The Rise of Bolivarian Organized Crime

Corruption has been endemic to Venezuela’s political institutions for decades. However, under President Hugo Chavez, corruption in Venezuela has exploded to new heights never experienced before in the country’s history.

Chavez received a hollowed-out, institutionally weakened state when he assumed the presidency in 1999. But during the almost 11 years that Chavez has been in power, all of Venezuela’s institutions of democratic governance and law have been dismantled systematically.

There is no constitutional separation of powers anymore in Bolivarian Venezuela. Chavez controls the National Assembly, Supreme Court, the Attorney General of the Republic, and the National Electoral Council (CNE).

The destruction of Venezuela’s institutions of governance and the judiciary caused by the Bolivarian revolution has facilitated the emergence of organized crime networks at all levels inside the Chavez government.

In fact, local and international attention with respect to Venezuela has largely overlooked this oil-rich country’s emergence as the regional hub of a rapidly growing global network of interlocking strategic alliances between rogue and undemocratic states, international terrorist organizations, transnational organized crime groups and drug trafficking cartels operating in North America, Europe, Africa and Asia.

Since 2002, particularly, individuals at very high levels in the government of President Hugo Chavez have established organized crime groups which network loosely with each other to advance their common interests.

These interests include:

Building corrupt personal fortunes on a scale never seen before in Venezuela.

Individuals who lived in humble barrio dwellings and held low-paying jobs only 5-8 years ago now have fortunes in the hundreds of millions of dollars. For example, Public Works and Housing Minister Diosdado Cabello’s fortune, held largely through intermediaries, is estimated conservatively at over $2 billion. Arne Chacon Escamillo is another example. He bought 49% of Baninvest in 2004 on credit extended by the seller (Pedro Torres Ciliberto) because, by his own admission, he was broke. Five years later, in June 2009, Arne Chacon says he has $1 billion in cash to buy banks and insurance companies. Ricardo Fernandez Barrueco’s only business in 1997 was a parking garage in Caracas. However, at end-2005 Fernandez Barrueco was certified by KPMG’s Venezuelan affiliate as having a net worth of over $1.6 billion. Currently he claims to have $1 billion in cash to invest in acquiring more financial assets.

The sources of the illicit wealth of these groups are numerous: running up huge cost overruns on government contracts for infrastructure, imports of food and other goods, and other services (health and vehicle insurance for government workers, etc.); kickbacks and bribes; intermediation fees; trading government financial instruments and hard currency; arms smuggling; drug trafficking; extortion; money laundering, and abductions for ransom. This wealth is laundered through cash-intensive businesses like restaurants and nightclubs, property development, travel agencies, import/export firms, casinos, etc.

Seizing operational control of Venezuela’s most important security, intelligence/counter-intelligence and financial/fiscal supervision authorities.

The entities now controlled by persons engaged in criminal enterprises, corruption and espionage of private citizens include the Defense Ministry’s military intelligence division (DGIM), the Interior and Justice Ministry’s political police (DISIP), the office of the banking superintendent (Sudeban), and the national tax authority (Seniat), among others. The individuals now in control of these entities ensure their interests advance at all costs, while the risk of being investigated and exposed is zeroed out. For example, Diosdado Cabello currently is aggressively shutting down dozens of radio stations because President Chavez wants to muzzle press freedom, but doing the president’s bidding also creates opportunities to buy broadcasting assets at fire-sale prices and minimizes the risk that Cabello’s criminal enterprises could be exposed by an independent press.

Fostering permanent instability.

These organized crime groups have a vested interest in an unstable environment. This includes fostering conflict, crime and insecurity, and seemingly ideologically-driven initiatives to silence the press, intimidate political opponents, expropriate private assets, and unsettle the general populace. Organized crime flourishes in unstable environments where the rule of law is ignored by the judiciary, the government is corrupt and regulatory/oversight controls are ineffectual.

The individuals who lead the organized crime groups mentioned here are so powerful that they are known within Venezuela’s national security and intelligence establishment as “the untouchables.”

They have neutralized the Attorney General of the Republic, the entire judiciary including the Supreme Court, and the National Assembly. They control DGIM, DISIP, and the federal investigative police (CICPC). They have significant influence within the Army and National Guard.

If intimidation and bribes fail, they murder. Two victims of the main organized crime group in the Chavez regime, which is headed by Public Works and Housing Minister Diosdado Cabello, include public prosecutor Danilo Anderson (2004) and Pierre Fould Gerges (2008), who was business manager of Reporte, a newspaper which published hundreds of articles about the corrupt and criminal activities of some of these groups.

