Archive for August 2009
President Hugo Chavez emerged from the day-long Unasur summit in Bariloche in full-spin mode.
The summit fulfilled everyone’s expectations, Chavez told reporters clustering around him. Everyone had “a space to say what each wished to say.”
Chavez described the meeting as a “great step which opens the gates of understanding, unity and peace, because we do not want war.”
Here’s the truth about Bariloche: President Chavez got his Bolivarian butt handed to him on a silver platter.
Chavez traveled to Bariloche with plans to pick a fight with President Alvaro Uribe Velez.
Chavez thought he could rally Unasur’s other members to join his crazed crusade against the United States and Colombia.
Instead, Chavez made an ass of himself, quoting from an alleged secret US military intelligence document which – said the great Bolivarian warlord – outlined an imperialist gringo scheme to invade South America and steal its natural resources, including Venezuela’s oil and gas reserves.
The document in question was an unclassified white paper available to the general public at National Defense University’s web site.
Even better, the final document approved by Unasur’s heads of state does not condemn the Colombia-US base rights agreement.
Instead, Unasur’s final document put a big leash on Chavez, at least on paper.
The agreement commits Unasur’s members to six points:
“1. Strengthen South America as a zone of peace, with all parties committing to establishing a mechanism of mutual trust in matters of defense and security, sustaining our decision to abstain from recurring to threats or the use of force against the territorial integrity of another Unasur state.”
CG comment: In principle, the agreement prohibits any Unasur member from threatening violence against another Unasur member. The only Unasur president who consistently threatens other states with violence is Chavez. Over the past 18 months Chavez has threatened to deploy troops to Bolivia and Honduras, and start a war with Colombia over the air strike which killed FARC’s No. 2 chieftain Raul Reyes in northern Ecuador. Can Chavez keep his bullyboy mouth shut in the future? Doubtful.
“2. Reaffirm our commitment to strengthen the struggle and cooperation against terrorism and transnational organized crime and its related crimes: drug trafficking, small and light arms smuggling, and rejecting the presence and action of armed groups at the margin of the law.”
CG Comment: The agreement doesn’t mention the FARC, but the intent is clear. The presence and action of armed groups outside the law is rejected. On paper at least, this puts Chavez in a bind with respect to his 16-year-old strategic and political alliance with the FARC. The public record of the Chavez regime’s active cooperation with the FARC is extensive and well-documented. If Chavez continues his support for the FARC, he risks isolating himself within Unasur.
“3. Reaffirm that the presence of foreign military forces cannot, with their means and resources linked to their own objectives, threaten the sovereignty and integrity of any South American state and in consequence the peace and security of the region.”
CG Comment: The agreement does not ban or condemn the presence of foreign military forces in South America. Moreover, it can be inferred between the lines as saying that South America’s democracies must develop effective mechanisms for regional security cooperation that would make it unnecessary for any Unasur member to negotiate security agreements with the US or any foreign power outside South America to fight drug trafficking and terrorism.
“4. Instruct (Unasur’s) Foreign and Defense Ministers to hold an extraordinary meeting during the first half of September, to design in the interests of greater transparency mechanisms to foment trust and security in a way complementary to the instruments existing within the OAS, including concrete implementation mechanisms and guarantees for all of countries applicable to existing agreements with countries of the region and extra-regionals (i.e. outside South America); and also with respect to illegal arms trafficking, drug trafficking and terrorism in conformity with the legislation of each country. These mechanisms must contemplate the principles of strict respect for the sovereignty, integrity and territorial safety of (of the Unasur countries) and non-interference in the internal affairs of the States.”
CG Comment: A convoluted text which, summarized, basically instructs Unasur’s chief diplomats and military commanders to design effective regional security cooperation mechanisms to fight the drug traffickers, transnational crime groups and armed militant groups (like the FARC) which operated with great freedom in the region. One way of saying it is: time to fish or cut bait. Time for Unasur’s members to grow up and actually do something regionally beside the bla-bla-but-do-nothing which is habitually practiced by this group (with the exception of Colombia).
“5. Instruct the South American Defense Council to analyze the text ‘South American Strategy. White Paper. Air Mobile Command,’ and verify the situation o the frontiers and raise the resulting studies to the Council of Heads of State to considering actions to be followed.”
CG Comment: This is a funny (i.e. comical) concession to Chavez, who tried to make a big deal about an unclassified research paper anyone can download at NDU’s website. No doubt Foreign Minister Nicolas Maduro will talk a lot of compost at the meeting in September, but the conclusion is obvious. Anyone with access to the Internet can Google literally dozens of white papers – and the ones relating to Latin America certainly will focus on fighting drugs and terrorism and humanitarian missions. But there won’t be anything about US military invasion plans because such plans do not exist. US national security and defense planners don’t see any threats to the US anywhere in Latin America.
“6. Instruct the South American Council Against Drug Trafficking to urgently draft its statutes and a plan of action with the aim of defining a South American strategy to battle illicit drug trafficking and strengthen cooperation between the specialized organisms of our countries.”
CG Comment: Finally, it appears South America’s governments will try to find ways of working together to fight the drugs, terrorism and transnational crime groups in the region. It’s about time, in fact, it’s long overdue. But it’s doubtful the initiative will prosper. The last thing the Chavez regime wants is for other South American powers to see first-hand the direct involvement of senior Venezuelan government and security officials in the drug trade controlled by the FARC.
After viewing the almost seven hours of redundant discussions televised from Bariloche, a few conclusions are possible:
*Colombian President Uribe Velez once again gave his South American colleagues a masterful lesson in public diplomacy and statesmanship. Uribe repeatedly made Chavez look like the fool he is.
*Chavez’s Bolivarian bull manure is wearing very thin in the region. Even putative allies like Ecuador’s President Rafael Correa and Bolivia’s Evo Morales couldn’t hide their boredom as Chavez rambled on rhetorically without making much sense.
*The televised Unasur discussion showed that the group lacks depth, vision and ideas. In fairness, Peru’s President Alan Garcia and Chile’s President Michelle Bachelet did stress the need for Unasur to acquire institutional strength and credibility. But it’s difficult to soar like a Condor when one is surrounded by turkeys like Chavez, Correa and Morales.
*The radical revolutionaries in the group bashed the hapless gringo imperialists mightily throughout the day, but in the end all they managed was to look silly.
Chavez and Correa lied repeatedly throughout the discussions, denying their governments cooperate with the FARC when the public record clearly shows that Chavez and Correa are in cahoots with the Colombian narco-terrorist group.
“Mountains of lies,” Chavez wailed, though Chavez lies so often he likely has trouble differentiating between the facts around him and the fiction boiling in his feverish Bolivarian brain.
Correa described himself repeatedly as an academic. But one of the summit’s funniest moments came when he asked someone to interpret what “mobility” means in a military context, and Argentina’s President Cristina Fernandez de Kirchner explained it to him.
Morales came across as a whiney, pathetic pendejo digging up centuries-old resentments.
This trio reminded CG of an Alcoholics Anonymous meeting for beginners, where the tendency amongst the newbies is always to blame on everyone else their own failures and deficiencies.
President Luiz Inacio Lula da Silva was visibly grumpy before the day was half over in Bariloche, complaining that televising the summit was not a good idea because it prevented attendees from saying what they really thought.
