Archive for October 2009
The National Assembly tossed a desperately needed life raft to the floundering financial fortunes of corrupt Bolivarian “bankers” like Ricardo Fernandez Barrueco, Arne Chacon Escamilla, and Pedro Torres Ciliberto, among others.
The assembly also guaranteed the rising fortunes of favored financial “intermediaries” like Baldo Sanso, the brother-in-law of Energy Minister and Pdvsa President Rafael Ramirez.
And, of course, the Assembly also bailed out every Fourth Republic “banquero” who joined arms with the regime over the past decade, like the Gils and Salvatierras, among others.
The still unsigned reform of the Central Bank Law approved unconstitutionally in recent days erased the legal prohibitions which ensured the Central Bank’s autonomy and independence, which comes as no surprise.
The regime has worked tirelessly for years to reduce the Central Bank’s autonomy and independence. The reforms approved by the assembly are, de facto, de coup de grace.
Until about a week ago, the Central Bank was prohibited from financing the government. It could not buy sovereign bonds. It could not accept sovereign or other state-issued bonds as collateral for Central Bank loans to financial institutions.
All those vitally needed prohibitions meant to guarantee the Central Bank’s autonomy and independence from any political or government interference were erased.
As a result, broken banks like Banpro, Bolivar Banco, Banco Confederado and Banco Canarias – all owned by Fernandez Barrueco – now have the opportunity to transfer their losses to the Central Bank by trading in sovereign and Pdvsa bonds.
Just in time, since the four banks reportedly are in the process of being merged into a single financial group.
And so can every other busted bank in the country. Which banks are we talking about?
All of them are listed on the document Pdvsa issued identifying the commercial banks, investment banks and other financial entities approved by Pdvsa to buy the Pdvsa 2014, 2015 and 2016 combo bonds – over $3.2 billion worth – this week.
There may be some good financial entities on that list, but in the main…. readers will sense the drift.
“A Black Swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The success of Google was a black swan; so was 9/11.”
The Black Swan – The Impact of the Highly Improbable – By Nassim Nicholas Taleb, Dean’s Professor in the Sciences of Uncertainty, University of Massachussetts at Amherst.
At 1:20 a.m. on 17 August 2009, a fire broke out at the Bratsk hydropower plant/dam complex (officially named “50 years of Great October”), which is located at the second level of the Angara River hydroelectric power plants cascade in the east-central Russian province of Irkutsk Oblast.
The Bratsk hydropower plant immediately shut down, and other power generation plants in the Russian power grid were ordered to increase their power generation, including the Sayano-Shushenskaya hydropower plant in southern Siberia several hundred kilometers away from Bratsk.
On 17 August 2009, the Sayano-Shushenskaya hydropower plant was the largest in Russia and the sixth-largest in the world.
However, at approximately 8:13 a.m. that morning, turbine unit No. 2 at the Sayano-Shushenskaya hydropower plant, one of 10 Russian-made 640 MW turbines weighing almost 2,000 tons each, was blown loose from its seating and flew in pieces over 40 meters into the air.
The control rooms and turbine hall flooded immediately. But two other turbine generating units continued to run under water for over a minute, causing massive short circuits and explosions which left the hydropower plant without power, increasing the scale of the catastrophe and killing 76 workers inside the control rooms and turbine hall.
The surging water and electrical explosions caused massive structural damage that will take at least four years to repair at a cost of billions of dollars.
An investigation headed by Rostekhnadzor director Nikolai Kutin concluded that turbine unit No.2 was overstressed and structurally damaged as a result of years of poor maintenance and technical deficiencies.
How does this relate to Venezuela? Why should a catastrophic failure at a Russian hydropower plant in Siberia matter to Venezuelans concerned about the fate of their nation?
It matters because officials at the Guri hydropower plant/dam operated by Corpoelec subsidiary Edelca report that turbine unit No.2 – which is currently shut down for maintenance – vibrates abnormally when in operation.
The Edelca officials also report that the concrete spillway that funnels water into turbine unit No. 2 has suffered structural damage (“perforations”) about 93 meters above the turbine unit, which make it increasingly difficult to control the volume/flow of water running through the power generation turbine.
