Gustavo Coronel:PDVSA and the Venezuelan Central Bank: Bonnie and Clyde

[seemslikeadream]

The newest financial mess created by this government has to do with the decision, reported by El Nacional on Saturday June 5th, to suspend the legal and mandatory deliveries of dollars obtained from the sale of petroleum, from Petroleos de Venezuela to the Venezuelan Central Bank, in favor to hand over this money directly to the government of Hugo Chavez for “social uses”, or, in simpler words, for the political and personal use of this money by Chavez and his accomplices.

This intolerable abuse of power is reported, as a matter of fact, by Rodrigo Cabezas, the President of the Finance Commission of the National Assembly and member of the government political party. Says Cabezas that the decision of PDVSA was taken in order to establish “a shorter route for the financing of public investment projects”. This measure, probably taken over a few drinks on a Saturday afternoon by a small group of ignorant people close to Chavez, is the equivalent to the elimination of the role played by the Federal Reserve and the Congress of the United States in the handling of public financial resources.

Cabezas reported, like if he was talking about peanuts, that some $2 billion would be handed over to the government by PDVSA, short circuiting the Venezuelan Central Bank which was supposed, according to the Law, to receive that money. Already $ 750 million have been diverted, in this fashion, away from the Venezuelan Central Bank to the Chavez government during the month of May, as reported by Central Bank Director Armando Leon.

The report by El Nacional adds that these illegal transfers explain why the international financial reserves of the Venezuelan Central Bank have been diminishing, in spite of increasing petroleum income. Although I am not a financial expert, it seems clear to me that the Venezuelan government has been stealing the money that belongs to the nation. Stealing, according to the dictionary, is to grab money or assets that do not belong to you. This is what Chavez has been doing.


http://www.petroleumworld.com/EdJune0704.htm

somebody's not too happy

[On the Road]

1. Can You Explain What's Going On?

The article really doesn't seem to have much information or rationale, and the author can only speculate that the decision "was probably taken over a few drinks on a Saturday afternoon by a small group of ignorant people close to Chavez."

Is this part of a struggle between Chavez and the central bank? Does Chavez want to release more money for social programs but is blocked in some way from doing so? Regardless of how the laws are written, the revenues would appear to be state assets that are being used for state purposes -- the author mentions no evidence that the money is being stolen, as he characterizes it.

The author is, BTW, a former member of the board of directors of the state oil company.

[Imperialism Inc.]

2. Several interesting things about this article.

I was going to stay away from these discussion as there already seem to be enough contributors. Since no one is answering though, I will give a response.

First I hope everyone notes that Mr Coronel's commentaries on VHeadline are very critical of Chavez. Very interesting considering it is a news outlet that some on this board constantly complain about being a Chavez mouthpiece.

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983. In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement. You may contact Gustavo Coronel at email [e-mail]

Next, I can't speak specifically to this incident since I haven't seen the details yet. I can talk about when the opposition was complaining about similar occurrences a few months back. Again, I am not sure if there has been a new development so this may not completely address the issue. The laws that the government is using to do this are old laws. They are the Venezuelan equivalent of our Fast Track law. They have existed before Chavez and aren't a Chavez invention. I am against Fast Track laws myself but this is no basis for calling it illegal.

Why are they doing it? Corruption. The same people complaining are the first ones to complain about corruption from the central bank and to blame that on Chavez as well. So they complain when it goes through the central bank and there is corruption and then complain some more when someone tries to circumvent the bank and the corruption.

If you have been following the situation down there , you will probably not be surprised to find out that these same people didn't care so much when the corruption was even worse and they were in power.

Hope that helps.

[On the Road]

3. I Was Wondering About the Corruption Angle

the central bank doesn't get to decide how the money is spent. Presumably they would have to make it available if Chavez or parliament decide on spending programs. It simply eliminates a set of hands that the money passes through.

Or maybe not. But the article is frustratingly vague. Sr. Coronel may have a justifiable beef with Chavez's decision, but he seems to go out of his way to make it as clear as mud.

Has the state petroleum industry been accused of being a mouthpiece for Chavez? I didn't know that -- maybe there's a power struggle going on. I heard that the owners have called for another lockout during the summer.

[Imperialism Inc.]

5. I can't read his 1996 article about corruption so I don't

know what his personal take was on corruption before now. I know that everything I have ever read from him is fairly critical, not to mention vague and full of distortions. I think it is fair to call him a mouthpiece for the opposition at this point.

I do know that the opposition was complaining back in February that 50% of the funds from the central bank were disappearing and that, to them, was the fault of the Chavez government then as well.

60% of the Assembly passed the fast track like law to allow him to do this and included members of the opposition. Now they want to complain. Just like they praised the method by which the CNE members were appointed, since it included input from all parties, and now they say it is controlled by Chavez because they didn't like some of the rulings.