The nature and breadth of their criminal enterprises, combined with the Chavez government’s systematic embrace of rogue regimes and ideological extremism, has enabled these crime groups to form strategic and commercial alliances with groups like the Revolutionary Armed Forces of Colombia (FARC), National Liberation Army (ELN), the Basque group ETA, the IRA, and with Islamist groups like Hamas and Hezbollah.

The Cabello Group

Currently the most powerful organized crime group operating inside the Chavez government is headed by Public Works and Housing Minister Diosdado Cabello.

The Public Works and Housing portfolio gives Cabello direct control over every public sector infrastructure project in Venezuela. It also gives him direct control over supply sources like the nationalized cement and steel companies.

Cabello also has a presidential mandate to reorganize (i.e. shut down) the country’s remaining independent radio and TV broadcast networks. This positions Cabello not only to shut down broadcast outlets critical of the government, but also creates opportunities for his group to acquire new broadcast assets.

Finally, Cabello in June 2009 was appointed by President Chavez to the newly created post of financial czar responsible for overseeing the reorganization/restructuring of Venezuela’s financial system. With his intermediaries actively shopping for new bank and insurance acquisitions with a reported $2 billion cash kitty, Cabello is very well-positioned to expand his financial holdings over the coming months/years.

Cabello’s group operates out of Caracas and Panama.

Cabello is very careful about always remaining in the background. He works through intermediaries.

His closest strategic adviser is Rafael Sarria. Their longtime friendship dates from when they were children, and both were in the military together. Sarria introduced Cabello to the world of finance. Sarria is described by several sources who know the two men as Cabello’s strategic thinker and planner. But his actual experience as a banker reportedly is limited.

Key intermediaries in Cabello’s financial group include Ricardo Fernandez Barrueco (Banpro Group), Arne Chacon and Pedro Torres Ciliberto (Baninvest Group), and Gonzalo Tirado, who obtained the operating license to open Banco Stanford de Venezuela although he did not comply with Sudeban’s minimum standards.

The news media describes these individuals as leaders of three separate financial groups which have grown quickly in the Bolivarian revolution, but this is inaccurate. While the three “groups” these individuals putatively lead appear to be completely unrelated, they form part of Cabello’s growing financial empire.

Cabello also is associated strategically and politically with the leaders of President Chavez’s black operations and intelligence/counter-intelligence services: former Interior & Justice Minister Ramon Rodriguez Chacin, DGIm director General Hugo Carvajal, and former DISIP director general Henry Rangel Silva, who in August 2009 was moved from DISIP to the presidency of state-owned telecommunications company CANTV after Colombia’s government announced the capture in FARC camps of AT-4 rockets owned by Venezuela’s army.

The Cabello Group’s Origins

Cabello’s relationship with Rodriguez Chacin was consolidated during January-April 2002, while Cabello served as Vice President of Venezuela and Rodriguez Chacin was Interior & Justice Minister.

During this period, Cabello and Rodriguez Chacin actively plotted with President Chavez, then-Defense Minister Jose Vicente Rangel and other senior regime officials to instigate a self-coup against Chavez in order to create an excuse to decree martial law and silence the political opposition permanently.

Cabello and Rodriguez Chacin shared responsibility for training, arming and deploying paramilitary street forces under the guise of Bolivarian Circles.

They also commanded a round-the-clock situation room at the Interior & Justice Ministry which ran simultaneous parallel intelligence/counter-intelligence operations inside the armed forces and inside the civilian political opposition.

On 11 April 2002, Cabello and Rodriguez Chacin commanded via secure cellular and radio networks the groups of armed “chavistas” who opened fire against unarmed protesters in downtown Caracas.

But 11 April 2002 ended bitterly and frighteningly for Cabello, Rodriguez Chacin, Jose Vicente Rangel and other senior “chavistas.” When part of the army revolted against the violence which military leaders clearly perceived as having been caused by the Bolivarian Circles, President Chavez folded immediately, offering to resign before sunset that day provided he was allowed to leave Venezuela safely.

Confronted with Chavez’s cowardice and haste to abandon his closest supporters, Cabello fled into hiding in an apartment in Vargas state owned by his lifelong friend Rafael Sarria. Rodriguez Chacin tried unsuccessfully to hide in his own apartment, where he was captured and beaten by dozens of his furious neighbors. Rangel reportedly took refuge in the embassy of Chile, although some say he hid in the home of his old friend Teodoro Petkoff.