However, turbine unit No.2 is only one of seven turbine units currently out of service at Guri, which has 20 turbine units with a combined power generation capacity of 10,000 MW. The other turbine units offline at present include Nos. 5, 6, 8, 10, 12 and 16.
Regional newspaper Correo del Caroni reports that turbine unit No.8 is almost ready to be restarted.
But Edelca officials at Guri complain that Corpoelec’s insistence that the repairs be accelerated is creating a dangerously unsafe situation in the turbine hall.
One attempt to restart turbine unit No. 8 earlier in October had to be suspended when the turbine’s rotation speed red-lined.
Turbine unit No. 16 has unspecified operational/technical problems which Edelca officials decline to disclose, even off the record. But a union official at Guri tells Caracas Gringo that turbine unit No. 16 is also, like turbine unit No. 2, a prime candidate for a catastrophic failure.
The other inoperative turbine units – Nos. 5, 6, 10 and 12 – are in the process of being maintained/repaired and soon will be restarted, according to Edelca and Corpoelec managers.
But union officials at Guri warn that these inoperative units also have unspecified problems which technicians are having problems repairing.
Complicating matters further, an explosion and fire on 20 October 2009 at Planta Centro, the thermal power generation plant with a capacity of 2,000 MW near Puerto Cabello, completely destroyed one of the plant’s five 400 MW generation units.
Cadafe officials who manage Planta Centro confirm that three other Planta centro power generation units with a combined capacity of 1,200 MW are unsalvageable. One of these units – No. 5 – is being cannibalized for parts and components in a desperate attempt to restart the other units.
And the only power generation unit still operating at Planta Centro is incapable of generating even 130 MW, which means it is operating about 70% under its rated generation capacity
Investigators with the Interior and Justice Ministry’s political police (Disip) have been sent to Planta Centro to determine if saboteurs caused the explosion and fire. But Cadafe managers and union leaders at Planta Centro say the explosion/fire last week was the result of 10 years of almost zero maintenance.
Venezuela has an installed power generation capacity of 23,000 MW, according to Corpoelec and the Energy Ministry. About 71% of this power generation capacity is hydro, and the rest is thermal (fuel oil mainly, and decreasingly gas).
But Venezuela’s current real operational power generation capacity is between 16,000 MW and 17,000 MW.
The three hydropower generation plants/dams on the Lower Caroni River – Guri, Caruachi and Macagua – currently generate 71% of the country’s power, or roughly 11,000 MW of the 16,000 MW to 17,000 MW of effective operational generation capacity nationally.
Overall, about 7,000 MW of power generation capacity is inoperative, of which about 2,100 MW is hydropower generation capacity and the rest is thermal power generation capacity.
Corpoelec officials confirm that at least 57% of the country’s installed power generation capacity is currently inoperative.
Will there be a catastrophic failure at Guri? Impossible to answer, but we certainly hope not.
If Guri were to suffer a catastrophic failure in its turbine hall, Venezuela would be hurled literally back into the dark ages – perhaps for several years.
Power outages would not be the current average of 6-12 hours per day everywhere in Venezuela except Caracas. Instead, if Guri fails power outages would be national in scale, including Caracas, and easily could last days or even weeks.
Pdvsa’s crude production, refining and export operations would be affected. It’s conceivable that most of the country’s oil production would be shut down, depriving Venezuela of the foreign exchange earnings without which the Chavez regime, and the country, cannot survive.
The petrochemicals sector likely would be forced to shut down, and so would the basic steel/aluminum industries located in Ciudad Guayana. Gasoline shortages would surge nationally because Pdvsa’s refinery operations would decline and service stations would have no power to operate their pumps.
Private manufacturers also would be forced to shut down, and most commercial activities would be sharply reduced.
Agricultural production probably would collapse too.
The financial sector would come to a standstill. ATM’s would not work, and banks would be unable to process any transactions electronically, including credit card and debit card operations, and the “conformacion” of checks.
Ports, airports, and urban transportation would be forced to significantly scale back operations or even shut down. Imagine the vehicle congestion in Caracas and other cities if traffic lights stop working. Imagine the congestion in Caracas if the Metro has to suspend operations.
