Tuesday, June 20, 2006

While England slept (and Venezuela watched the ball, part 2)

We continue our travels among all these unpleasantness that Chavez is trying to stick us with while the country is watching the ball games in Germany. Today we will take a look at how the army never loses a penny and dispel any harebrained belief that Venezuela is not a military regime..

A definitive proof of Venezuela as a military regime?

The scandal at hand here is a tomato processing plant that Chavez announced about two years ago that it would be recovered to make it a “co-management” project to process tomato from the Barinas state in paste, catsup and peeled canned tomatoes. Nobody apparently told Chavez that if the tomato plant went bankrupt it was because Barinas is not the best area to grow tomatoes. But it seems that Chavez cannot be bothered by such details.

Thus, in Chavez brave new world, the army would be associated with the people to reopen this failed industry, generating jobs through newly formed agricultural cooperatives and managing the plant in a “co-gestion” system where everyone is the boss and employee. The financing for such a noble cause would come from the National Guard which will use its own Savings and Loans institute for this task (Cabisoguarnac).

Well, it did not turned out as expected. Apparently the money invested was used without much to show for it. At this point there is not even the sterile canning area properly set up yet. El Nacional (subscription only) followed the story quite well. Thus I will point out some of the main articles.

March 22. Following other scandals such as the ghost sugar mills of Barinas the National Assembly decides to investigate what happened with the tomato plant project, now referred as “la tomatera”. By the way, it seems that Barinas, the fief of the Chavez gang, is particularly prone to money disappearing and suspicious lands transfers which affect all but the Chavez family and its friends families who see their estate steadily grow under the governor stewardship (Chavez Dad) and its chief of staff (one of Chavez brothers). But back to the question that interests us today: what happened to 900 millions Bs (about 420 000 USD) earmarked to the project?

April 3. We learn that early in 2005 there were already reports of suspicious management of funds to the Republic Comptroller office, with no action taken. The reports were filed by Cabisoguarnac people, worried about where the savings were going. We learned a few juicy tidbits. For example, the loans were based on a supposedly 1.4 million USD expected profit, without even presenting a realistic plant to develop the cultivation of tomatoes in the area! The story of the refinancing and reorganization of the tomatera are quite something to read as not only there were not enough tomatoes to ensure the good working of the plant, but apparently even the weather refused to cooperate. Imagine that!

April 4. We learn that prosecutors on the case have been forbidden to discuss the matter. Apparently there is possible inculpation of the ex minister Albarrán, heavily implied in the Ezequiel Zamora Sugar Mill black hole (army involved too).

June 12. In Alo Presidente Chavez announces that Albarrán is “honest” (ignoring the official report that attributes him political responsibility for the Sugar Mill case).

June 15. The investigation is over, nothing wrong happened apparently. The Venezuelan Central Bank will cover the black hole by giving an extra 1.15 million USD to the tomatera project. Out of it 345 116 USD will go to the National Guard Savings and loan to restore its loss of the previous investment. The lame excuse used by Assemblymen Wilfredo González: There is no corruption act, simple the savings and loans did not have the capacity to complete the reactivation of the tomatera”.

Yes, that is right, the National Guard will not foot the bill. In summary: the National Guard invested some of it savings; something went wrong; there was a huge loss (corruption or not, we have not been shown the investigation report); the government restores its funds; tax payer money from suckers like this blogger will foot the missing millions. Allow me to express doubts as to the ability of the tomatera to EVER generate enough income to refund someday the monies.

But the problem here is not really whether corruption and bad investments took place (after all the very own board of Cabisoguarnac fired its chairman General Martín Albert Espinoza on the matter, suggesting already that an investigation should take place and its results duly published). For all that I know, it was just bad luck and the money was lost the good old fashioned capitalist way, notwithstanding co-gestion and cooperatives… No, the point here is that the National Guard asked for its money back and in a couple of months it got back every single penny it paid, eschewing any financial responsibility, any investigation (including, OF COURSE, any investigation on the complicated net of the Chavez family interests in Barinas). Even Albarrán, the one who planned most of this things if free now. Did he threatened to talk, à la Velázquez Alvaray?

Now, I ask the reader, who rules in Venezuela? Be it from this telling story, to the score of military personnel in all key position of the government and to all the unnecessary toys purchased for the army to play with (and juicy commissions), to the fat generals close to Chavez, Venezuela has become a military regime. There are silly people outside who think that actually Venezuela is a democracy and that Chavez is here to help the poor. Nothing of the sort: we are back to the XIX century where the army reached power to help itself except that with this time, with Chavez, they managed to do it through elections.

There is no better moment to deal with this sordid affair than a World Cup, isn’t it? Stay tuned, I have a lot of such moral tales to write on as I watch the games...

As for any investor foolish enough to come to Venezuela: make sure that none of your business partners belongs to the army if you want to share more than profits…

PS: there is an article in El Universal that addresses some of these points. Spanish.

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