However, when everything appeared to be lost, and Cabello and other senior “chavistas” saw themselves going to prison or into exile, Chavez was saved by the unexpected duplicity of Pedro Carmona, who betrayed the army and political opposition by seeking to impose a rightwing regime associated with the interests of former President Rafael Caldera’s inner circle.

Cabello, Rodriguez Chacin and other members of the crime network described in this intelligence report, like Jose Vicente Rangel, resolved after 11 April 2002 to never again be caught by surprise. They understood that President Chavez was, at heart, a coward who would turn on them at the slightest twinge of fear for his life. However, this did not diminish Chavez’s strategic value to their interests, because they understood that only Chavez had the charisma and popularity to keep them afloat as long as he survived in power. After 11-14 April 2002, Cabello, Rodriguez Chacin, Rangel and others mentioned in this report would be the most loyal of Chavez’s followers outwardly. But self-interest would forever remain their top priority.

Ramon Rodriguez Chacin

Rodriguez Chacin has been Chavez’s personal liaison to the senior FARC leadership since 1994, when Chavez and Rodriguez Chacin met in Colombia with several members of the FARC’s directorate to forge a political alliance.

Rodriguez Chacin served as Interior & Justice Minister briefly in 2002. He was one of the chief architects of “Operation Knockout,” a plan designed by President Chavez to instigate a coup attempt against his government in order to justify declaring martial law and crushing his political opponents.

From approximately mid-2002 until 20075, Rodriguez Chacin continued to operate outside the Chavez regime as the Bolivarian president’s personal link to the FARC. During these years, Rodriguez Chacin traveled frequently under at least four false identities (but with legal Venezuelan passports and identity documents) to countries like Colombia, Ecuador, Panama, Peru, Paraguay, Bolivia, Brazil, Nicaragua, El Salvador and Mexico.

Rodriguez Chacin returned as Interior & Justice Minister for less than a year in 2007-2008, but he resigned on 8 September 2008 almost at the same time that the US Treasury Department designated him a second tier kingpin for materially aiding the FARC and known Colombian drug traffickers. The evidence for these charges came from the captured laptops of dead FARC No. 2 leader Rafael Reyes.

Rodriguez Chacin says his only interest nowadays is farming and cattle ranching on his “hato” in Barinas. He also is a senior official of Chavez’s PSUV party. However, Rodriguez Chacin continues to serve as President Chavez’s personal liaison to the FARC’s top leaders. He is also in permanent contact with the ELN leadership. Further, he is believed to be the military commander of the Bolivarian Liberation Front (FBL), a nominally all-Venezuelan Marxist guerrilla (militant) group which operates in Border States like Apure, Barinas and the Andes region.

Rodriguez Chacin’s relations with the FARC also coincide geographically in countries where the FARC is active, including Ecuador, Peru, Bolivia and Paraguay in South America; and Panama, Nicaragua, El Salvador, Honduras and Mexico in Central/North America. Rodriguez Chacin has been spotted repeatedly visiting these countries since 2002 under his own name, and also under at least four known false identities. He was spotted in northern Ecuador by that country’s military intelligence services several times during 2005, when the family of kidnap victim Jorge Azpurua (see annex to this report) was negotiating his release with the FARC in Ecuador’s Sucumbios province.

It is not in the mandate of this investigation to analyze Rodriguez Chacin’s activities with the FARC and with radical leftist groups in these countries. But there is a clear pattern of direct cooperation between the highest levels of the Chavez government with the FARC, and regionally with dozens of radical groups dedicated to provoking social and political instability.

Gangsters at DGIM and DISIP

Diosdado Cabello also has good political and business ties with DGIM director Carvajal and former DISIP director Rangel Silva, the country’s top intelligence/counter-intelligence officials.

Carvajal and Rangel Silva have been running their own autonomous and independent criminal enterprises at DGIM and DISIP since 2004 and mid-2005, respectively. Each has his own organized crime gang at DGIM and DISIP, numbering about 12-20 “made” members who also work as officials of these intelligence/counter-intelligence entities.

Carvajal and Rangel Silva are not direct members of Cabello’s crime group. However, they frequently do contract work with (or for) Cabello and others in the organized crime network analyzed in this report, including Rodriguez Chacin, Jose Vicente Rangel, Fernandez Barrueco, Pedro Luis Martin, Pedro Torres Ciliberto, etc.

But Carvajal and Rangel Silva also independently provide a wide range of criminal services to FARC and ELN militants, civilian drug traffickers and other professional criminals.

These services include protecting drug trans-shipments through Venezuelan territory, providing weapons and legal citizenship and residency documents to narco-terrorists and professional criminals, drug trafficking, extortion, abductions and contract killings.