It is maddening at times. This is our modern day Nicaraguan intervention. Reagan's legacy lives on :(

[seemslikeadream]

4. Gustavo Coronel: How many lies can you get in one page?

Here is a sampler by Hugo Chavez on its letter published in The Washington Post, last week " Ready for a Recall Vote " by Hugo Chavez.

1."The coup leaders told Venezuela and the world that. I had resigned".

We all heard this statement on national TV, from the mouth of General Lucas
Rincon, then the Chief of the Armed Forces and today the Minister of the
Interior of Chavez. What is a leader of the coup doing in Chavez's Cabinet?

2. "Millions of Venezuelans took to the street".

Hundreds of violent followers of Chavez took to the streets to sack and burn modest shops in the poor sections of the city of Caracas, after the military had put Chavez back in power.

3. "This near-death experience changed me".

But not for the better. If anything, today's Chavez is more authoritarian and violent than the one who was briefly ousted.

4. "My opponents, most of whom are from the upper classes".

In a country where 80% of the population is poor and where 65% or more of the population opposes the regime, how can the majority of opponents belong to the upper classes? This is a mathematical impossibility.

5. "My opponents shut down the government oil company last year".

On the contrary, he provoked the crisis that led to the oil stoppage, as he
confessed in January of this year in a speech before the National Assembly,
by naming a totally unqualified person as President of the company. This
company, by the way, is not "the government oil company". This company
belongs to the Venezuelan nation, not to the government.

6. "Venezuelas'National Electoral Council--- a body as independent as the
Federal Election Commission in the United States".

The Board of this Council has a majority of Chavez's unconditional followers, who have decided on the maneuvers designed to block the referendum.

7. The Council "found that an additional 800000 (signatures) had similar
handwriting".

The signatures did not have similar handwriting. The persons assisting the signatories at the centers of signature recollection filled the accompanying data in many instances, a mechanism not forbidden by the Council until after the fact and one which has always been used in Venezuelan electoral events.

http://www.petroleumworld.com/EdJune0104.htm








Powell urges members of OAS to promote democracy

BY NANCY SAN MARTIN

Knight Ridder Newspapers


QUITO, Ecuador - (KRT) - Secretary of State Colin Powell on Monday called on the Organization of American States to continue to enforce democratic principles in the hemisphere so that elections produce accountable leaders.

Powell also said the 34 member countries of the OAS should be ready to step in to help neighboring countries "when their own democracies suffer setbacks."

"My friends, democracy is at a critical juncture in our hemisphere," Powell said. "The progress we have made and could yet make is at risk. ... We must make good on the commitments that we have given our citizens to put democracy's principles into daily practice, lest our people lose their hope in democracy's promise of a better life."

Powell's comments before the annual general assembly came as delegates elected a former Costa Rican president to head the organization. Secretary General-elect Miguel Angel Rodriguez, who assumes the post in September, pledged to promote liberty, justice and progress.

Rodriguez also praised the work of outgoing Secretary General Cesar Gaviria, pointing to the recent signature verification process in Venezuela that paves the way for a recall referendum against leftist President Hugo Chavez, which is expected in mid-August.

The recall is meant to put an end to more than two years of political crisis that's divided Venezuela and claimed dozens of lives.

A top OAS diplomat, speaking on condition of anonymity, expressed concern about potential problems surfacing with the recall drive.

http://www.kentucky.com/mld/kentucky/news/world/8863548.htm



I'm not sure what's going on, others are far more knowledgeable but I do know one thing Powell assisted in the overthrow of Aristide and I'm not too happy about that.

EVERY DEATH CREATES NEW ENEMIES
MORE TERRORISTS
MORE DANGER
MORE DEATH
AND REMEMBER...
HE IS JUST GETTING STARTED...
BUSH'S PLAN FOR PEACE
IS THE PEACE OF THE COMMON GRAVE

http://www.bushflash.com/pax.html


Let America be America again.
Let it be the dream it used to be.
Let it be the pioneer on the plain
Seeking a home where he himself is free.

(America never was America to me.)

Let America be the dream the dreamers dreamed--
Let it be that great strong land of love
Where never kings connive nor tyrants scheme
That any man be crushed by one above.

(It never was America to me.)

O, let my land be a land where Liberty
Is crowned with no false patriotic wreath,
But opportunity is real, and life is free,
Equality is in the air we breathe.

(There's never been equality for me,
Nor freedom in this "homeland of the free.")

Say, who are you that mumbles in the dark?
And who are you that draws your veil across the stars?

I am the poor white, fooled and pushed apart,
I am the Negro bearing slavery's scars.
I am the red man driven from the land,
I am the immigrant clutching the hope I seek--
And finding only the same old stupid plan
Of dog eat dog, of mighty crush the weak.

I am the young man, full of strength and hope,
Tangled in that ancient endless chain
Of profit, power, gain, of grab the land!
Of grab the gold! Of grab the ways of satisfying need!
Of work the men! Of take the pay!
Of owning everything for one's own greed!