The “barrios” where up to 80% of the country’s inhabitants live would be hellishly, lethally darker at night. Imagine how violent crime could explode completely out of control.
As economic activity collapses, unemployment would climb into the clouds, shortages of food, gasoline and everything else would quickly escalate, possibly pushing inflation into very high double or even triple digits.
Higher unemployment, more violent crime, hunger, popular rage would escalate.
And, perhaps sooner than President Chavez and his criminal associates suspect, millions of poor Venezuelans might start eyeing light posts as a convenient place to hang chavistas upside down – like the Italian communist partisans who executed fascist leader Benito Mussolini on 28 April 1945 in the small village of Giulino de Mezzegra, and then hung his corpse upside down at an Esso (Exxon’s ancestor) service station.
President Hugo Chavez declared in Cochabamba on 17 October that Repsol YPF’s huge gas find in the Gulf of Venezuela’s Cardon IV Block – between 8 trillion and 10 trillion cubic feet – soon will “illuminate all of Venezuela.”
But Repsol’s CEO Antonio Brufau says it will take at least five years to develop the offshore gas field commercially.
The Bolivarian regime won’t illuminate anything with Cardon IV’s gas sooner than the start of 2015.
Meanwhile, dozens of power outages are reported daily in Venezuela. These outages generally last between two hours to six hours per day, on average, everywhere in Venezuela except Caracas.
Caracas has been spared for two reasons: election politics** and the fact that for over a century, La Electricidad de Caracas was a private power utility with excellent managers/workers and very well-maintained generation and transmission assets.
Venezuela’s power crisis – daily consumption is, on average, 1.5 GW higher than real operational generation capacity – is entirely a creation of the Chavez regime.
It is a crisis which cannot be “fixed” quickly. The Chavez regime can end the crisis within five years if it spends at least $20 billion and actually completes all critically needed generation and transmission projects on schedule – which is something it has been incapable of doing since 1999.
Even worse for Chavez, Venezuela’s power crisis will certainly trigger volatile social and political situations throughout the country over the coming months.
Because of the power crisis, which has been growing worse since 2005, millions of mostly poor Venezuelans have been increasingly enraged with the Chavez regime for almost four years now.
There have been literally thousands of protests in hundreds of communities throughout Venezuela during the past four years.
And there have been many cases where protesters invaded and trashed the local offices of state-owned power utilities, trucks owned by the utilities were burned, streets were blockaded with burning tires and debris, and power company workers have been physically abused, etc.
The daily outages have damaged or destroyed household appliances and other electronic products like computers and TV sets in tens of thousands of homes, according to reports by regional news media in cities like Maracaibo, Valencia, Maracay, Barcelona-Puerto La Cruz, Ciudad Bolivar and Ciudad Guayana, among others.
Businesses also have suffered huge losses as a result of the losses, including damaged equipment and machinery which in most cases is very costly to repair and requires imported components.
But President Chavez insists it’s not the fault of his Revolution. The ones responsible for the national power crisis are the “wasteful” Venezuelan people. This past weekend Chavez took time out from his busy schedule as self-proclaimed Paladin of the 21st Century socialism in Cochabamba to chastise and scold the Venezuelan people for their wasteful, irresponsible consumption habits.
The Chavez regime can – and does – lie congenitally and systematically about the real situation inside Pdvsa and other state-owned enterprises. It can fudge and falsify data at the National Statistics Institute (ENI). It can spread falsehoods and propaganda about everything in Venezuela.
But the Chavez regime cannot hide national power outages.
So far, there have been seven national outages since President Chavez nationalized the power industry in first quarter 2007. There will be many more national outages over the coming couple of years.
Popular rage certainly will increase nationally.
The problem is simple to explain, but impossible to fix rapidly.
Venezuela’s national power system (SEN) has installed power generation capacity of about 23,000 MW. But the SEN currently is capable of generating only 15,770 MW to 17,337 MW.
At any given moment, between 6,000 MW and 7,000 MW of Venezuela’s installed power generation capacity is offline because generation units at many thermal power plants (Planta Centro, Josefa Camejo, etc.) are shut down.