Carvajal and Rangel Silva are always ready to engage in any criminal enterprise which guarantees them a large profit.

Specific examples of major crimes in which Carvajal and Rangel Silva are believed to be directly implicated include:

*The car bomb assassination of Danilo Anderson in November 2004. Jose Vicente Rangel was one of the intellectual authors of this contract killing, which was set up and executed by Rangel Silva’s gang at DISIP and pinned on the Guevara brothers.

*The abduction of Jorge Azpurua in April 2005. This abduction was contracted by Cabello intermediary Fernandez Barrueco with the aim of forcing Banpro’s sale to his group.

*The assassination of Reporte Diario de la Economia’s business manager, Pierre Fould Gerges, in June 2008. The intended target was Reporte’s publisher Tannous “Tony” Gerges, but the shooters killed Pierre Gerges in a fatal case of mistaken identity. However, Pierre’s assassination effectively silenced Reporte and destroyed Tony Gerges, who low lives permanently in hiding and fearful that he will be assassinate at any moment. The attorney general’s office has confirmed beyond any reasonable doubt that the shooters were (and remain) active members of the DISIP. But no criminal prosecutions have been initiated.

*The abduction of banker German Garcia Velutini in February 2009.

Carvajal and Rangel Silva report directly to President Chavez, who holds both men in high regard. Chavez reportedly trusts them greatly because they always carry out his orders without question or delay.

Carvajal conducts permanent witch hunts looking for conspiracies inside the armed forces, and Rangel Silva runs intelligence and surveillance operations against the president’s top civilian supporters and enemies.

Carvajal and Rangel Silva also are good friends, though they graduated in different promotions of the Military Academy.

Carvajal and Rangel Silva also cooperate frequently with Rodriguez Chacin on political and material issues relating to President Chavez’s strategic alliances with the FARC and ELN. But the three men are not close partners in crime.

Rodriguez Chacin is primarily a geopolitical operator whose chief interest appears to be working with the FARC to build regional networks of new armed guerrilla groups modeled on the FARC. These activities extend from Mexico to Argentina/Chile.

However, the cooperation which Carvajal and Rangel Silva give Rodriguez Chacin, with respect to the FARC and ELN, is local, such as providing documents, security details, etc.

Bolivarian Intelligence Services and the FARC/ELN

The drugs/weapons smuggling, extortion and kidnapping enterprises which Carvajal and Rangel Silva are running out of DGIM and DISIP were developed with the FARC and ELN independently of the political cooperation they provide to Rodriguez Chacin, Cabello and others in need of their black services.

Carvajal and Rangel Silva are known to be working directly with elements of the FARC’s 10th, 16th and 45th Fronts, which together have about 600 fighters deployed in Venezuela, mainly in Apure, Barinas, Tachira and Trujillo.

The 10th Front is responsible for managing the FARC’s money laundering operations in Venezuelan state-owned and private financial institutions. It also ships large volumes of cocaine through Venezuela. The 16th Front handles arms smuggling relations with the groups led by Carvajal and Rangel Silva. And the 45th Front ships tons of cocaine through Venezuela under the official protection of Carvajal and Rangel Silva at the DGIM and DISIP, respectively.

Protecting drug trans-shipments is one of the most lucrative criminal enterprises in which Carvajal and Rangel Silva are involved. About 270 metric tons of cocaine was smuggled through Venezuela in 2007, mostly to Europe. The volume dropped in 2008 to about 180 metric tons after FARC chieftain Raul Reyes and several other senior FARC leaders were killed during the first half of 2008. The FARC’s losses disrupted drug shipments last year, but they’re recovering quickly so far in 2009.

Carvajal and Rangel Silva reportedly charge the FARC and other Colombian drug traffickers about $1,500 per kilo to protect drug shipments transiting through Venezuelan territory by land, air or water. The FARC reportedly is responsible for about 70% of the cocaine moving through Venezuela at any time. Based on these numbers, it can be implied that in 2007 the roughly 189 metric tons of FARC-owned cocaine which transited through Venezuela represented potential profits of up to $283.5 million for the organized crime gangs run by Carvajal at DGIM and Rangel Silva at DISIP – assuming all of this cocaine received official protection, which is not necessarily the case.

And while 2008 was a “bad” year for the FARC’s cocaine trade through Venezuela, the potential maximum profits of the protection services provided by Rangel and Rangel Silva were about $189 million.

Based on intelligence extracted from the laptops of killed FARC leader Raul Reyes, the US Treasury Department on 8 September 2008 designated Carvajal and Rangel Silva as second tier kingpins for cooperating with the FARC materially. Information from Reyes’ laptops also was used to substantiate Rodriguez Chacin’s designation as a FARC collaborator.

