Sunday, May 30, 2010

Losing 20,000 tons of food: what does that say about Venezuela?

I am still flabbergasted about the news that at the very least 20,000 tons of imported food went to waste in Puerto Cabello because no one cared enough to remove them from the container storage area to deliver them to their righteous owner/handler/beneficiaries/whatever.  At this point it is impossible to structure a narrative about such an incredibly shameful operation though we can already predict in all confidence that no one will go to jail, or even receive a public sanction for such a disaster.  After all, let's not forget that in 2000 Venezuela received a lot of help for the Vargas disaster and a lot of that help found its way in some lot at Puerto Cabello where it went to waste, waiting for its discovery years later. No one was prosecuted or even fired for such an attempt against Human Rights, the Human Rights of the victims of the Vargas disaster to which that generous international help was destined.

However I can list a  few things about this latest disaster that speaks volumes about what kind of country we have become after 11 years of Chavez.

The facts

We will never know for sure, since we never know for sure in this country about things that cast a negative light on the regime's blunders.  From reading about a dozen entries on the web it seems that at the very least A THOUSAND + containers (1300?), loaded with food destined to Mercal and PDVAL, the food distribution system of the state, are involved in the deal.  Each container carried an average of at least 20 tons, which means that at the very least up to 20,000 thousand tons of food items might have been lost.  Maybe not all is lost, maybe some has still a valid expiration date.  But you will agree with me that expiration date on food is designed for food stored in proper warehouses and not for months under the sun and humid sea air of Puerto Cabello.  It does not matter how you cut it out, spin it, whatever, it is a monumental disaster only attributable to the regime bureaucracy since that one seized Puerto Cabello from its independent control as soon as the Carabobo state was taken back by the opposition in November 2008.  The blame is with Chavez and his appointees, NOWHERE ELSE.

The outrage

It does not exit, really.  Only El Nacional had it in big on its front page, El Universal in smaller, and nowhere on top in Globovision.  On the other hand plenty of articles about the primary vote  fallback on each side. The opposition alliance MUD, given such an excellent opportunity to attack Chavez mis-administration, is wasting it since it cannot be bothered to create a group of spokespeople to hammer the government with such things.   I mean, the MUD should have sent a commission to visit Puerto Cabello!!!  even if they knew full well that entry would be denied at least they would have made a media show at the door!

The honor, to give it a name, was saved by Carabobo folks who have been denouncing the routine losses at Puerto Cabello as much as for its waste as for the public health hazard that tons of food going to rot represent.  It is through Carabobo State legislator Neidy Rosal that we learn, in horror, that these thousand plus containers were discovered by luck, because the authority was investigating the robbery of three powder milk trucks in an unrelated event.  That is how they "stumbled" on the mound of rotting food!

The Governor of Carabobo Salas Feo reminds that his administration has been making similar accusations for a while, accusing mafias associated with the regime for these importations that go nowhere.  He notes that in a time of crisis, the food that went to waste could have fed for several days million of people in Venezuela.  That is right, it could have fed at least  all of Carabobo State for a few weeks.

The government reaction

Very limited of course: what can they say besides brief declarations from the SEBIN officials in charge of the investigation?  But from other two items happening today we sense that they are trying to take measures to make sure people do not speak up while creating a side show to distract.

The government certainly is going to try to limit the fallout of this scandal.  How?  For example punishing the whistle blowers just as it is doing in punishing the PDVComunal Gas workers who dared to go to Caracas this week to protest the miserable conditions that are forced to do their work.  Any "informant" in Puerto Cabello caught is certain to get punished.  How else can we explain that the workers did not report of such a storage that was in front of them?  Even if that area was of limited access or interest, surely someone must have walked around regularly in the last 6 months since the containers arrived.  No?

As an importer I know that when one of my containers is delayed for any reason the port authority bills me for the storage.  Nobody was watching for the storage fees of 1000+ containers?  This hiding of containers could have only happened if there was some sort of complicity at the highest level of the port authority and the Nazional Guard that supervises everything.