Many of the new power generation plants commissioned in the past two years by the Chavez regime also are operating at substantially less than their rated generation capacity.
In some cases, it’s because the transmission infrastructure linking the plants to the national grid cannot handle increased power loads coming from the new generation plants. But Fetraelec power union officials tell Caracas Gringo that Corpoelec doesn’t spend on maintenance, even at the new plants.
The Chavez regime has no ready solutions for the power crisis.
Besides scolding the “pueblo” for being “wasteful,” President Chavez has ordered Corpoelec to implement a daily power rationing plan nationally between the hours of 2 p.m. and 8 p.m. – everywhere except Caracas, of course.
Officially, the power rationing program is supposed to last only until first quarter 2010.
In reality, Corpoelec will continue to ration power indefinitely – at least until the Chavez regime makes 100% of the minimal capital expenditures ($20 billion) in new generation and transmission capacity needed urgently by the country.
Also, hopefully, 100% of these projects would be built and commissioned by the start of 2015 if the effort begins no later than 31 December 2009.
Of course, this won’t happen.
Since the start of the Chavez regime in 1999, less than 25% of state-owned power generation and transmission infrastructure projects have been completed and commissioned in any given year.
Venezuela’s power crisis likely will get much worse over the coming 24 months. Theoretically, higher oil prices in 2010 and 2011 should spur more robust GDP growth. But the SEN’s structural incapacity to generate more power could be a strong brake on Venezuela’s economic recovery.
As the lights go out daily across Venezuela, and the duration of the outages lengthens, next year’s scheduled National Assembly elections could become a competitive event.
Some in the political opposition certainly hope the power crisis can be leveraged into a winning issue, more so even than the security issue. After all, violent crime will spiral out of control quickly if the lights go out in the “barrios.”
But Chavez has a history of winning when all indicators showed him losing, and the political opposition has a history of shooting itself in the foot time and again.
Meanwhile, small portable generators for individual family use could be a sensible investment – but just in case diesel supplies fail because the refineries shut down due to the power outages, it might be a good idea also to stock up heavily on candles.
Or better yet, download and print instructions on how to make candles.
** Venezuela is scheduled to hold National Assembly elections in November 2010. Every opinion poll shows that if elections were held today, the Chavez regime likely would lose dozens of seats. But this assumes the political opposition parties get their acts together, which they have never been able to achieve consistently over almost 11 years of Chavez rule.
President Hugo Chavez said at the recent ALBA summit in Cochabamba, Bolivia that Bolivarian Venezuela “never will make an atomic bomb.” (The exact words in Spanish were “Venezuela jamás hará una bomba atomica.”)
Chavez is mind-numbingly bombastic and verbose. But he is also very precise. Chavez said Venezuela will “never make” – i.e. build – a nuclear weapon.
Of course, Chavez would never admit his ambition to possess nuclear weapons. That would be supremely stupid, which Chavez is not.
But Cuban leader Fidel Castro has been mentoring Chavez since the two first met in person at Jose Marti International Airport in Havana on 13 December 1994. And Fidel has always hankered to own nuclear weapons.
Chavez also has a very close strategic and personal alliance with Iran’s President Mahmoud Ahmadinejad, who aggressively denies that Iran is developing nuclear weapons capabilities, insists that Iran’s nuclear program is only for peaceful purposes, and menacingly defends Iran’s “rights” to develop a native nuclear industry.
Chavez understands completely that the first rule of any despot or rogue state seeking to acquire nuclear weapons capability is “deny, deny, deny…”
But close Chavez ally Iran is almost at the point where it will have everything required to build nuclear weapons.
Iran also has impressive ballistic missile capabilities, thanks to other peace-loving states (and friends of Chavez) like China, Russia and North Korea.
And Chavez has several bilateral defense and security agreements in place with Tehran.
Israel’s Foreign Ministry charged in May 2009 that Venezuela and Bolivia are “selling” uranium to Iran.
Just a few weeks ago, Basic Industries and Mines Minister Rodolfo Sanz unwisely admitted that Iran is “helping” Venezuela prospect for uranium deposits in Bolivar state.