Kidnapping is another lucrative sideline which Carvajal and Rangel Silva provide through their respective crime groups in DGIM and DISIP. The Chavez government is officially indifferent to abductions of hundreds of Venezuelans by FARC and ELN kidnap specialists, but FARC and ELN work with Carvajal and Rangel Silva in several ways.

For example, FARC and ELN gangs contract with Carvajal and Rangel Silva for DGIM and DISIP protection and surveillance services. They purchase financial intelligence on potential abduction targets obtained from DISIP’s financial intelligence division and Seniat. Members of the Carvajal and Rangel Silva crime groups, all elite members of the DGIM and DISIP, also participate directly with FARC and ELN kidnap specialists in abductions, and do contract murders.

In 2008 there were 537 reported kidnappings in Venezuela. The average ransom payment at the end of 2007 was between $300,000 and $500,000 per victim. Based on trends through June 2009, it’s estimated there will be some 900 kidnappings in Venezuela this year. The FARC and ELN are believed to be responsible for at least three-quarters of these abductions. At $500,000 per victim in 2009 (assuming some ransom inflation from 2007-2009), the potential profits to kidnapping gangs this year could be as high as $450 million.

However, Carvajal and Rangel Silva’s groups also participate directly in some kidnappings. For example, DGIM and DISIP commandos were in the group which abducted Jorge Azpurua in 2005 and German Garcia Velutini in 2009.

Cabello’s Financial Group

Rafael Sarria is Cabello’s top strategist and thinker on all matters relating to finance. He is a childhood friend and former military colleague of Cabello. But his experience in banking is limited, though he did work for three years in Miami for Banco de Venezuela’s office. His money is inherited, and his father (also named Rafael Sarria) helped junior get started in banking.

Ricardo Fernandez Barrueco, a Colombian-Venezuelan citizen who lives in Panama and claims a net worth of $1.6 billion, is a key Cabello intermediary in the acquisition of banks and insurance companies. However, Fernandez Barrueco is also “partnered” with Cabello in a wide range of other non-financial businesses involving contracts with the Chavez government. For example, Fernandez Barrueco’s Pro-Arepa group is the leading supplier of food imports to Mercal and Pdval. Fernandez Barrueco is considered by some who know him to be a “cowboy” willing to engage in violent coercive tactics to achieve his aims. He has been implicated in Panama in the kidnapping of a Venezuelan citizen and the attempted murder of a Panamanian attorney’s wife.

Arne Chacon Escamillo, who overnight became a “banker” of the revolution five years ago when Pedro Torres Ciliberto sold him on credit 49% of Baninvest (valued at the time at over Bs.8 billion of the old Bolivars). Arne Chacon’s brother, Jesse Chacon, currently is the Science, Technology and Intermediate Industries Minister. Jesse Chacon is aligned with Cabello, but is considered a follower and subordinate rather than an equal associate of the all-powerful Public Works and Housing Minister.

During a brief stint with Banco Industrial de Venezuela in 2002-2003 during which he briefly occupied the presidency of the state-owned financial entity, Arne Chacon is believed to have set up a money laundering system for the FARC’s 10th Front. The FARC’s money laundering system in BIV operated until 1 March 2008 when Raul Reyes was killed in northern Ecuador.

The FARC’s money laundering operations have since been re-routed through other Venezuelan banks, insurance companies and financial brokerage companies owned by Fernandez Barrueco, Torres Ciliberto and other “Bolibourgeois” financial entrepreneurs associated with Cabello’s group. Panamanian financial regulators say at least 10 Venezuelan financial services firms have applied for operating licenses in Panama recently, hinting at a possible new money laundering route for FARC’s illicit earnings.

The FARC is also believed to be laundering drug money through Islamic groups raising funds in Venezuelan territory for militant groups like Hamas, the PLO and Hezballah.

The $2 billion of combined cash which Arne Chacon, Torres Ciliberto and Fernandez Barrueco claim to have in hand to buy banks, insurance companies and other businesses almost certainly includes some FARC drug money.

Pedro Torres Ciliberto inherited a large family fortune from his father. He has a close personal friendship with Jose Vicente Rangel and Ana Avalos de Rangel. Torres Ciliberto serves as intermediary for both Rangel and Cabello. Torres Ciliberto’s “sale” of 49% of Baninvest to Arne Chacon was Cabello’s first step into banking, though his name never surfaced in connection with the deal. Torres Ciliberto’s role as an intermediary of both Cabello and Rangel reflects the uneasy association between Diosdado and Jose Vicente.

