good riddance. They certainly failed in protecting the votes and guaranteeing that there would not be fraud. I still think the Coordinadora should have taken a tougher stance on August 14th. and even threaten to withdraw that night if the members of the mesas were not respected. The same with the members of the Juntas Electorales at the regional level which were replaced sometimes even the same day (the 14th. of August), by mostly pro-Chavista members.


I also think the CD dropped the ball on Sunday the 15th. thinking that it had won handily and not making sure that the hot audit was performed that night. To me, that hot audit remains the single most important mystery of the whole process. First, there is no public data on it, which centers were scheduled to be audited, which ones were audited and which ones were audited in the presence of opposition witnesses. Just to remind everyone, 199 centers were chosen to be audited that evening, opening the ballot boxes and comparing them to the results. Of these, only 78 were actually audited, but opposition witnesses were only allowed in 27 of them. In these 27, the Si won handily 63% against 37% for the No vote. Remarkably, when all 78 are added together the No wins 57% to 43% in all of them. Strange, no?


 


The role of leadership for the opposition will be assumed by the Governors and Mayors who are part of the opposition. The group will initially be composed of three Governors and three Mayors and they will negotiate the conditions for the regional elections with the Electoral Board.


 


Meanwhile, the CNE and the pro-Chavez members of the CNE continue acting with arrogance. First, they denied the request by the opposition to invalidate the results of the recall vote by the usual three to two majority. Moreover, they did not provide an explanation for doing so, saying only that there was “no proof” of any fraud. Second the dance of millions continues with the CNE spending more on purchasing voting machines and the infamous fingerprint grabbing machines (US$ 20 million)  which were a total failure on August 15th.


 


I guess the Saudi-Venezuela of the 70’s is back, let’s throw lots of money at a problem and hope things work out. While these irresponsible people do that, poverty is up, but the poor seem to be forgotten when it comes to spending money on gadgets or frivolous celebrations of anniversaries that most Venezuelans would rather forget like the one year Anniversary of the new CNE.


 


To top it all off, these guys are so proud of the transparency, clarity and lack of controversy of the recall vote of that they propose eliminating foreign observers from the upcoming elections “in order to give more institutional autonomy and national sovereignty to the processes”. This really worries me, Taliban CNE Director Battaglini, who is in charge of the observation process, must feel that the fraud in October will be impossible to implement if there are observers or he is simply extremely cynical and could care less about 40% (likely 60%) of Venezuelans. But that is the nature of this fascist revolution. (And I know exactly what I am saying and why I am saying it: a fascist regime imposes an authoritarian and hierarchical Government that leaves democracy on the side, this is what we have in Venezuela and all of the CNE’s decisions this week fit this behavior exactly)

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CD is gone, CNE the same

September 23, 2004

So, the Coordinadora Democrática (CD) is dead and good riddance. They certainly failed in protecting the votes and guaranteeing that there would not be fraud. I still think the Coordinadora should have taken a tougher stance on August 14th. and even threaten to withdraw that night if the members of the mesas were not respected. The same with the members of the Juntas Electorales at the regional level which were replaced sometimes even the same day (the 14th. of August), by mostly pro-Chavista members.


I also think the CD dropped the ball on Sunday the 15th. thinking that it had won handily and not making sure that the hot audit was performed that night. To me, that hot audit remains the single most important mystery of the whole process. First, there is no public data on it, which centers were scheduled to be audited, which ones were audited and which ones were audited in the presence of opposition witnesses. Just to remind everyone, 199 centers were chosen to be audited that evening, opening the ballot boxes and comparing them to the results. Of these, only 78 were actually audited, but opposition witnesses were only allowed in 27 of them. In these 27, the Si won handily 63% against 37% for the No vote. Remarkably, when all 78 are added together the No wins 57% to 43% in all of them. Strange, no?


 


The role of leadership for the opposition will be assumed by the Governors and Mayors who are part of the opposition. The group will initially be composed of three Governors and three Mayors and they will negotiate the conditions for the regional elections with the Electoral Board.


 


Meanwhile, the CNE and the pro-Chavez members of the CNE continue acting with arrogance. First, they denied the request by the opposition to invalidate the results of the recall vote by the usual three to two majority. Moreover, they did not provide an explanation for doing so, saying only that there was “no proof” of any fraud. Second the dance of millions continues with the CNE spending more on purchasing voting machines and the infamous fingerprint grabbing machines (US$ 20 million)  which were a total failure on August 15th.


 


I guess the Saudi-Venezuela of the 70’s is back, let’s throw lots of money at a problem and hope things work out. While these irresponsible people do that, poverty is up, but the poor seem to be forgotten when it comes to spending money on gadgets or frivolous celebrations of anniversaries that most Venezuelans would rather forget like the one year Anniversary of the new CNE.


 


To top it all off, these guys are so proud of the transparency, clarity and lack of controversy of the recall vote of that they propose eliminating foreign observers from the upcoming elections “in order to give more institutional autonomy and national sovereignty to the processes”. This really worries me, Taliban CNE Director Battaglini, who is in charge of the observation process, must feel that the fraud in October will be impossible to implement if there are observers or he is simply extremely cynical and could care less about 40% (likely 60%) of Venezuelans. But that is the nature of this fascist revolution. (And I know exactly what I am saying and why I am saying it: a fascist regime imposes an authoritarian and hierarchical Government that leaves democracy on the side, this is what we have in Venezuela and all of the CNE’s decisions this week fit this behavior exactly)

Posted in Venezuela | Leave a Comment »

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