But Lula is mistaken. Televising Unasur’s Bariloche summit was a great idea, because it showed South American voters, and the rest of the world, that Unasur is light on substance and heavy on the diplomatic equivalent of flatulence.
And the loudest rhetorical flatulence, of course, was provided by Chavez.
If Simon Bolivar were still alive today, his face would be red with embarrassment at the mediocre performance of Venezuela’s president.
President Hugo Chavez fancies himself a warrior, a Bolivarian warlord, a great Venezuelan military historian and strategist.
However, here’s the truth: Hugo Chavez has never commanded troops in actual combat anywhere.
Chavez talks a mean fight, but throughout his life has always opted for running away from the possibility of suffering a hot lead enema.
The only military adventure in which Chavez ever participated – the attempted coup against then-President Carlos Andres Perez on 4 February, 1992 – ended in failure less than 12 hours after it was launched.
And the biggest reason why it failed is that the coup’s putative chief plotter and principal leader – Lt. Col. Hugo Chavez Frias – halted his forces well out of harm’s way in Caracas and immediately started to negotiate his surrender.
Betrayal is as natural as breathing to Chavez.
However, on Friday of this week, Chavez will take his Great Leader/Warrior dog-and-pony show to the Argentine ski resort of Bariloche where the heads of state of the South American Union (Unasur) countries are meeting to discuss the new Colombia-US base rights agreement.
The Colombia-US agreement isn’t any of Unasur’s business, but Colombia’s government is willing to hear the views of Unasur’s members and present its case on why the base rights agreement is vital to Colombia’s national security.
Chavez has been beating the rhetorical drums of war loudly since the new Colombia-US base rights agreement was announced. He claims that the Colombia-US agreement is part of a US plan to invade Venezuela and seize control of its oil and gas reserves. Chavez also claims the hated gringos want to invade “Amazonia.”
Chavez has pledged to back up these crazed accusations in Bariloche with an alleged US intelligence document that will confirm the US is planning a military invasion of Venezuela.
Meanwhile, Chavez has ordered his Foreign Minister Nicolas Maduro to “prepare for a permanent rupture” with Colombia. He plans to terminate bilateral trade worth $6.5 billion this year (with a $6 billion surplus favoring Colombia), and replace imports from Colombia with imports from Brazil, Argentina, Uruguay and Ecuador – anyone but Colombia.
Chavez also has ordered an investigation of the sources of capital used by Colombian companies in Venezuela, to determine if any Colombian drug money has snuck into Venezuela. Chavez wears hypocrisy like a second skin.
Breaking trade ties with Colombia will hurt Colombian companies of course. But Venezuelan consumers and producers will get hammered much harder.
It takes a week to import anything from Colombia in normal times, and about two months to import anything from Brazil, Argentina or Uruguay. Imports from Ecuador take even longer.
Longer import distances/times = higher transportation/freight/insurance costs = higher retail prices = screwed Venezuelan consumer.
Chavez also is threatening that a military conflict could be imminent between Venezuela and Colombia. However, it’s doubtful that Chavez actually will order his Bolivarian Armed Forces to battle Colombian troops.
First, despite the new Russian weapons acquired since 2005 at a cost of $4.4 billion (including 100,000 AK-103/104 assault rifles), the Bolivarian Armed Forces (FANB) are in dreadful operational condition. Not a single combat unit in the country is at 50% preparedness.
The commanders of the FANB excel at kissing presidential butt, but they could not win a fight with the Tin Man from the Wizard of Oz.
Second, President Chavez doesn’t personally have the “cojones” to pick a fight with anyone. Chavez is a loudmouthed bullyboy who makes terrible threats from within the relative comfort of his multiple layers of security. But at heart, Chavez is a coward, and the people around him know it.
As a young cadet in the Military Academy, Chavez always flinched and backed away from his opponents in unarmed combat training exercises.
As a young Army officer already plotting to betray his elected democratic government, Chavez excelled at conspiracies but never participated in a single patrol, operation or anything that could threaten his personal safety.
We already mentioned how Chavez betrayed his comrades on 4 February 1992.
On 11 April, 2002, when the terrible magnitude of his criminal conspiracy to commit mass slaughter against unarmed civilians blew up in his face, President Chavez betrayed his closest comrades again.
While hard men like Grima Wormtongue urged unflinching armed resistance in Miraflores against the Army troops they feared were en route, Chavez ordered his senior generals, including then-CUFAN commander General Manuel Rosendo, to start negotiating his surrender immediately to the Army’s commander, General “Rapidito” (aka “Swifty”) Vasquez Velasco.
“You want me to immolate myself like that “pendejo” Allende?” Chavez is said to have shouted at Grima. “Yo no soy ningun pendejo.”
President Chavez always thinks of his own butt first, and always betrays his own people.
This is the great Bolivarian warrior who will seek in Bariloche on Friday, 28 August to rally Unasur against the Colombia-US base rights agreement.
Will Unasur’s leaders rise to his bait?
President Rafael Correa of Ecuador and President Evo Morales of Bolivia likely will back Chavez’s play.
Correa is allied strategically and politically with the Revolutionary Armed Forces of Colombia (FARC). It is public record that Correa’s government actively cooperates with the FARC, an international narco-terrorist group. Perhaps Uribe will raise this point in Bariloche.
Morales also has ties with the FARC, although not as notoriously as Correa.
President Cristina Fernandez de Kirchner and her sidekick Nestor, a corrupt duo who are so deep in Chavez’s pocket they can never climb out, may support Chavez too.
Uruguay’s President Tabare Vasquez seems to be leaning against Colombia on the base rights agreement, and Paraguay’s Bishop-turned-President Fernando Lugo is a dyed-in-the-wool Liberation Theologist (i.e. perfect Latin American idiot).
Peru’s President Alan Garcia will support Colombia’s sovereign right to protect its own territory.
The wild cards could be Presidents Luiz Inacio Lula da Silva of Brazil and Michelle Bachelet of Chile. But maybe we’re being too optimistic.
Collectively, Unasur’s mostly leftist presidents haven’t shown much intelligence, judgment, courage and political will when it comes to defending democracy, strengthening security in South America, and confronting Chavez.
*President Chavez has an explicit strategic and political alliance with the FARC. This alliance between Chavez and a narco-terrorist group includes providing the group with cash, weapons, political support and advocacy for the alleged Bolivarian cause of the world’s largest cocaine trafficking enterprise. But no one in South America (except Colombia’s government) addresses the issue.
*The Chavez regime is actively working through indigenous groups in Peru to foster civil violence in an effort to spark a larger conflict that could overthrow that country’s elected government, but no one in South America (except Peru) addresses this issue either.
*The Chavez and Correa governments allow the FARC to base large numbers of militants in Venezuelan and Ecuadorean territory. This is public record, but no one in Unasur says anything.
*The Chavez regime allows at least nine senior FARC leaders, and several top ELN leaders, to reside permanently in Venezuela under official protection, with legal Venezuelan documents under assumed names. This is also public record, but not a peep of protest within Unasur.