The octogenarian Rangel is both a strategic ally of Cabello, and one of Cabello’s most dangerous potential enemies. If Cabello is the Young Turk or rising force in corrupt Venezuelan power politics, Rangel is the Moustache Pete or aging lion of a much older generation. The issue will be moot when Rangel dies, but meanwhile the two are partners in banking because making Rangel a partner guarantees he won’t expose any “corruption” allegations which could affect Cabello’s long term interests.

Gonzalo Tirado, who obtained a license to open Banco Stanford de Venezuela (Stanford Financial Group) though he had no banking experience, is also an intermediary for Cabello in financial acquisitions.

Cabello has an extensive financial intelligence system in place.

His brother, David Cabello, is the director of the Seniat tax authority.

Sudeban superintendent Edgardo Hernandez Behrens reports directly to Cabello, particularly now that Cabello is the president’s officially designated financial czar. Hernandez Behrens also reportedly is close to the Isea and Ameliach brothers, who are enemies of Cabello. But his fear of Cabello is greater than his alleged with the Isea and Ameliach clans.

Cabello’s interests are well-protected at Seniat, Sudeban and the national registry. Repeated efforts to obtain financial and tax information on the banks in which Cabello has hidden interests determined that access to the sought-after information is blocked by unofficial internal controls and restrictions which are not applied to other banks in general.

Cabello also relies on Pedro Luis Martin, the former DISIP financial intelligence director, for information and advice relating to financial issues.

Pedro Luis Martin reportedly is associated with Rodriguez Chacin, although it is also said that they distrust each other greatly. Martin has been implicated at least a half-dozen times since 2002 in alleged extortion schemes against prominent figures in the financial system. Several sources who know Pedro Luis Martin personally say he is very dangerous, capable of ordering the murder of people he considers a threat to his interests.

The accounting/auditing firm Alcaraz Cabrera Vasquez, the local affiliate of KPMG, handles some financial matters for Cabello, Sarria and Fernandez Barrueco, among other persons associated with the crime groups mentioned in this report. This is relevant for the following reason:

During the course of this investigation, we learned of a recent attempt by the Cabello group, through its contacts inside Alcaraz Cabrera Vasquez, to infiltrate a mole into the Caracas branch of a German multinational reinsurance group which handles the reinsurance market for over 90% of the kidnapping insurance policies written in Venezuela for high-net worth persons and multinational executives.

The mole was detected as the result of a due diligence investigation requested by a manager of the German reinsurance group’s branch in Caracas. One of the responsibilities this mole was being trained for would have given him direct access to the German reinsurance group’s digital and paper files on the corporate/personal assets and net worth of Venezuelan and foreign persons with anti-kidnapping insurance policies.

This information could be used by Cabello’s group to identify assets subject to coercive acquisition tactics and extortion rackets.

It also could be used by other crime groups, like the ones in which Carvajal and Rangel Silva are implicated with the FARC/ELN, to identify potential abduction victims and calculate with precision beforehand how much each victim is worth in ransom negotiations.

About Caracas Gringo

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19 Responses to The Rise of Bolivarian Organized Crime

  1. Pingback: The mystery of the sudden fall in grace of a leading bolibourgeois magnate « The Devil’s Excrement

  2. Crow says:

    Please excuse me for not commenting on this post, but has anyone identified the individuals who are with Zelaya in the Brasilan embassy compound. Rumor has it that some if not many are Venezuelan and Cuban. One email I recieve went so far as to say one individual in the backround of one photo is or has been asssociated with FARC.


  3. Quico says:


    You know, rereading this piece, it strikes me that the amazing thing is that, for all the mountains and mountains of shit you’ve dug up on these guys, there’s a whole lot of Bolivarian corruption missing from this essay.

    The focus on Diosdado and the corrupt little cabal in DISIP and DGIM leaves out huge expanses of the bolivarian corruption universe. To boot:

    1-PDVSA: The Ramírez clan and the INSANE arbitrage profits being skimmed off of the Permuta market by PDVSA’s in-house trading arm. I don’t know any of the names involved, but the scam itself is massive, involving sums that I would guess run into the billions.

    2-Central Bank/Merentes. Possibly a smaller hotbed of corruption now that most of the exchange arbitrage action has moved on to PDVSA, but still a massive potential source of corruption.

    3-Alí Rodríguez and Finance. Another bottleneck billions of dollars have to go through. Even apart from the Seniat racket, who really knows what is happening in the rest of MinPoPoFinanza?