The irony is that the show this week end to cover up all the troubles of the country is the government making a big fuss of the distribution in diverse markets of Venezuela of 9,000 tons of food stuff!!!  Yes, you read that right, the government heralds the distribution of 9,000 tons of food which do not represent half of what was lost in Puerto Cabello!!!!!  They go overboard, claiming the organization of 1,800 points of distribution and they call it "Socialist meat fair" to fight against speculation and hoarding.  They certainly are not fighting waste and mismanagement.

The minister in charge of the the ministry that was supposed to monitor such things is Richard Canaan.  He was named in February 2010 to replace Eduardo Saman, the red shirted, bearded taliban who loved to close business on any excuse and whose claim to fame was the opening of the first "arepera socialista" of dubious success.  Thus the purchase order for this rotten food was placed during Saman tenure.  Though this should not excuse Canaan who should have made a point of getting to know about all what his predecessor left on his desk, the more so that Canaan function is to deal with perishables.

The fear

Based on precedent we also learn that the legislators of Carabobo who monitor Puerto Cabello are afraid that the government will try to recover some of the stuff found.  Of course this would go for sale at the Mercal and PDVAL outlets because it is clear that health is not an issue here, only political propaganda.  The hoi poloi should be happy with free food and not look into the quality.

Indeed,  we should look into what could be recovered, if anything to feed livestock.  But it should be done in the open, people knowing where everything goes.  From past knowledge I am willing to bet that this will not happen, and that in fact new juicy contracts will be established to reprocess the stuff through friends of the regime.

My scenario

This is such an example of all that is wrong with Venezuela today that even a seasoned observer like me has trouble comprehending the scale of it.  Below I am going to write a list of a few of the things that may have happened in the whole process and I am willing to bet that most of them are true.  I know that because I know the Puerto Cabello beast form the inside, because I have suffered for too long of its inadequacy and corruption and because my personal tales are almost nothing compared to the tales from other folks that reach me regularly.

The purchase

The government buys for Mercal and PDVAL without any control, without bothering for quotes.  It buys wherever it can through "trusted" bolivarian nouveau riche.  Or through Cuban agencies.   It is rare that the private sector can quote and sell large amounts today, unless for some reason it is the private sector that has access to a given source of food (for example some of the US grain imported directly).  The whole process is laden with corruption since with CADIVI and import permits there is is all sorts of paper works that can block you.  Bolibourgeoisie turns that around easily because they 1) "are with the revolution", feeding "el pueblo" and thus get "priority", 2) are willing to pay the necessary bribes and 3) simply charge the whole thing to the overpriced bills that are cashed to the state.  Since there is no public accounting we do not know for sure what was bought where and for how much.

Overprices, back handled payments and forced intermediaries are the norm if you need to sell anything to Venezuela as the latest Argentina scandal of the "coimas" reveals.

The delivery

As it is only too often the case with these type of business "arrangements", the trader really does not care much about the fate of the merchandise once he receives the purchase order and can cash the bill.  The trader receives preferential dollar value, at 2.6 today, well more favorable than the black market one of 8.  thus the temptation of overpricing the stuff so as to get a substantial margin is simply too strong to resist.

The port Authority of Puerto Cabello and the Nazional Guard which is supposed to control it know very well what is going on (in addition of the other business of drug trafficking, contraband and what not).  They know of all the people that deal with the government and long ago have established the network to skim the traders along the way.  They know the traders are robbing the state, that the state allows it, so why should they not get their cut?

Thus, from the initial emission of the purchase order to the time when the truck leaves Puerto Cabello for a given Mercal facility, a spectacular network of corruption has been built.  And it has gained strength since the local authorities have been banned, along as the private subcontractors, from the facilities in the first half of 2009.  Venezuelan ports have now the reputation of being among the very most corrupt organizations of the state.  It is to be noted that in ALL countries of the world ports are in need of close supervision as they offer too many opportunities of crooked deals, from the dockers giving priority to those who give nice tips, to contraband fees paid to security.  So you imagine what it is in Venezuela where the government is not only corrupt but overly lax in efficient controls, controls being designed to make sure the Guard and port bureaucrats can cash in at the gate, literally.

