A historical radiography of corruption in Venezuela (research)


January 1, 2018 – Fort Russ News – Paul Antonopoulos – Translated from Mision Verdad.

CARACAS, Venezuela – Perhaps there is no such sensitive issue in Venezuelan political history as corruption. The great corruption scandals during the 100 years of oil exporting Venezuela had no one to control them, despite the fact that the country has had an effective punitive structure only for those who could pay for it.

The assumption of the autocratic State of Juan Vicente Gómez, characterized by a corrupt policy of concessions, was taken as an effective tool to obtain the political favors of the big oil transnationals. In turn, the wide circulation of money from the extractivist industry eroded the productive imprint and stimulated the spread of financial speculation and corruption.

Subsequently puntofijismo perfected the subtleties (sometimes too bloody and visible) of corruption, a supposedly democratic era in which the petty cash of the State was taken to enrich various private sectors, the favors received were rotated depending on who held the Presidency of the Republic. This is why the Venezuelan writer José Ignacio Cabrujas called the national petro-state a camp: whoever occupies the store has money from oil in his hands.

The following data is devastating: according to the Venezuelan Public Ministry between 1966 and 1996, the nation’s income reached 260 billion dollars; almost half was diverted into the pockets of a small political and importing elite through the misappropriation of public funds, money laundering, overbilling in official purchases, ghost companies, fraudulent purchases, unscrupulous bankers, complacent judges, muted prosecutors, traffic of influences, extortions, selective murders. Lovers with power are another interesting chapter in the history of corruption in Venezuela.

Well documented the private origins of public corruption in Venezuela, we must take into account the serious injury received by the national treasury by those who dissolved the money that oil contributed to the country in the financial services of national and international private capital. During puntofijismo impunity was the closest cousin of corruption.

Today in Venezuela the Public Ministry led by Tarek William Saab gives some answers to the population about corruption plots that were previously reported via the media. The policy of the renewed General Prosecutor’s Office of the Republic, contrary to that of the previous administration of Luisa Ortega Díaz (who led an extortion network within this institution), focuses on individuals and groups of power that took for themselves that it is of the State and they turned it into a weapon to implode, weaken, sabotage, corrupt, state nodal institutions for the economy and the country’s finances.

A review of some cases of corruption in the Fourth Republic, known to all Venezuelans with national memory, contrasts the current crusade that the Public Ministry maintains with respect to the impunity of the previous decades.

The murder of Ramón Cardona: autopsy of corruption in Saudi Venezuela

Gladys Jorge tried to demonstrate to the media that her husband, the Venezuelan lawyer Ramón Carmona, had been murdered for political reasons and not for others (robbery or crime of passion), as proposed by the Judicial Technical Police (PTJ).

July 28, 1978. Andrés Bello Avenue, Caracas. 2 and a half in the afternoon. Witnesses on the ground said that three men got out of a truck, tried to get the lawyer to get on the vehicle, and before his refusal and consistent struggle, he received two bursts of machine gun that would leave the body of Carmona on the asphalt and bloody as in a movie of American gangsters.

Carmona’s widow publicly accused the PTJ of being the material author of the murder. But who is the intellectual author? What are the reasons? Both El Nacional and Radio Caracas and the magazine Summary, directed by Jorge Olavarría, meticulously documented all the details of the case and even acted as prosecutors in the face of state impunity.

The then President Carlos Andrés Pérez moved his influence in the Venezuelan judicial system, through the client relationship between Adeco leader David Morales Bello and an important clique of judges and prosecutors, to stop the investigations relevant to the case. What is the relationship between the murder of Carmona and the President of the Republic? Why so much diligence on the part of Perez?

All the evidence uncovered a complex structure of illegal transactions that included the use of the State for private enrichment purposes by a disguised social network whose center was President Perez himself and his close circle of “apostles” and lovers.

To understand this network we should talk about Italian industrialists.