This Bolivarian/Iranian uranium program was vox populi in Venezuela for years before Sanz admitted the obvious.
Chavez went ballistic, and then Science and Technology Minister Jesse Chacon made things worse by clarifying that it was the Russians, not the Iranians, who were helping the Bolivarian regime look for uranium.
The Medvedev/Putin and Chavez regimes have an explicit nuclear cooperation agreement. France also reportedly wants to support the Chavez regime’s peaceful nuclear development program. Anything for a profit, Monsieur.
Chavez says that Venezuela has a right to its own nuclear power industry because the country’s crude oil and gas reserves won’t last forever. But Chavez also says Venezuela has over 315 bn bls of certified crude oil reserves and will soon be recognized as the world’s fourth largest gas power. Typical Bolivarian double-speak.
Caracas Gringo’s friend, the brilliant and sorely missed Dr. Constantine Menges, predicted almost seven years ago, in 2002, that as Chavez consolidated/expanded his power he would seek to acquire nuclear weapons capability as a deterrent against the United States and to menace neighbors like Colombia, Trinidad & Tobago – and, of course, Brazil.
The closer Iran comes to building nuclear weapons, the closer Chavez gets to clandestinely acquiring a nuclear device or two.
A Venezuelan-based nuclear deterrent in Bolivarian hands would fundamentally alter the landscape on which states like Iran, Russia, China and others are challenging the US globally.
President Hugo Chavez is spreading the Bolivarian revolution regionally by diplomatic pouch.
For years, the Chavez regime has distributed huge sums of hard currency and other logistics support materials used by extremist groups to corrupt and destabilize democratically elected governments which are not aligned with the Caracas/Havana axis.
Chavez routinely violates Article 27 of the 1961 Vienna Convention on Diplomatic Relations by using the diplomatic immunity rights accorded to diplomatic pouches to corrupt government officials, finance extreme leftist parties and militant groups, and fund social and political instability in Panama, Guyana, Suriname, Trinidad, Bolivia, Ecuador, Peru, Colombia, Paraguay, Uruguay, El Salvador, Nicaragua, Mexico and Honduras, among others.
The Kirchners of Argentina have become multi-millionaires thanks to their alliance with Chavez, who financed President Cristina Fernandez de Kirchner’s presidential election campaign in 2007.
Bolivian President Morales still dresses down, but the financial patronage of Chavez has made Morales a very wealthy man. Ecuador’s President Rafael Correa also has become visibly more prosperous since he climbed aboard the Chavez-funded Bolivarian Alternative of the Americas (ALBA).
Former President of Honduras Manuel Zelaya is also an example of the corrupting power of the Chavez regime. Officials of the interim government that replaced him last June claim to have evidence that Zelaya pocketed millions of dollars in official Bolivarian aid from caracas.
Another good example is Zelaya’s Foreign Minister, Patricia Rodas, who reportedly has purchased over $40 million of real estate in Honduras since Zelaya sold his soul, and his country’s democracy, to Chavez.
Indigenous violence in Bolivia, Ecuador and Peru over the past eight years was funded via Bolivarian diplomatic pouches dispatched from the Casa Amarilla in Caracas to Venezuelan diplomatic missions in other Latin American countries.
Military/civilian intelligence sources in Quito, Lima, La Paz and Tegucigalpa tell Caracas Gringo that violent indigenous and leftist militant groups in their respective countries are funded by the Chavez regime via Venezuela’s diplomatic missions.
Besides cash, these extremist groups have received telecommunications and radio equipment shipped via diplomatic pouches from Venezuela, according to these sources.
Bolivarian intelligence officers embedded as commercial and political attaches in Venezuelan diplomatic missions also provide direct strategic, political and tactical support to extremist militant groups in countries not aligned with ALBA.
The regional destabilization/subversion program which is being run clandestinely through the Chavez regime’s Foreign Ministry is supported actively by political/strategic/tactical advisers Cuban advisers in Caracas where the Castro regime’s intelligence service (DGI) has a major presence.
It is also supported by Cuban DGI officers who are embedded in Cuban and Venezuelan diplomatic missions in the region.