The beauty of the Venezuelan system is that it is nearly impossible to collect the evidence.  One, it is simply difficult to collect evidence as any attempt form your part to complain becomes quickly a fine or a delay in delivery with fast accruing storage costs.  Second, even if you could collect the evidence, to what tribunal are you going to go?  And third, all is so time consuming and your business needs so badly the merchandise so you can work and meet payroll and customer demands that you simply swallow hard, pay your custom agent (the one that does the dirty work for you) and simply increase your resale prices to compensate.  At the end the ones who pay for the corruption are the same as always: "el pueblo".

The payment: did something go wrong?

Clearly something went wrong along the way.  That the merchandise was abandoned in a lot for over six months can only be because some scam was at play and either something went wrong at the time of finishing it up, or went very well, the "trader" cashing his or her money and bailing out of doge, forgetting about the merchandise sunbathing for ever.

Case 1: something went wrong.  The date is the clue: Saman was fired at the time I suspect the paperwork was processed if the containers arrived in December/January.  That does not mean that Saman is involved but he was a dork and when he left office some of his administrators also left the office or were shuffled somewhere else by the Canaan staff.  Chavista ministers rotate so much that it is known that they have a close posse like staff that they bring along with them to whichever posts they go.  If one of Saman minions was involved in some "coup" his early dismissal screwed everything and he remained quiet about it least someone in the incoming group would notice.  After all Saman was fired in disgrace so it would have been unlikely that anyone in the Canaan group would have been willing to talk and take chances.

Case 1B: of course we cannot forget that the chavista famous incompetence might be the only explanation needed.  Saman was out, nobody cared anymore about the matter.  In this case the responsibility is with the Canaan group not to make sure they were receiving a complete detail of on going operations.

Case 2: all worked out just fine for the interested parties.  Let's do some numbers.  We are talking here of at least 20,000 tons of food at an average price of say, modestly, 2 USD per kilo.  Let's say that the overprice was a mere 0.5 USD per kilo.  We are talking here of a 10 million dollar commission at the very least, more likely, form precedent, of twice or thrice that amount.  Even if the head of the scam had to share a lot of that commission, we can assume that a group of 2-3 guys cashed in from 5 to10 million dollars.  If you have 3 million dollars and put them in a fund paying you interest and out of capital 200,000 a year, you can live comfortably for at least 20 years out of that scam.  Which does not stop you form starting your business outside of Venezuela, you know, to extend these years by a few more.

What happened in this case?  Whoever was in charge of the scam needed just the approval of importation to cash in the CADIVI dollars, pay the provider and cash in his commission.  He paid off whatever Nazional Guard mafia he needed to pay off, sent the notice to PDVAL and Mercal and forgot about the whole business.  Why Mercal did not act on it?  That is the mystery we would like to know, but there is no mystery about why the provider never bothered in making sure the goods were delivered as planned.

The storage

This is really the most interesting mystery when you think of it.  How can 1,000+ containers be stored somewhere and no one notice?  No one asking when the space will be made available?  No one asking for the storage fees?  No one noticing that some of the stuff started to smell?  No one noticing that there were more rats than usual in that area?  No electricity bill charged on the refrigerated containers?  And so many other questions, made the more inexcusable as the traffic at Puerto Cabello has been going down so there is not even the excuse of "we were too busy to notice".

We can attribute this to the utter neglect that we witness today at every level of the Venezuelan bureaucracy now that the "customer" is helpless, unable to go anywhere to complain from the bureaucratic abuse.  But this case is just too big, to flagrant, too inexcusable for mere neglect: there was foul play somewhere.  That is why I think that these imports were illegal in some way, from excessive pricing to even some drug smuggling scheme that failed at the last moment.  That is the only explanation I can come up to explain that not only the delivery was never made but that the Puerto Cabello workers and administration decided to remain quiet about it, pretending that these containers were not there.

What does it says about Venezuela?

By now you must guess what follows.

Venezuela has become a nation ruled by an inept, corrupt and heartless administration.  Kind of redundant when you think of it?  That so much food has been wasted and no one noticing it, no one assuming the blame is simply a mark that chavismo has created the most egotistical, careless, self centered, arrogant administration that we have ever seen here, and probably in our continent.  If such a scandal were to happen in a semi normal country, the president might not have to resign but I am sure that at least a dozen of high ranking officials would have already tended their resignation and probably some of them would already be in preventive jail.  It is not a matter of only corruption, robbing the state.  It is a matter of playing with the needs of the people, their rights, their hunger.  And this for a government that operates in the name of "el pueblo", and that as such thinks it has the right to accuse Alimentos Polar of hoarding 114 tons of food.  I am going to tell you something: I doubt that Polar has ever let rot any food it has imported.