*The Chavez regime intervened openly in Honduras in the months leading up to the legal ouster of former President Manuel (all hat, no cattle) Zelaya, in violation of Unasur rules (and also the norms of the Organizaton of American States in Washington, DC). However, all of Unasur’s presidents (except Colombia and Peru) embraced the grand lie that Zelaya was toppled by a military coup. Again, no one in Unasur upbraided Chavez.
*The Chavez regime has intervened often and repeatedly in the sovereign internal and electoral affairs of Bolivia, Ecuador, Paraguay, Colombia, Panama, El Salvador and Nicaragua, to name a few, but no one in Unasur (except Colombia) says “boo.”
*The Chavez regime has purchased $4.4 billion of Russian weapons since 2005, an issue which Colombian President Alvaro Uribe Velez intends to bring up at Unasur’s meeting in Bariloche.
Chavez says he will buy “‘battalions” of battle tanks and armored fighting vehicles when he visits Moscow in September – to defend Venezuela against the imminent US military invasion that will be launched from Colombian territory.
Colombia’s government and armed forces will not deliberately start a fight with Venezuela, regardless of how hard Chavez pushes to cause an “incident.”
But if a clash ever happens, it’s a safe bet that the Colombian troops will seriously kick Venezuelan butt.
Colombia has a seasoned professional army with years of combat experience, and is well equipped with everything an infantryman needs to operate effectively in battle.
No offense whatsoever is intended to the many active and retired professional Venezuelan soldiers who have befriended Caracas Gringo over the years, but the sad truth is that Chavez’s Bolivarian armed forces are not operationally ready for military conflict at any level.
In fact, this problem pre-dates Chavez’s election at the end of 1998 and has not been fixed despite the huge arms buys in recent years.
But maybe an armed confrontation in which Venezuelan troops suffer the worst is what Chavez is seeking so that he can play the role of aggrieved victim again, as he always does.
The discussion at Unasur will give some hint as to the great Bolivarian leader’s thinking.
As PMB notes, sagely, it’s always dangerous to under-estimate Chavez, but it’s also dangerous to over-estimate him.
Banco Confederado, the insolvent bank owned nominally by Ricardo Fernandez Barrueco, has purchased over $744 million of “national treasury assets” (“activos de tesoreria nacional”) within the past 10 days, roughly.
The precise nature of those national treasury assets remains unknown.
Reports also are circulating at the highest levels of the national banking system that Banco Confederado has purchased stock in Ricardo Fernandez Barrueco’s Panama-based commercial tuna fishing fleet.
In effect, Fernandez Barrueco’s bank has acquired stock in Fernandez Barrueco’s offshore tuna fleet, using some of the funds it obtained since the start of August 2009 from its new multinational corporate client Telefonica via its Venezuelan subsidiary Movistar.
These transactions have caused a very significant contraction in monetary liquidity since the start of August.
But the full impact of this liquidity contraction will not be reflected in the Central Bank’s weekly monetary liquidity reports because the institution is now controlled directly by the regime of President Hugo Chavez.
This means the Central Bank now routinely cooks and fudges the official data.
Moreover, the Central Bank certainly will not publish anything remotely approaching the real monetary liquidity data immediately after confirming a 2.4% contraction in GDP during the second quarter of this year.
Officially, Venezuela’s GDP contracted 1% during the first six months of 2009, but unofficially the economy’s real contraction likely is greater.
Remember that the Chavez-controlled Central Bank lost all of its autonomy and independence some time ago, and now reports only what the Chavez regime wishes to report.
Sadly, Venezuelans who have a right to know the truth about the state of their economy and the organized criminal activities of the Chavez regime and its Bolibourgeois “entrepreneurs” like Fernandez Barrueco and gang won’t read (or hear) about Banco Confederado’s latest corrupt financial shenanigans in the mainstream news media.
Most newspaper publishers and television station owners in Venezuela, with the notable exception of Globovision, now actively practice self-censorship, or else have sold their souls in Faustian bargains with senior figures in the Chavez regime.
But we all know what happened to Faust when the time came to collect debts owed to the devil.
Witness the tragic surrender of Bobolongo aka Miguel Henrique Otero, publisher of the El Nacional daily newspaper.
El Nacional is one of the top two national dailies in Venezuela, the other being El Universal.
El Nacional has distinguished itself over the past decade of criminal “chavismo” by consistently maintaining an independent, critical stance in its news coverage.
But recently El Nacional’s editorial independence has been melting down like the polar ice cap.
In fact, El Nacional’s first couple – Bobolongo and Antonieta Jurado Blanco – now tell the newspaper’s editors what can, and cannot, be published.
For example, last week El Nacional’s editors had prepared a two-page spread in Estrategia, its weekly insert on economic issues, informing readers about Banco Confederado, Ricardo Fernandez Barrueco and the bizarre deal struck with Telefonica’s Venezuelan subsidiary Movistar during the late July visit to Caracas of Spain’s Foreign Minister Miguel Angel Moratinos.
El Nacional secured the source material for that two-page spread from Caracas Gringo’s blog.
Estrategia had been printed and was ready for distribution when orders from above arrived:
Gather up every last printed copy of Estrategia with the two-page story on Banco Confederado, Movistar/Telefonica and Fernandez Barrueco, and burn the entire print run immediately.
This caused a huge ruckus within El Nacional, so huge, in fact, that Telmo Almada, editor of Estrategia, reportedly resigned on 19 August, according to Caracas Gringo’s sources inside El Nacional. (Caveat: Caracas Gringo has never met or spoken with Mr. Almada.)
The individual who issued the orders from high up to burn last week’s Estrategia is Bobolongo’s new wife, Antonieta Jurado Blanco, who was the unnamed subject of a column in the 11 August 2009 edition of Reporte Diario de la Economia under the headline “La Reina de las Cruces.”
Antonieta is a “mujer de negocios” – a businesswoman, according to many people who know her.
Bobolongo dumped his first wife Carmen Ramia to take up with Antonieta, and by all accounts it was very ugly.
Mrs. Ramia, a woman of class and distinction, was literally kicked out of her marriage and home without much more than a dime to her name.
But before Antonieta managed to “encucar” old Bobolongo, she first went after two of the country’s most prominent and happily married businessmen, neither of whom are chavistas, by the way.
Fortunately for them, these men distanced themselves from her faster than a dog flees from a furious skunk.
Did you know, Bobolongo, that you were Antonieta’s third choice?
But maybe it wasn’t love at first sight. Maybe Bobolongo made his Faustian pact with the Chavez regime via Antonieta for political reasons.
Antonieta, who by the way controls Noticias24 but owns only 49% of that news aggregator site, was “hooked up” politically (and, some say, in other ways) with former Greater Caracas Mayors Alfredo Pena and Juan Barreto.
Pena used to have a widely read and very aggressive investigative column in El Nacional before he joined the Chavez revolution, became very wealthy as Greater Caracas Mayor, and then fled the country when Chavez decided to lop off his head after the events of April 2002.
Barreto, also a one-time journalist who never measured up to Pena’s soles before donning the red apparel of a Bolivarian revolutionary, also reportedly is in line for a Bolivarian guillotine.
Reportedly, Antonieta now is very close to the new Greater Caracas Mayor Antonio Ledezma. Be carefool, Antonio!