Renato Campetti was an entrepreneur who, along with other Italian shareholders, bought Playa Moreno, a publicly owned land of 1,200,000 m² on Isla de Margarita, Nueva Esparta state, thanks to the “permission” of the Pérez government to convert it into a private tourist center. Campetti was part of the trust circle of Cecilia Matos, secretary and lover of Perez. Carmona was a lawyer for the rich Italian.

For its part, the economic group Di Mase, always linked to Acción Democrática, had strong interests in banking and was the owner of the Venezuelan assembler of the Italian Fiat.

Both Campetti and the Di Mase brothers and the contractor Alberto Aoun acted as intermediaries in the purchase of the Venezuelan State from six military frigates, warships, sold by Cantieri Navali del Tirreno Riuniti, of Riva Tigroso, Italy. This transaction involved a business of more than 600 million dollars. The anthropologist Fernando Coronil, in his analysis and chronicle of the case, discovered that the annual report of the Comptroller General of the Republic shows that the Government paid for the boats 100 million dollars more than their market price.

Part of that money (between bribes and surcharges), according to the testimony of Manuel Molina Gásperi, stopped in the pockets of Cecilia Matos herself.

Molina Gásperi was the head of the PTJ during Perez’s first government, accused by Gladys de Carmona of being the mastermind of the murder of her husband, and imprisoned for facts that do not directly refer to the murder of the lawyer and later on conditional release.

Ramón Carmona and Manuel Molina Gásperi knew the business that led to inflate Matos’s bank account. Carmona and Molina were confronted.

The former head of the PTJ clandestinely declared in 1979 before the media that the murder of the lawyer had been decided “at the Presidential Palace, because Carmona knew too much” about the business of Cecilia Matos with Campetti and the Italians of Riva Tigroso.

Olavarría wrote at the end of 1978 in Semana magazine: “Carmona’s blood has fallen on all of us, she came out of the blood of all the poor murdered with ‘energy’ (reference to Pérez), a righteous one. the demagoguery that denounces corruption, but that practices it in plain sight, she was born of having accepted, without protesting, the first outrage, the first dead, the first corrupt, she springs from cowardice, from indifference, from complacency. the case itself, rotten in its antecedents, in its roots, in its projections, is no accident, it is a symptom of the purulence of a delinquent society, which persecutes the one who has the courage to speak and who protects the one who has the shamelessness of becoming in his concealer and accomplice. “

Needless to say, the details and surroundings of the case were not clarified.

The expiatory Chinese of Recadi

With the so-called Black Friday in 1983, outgoing President Luis Herrera Campíns inaugurated the Office of the Regime of Differential Changes (Recadi) for state control of currencies, including the imposition of a preferential rate for imports. It is assumed that the measure would help curb the flight of foreign currency.

The government of Jaime Lusinchi would keep Recadi as a monetary formula. The second administration of Carlos Andrés Pérez dismantled it. On February 23, 1989, a few days before the Venezuelan Sacudón, the former President of the Republic announced to the media that he had ordered the ministers of the Secretariat, Treasury and Interior Relations, “to open a rapid, exhaustive and decisive investigation into a possible fraud to the Nation, derived from the overbilling of imports with preferential dollars, authorized by Recadi to several companies of the private sector during 1988, and whose amount could amount to 2 thousand 500 or 3 thousand million dollars “.

By April 10, 1989 it was reported that the amount would reach 50 billion dollars. According to the following table shared by the journalist Ernesto Navarro, the amount would be much higher.

Navarro review around the plot that Recadi was “used by public officials, businessmen, politicians and individuals to traffic influences, grant and receive privileges, economic advantages, evade laws, responsibilities, profiting in group and individually from the popular majorities. Blanca Ibáñez, private secretary of President Lusinchi, will be one of the most related to this case. “

Carlos Tablante, of the Movement to Socialism (MAS), before the Chamber of Deputies of the extinct National Congress accused five companies of “fraudulent use of public funds, use of preferential dollars for purposes other than those declared, on import billing and bribery” in Recadi. The companies were:

Distributor New Zealand C.A.