I am the farmer, bondsman to the soil.
I am the worker sold to the machine.
I am the Negro, servant to you all.
I am the people, humble, hungry, mean--
Hungry yet today despite the dream.
Beaten yet today--O, Pioneers!
I am the man who never got ahead,
The poorest worker bartered through the years.

Yet I'm the one who dreamt our basic dream
In the Old World while still a serf of kings,
Who dreamt a dream so strong, so brave, so true,
That even yet its mighty daring sings
In every brick and stone, in every furrow turned
That's made America the land it has become.
O, I'm the man who sailed those early seas
In search of what I meant to be my home--
For I'm the one who left dark Ireland's shore,
And Poland's plain, and England's grassy lea,
And torn from Black Africa's strand I came
To build a "homeland of the free."

The free?

Who said the free? Not me?
Surely not me? The millions on relief today?
The millions shot down when we strike?
The millions who have nothing for our pay?
For all the dreams we've dreamed
And all the songs we've sung
And all the hopes we've held
And all the flags we've hung,
The millions who have nothing for our pay--
Except the dream that's almost dead today.

O, let America be America again--
The land that never has been yet--
And yet must be--the land where every man is free.
The land that's mine--the poor man's, Indian's, Negro's, ME--
Who made America,
Whose sweat and blood, whose faith and pain,
Whose hand at the foundry, whose plow in the rain,
Must bring back our mighty dream again.

Sure, call me any ugly name you choose--
The steel of freedom does not stain.
From those who live like leeches on the people's lives,
We must take back our land again,
America!

O, yes,
I say it plain,
America never was America to me,
And yet I swear this oath--
America will be!

Out of the rack and ruin of our gangster death,
The rape and rot of graft, and stealth, and lies,
We, the people, must redeem
The land, the mines, the plants, the rivers.
The mountains and the endless plain--
All, all the stretch of these great green states--
And make America again!

Let America be America Again...by Langston Hughes

[On the Road]

6. It is So Depressing to Read a Constant Stream of Propgagnda

especially on DU. Some of these don't even make much sense. It's tempting to let it pass. However, I think acquiesence is what the opposition is counting on to wint the recall vote.

1."The coup leaders told Venezuela and the world that. I had resigned".
We all heard this statement on national TV, from the mouth of General Lucas Rincon, then the Chief of the Armed Forces and today the Minister of the Interior of Chavez. What is a leader of the coup doing in Chavez's Cabinet?

What is the point? The author acknoledges that one of the coup leaders is still in Chavez's cabinet. I would guess that it's testimony to Chavez's limited control over the military. Cooincidently, it undercuts the author's tone elsewhere in the article about the government being stacked with Chavez loyalists.

2. "Millions of Venezuelans took to the street".
Hundreds of violent followers of Chavez took to the streets to sack and burn modest shops in the poor sections of the city of Caracas, after the military had put Chavez back in power.

OK, What's the point? Looting is bad? I would have loved to see the author cover the Rodney King verdict.

3. "This near-death experience changed me".
But not for the better. If anything, today's Chavez is more authoritarian and violent than the one who was briefly ousted.

I am astounded by Chavez's restraint. Can you imaginge what our fearless leader would have reacted to a coup?

4. "My opponents, most of whom are from the upper classes".
In a country where 80% of the population is poor and where 65% or more of the population opposes the regime, how can the majority of opponents belong to the upper classes? This is a mathematical impossibility.

Perhaps it should be phrased "the opposition is dominated by the upper classes" or something similar. Does anyone doubt that the leaders of the coup, the lockout, and the recall were organized and funded by the elite?

5. "My opponents shut down the government oil company last year".

On the contrary, he provoked the crisis that led to the oil stoppage, as he confessed in January of this year in a speech before the National Assembly, by naming a totally unqualified person as President of the company. This company, by the way, is not "the government oil company". This company belongs to the Venezuelan nation, not to the government.

The author seems to agree with the statement and make a ludicrous justification.


6. "Venezuelas'National Electoral Council--- a body as independent as the Federal Election Commission in the United States".
The Board of this Council has a majority of Chavez's unconditional followers, who have decided on the maneuvers designed to block the referendum.

Apparently there was some basis, since hundreds of thousands of the signatures were fraudlent. When it was found that the singature requirement was met, Chavez agreed. The point is?

7. The Council "found that an additional 800000 (signatures) had similar handwriting".
The signatures did not have similar handwriting. The persons assisting the signatories at the centers of signature recollection filled the accompanying data in many instances, a mechanism not forbidden by the Council until after the fact and one which has always been used in Venezuelan electoral events.

The first sentence doesn't agree with the second. Because 800,000 signatures in similar handwriting suggest fraud, they might have simply been thrown out by a government intent on prohibiting a referendum. Instead, a confirmation period was set which validated many of the signatures and allowed the referendum to pass.

---

. If this is the best the opposition can do, they are really bankrupt of ideas.