Bobolongo’s prestigious newspaper has managed to survive ten years of Chavez thanks to its good relations with the Greater Caracas Mayor’s office, which purchased beaucoup institutional advertisements in El Nacional.
But with Ledezma’s election, the Chavez regime shut off all financial support for the Greater Caracas Mayor. Now El Nacional reportedly is so far out on a limb financially that even a gentle breeze could send Bobolongo’s family-owned newspaper plummeting into the abyss.
So, perhaps, Bobolongo surrendered to Antonieta’s charms in a desperate “business decision” intended to save El Nacional from certain death.
But if that’s the case, Bobolongo may have miscalculated, and the consequences could be potentially fatal for his family’s ownership of El Nacional.
Antonieta reportedly is very close to senior regime figures like Public Works and Housing Minister Diosdado Cabello and Science and Technology Minister Jesse Chacon.
Antonieta also is very close to Grima Wormtongue (aka Marciano aka JVR).
who also used to have his own column in El Nacional.
So, perhaps, Bobolongo thinks that having married Antonieta he has saved El Nacional.
But here’s the nub of it all: Grima Wormtongue reportedly wishes to gain control of El Nacional. And Grima Wormtongue usually gets what he wants since Chavez has been in power.
A very old friend of El Nacional’s publisher says, “A Bobolongo lo van a volver mierda mas pronto de lo que se imagina.”
PS: Bobolongo is a nickname given to Miguel Henrique Otero by his social peers while he was barely in his teen years. Translated roughly into English, Bobolongo means “Dumbass.”
Marciano (aka Grima Wormtongue aka JVR) is required reading for anyone interested in the Chavez regime’s darkest and most dangerous notions.
Marciano has served Chavez since 1999 as foreign minister, then defense minister and finally as vice-president.
President Chavez reportedly never trusted him. Perhaps that’s why he kept Marciano so close by his side for so many years, as Machiavelli counseled centuries ago.
Certainly, Marciano is one of the three most dangerous men in Venezuela today, a basically lawless country which – as anyone who has lived or worked there for a long time knows – is filled with dangerous men.
The other two are Public Works and Housing Minister Diosdado Cabello and former Interior & Justice Minister Ramon Rodriguez Chacin.
Cabello currently is the second most powerful figure in the Bolivarian regime, right behind President Chavez.
Rodriguez Chacin is the president’s longtime personal liaison to the top leaders of the Revolutionary Armed Forces of Colombia (FARC). He also serves as the chief coordinator of President Chavez’s regional clandestine political activities in association with the FARC-sponsored Bolivarian Continental Congress (CCB).
Marciano returned to his career as an “investigative journalist” over a year ago. He has a weekly political talk show on Televen (Confidenciales) and pens columns under pseudonyms, including Marciano.
In many of his recent “Piedra de Tranca” columns in the rabidly pro-Chavez daily tabloid Vea, Marciano has warned repeatedly of rightwing conspiracies to assassinate President Hugo Chavez, destabilize the Bolivarian revolution and trigger a civil war in Venezuela.
These threats have been echoed by Public Works and Housing Minister Cabello, who warned recently that the regime has everyone “under observation.”
Cabello was speaking of what’s left of the independent news media, since 80% of the country’s news media – television, radio and print – are now controlled directly/indirectly by the Chavez regime.
But Cabello’s threat literally applied to every sector, entity and individual who dares to criticize any aspect of the Chavez regime.
Of course, Cabello has his own good reasons for desiring a meek, muzzled news media.
Silencing an independent news media in Venezuela means that Cabello’s own activities in pursuit of immense personal wealth – and the activities of his associates in the regime including Marciano – will never be investigated, exposed and sanctioned.
Besides, Cabello is only doing the president’s bidding.
President Chavez always sets the pace and tone of the Bolivarian revolution: Lies, insults, intimidation, political persecution by the Bolivarian judiciary, trials and convictions of some regime critics on completely fabricated charges, illegal detentions, physical assaults of regime critics by armed Bolivarian street thugs and criminals, threats of bloody civil war or conflict with other countries (mainly Colombia).
The president’s violence-ridden rhetoric, and that of his closest cronies, is so constant that one is tempted to downplay reality a bit. Friends of Caracas Gringo say things like, “Chavez has been making threats forever…Chavez is all bark and no bite…Chavez just enjoys hearing his own voice…etc.
But reading Marciano’s recent columns in Vea, it appears to some observers in Venezuela that President Chavez wants to stoke tensions until they reach a violent breaking point.
Chavez certainly has been on a tear recently, threatening war against Honduras and Colombia, announcing more unnecessary Russian arms purchases, asking for a Special Powers Law so he can deliver the “estocada” to what’s left of Venezuela’s democratic freedoms and institutions, etc.
Marciano always has been loyal to Chavez, meaning he always supports the president’s greatest excesses and craziest notions. But first and always, as anyone who knows him personally will attest, Marciano is only out for his own political and economic interests.
Marciano is also a masterful political strategist, and maintains multi-layered alliances with everyone – including some of the hapless “squalid” opposition figures he routinely ridicules and trashes in his columns and TV show.
Marciano certainly has strategic alliances in place with the likes of Cabello, Rodriguez Chacin and others. This doesn’t imply everyone is good friends. These are alliances of political and economic convenience, which usually overlap in Bolivarian Venezuela.
This means that when reading Marciano’s columns, the reader always must read between the lines to try to figure out who he is speaking for, and against.
Here’s a recent comment taken from one of Marciano’s columns in Vea:
“Once again, the opposition’s extreme groups have taken the road of assassinating political figures and economic life. In truth they never have abandoned this type of ‘solutions,’ but in recent days old plans are being accentuated. What’s new is that opposition figures have been added (CG: to an alleged hit list). When someone in a meeting asked by a specific subject appeared on the list, the answer was: chaos, chaos. That is, the plan is to foment a state of chaos.”
“What they do not realize is that in a situation of chaos many more oligarchs can lose their heads than chavistas.”
These extremist groups are receiving “stimuli” from Miami and Bogota, he adds, from groups that participated in the Bay of Pigs, the bombing of the Cubana de Aviacion airliner back in the 1970s. Their “recruits” come from “civilian and military exiles arrived from Caracas.”
Are there any Venezuelans in exile who possibly are dreaming, even plotting, of whacking Chavez and his closest associates, including people like Marciano, Cabello, etc?
Probably yes. With over 1 million Venezuelans now living in exile since Chavez became president as decade ago, the odds certainly support the notion that somewhere outside Venezuela at least one or two exiles are having dark dreams of becoming Rambo.
But Caracas Gringo insists that the real threat to President Chavez’s biological longevity could be as close to him right now as stink on flatulence.
Douglas Bravo described the situation not long ago: “A revolution is coming from within against the revolution, sooner than anyone including Chavez suspects.”
There certainly are true believers in the regime, nutcases like Commerce Minister Eduardo Saman.
But Cabello and others, like Science and Technology Minister Jesse Chacon, always have struck this observer (at least) as being way more pragmatic than ideological.
The revolution’s pragmatists have always served President Chavez well, politically and even ideologically. But in return, perhaps unwittingly, Chavez also has served the interests of the pragmatists in his regime, which has never been as unified internally as the president boasts.