    4-Others I don’t know about.

    As far as I can tell, though, the whole PDVSA-Permuta crucible is the real hotbed these days, though. We’ll look forward o a detailed post on that from you in the future!


  4. Knight says:

    Excellent piece CG – right on the dinero

    BTW – I have personal knowledge, if any of you doubt the theme of this report, of a young General de las FANB who showed up Stateside with $1.3B (yes, Billion$$) worth of PDVSA bearer bonds, trying to discount them at 70% off face value, and would have taken far, far less for a quick deal. The bonds checked out as legitimate with all international clearing houses. My source indicates he succeeded in placing said instruments with JP Morgan in NYC. And this was only one guy, although most likely fronting for a group.

    Que tal?


  5. m-astera says:

    I’ve been thinking for a while that the main objection to US bases in Columbia is that they may cut off the supply from FARC. Shove it all the other way, up through Central America, cut the GN out completely.


  6. m_astera says:

    Intelligence. Thanks, bro.


  7. Juan says:

    “During this period, Cabello and Rodriguez Chacin actively plotted with President Chavez, then-Defense Minister Jose Vicente Rangel and other senior regime officials to instigate a self-coup against Chavez in order to create an excuse to decree martial law and silence the political opposition permanently.

    But 11 April 2002 ended bitterly and frighteningly for Cabello, Rodriguez Chacin, Jose Vicente Rangel and other senior “chavistas.” When part of the army revolted against the violence which military leaders clearly perceived as having been caused by the Bolivarian Circles, President Chavez folded immediately, offering to resign before sunset that day provided he was allowed to leave Venezuela safely.

    Chavez was saved by the unexpected duplicity of Pedro Carmona, who betrayed the army and political opposition by seeking to impose a rightwing regime associated with the interests of former President Rafael Caldera’s inner circle.”

    Even in the labyrinthine cesspool of Venezuela politics, the previous claim seems remarkable, smacking of the “conspiracies” we hear trotted out about 9/11 and so forth – stuff that has always struck me as far-fetched and totally improbable.

    I don’t expect anyhone to give up their sources, but I’d appreciat to know a little more background on the intelligence behind the supposed self-coup which, if true, has to rank with the boldest piece of political chicanery I have ever heard of.

    Is there at this time any other tread going on about this self-coup? Any other info at all. If I didn’t respect Caracas Gringo as such a credible source I would never have asked.



    • Quico says:


      The term “self-coup” is loaded for sure. But the source for the claim that Chávez purposefully set out to provoke a crisis in early 2002 is…Chávez himself. In his State of the Nation speech to the National Assembly in 2004, he said:

      “Crisis in Chinese means danger and opportunity. Sometimes the crisis has to be generated, and kept measured, of course. What we did in PDVSA was necessary…and we generated the crisis. When I blew the referee’s whistle in ‘Alo Presidente’ and started to fire people, I was provoking the crisis. When I named Gaston Parra President of PDVSA and the new board, we were provoking the crisis. They responded and the conflict appeared. And this is where we are today.”

      The speech itself contains cryptic references to a “grupo colina” and a “plan colina” tasked precisely with instigating the crisis. So while the term “self-coup” may seem over the top, the idea that Chávez had a conscious strategy to provoke an institutional crisis in early 2002 isn’t even controversial. The guy said as much!

      Click to access chavezdiscurso.pdf


  8. Neil says:

    Didja see that Chavez is “considering” the possibility of shooting down unidentified aircraft suspected of carrying drugs when they fly over Venezuelan territory.


    First of all, as CG has noted, the FARC transship some 70% of the cocaine that comes through Venezuela, and it’s under protection from the National Guard. This means it’s all transported via truck, with a free pass at every alcabala from the GN.

    So these guys have decided that they want to eliminate the competition, or force the competition to use their services to run the drugs safely through the country. They dreamed up what they think is a two-birds-with-one-stone solution: 1) it eliminates or coerces the competition from other traffickers into working with the GN, and 2) supposedly convinces EU and US authorities that Venezuela’s really serious about cracking down on drug trafficking.

    It always amazes me how preposterously stupid these people are. Do they really think that anyone would fall for such a transparently bogus initiative?


  9. firepigette says:

    Thanks Caracas Gringo you wrote an excellent article detailing just how Chavismo’s millions are stolen using an unlimited amount of different rackets.

    It is important to put the focus on the fact that these people are essentially gangsters who will use any illegal means to make fortunes by using the power of the State which is at their disposal.By owning the State, you get a monopoly and STILL get to call it ” socialism for the People”.