But it is even worse, though at least on that one I hope to be mistaken over time.  This disaster should become a national cause, taken up by any independent media, by any political group including the now "dissident" PPT.  If the country does not demand an explanation for this, does not stop until at least someone is punished, then we will really have become a country as rotten as the food found in Puerto Cabello. We would have become a country so used to the easy oil moeny, so self assured of our entitlement, so little concerned about where the money goes,  that we deserve what Chavez has in store for us.  If the MUD does not make this one of its banner causes for the September election then they do not deserve to win because they have no moral fiber for that, they do not deserve office.


  1. Wonder who owned the containers, and if they wondered where they were? Or cared? I suspect that empties just collect around ports since there is little outbound need for them.

  2. Boludo Tejano2:18 PM

    A sad story,indeed. What is even sadder is that very few Venezuelans are currently aware of it. What is sadder yet is that in a week's or a month's time the vast majority of Venezuelans will remain unaware of this.

    For those PSF who still claim that Venezuela has freedom of the press, coverage or not of the rotted food will put paid to their claims. For what that is worth. As if they needed any more evidence.

  3. Snook3:58 PM

    What a disaster....the people need to know! Daniel, having read your blog for years, Im sure you have contacts within the media, MUD or any other links to the masses. Anyone who reads this blog has to do their part to inform as many people of this f@#$%%^ scandal. Can a letter be written? It may not do any good but we need to try. This is just blatant incompetence and corruption at so many levels.

  4. snook

    no one is a prophet in his own country, even less when one writes in a foreign language. if i have had contact with foreign media, the local one has been in general very ignorant of the blog, or blogs. by accident i have chosen the way out of Venezuela and it takes quite a lot of work. enough that i cannot spend additional time courting the MUD or the local press barons. besides i might get better readers off shore than they do :)

    the point is that they get the same information than i do. if they cannot put it together, if they do not understand the importance, if they are too afraid of the regime to harp on the issue, then there is nothing i can do about it. what matters is that it is written somewhere so it can be used the day of reckoning.

  5. Venezuelan Patriots Against the Bolivarian Revolution4:38 PM

    This is a sad day indeed. Chavez is letting the Venezuelan people go hungry and he's turning this once beautiful and peaceful country into a modern day Cuba.

    Let it be known, the people of Venezuela from Caracas to Maracaibo will rise up one day and overthrow this tyrant of 21st Century Communism, just like their ancestors did 200 years ago against the Spanish king.

    Que viva La Republica de Venezula y que muere la Revolución Bolivariana.

  6. Extremely good post.It gives quite a picture of what goes on and what goes on is pretty bad.

  7. Anonymous6:37 PM

    Daniel is it possible an order of the famous Ricardo Fernandez Barrueco companies for Mercal delivered when he is in prison and
    they did not know whom to contact about?


  8. Roger8:39 PM

    Im not sure what to make of this. First, things get lost "stolen" in Customs especialy if they sit around too long. Second, you almost always have to pay a "Extra Charges" (bribe) to get your stuff out. I can hear it now... " I don't know any Hugo and you have to pay these charges if you want your stuff" Third, the Venezuelan Military Socialist Complex now runs PC. One would think that their gang would have found alternatives. Fourth, I find it depressing to think that Venezuelans have become so lazy that they have on interest in low value per kilo items like food. Though Im sure hi value electronics don't get abandoned at PC!

  9. Tim D1:44 AM

    Most containers are rented from container/shipping companies. I have no idea what the current rate is but assume $10/day for a twenty foot box and someone either has paid or will have to pay nearly $500,000 in rental charges. Refa box charges are much higher.

    Containers are never 'lost'. They may be damaged, stolen, delayed but the paper trail will show who is responsible.

  10. Tim D

    Which makes this even more of an incredible story! I am sure that the containers company were looking for their boxes!!! How come nothing came out of it? Maybe someone actually paid the rental fee?


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