However, what happens when (or if) the converging interests of Chavez and the regime’s pragmatists suddenly diverge and follow radically different paths?
Not that we think this will happen soon. CG agrees with Moises Naim’s recent remark that Chavez has the resources to stick around a long time. But if a rupture were to occur within the regime, the faction described by some as “chavismo without Chavez” could be encouraged to act.
Meanwhile, what of Marciano’s warning of imminent violence against political figures including members of the opposition?
Two possible scenarios:
One, groups that oppose Chavez could be organizing violent attacks against regime figures, as Marciano charges.
Two, the Chavez regime’s political intelligence & counterintelligence services, very ably assisted by Cuba’s DGI assets in Venezuela, are running an operation to selectively assassinate individuals associated with the regime, and pin it on figures associated with the political opposition.
Cuba is suffering an economic crisis so severe that the island nation has run out of toilet paper, according to recent news reports.
Another recent news report from Miami said the Cuban regime is getting about $5 billion a year from Caracas in oil, cash and kind – or, say, $25 billion since 2004.
We estimate, conservatively, that the Bolivarian organized crime groups entrenched within the government of President Hugo Chavez have skimmed about $100 billion of the almost $1 trillion of oil revenues Pdvsa has earned since 1999.
Chavez’s generosity to the Castro regime represents about one-quarter of the money stolen overall by the Bolivarian crime groups.
Revolutions are expensive, but at least Venezuelans still have access to toilet paper, for now anyway. But where’s all that money going in Cuba?
Obviously it’s not trickling down to the general Cuban populace, which currently is largely reduced to choosing between banana leaves and pages of Granma or Juventud Rebelde to wipe their butts.
Most likely, it’s going into the pockets of the Cuban revolution’s elites, starting with the Castro brothers and including its military chiefs, and the members of its defense and interior ministry state security and intelligence services.
These Cubans are not only among the elites of the revolution, but also run its state-sponsored/tolerated organized crime groups.
What’s most important from the perspective of a casual observer in Caracas is that these Cuban state organized crime groups have certainly set up shop in Venezuela at the invitation of President Hugo Chavez.
In previous posts, we have described how transnational organized crime groups have flourished inside the Bolivarian revolution, with current and former Cabinet officials actively leading groups which are snapping up banks and other financial assets with funds of opaque origin, or else engaged in criminal enterprises ranging from bribery and rigged public contracts, to money laundering, drug trafficking, kidnapping and the like.
These Bolivarian organized crime groups – which also include current/former directors/members of Defense Ministry military intelligence (DGIM), Interior & Justice Ministry political police (Disip), the National Guard, armed forces and CICPC – have explicit strategic, political and business alliances with elements of the FARC and ELN engaged in drug trafficking, arms smuggling, money laundering and kidnapping.
They also have alliances with paramilitary and other Colombian organized crime groups engaged in smuggling drugs, gasoline and people.
The Bolivarian crime groups we have been tracking are deeply entrenched in the institutions of the Bolivarian revolution, inside the Chavez regime.
In addition to their control of the Bolivarian state’s key intelligence/counterintelligence and other law enforcement entities, these crime groups also control key Venezuelan government institutions like the Seniat tax authority and the banking system regulator Sudeban.
They also have influence at senior levels of entities like Onidex (passports and identity cards), and the national civil and mercantile registries.
They also have a lot of clout inside Pdvsa and the Central Bank.
Now they are consolidating control over the state-owned telcom system concentrated at CANTV, Movilnet and ABA, which reportedly have been entrusted to the “management talents” of former Disip director General Henry Rangel Silva.
It’s not a coincidence that the Cuban regime also has human assets in all of these Venezuelan state entities and enterprises.
The Cuban regime is present in Venezuela in very large numbers. At least 50,000 Cuban nationals are in Venezuela on various official missions. They blend into the Venezuelan populace very easily. And they are everywhere in the government, intelligence & security services, and the armed forces.
There are some interesting parallels or similarities between Bolivarian and Cuban organized crime groups:
*They flourish in the shadow of the Supreme Leader, both tolerated and even encouraged actively by El Supremo.
*Many of the Bolivarian and Cuban revolution organized crime groups are led by individuals with professional military backgrounds.
*The Cuban revolution is 40 years older than the Bolivarian revolution, but viewed objectively in real time, it’s fairly obvious that both “revolutions” are at the point where they could continue without their respective Comandantes.
*The supreme leaders of the Bolivarian and Cuban revolutions always disavow corruption, but have practiced corruption systematically to enrich themselves and their families. The Castro brothers are easily worth a combined $2 billion, and the Chavez Frias family in Venezuela has amassed wealth on a similar scale since Chavez became president in 1999.
*Venezuelan and Cuban military officers on active duty simultaneously serve their respective revolutions in senior positions as cabinet ministers, presidents of state-owned companies and other government entities, and also command/control all the key state intelligence/counterintelligence and law enforcement entities.
*Bolivarian and Cuban revolution organized crime groups have explicit strategic, political and criminal alliances with groups like the FARC and ELN, and other Colombian and Mexican organized crime groups.
*Military and law enforcement entities at the service of both revolutions are actively engaged in the drugs and arms smuggling trade, with very close ties particularly to the FARC.
*The Bolivarian revolution historically has been flush with cash, while the Cuban revolution is cash starved. But both revolutions are extraordinarily corrupt at all levels, with government officials always seeking to supplement their state salaries with “negocios.”
*The Bolivarian and Cuban revolutions preach a people’s mantra of socialist revolution and opposition to the United States, but the elites of both revolutions are avid practitioners of western capitalism and consumerism.
Cuba’s Interior Ministry has a security and intelligence machine estimated at over 20,000 officials. A substantial portion of those assets are now focused on Venezuela.
Cuba’s Direccion General de Inteligencia (DGI) is one of the best intelligence agencies in the world today.
The DGI was trained during the Cold War by the KGB, and by East Germany’s foreign intelligence service (Hauptverwaltung Aufklärung, or HVA) and its national police (Stasi).
A former colonel in the old Soviet Glavnoye Razvedovatel’noye Upravlenie (GRU) – the Main Intelligence Directorate of the Russian Armed Forces General Staff – who Caracas Gringo had the pleasure of working with a few years ago, says the DGI is one of the world’s top two or three most effective and dangerous intelligence services. “The DGI routinely runs the CIA and FBI in circles,” our friend says.
When the Soviet Union imploded, the KGB went into business and organized crime on a global scale. Miami became a hub of Russia organized crime in the 1990s, as did other US cities like New York and Los Angeles, and Canadian cities like Vancouver and Toronto. From Miami, Russian mafiya engaged in drug trafficking with Colombian and Mexican cartels, did drugs-for-weapons trades with the FARC, and even tried to sell a Soviet submarine to a Colombian drug cartel.
The DGI, says our amigo the former GRU colonel, is way better today than the KGB ever was.
And the DGI currently has a very substantial operational presence in Venezuela.