Ramon Rodriguez Chacin reportedly is a multi-millionaire potentate in Bolivia’s bingo gaming industry thanks to his business partnership with Luis Nolberto Clavijo Castro.
Luis Nolberto Clavijo Castro is an alleged Bolivian government intelligence official who played a still-unclear role in the 16 April 2009 slaying of three alleged foreign terrorists at the Las Americas Hotel in Santa Cruz, Bolivia.
Romanian citizen Magyarosi Árpád, Irish citizen Dwyer Michael Martin and Bolivian-Croatian citizen Eduardo Rózsa were literally massacred in their room by an elite SWAT unit of the Bolivian national police. Two other alleged terrorists survived the police assault.
Bolivia’s Interior Ministry said the dead trio were members of a group of “international terrorists” on a mission to assassinate President Evo Morales.
The official version obviously is a total fabrication.
But the Morales government has invoked “national security” to justify its refusal to answer legitimate inquiries about a violent incident which could have been a political fabrication by Morales regime insiders to make it appear that the president was the target of hired assassins. The fact that it happened in Santa Cruz hints at a scheme to entrap radical separatists in the country’s richest province.
The direct participation of Clavijo Castro, whose involvement in murky political violence and quasi-criminal enterprises like the bingo gaming sector are notorious within Bolivia’s intelligence community, also hints at a “negocio” that soured. Perhaps some arms smuggling or drug trafficking?
But relatives and friends of the slain trio insist they were good and honest men. Absent any credible evidence to the contrary (which the Morales regime fiercely refuses to provide), it appears that Clavijo Castro is directly implicated in homicide-by-cop.
Of course, homicide would not be off the beaten path for business associates of Rodriguez Chacin.
Clavijo Castro registered at the hotel on 15 April, the day before the police killed the three civilians. He was lodged in Room No. 453, next to one of the two alleged terrorists who survived, and one floor directly beneath the room in which the three civilians were killed.
Bolivian news reports initially identified Clavijo Castro as an official of the Morales government’s intelligence services.
But it quickly emerged that Clavijo Castro has no official role whatsoever with any Bolivian government intelligence, military or police entity.
But he was the “intelligence agent” who monitored the alleged terrorists, notified the National Police precisely where the alleged terrorists were located and what their alleged plans were, and then disappeared shortly before the police stormed the room in which the three civilians were killed.
Clavijo Castro didn’t reappear publicly for 23 days, and only surfaced after the hotel’s manager publicly questioned why police weren’t looking for the guest who had disappeared mysteriously on 16 April.
Caracas Gringo is told that Clavijo Castro is the longtime intelligence director for Bolivia’s ruling MAS party, and also that his relations with President Morales are similar to the relationship between Rodriguez Chacin and President Hugo Chavez.
Rodriguez Chacin is Chavez’s longtime personal liaison with the Revolutionary Armed Forces of Colombia (FARC), and is also believed to be a senior figure in the clandestine national command structure of the Bolivarian Liberation Front (FBL).
In September 2008 the US Treasury Department also designated Rodriguez Chacin and two others (DGIM chief General Hugo Carvajal and former Disip chief Henry Rangel Silva) as kingpins for cooperating actively with the FARC.
Given their similar roles in the Chavez and Morales regimes, it follows logically that Rodriguez Chacin and Clavijo Castro would partner in for-personal-profit ventures like controlling the Bolivian bingo gaming industry.
And it isn’t smart to run afoul of this Bolivarian bingo duo. Ask Julio Montes, Venezuela’s former Ambassador to Bolivia from the start of the Morales presidency in 2006 until he was sacked in July 2009.
Montes got the boot because he foolishly ran afoul of Rodriguez Chacin by attempting to start up his own bingo gaming enterprise in Bolivia. Say it ain’t so, Julio!
The clandestine flights originate from an area of eastern Venezuela which lies to the east of Maturin and Tucupita, near the Orinoco River Delta.
The small aircraft fly towards the Atlantic Ocean, with Trinidad & Tobago on the port side of the outbound flights, sometimes flying 150-200 miles out to sea before returning to Venezuela.