Royal C.A. Machinery

Maquinarias Europa, C.A.

Victory Machines.

Onix machineries.

The companies belonged “to the Chinese citizens Ho Fuk Shum and Ho Fuk Wing, both with a false corporate domicile and totally unknown commercial activities,” Tablante said in his address on March 26, 1989.

The investigations focused on three specific fronts: immediate investigation of the last steps taken by the most recent directors of Recadi, Ana Teresa Herrera Balduz and Edgalia Bastardo de Leandro; the administration of currency for the Free Port of Margarita; and the performance of international verification companies: Caleb Brett, Bureau Veritas and Société Généralé Surveillance.

At the beginning of May 1989, Judge Luis Guillermo Larriva López, in charge of the case, issued arrest warrants against the presidents of the three foreign import verification companies and against two Venezuelan nationalized Chinese (Ho Fuk Shum and Ho Fuk Wing) for the crime of “fraudulent use” of state money. They also arrested three employees of Banco Italo Venezolano.

These were the first and last detentions around the Recadi case.

For this reason, the statements of the president of the Superior Court of Safeguard, Guillermo Urbina Cabello, about the Recadi case of April 12, 1989, were surprised: “In these cases, when they are implicated above all by high public officials, it is very difficult, because say impossible, prove the commission of an act of corruption, because they are generally university people, enlightened and with a certain culture that, moreover, to commit these crimes, they are advised by lawyers, auditors, accountants, economists … they are the so-called thieves of White neck”.

Urbina Cabello, together with another member of the Superior Safeguard Court, decided to close the criminal investigation against the Interamericana de Aviación company and its president, Julio Mendoza Silva, “for considering – and this was the first decision in the Recadi case in against or in favor of some individual – that up to now no damage has been done to the public property in the granting of preferential dollars, given that the National Treasury can execute the bond granted, therefore, this other denounced fact does not have any illicit criminal, “the paper said.

In fact, the only one who remained behind bars was Ho Fuk Wing, better known in the history of Venezuela as “the chinito de Recadi”. Fuk Wing was the expiatory Chinese who needed puntofijismo in his “gatopardista” approach to politics: that an individual who was of no importance to the most scandalous corruption plot until those moments was a victory limited to the impunity of the criminals with the levita and palló, a whitening of political capital that would last only a few more years.

The wolves of Banco Latino

Between 1993 and 1995 there was the famous financial crisis in which the Venezuelan State intervened 16 bankrupt banks whose assets represented 48.4% of the local financial system and concentrated more than 50% of deposits. In addition, there was a flight of capital estimated at 3 thousand 730 million dollars.

Pedro Tinoco Jr. was president of Banco Latino and one of the most powerful “apostles” of Carlos Andrés Pérez. In the 1990s he served as president of the Central Bank of Venezuela, while remaining as the main shareholder of the Latino.

Being the main responsible of the Venezuelan currency regulator, he approved the free will of his prosperous bank allowing the disproportionate increase of interest for deposits and bank savings, with the aim of attracting savers and consequently the money of the population that came to the financial services of Banco Latino.

Franco Vielma explains that the mission of Tinoco and many other bankers of the time “consisted of amassing immense amounts of capital with one purpose: to centrifuge Venezuelan money and acquire with it (that is, with silver that was not theirs, but the savers) immense amounts of dollars to the State and to the holders who offered them in the parallel market of the time “.

Vielma continues: “In this way the banks were capitalized with foreign currencies that later escaped the country.” At the same time, this group of banks and bankers detonated a “massive insolvency”, both in dollars and in bolivars capital – of the savers – in the Banks: A financial corralito was declared and the real pandemonium was imposed.For avarice and to act at ease dominating the state monetary policy, the bankers burst a crisis where millions of people lost their savings, without whom they responded for them and without announcing repairs. It was those times ‘when we were happy and we did not know’, times in which having money in the bank was a real risk of losing it. “

What happened later, the flight of all the bankers to Miami, Panama or Costa Rica, formed one more page of impunity around financial corruption in our country. Everyone, including those remembered Orlando Castro (Banco Progreso) and Gustavo Gómez López (Banco Latino), claimed to be victims of compromises or political persecution.