The DGI also has longtime relations with the FARC and ELN, and maintains ties/works with the armed forces and intelligence services of countries like Iran, Syria, North Korea, China, Vietnam, Belarus and Russia, among others
President Chavez and his Iraqi Baathist Interior & Justice Minister Tareck al Assaimi may deny it to hell and back, but the new Bolivarian National Intelligence & Counterintelligence Service and the new Bolivarian National Police which currently are in the process of being created are receiving substantial “technical advice,” “training support” and “technology transfer” from the DGI and from the Cuban Interior Ministry’s state security apparatus.
When Fidel and Raul Castro die, the DGI, the Interior Ministry’s state security apparatus, and the Cuban armed forces will be well-positioned to transition/expand their criminal enterprises in a post-Castro era.
The same could happen in Venezuela. President Chavez may believe he is indispensable for the Bolivarian “revolution.” But he is not. Chavismo without Chavez is not a myth.
It’s likely that if Chavez were to lose power unexpectedly there would be a violent and bloody convulsion in Venezuela.
But the Bolivarian organized crime groups entrenched within the regime have the power, thanks to strategic alliances with Venezuelan military leaders and their Cuban counterparts, to transition to a post-Chavez Venezuela in which the reality could easily be as bad or worse than it is now.
After all, as Jose Antonio Gil Yepes so famously put it in his doctoral dissertation many years ago, Venezuela is fundamentally “a society of accomplices.”
Colombian and US officials will wrap up negotiations this weekend in Washington, DC on an agreement allowing US military counternarcotics forces to use seven military bases in Colombia including three air bases, two navy bases and two army bases.
“God willing, this weekend everything will be closed,” says General Freddy Padilla, commander of Colombia’s armed forces.
Padilla’s confirmation that the Colombia-US base rights agreement is practically a done deal certainly will trigger more rhetorical broadsides from President Hugo Chavez, who is doing everything thinkable to turn a mole hill into a regional geopolitical Krakatoa.
President Chavez claims the US government, but not President Barack Obama, is establishing seven US military bases in Colombia from where it plans to launch a military invasion of Venezuela to seize control of its oil and gas reserves – the largest on the planet, boasts Chavez. Chavez said this in a recent interview with Colombia’s RCN.
At the Unasur summit in Quito, Chavez ratcheted up his wild unfounded accusations, saying the “Yanqui Imperialists” also want to invade and seize control of “Amazonia.” The Colombia-US base rights agreement is an imperialist scheme to invade and steal all of South America, Chavez concludes, rather hysterically.
Three questions, for consideration:
Is the Colombia-US base rights agreement necessary?
Does the Colombia-US base rights agreement threaten the national security of Venezuela?
Does the Colombia-US base rights agreement threaten the national security of any Latin American or Caribbean country?
Is the agreement necessary?
Forget chicken/egg views with respect to whether a base rights agreement would be necessary if the US government was to change its drug policies and laws, etc. Things are what they are. The national governments of Colombia and the US agree on the need to expand and strengthen a several decades-old bilateral security relationship which has resembled a roller coaster during the 1970s, 1980s and 1990s.
The ten-year base rights agreement certainly does that.
US and Colombian officials say it was negotiated because President Alvaro Uribe Velez offered the US the possibility of basing counternarcotics assets in Colombia after Ecuador’s President Correa refused to extend the base rights agreement at Manta.
But Manta was one base, and Colombia is allowing US military counternarcotics (and, yes, counterterrorist) assets usage rights at seven very strategically located bases, including:
Air bases: Palanquero in Central Colombia, Apiay in the East and Malambo in Colombia’s northern/Caribbean region.
Army bases: Tres Esquinas in southern Colombia and Tolemaida in central Colombia.
Navy bases: Cartagena on the Caribbean Sea and Bahía Málaga on the Pacific Ocean.
Look at a map. This is full-court coverage. The location of these seven bases greatly expands the geographical/territorial reach of air, sea and land-based US counternarcotics/counterterrorism assets. The signals intelligence capabilities of US/Colombian intelligence services also will expand very significantly. The “business” climate is going to get more difficult, even lethal, for Colombian drug trafficking organizations, including the FARC. The extent of the FARC’s drug trafficking relations with senior elements of the Venezuelan government probably will become easier to detect – because it’s a safe bet that the enhanced Colombia-US counternarcotics & counterterrorism partnership will focus more sigint, elint and humint assets at the Chavez regime’s drug kingpins.
Over the past decade since former President Andres Pastrana first proposed a Plan Colombia in mid-1998, the Colombia-US bilateral partnership has made extraordinary progress on all fronts – though the US since 2006 has failed to hold up its end of the partnership. Even so, as of August 2009 the bilateral Colombia-US relationship is working quite well. The international cocaine trade continues to flourish, with the FARC accounting for over 60% of Colombia’s total cocaine exports as of end-2007 and end-2008. However, the FARC has been damaged significantly by the Uribe government’s US-backed military offensive against the FARC.
The group has shrunk from over 17,000 fighters to about 9,000 today. Its top leaders –Manuel “Tirofijo” Marulanda and Rafael Reyes, among others – are dead of natural causes, or were killed by attacking Colombian army troops. Most of the FARC’s top leaders today are hiding in Venezuela or Ecuador. Some FARC chieftains remain in Colombia – like Mono Jojoy and Alfonso Cano, who replaced Tirofijo as the FARC’s commander in chief. But while the FARC is wounded, these wounds are not even remotely fatal.
However, the new Colombia-US base rights agreement will put more hurt on the FARC’s operations, principally drug trafficking and kidnapping. A likely result will be to drive more FARC forces – and related organized criminal activities – out of Colombia and into the FARC-friendly territories of Venezuela, Ecuador, the Peruvian Amazon (Iquitos), and northern Brazil.
For example, the FARC accounts for about 70% of the cocaine shipped through Venezuela. Total cocaine shipments through Venezuela in 2007 were about 270 metric tons, of which about 189 metric tons belonged to the FARC. At the very least, the much-enhanced Colombia/US counternarcotics capabilities will confirm what everyone already knows – that the Chavez regime cooperates actively with the FARC.
President Uribe is playing his geopolitical cards wisely. The US is Colombia’s most important political and commercial partner. However, Colombia’s closest neighbors and largest regional trading partners – Venezuela and Ecuador – have presidents that cooperate actively with the FARC, a terrorist group which is one of the world’s largest drug trafficking organizations and also kidnaps (and murders) hundreds of innocent civilians each year. This is public record.
Presidents Chavez and his less talented sidekick, Correa, are helping the FARC wage its decades-old “war” to topple Colombia’s democratically elected government and replace it with a tropical Marxist revolutionary state aligned with Caracas, Havana and other revolutionary regimes in the region. Whether or not the FARC’s war against the Colombian state has more chances than a cockroach in a chicken coop isn’t the issue. With the active support and cooperation of the Chavez and Correa governments, the FARC’s opportunities to evolve and adapt to the challenges the group currently faces are significantly improved.
Throughout its existence since 1964, the FARC has successfully evolved and adapted to every internal and external challenge it has ever confronted. The FARC hasn’t suffered any internal schisms. It has matured as a cohesive rural-based militant force, assimilating at least three separate generations of leaders. And as the joint Colombia-US security partnership is expanded with the goal of striking at the FARC more aggressively, there are many indications that the FARC once again is evolving and adapting. The FARC is globalizing, and President Chavez is aiding the process. He was clear about that in the RCN interview. When asked if the FARC are terrorists, he said, repeatedly, “No, no they aren’t, no, no on, no they’re not, no…”
Is Venezuela’s national security threatened?