    Many have described particular aspects of the corruption, like drug trafficking, kidnapping etc.,but we need a more integral focus, exposing these actors who exponentially increase their income by combining these methods.


  10. firepigette says:

    Roy and Neil,

    One thing is to have actionable intelligence and another to have proof than can stand up in a court of law.In addition we are dealing with gangsters who own a petro-state with all its resources at their disposal and who would have to be accused in an international court.Gangsters have always been notorious for knowing how to evade the law, often requiring special racketeering laws to be convicted.
    On the other hand you don’t have to convict them for all their crimes as long as you can prove some of them.


  11. Kepler says:

    By the way:
    As soon as the gringos were presenting their report about drug and Venezuela, طارق declared over 600 kg cocaine were discovered in the Lufthansa area of Maiquetia Airport. Pity that the Lufthansa people contradict that:
    I wonder where that cocaine is now.


  12. Kepler says:


    Thanks for the excellent post.
    Have you thought about writing this in Spanish?
    Roy can use Venezuelan rum and support Venezuela’s industry. 🙂 He will have also more chances to support our rum industry in the following months.


  13. revbob22 says:

    Roy: Find yourself a good bottle of 21 year old scotch, and sift through the rest of the articles here.

    You’re gonna need the scotch, so don’t skimp on it.


  14. Neil says:

    Roy, my sense, living here in Venezuela, and being somewhat privy to how the cookie crumbles in these latitudes, I have no doubt that this is much much, more than informed speculation. I also believe that the Gringo is right on target when he says that Fernández Barruecos is the “autor intelectual,” as they say here, of the García Velutini kidnapping. That’s the bombshell in this freport. When all the news fits, it really fits, and this one is a clean, no-nonsense fit. I’m also sure that none of this comes as a surprise to the Colombian and U.S. intelligence communities. How they’ll make use of it, when they’ll make use of it, or even if they’ll make use of it….it’s all a question of how events develop and how opportunities present themselves. Timing is everything.

    Re Chávez and how he fits into this….there are so many currents and undercurrents shaping events here that Chávez is basically trying to use whatever resources he has to keep his head above water level. Cabello, Rangel, all those guys, are just part of the snakepit he has to maneuver in. What he has, however, which is something no one else in his entourage has, is that magic, larger-than-life charisma that keeps the lumpen raving for more. Sadly, the Oliver Stones and the Michael Moores of the world are part of that equation, aided and abetted of course by Chávez’s ability to unilaterally write checks to whomever he wants.

    Chávez is no dupe. Cynical, yes. He knows that neither Cabello nor Rangel would cross him, because he’s still King of the Hill. The day he slips is the day the shit hits the fan here, and he knows it. So he lets them get away with what they need, and he pursues his own objectives, which these days are 99% media-driven. He has to skate faster and faster every day to stay ahead of the game, and he has to keep putting off the big painful decisions (witness the big economic/financial decisions being put off til October) because he knows he’ll lose traction with el pueblo if he doesn’t keep delivering all the goodies, real or imagined, he’s been promising them for years. The Correo del Orinoco, the government’s latest print mouthpiece, has as its most headline the announcement of a massive public works/employment program supposedly starting in October.

    These guys are scared. Really scared. They know the polls don’t reflect the real levels of support they have among the public. They know that if 30% of Venezuelans really support them it’s a miracle. Meanwhile, money talks and BS walks.


  15. Roy says:

    This is the first time I have read your blog. I got here via a link from Daniel Duquenel’s blog. I am astounded by the level of detailed information you have included in this post. I don’t want to say that I doubt any of it, because it certainly has a ring of truth to it, but I do wonder how much of what you write is informed speculation, and how much is documented and provable. And if it is all “provable”, why would the U.S. and Colombia not make better use of it?

    Furthermore, in the scenario you paint, is Chavez an ideological dupe, being played and manipulated by the various competing players, or is he just another cynical hypocrite who is also playing the system to amass money and power?


  16. correfoc says:

    shills down my spine.
    how depressing and sad, and how much I fear for the remaining of my family back in the country…


  17. revbob22 says:

    Immunity in Venezuela is directly proportional to your available cash. From the contents of the article, it seems like most of the top players have enough “immunity”. None of these criminals are going to jail, no matter who ends up in power. What would really hurt them is to empty their accounts………..


  18. Neil says:

    If we ever get to the point where the Chavez regime begins to collapse under the pressure of international investigations and solid evidence of its illegal activities it will be interesting to see who in this incestuous little cluster-f*ck first starts ratting out the others in exchange for immunity.


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