Somewhere on the outbound or return trip, the aircraft dump bales of cocaine into the ocean where they are retrieved by small boats or persons piloting jet skis.
The cocaine is then loaded aboard mother ships en route to southern European ports or, increasingly, ports in West Africa.
Caribbean counter-drug authorities have tracked dozens of these flights over the past 12-24 months. Their frequency is growing, officials tell Caracas Gringo.
FARC militants based in Venezuela are believed to be heavily involved in these clandestine drug flights.
“We have confirmed the FARC has a permanent operational presence in Guyana and all the way out the Caribbean to St. Lucie,” a Lt. Commander with a Caribbean state navy says.
But clandestine flights are only part of a larger tactical problem facing Caribbean counter-drug forces.
Eastern Venezuela is also the point of departure for hundreds of “pirogues” – the small fiberglass fishing boats equipped with between two and four outboard motors.
These pirogues transport cocaine out to sea where the drugs are offloaded to other pirogues, or to larger boats that carry the drugs further out to sea where mother ships wait.
The drug pirogues sailing out of eastern Venezuela’s delta region are very fast and very difficult to detect by radar.
Increasingly, Caribbean counterdrug patrol boats intercepting pirogues over the past year have reported coming under semi-automatic and automatic weapons fire.
Caribbean naval intelligence sources operating from islands like Barbados and Trinidad were alarmed when Colombia’s government reported in August the capture of several Venezuelan-owned AT-4 rockets in FARC camps.
Caribbean naval strategists and tactical operations experts are war gaming scenarios in which counter-drug forces could be attacked by swarms of pirogues armed with RPG’s, AT-4’s or perhaps newer Russian-made Strela or Igla manpads.
Strela and Igla manpad SAMs are designed for anti-aircraft defense. But Caribbean naval sources say that in trained hands a Strela or Igla manpad could be a terribly effective weapon against a patrol boat.
Caribbean naval intelligence sources also say that the government of Trinidad & Tobago is increasingly concerned about systematic, ongoing efforts by agents of President Hugo Chavez to corrupt key officials and institutions of the island’s government and business groups.
“We know Chavez has his eye on Trinidad’s LNG and petrochemical infrastructure,” an official says. “But the question is whether Chavez ever would attempt to take control by force of Trinidad’s energy industry? Or, alternatively, would he facilitate terrorist strikes launched from Venezuelan territory against Trinidad’s energy infrastructure?”
President Hugo Chavez continues to consolidate his control. The National Assembly has approved a new armed forces law that merges the civilian militia into the regular armed forces, and also allows foreign nationals to serve in the Venezuelan military.
Separately, the PSUV claims it has organized over 100,000 “combatant” patrols crewed by the party’s younger members.
Also, Chavez has now raised Venezuela’s total arms expenditures since 2005, including Russian weapons bought and delivered and orders placed recently on $2.2 billion of credit extended by Russia, to over $7 billion.
Chavez has been pushing for years to create a Latin american equivalent of NATO, but never got anywhere. Now he is taking a different direction, reforming Venezuela’s military legislation to incorporate foreign nationals into the armed forces as troops and officers.
Chavez apparently is determined to create a multinational armed force under his direct command. Perhaps he is trying to resuscitate a 21st Century Bolivarian version of the army led by the Liberator Simon Bolivar
But important elements are still lacking. For example, Chavez still lacks the heavy transport capability to project force anywhere in the region. But the Russians likely will help him solve that problem.
Chavez also has an unresolved credibility issue. Chavez wants, indeed he desperately needs, to be taken seriously by the big dogs. His strategic alliances with Iran, Russia, China, Belarus, Cuba are aimed at leveraging himself from third-rate banana despot to the status of serious contender in geopolitical confrontations with the US.
What does Chavez need to be taken seriously? A nuclear weapon or two would do nicely. Who might give Chavez a couple of nuclear weapons? Perhaps Iran, together with some baliistic missile capability with sufficient range to constitute a credible deterrent.
US officialdom thinks the odds of this scenario happening are very slight. Perhaps so.
But would it serve the interests of Iran, and possibly other roguish powers, to foster perceptions that Bolivarian Venezuela could acquire nuclear weapons soon after Iran builds its first nukes?