No. But Colombia’s national security is strengthened against its declared enemies in Caracas and Quito. If there’s ever a war between Bolivarian Venezuela and Democratic Colombia, there’s no doubt which side the US will back. This bothers Chavez very much because it upsets his strategic plans to help the FARC destabilize Colombia by letting it deploy attacking forces from camps inside Venezuela (and Ecuador). With US forces “listening” just across the street, literally, the FARC’s active collaborators within the Chavez regime will have to be more cautious about their drug trafficking and terrorist activities. Since these activities usually overlap with Chavez’s regional political agenda with the FARC, it’s understandable that Chavez is raising a holy ruckus about the new base rights agreement. However, it also gives Chavez a political opportunity he has wasted no time in leveraging.
President Chavez will visit Moscow shortly, to sign more bilateral energy, trade and security agreements. He confirmed plans to purchase “battalions of new tanks…like 007’s…” Apparently the Chavez regime is looking at the latest generations of the T-80 and T-90 battle tank. However, it’s also possible that Chavez will extend the Medvedev/Putin regime another invitation to forge a comprehensive bilateral security partnership including a base rights agreement for Russian navy, air force and even army troops. The first time Chavez offered the Russians a base rights agreement was in September 2008, but Medvedev/Putin turned him down. But times have changed, and Russia-Venezuela ties have grown considerably in the past year.
Imagine a Venezuela-Russia base rights agreement juxtaposed to a Colombia-US base rights agreement. Old Fidel must be leaping with glee in Havana. And while Chavez is raging publicly against Colombia and the US, inwardly he must be delighted. The hysterical edge to Chavez’s shrieks of impending war with Colombia, a “yanqui” invasion to steal Venezuela’s oil and the “imperialista” designs on Amazonia is deliberate, calculated. Chavez is on the verge of landing a starring role in a Bolivarian mini-Cold War with the US. Now, if he can just persuade Medvedev/Putin to join the game…
Will Moscow play with Chavez? Hard to say, but Chavez certainly is offering the Russians some sweet deals which other important Bolivarian allies like China and Iran aren’t getting yet.
Deputy Prime Minister Igor Sechin was in Caracas 27-29 July to refine the agenda of Chavez’s upcoming visit to Moscow. During his stay, several agreements were signed.
For example, Pdvsa and the Russia Consortium (LUKoil, Gazprom, TNK-BP, Rosneft and Surguneftegaz) signed an agreement to advance studies on a joint venture to develop 200,000 b/d of extra-heavy crude production capacity in the Orinoco oil belt’s Junin 6 block, which containes 30.4 billion “certified” barrels of 7-8 API extra-heavy crude. However, Sechin remarked that the Russia Consortium is studying the development of between 400,000 and 1 million b/d of Orinoco production capacity, implying that between two and five joint ventures with Pdvsa are being studied. That works out to between $10 billion to $25 billion of investment, of which the Russians would put up 40%, at least.
A second agreement between Pdvsa and Gazprom Latin America aims to create an oil services joint venture in which Gazprom would have a 40% stake and direct operational control of some 50 gas compression/injection plants owned by US firms Williams Cos and Exterran Holdings until they were nationalized in May 2009. The former owners have not received any compensation yet, but Gazprom has been awarded their seized Venezuelan assets.
A third agreement seeks to create a new subsidiary we shall call Pdvsa Bank. Imagine Pdvsa going into the banking business with Russian financiers via the oil companies in the Russia Consortium? We may anticipate extraordinary transparency.
Also, Venezuela and Russia just signed a bilateral investment treaty which says that any disputes in Venezuela-Russia joint ventures will be resolved by arbitration at the Stockholm Chamber of Commerce in Sweden. But Energy Minister Rafael Ramirez continues to insist, backed by a Venezuelan Supreme Court ruling, that Pdvsa will never agree to any international dispute resolution procedures in any of its joint ventures.
However, Putin – a cunning veteran KGB expert with a keen understanding of energy geopolitics – likely will engage with Chavez only to the extent that it benefits Putin’s strategic concerns. At the least, Chavez’s trip to Moscow will produce increased military/security cooperation in parallel with more arms buys.
Does the agreement threaten the national security of any Latin American or Caribbean country?
No, although Chavez is trying to whip up popular and political concerns by vastly exaggerating the scope and reach of the Colombia-US base rights agreement. Unasur is trying to make it into a South American security crisis, which it is not by any means. The long-buried ghosts of the bad interventionist gringos are being trotted out again, though the folks doing the reviving reek of hypocrisy. But the real threat to South American democracy and stability isn’t the “Yanqui Imperio.”
The real threat is Chavez. Uribe and the Colombians know this, and so do Alan Garcia and his fellow Peruvians. Chavez foams at the mouth against Colombia and the US, accusing them of plotting to invade Venezuela. However, in the past 18 months Chavez has been the interventionist. He threatened to send Venezuelan troops to Bolivia. He also deployed army battalions and tanks to the border and threatened Colombia with war after FARC’s No. 2 chieftain Raul Reyes was killed in northern Ecuador by a Colombian air strike in March 2008. And most recently, Chavez threatened to send troops to Honduras to restore democratically deposed President Manuel “All Hat, No Cattle” Zelaya to power. Now he is also pounding the drums of war against Colombia.
Of course, Chavez doesn’t follow through on these overt threats. He doesn’t have the force multiplier/projection capabilities yet. And he doesn’t have the stomach for a real fight, either. Chavez talks a mean fight, but he’s not a standup slugger. Given the choice, Chavez favors clandestine, indirect, from-behind disruptions. He plots and leads coups like February 1992 and slaughters like April 2002, but is always first to surrender and flee when the going gets a little difficult.
Chavez’s way is on show currently in Peru and Honduras, where the Bolivarian regime has been very active in recent weeks financing street violence against the governments of the two countries.
An interesting aspect of the Chavez regime’s foreign policy in the region is the presence in every Latin American country of groups associated with the Bolivarian Continental Coordinator (CCB) and the Congress of the Bolivarian Peoples (CPB). The CCB and CPB operate with the direct support of Venezuela’s embassies in these countries, often from offices inside the embassies.
The CCB was the conceptual brainchild of long-dead FARC ideologue Jacobo Arenas, and is a FARC initiative.
The CPB is the radical offspring of the Sao Paulo Forum, which was co-created in 1990 by Fidel Castro and Luiz Inacio “Lula” da Silva, then a radical Marxist Brazilian labor activist and today president of Brazil. The Sao Paulo Forum still meets every year, but is a fossil. The real action today is inside the CPB.
The common mandate of the CCB and CPB is to spread the gospel of the Bolivarian revolution, which embraces seeking power democratically or by force if democracy isn’t an option, and having gained power to hold it at any cost while a “revolution” from within uses the institutions of democratic governance to kill democracy.
This is the Chavez model, perfected in Venezuela and now being applied with varying degrees of success in Bolivia, Ecuador and Nicaragua.