The bankruptcy caused suicides and large losses to natural and legal persons. The crisis was exacerbated at first with the financial assistance of the State to the bankers, money that the State generated from nothing, without support and that accelerated the monetary crisis.

The escape of the “aid” occurred again with the reproduction of systematic theft, because the conditions of ungovernability and monetary free will persisted. The savings of natural persons did not receive repairs or were repaired after years, when devaluations and inflation had devalued those savings. Even many of those pending reparations were made in the first government of Hugo Chávez in response to a demand for justice by a large number of affected people.

The total of the “aid” delivered by the national government at that time to commercial banks was approximately 1 billion 272 billion bolivars, Vielma notes.

On January 19, 1994, the government of Ramón J. Velásquez, who replaced the fallen Pérez, rescued Banco Latino at a cost of almost 1,800 million dollars. In the Latino not only savings were deposited from the population (1.2 million depositors), but also state funds, including resources from the banking regulation agency.

The amount of money in “financial aid” delivered by the government of Rafael Caldera to the affected institutions reached, in mid-June 1994, more than 8 thousand 500 million dollars, equivalent to 75% of the national budget for that year.

The population, and even the Venezuelan State itself, saw in front of itself how oligopolistic groups appropriated their money and fled to large centers of financial capitalism, to tax havens. Neoliberalism without adjectives.

Key comparisons

No doubt the corruption cases that illustrate this investigation have common characteristics with the current plots discovered by the Public Ministry in structures such as Cadivi / Cencoex and PDVSA.

– Its origins are characterized by the insertion of individuals and groups in the structures of the State that had the objective of capturing, privatizing it, money from oil revenues.

– The figures of ghost companies were used to collect over-invoicing in public purchases and other irregularities for the benefit of embezzlement.

– The influence peddling and extortion of judges, prosecutors and state security agencies are unified in networks that bring together private entities such as law firms, banks, legal entities.

– The flight of capital is a vital feature of these cases of corruption.

– The capture of oil revenues by billions of dollars is the ultimate goal of “white collar” criminals.

– The only difference between the cases of puntofijismo and those now investigated by the Attorney General is that the latter have corruption as a tool to flagellate, with treachery, the foundations of the Venezuelan nation-state while providing personal wealth.

In none of the aforementioned cases was there any objective of getting justice done or determining what really happened.

The aforementioned anthropologist Coronil, in relation to this confusion, wrote in El Estado mágico: “The scandals were the expression of a power struggle whose purpose was to recompose a violation of the rules or a specific imbalance by informal means. to realign the forces within the ruling class, not to achieve a conclusive legal result.The existing ties of reciprocity, built around a complex network of complicity, served as a restraint against the formalization of the resolution of conflicts through the legal system The scandal transformed a case into a spectacle The spectacle did not produce the results of obligatory compliance produced by legal decisions, but a representation, the illusion that there were results “.

On the contrary, the fight against corruption seeks to compensate for the damages caused by fraudulent businessmen and public officials, with an imprint of repatriating the escaped and illegally obtained capital.

The balance so far is a sign that the fight against impunity is not taken lightly: for the multiple cases that concern PDVSA and its subsidiaries, including the plots discovered in the Orinoco Oil Belt, 67 managers are detained, 17 of them senior managers, former presidents of the state oil company and former ministers (Eulogio Del Pino, Nelson Martínez); in the case of Cadivi-Cencoex there are 209 companies investigated, in addition to 21 businessmen arrested for exchange fraud until now.

The same Attorney General announced that the crusade is just beginning. With the unrestricted support of President Nicolás Maduro and the Venezuelan population, the fight against corruption in Puntofijista style seems a thing of the past. The story, this time, does not seem to repeat itself: other times are.

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