Chavez’s principal mentor, Fidel Castro, has sought unsuccessfully to acquire nuclear weapons capability for almost 50 years. Chavez has the oil resources to buy weapons if any ever become available to him.
Skyping with a friend, who says: “There’s a group of brujos/psychics and seers who claim that fatman’s days as big boss are over by the end of this year.”
There’s never any shortage of scenarios on how and when the reign of President Hugo Chavez will end.
But we agree with forecasts like the one Moises Naim made recently: Chavez has the resources to remain in power for a long time.
It doesn’t matter if presidential elections are held at the end of 2012 or tomorrow. Even if Chavez loses, the final results will declare him the winner – because he controls the National Electoral Council.
Chavez already has said the PSUV – his party – must win 75% of the National Assembly seats in the 2010 legislative elections. The CNE already knows what the outcome will be.
The “opposition” may be allowed to gain a small foothold in the assembly, but not enough to affect the pace and direction of the revolution.
The political opposition’s chronic systemic disarray, disorganization and perpetual infighting and backbiting also is a big plus for Chavez.
Chavez has been proclaiming for years that he will continue to rule Venezuela until at least 2021.
Since losing the Constitutional reform referendum in 2007, Chavez has worked incessantly by presidential decree and assembly line legislation to create the new Socialist state which voters rejected.
Right now the Chavez regime appears weakened – oil prices are down and so are the regime’s political fortunes.
But it’s clear that the Chavez regime is biding its time and waiting for oil prices to soar into triple digits again.
The “economic measures” announced by Public Works and Housing Minister Diosdado Cabello, Science and Technology Minister Jesse Chacon, and Planning Minister Jorge Giordani were simply hot air – a typical Bolivarian propaganda ploy.
The goals: contain inflation and spur economic growth. How? More public borrowing and more public spending. The regime will float more bond issues, and will tap the Central Bank for about $15 billion of the country’s foreign Exchange reserves, currently at about $32 billion.
The regime hopes that by first-half 2010 the price of oil will be climbing rapidly again.
We settled down for a little light Sunday reading – the just-published externally audited financial statements which Venezuelan banks are required by law to publish every six months.
The financials are available to the general public at the Asociacion Bancaria de Venezuela website.
But much to our surprise (not!), there aren’t any published financials for Banpro or Bolivar Banco, which are owned by Ricardo Fernandez Barrueco.
Baninvest – owned by Arne Chacon and Pedro Torres Ciliberto – hasn’t published an externally audited financial report since 30 June 2008, and the last one before that was 31 December 2006.
Fernandez Barrueco bought Banpro in 2005 while the son of its controlling shareholder, Jorge Azpurua, was being held in Caracas by kidnappers who are known to have links to current and past senior officials in Disip, CICPC and DGIM.
Bolivar Banco’s owner, Eligio Cedeno, who has been jailed illegally/unconstitutionally at Disip’s Helicoide headquarters for over two years, also was also forced to sell his bank, reportedly at pennies on the dollar, to Fernandez Barrueco.
Why do Bolibourgois bankers like Fernandez Barrueco, Chacon and Torres Ciliberto get special dispensation from Sudeban to ignore the law?
Sudeban officials decline to give any explanations. But Caracas Gringo knows that Sudeban chief Edgar Hernandez Behrens keeps sensitive documents on these Bolibourgeois banks inside a secure safe in his office.
Hernandez Behrens is at Sudeban basically to protect the Bolibourgeois bankers who, in reality, serve as “testaferros” (front-men) or key business associates of Public Works and Housing Minister Diosdado Cabello (Godgiven Hair) and former Vice President/Defense/Foreign Minister Jose Vicente Rangel (aka Grima Wormtongue).
Godgiven is arguably the second most powerful man in Venezuela, after President Chavez. And Grima is the human manifestation of J.R.R. Tolkien’s Balrog – a character who would chill the blood of Machiavelli or the Borgias.
Perhaps that is why these Bolivarian banks are allowed to evade the rules and do whatever they wish.
Sensible “chavista” servants don’t cross their masters.