The Colombia-US base rights agreement is a positive development. But a critical detail is still lacking in the enhanced US-Colombian strategic partnership: President Barack Obama and the Democrat-controlled Congress have not shown any interest in approving the US-Colombia Trade Promotion Agreement, sometimes called the Colombia Free Trade Agreement or FTA, which was signed on November 22, 2006.
The Chavez and Correa regimes are seeking to punish the Uribe government (and Colombia) by breaking trade relations. In Venezuela’s case, Commerce Minister Eduardo Saman, a real dyed-in-the-wool communist who actually believes the silly destructive nonsense he preaches/practices, has declared that Venezuela will replace everything it imported from Colombia with new suppliers in Argentina, Brazil, Uruguay, etc.
Deals were already signed this week to purchase 10,000 Argentine-made autos instead of importing 10,000 autos from Colombia. President Chavez also announced that Ecopetrol will not participate in developing the Orinoco oil belt, and warned (very mistakenly) that western Venezuela can survive nicely without the 300 million cf/d of Colombian natural gas which is imported from Punta Ballenas via the Antonio Ricaurte gas pipeline. Commerce sources on both sides of the border in San Antonio and Cucuta tell Caracas Gringo trade has dried up completely.
Colombian exporters are hurting, of course, but Venezuelan consumers will hurt much more. The Chavez regime has wrought such ruin on Venezuela’s agriculture sector that most of the fresh food that Venezuelans consume is imported from Colombia. It takes a week to import anything from Colombia, but it takes at least two months to import anything from Argentina, Brazil or Uruguay, and the cost of those imports from afar can be three and four and five times higher than if imported from Colombia. But don’t expect your typical Bolivarian Marxist to understand this.
If the Obama administration is serious about growing the US-Colombia strategic partnership, the US president has to persuade Congress to approve the US-Colombia FTA quickly.
The USTR website says:
“The US-Colombia FTA is a comprehensive free trade agreement. When the Colombia FTA enters into force, Colombia will immediately eliminate most of its tariffs on U.S. exports, with all remaining tariffs phased out over defined time periods. The Colombia FTA also includes important disciplines relating to customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, electronic commerce, intellectual property rights, and labor and environmental protection. U.S. firms will have better access to Colombia’s services sector than other WTO Members have under the General Agreement on Tariff and Trade. All service sectors are covered under the Colombia FTA except where Colombia has made specific exceptions. Colombia’s Congress approved the agreement and a protocol of amendment in 2007. Colombia’s Constitutional Court completed its review in July 2008, and concluded that the Agreement conforms to Colombia’s Constitution. President Obama tasked the Office of the U.S. Trade Representative with seeking a path to address outstanding issues surrounding the Colombia FTA.”
Ideally, the new US-Colombia base rights agreement would be accompanied by swift US congressional approval of the US-Colombia FTA. But that won’t happen. As always, Washington is way behind the curve, always reacting to events instead of anticipating them.
Banco Confederado, Banpro, Bolivar Banco: These three banks form part of the Grupo Bolivar whose majority stakeholder of record is Ricardo Fernandez Barrueco.
Baninvest, Central Banco Universal and Banco Real: The majority owners of record are the banking partnership of Pedro Torres Ciliberto and Arne Chacon Escamilla, the brother of Science and Technology Minister Jesse Chacon Escamilla.
Together, these six banks accounted for 4.48% of the private banking system’s total deposits as of April 2009.
The published financial statements of these six banks are not useful documents for analyzing their operations. However, several conclusions are possible from reviewing five-plus years of financial statements and other open source intelligence (e.g. newspaper reports) about these banks:
These six banks depend on the Chavez government for very substantial portions of their deposits.
They are severely undercapitalized.
All six banks have large sums of their assets – substantially more than their total equity in most cases – in “structured notes.”
Structured notes are to Bolivarian bankers what mortgage derivatives were to Wall Street – essentially suspect, possibly worthless, and perhaps illicit.
The majority owners of record of these six banks are Ricardo Fernandez Barrueco, Pedro Torres Ciliberto and Arne Chacon Escamilla. But Sudeban sources claim they are, in truth, intermediaries (testaferros) for other secret shareholders who happen to be the real controlling owners of these banks.
One of these alleged secret shareholders is Public Works and Housing Minister Diosdado Cabello. Another is said to be former Vice President/Defense Minister & Foreign Minister Jose Vicente Rangel.
Fernandez Barrueco and Torres Ciliberto/Chacon Escamilla position themselves publicly as different financial groups. They seek to project the image of several competing Bolivarian financial groups to distract the attention of potential critics inside and outside the regime.
However, the two financial groups belong to a single financial group whose chairman is the Public Works and Housing Minister.
Fernandez Barrueco and Torres Ciliberto/Chacon Escamilla are currently on a financial acquisitions spree.
In recent weeks, Torres Ciliberto has acquired Banco Real and Helm Bank for $175 million, and Seguros La Previsora for $185 million. He also acquired Mi Banco for a still-undisclosed sum.
Grupo Bolivar just acquired Banco Canarias for an undisclosed sum. The deal reportedly is still pending approval by Sudeban.
However, these two Bolivarian banking groups claim, separately, to have $1 billion apiece on hand to buy more banks, insurance companies and other financial and non-financial companies. That’s $2 billion, combined.
Torres Ciliberto comes from a moneyed family. He inherited wealth, and has expanded that wealth by serving for a very long time as the chief front-man (testaferro) for JVR’s clan.
But Fernandez Barrueco and Arne Chacon went from almost 0 – ZERO – in 1997 and 2002, respectively, to $1.6 billion at end-2005 and $1 billion in 2009, respectively.
In 1997 Fernandez Barrueco owned a parking garage business. But by the end of 2005 he claimed a net worth of over $1.6 billion.
In 2002 Arne Chacon lived in a very humble home in Caracas, but then Torres Ciliberto sold him 49% of Baninvest on credit and Arne’s fortunes soared.
Where did all of this alleged cash – $2 billion – materialize from? Who knows?
A lot of the money appears to be arriving via offshore companies in nearby Curacao, like Fernandez Barrueco’s Galopy Corporation International “patrimonial contributions” to Banco Condeferado – fresh capital which Sudeban for unexplained reasons has declined to approve not once, not twice, but several times.
Why? Again, who knows?
State banking regulator Sudeban isn’t giving any explanations.
But Sudeban certainly is not paying much attention to the origins of all this money being spent to buy banks and insurance companies, either.
Article 19 of the “Ley General de Bancos y Otras Instituciones Financieras” (Banking Law) published in Gaceta Oficial Extraordinaria No. 5,892 on Thursday, 31 July 2008 says:
“The request for acquisition must be accompanied by the documents determined by the Superintendency of Banks and Other Financial Institutions. Also, the (buyers of banks and other financial entities) must present to the superintendency…all of the information which (the superintendency) considers necessary to determine the suitability and solvency of the persons entering into the financial activity, the origin of the resources, and the changes in business plans, if that is the case.”
In plain words, Sudeban legally is obligated to investigate the personal and business backgrounds of all individuals seeking to buy a bank or any financial firm including insurers and brokerages.
Sudeban also is obligated to confirm that the funds used to buy banks and other financial entities are legitimate, meaning clean, honestly acquired capital.
But this isn’t happening. Sudeban is laying low.