They still love Putin

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Polina Gagarina, who represented Russia in the 2015 Eurovision contest

The other day, watching the Eurovision Song Contest – Europe’s equivalent of the Super Bowl, only with bad songs instead of a football game – we reflected on how odd it was to see performers from Estonia, Latvia, Lithuania, and Poland taking the same stage as an act from Russia. This was, after all, going on at a time when the people living in the countries on Russia’s Western border have serious, growing, and thoroughly legitimate concerns that Vladimir Putin, any day now, may order Russian troops to march across their borders. As one observer noted a couple of weeks ago, the Baltics may be “model states for democracy, respect for human rights, and transparency,” may “have the highest standard of living among the former states of the Soviet Union,” and may be the only former Soviet states in the Eurozone, but “the mood in all three countries is dark.”

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Elina Born & Stig Rasta, who represented Estonia in the 2015 Eurovision Song Contest

Consider this: in a single week earlier this month, NATO military exercises were held in Poland, Lithuania, Georgia, Estonia and the Baltic Sea. Such is the air of menace Putin has created in his neighborhood, reported the Guardian in May, that “[e]ven Sweden and Finland have started musing aloud about joining NATO.”  

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Monika and Vaidas, who represented Lithuania in the 2015 Eurovision Song Contest

Missing from Eurovision this year was Ukraine, which already has Russian troops on its soil. (In fact, the financial challenges caused by the conflict in eastern Ukraine were reportedly the reason why Ukraine pulled out of this year’s Eurovision.) One is reminded of the notorious 1936 Berlin Olympics, at which countries soon to go to war with one another engaged in “friendly” athletic competition under the very eyes of Hitler; only the comparison would be even more apt if the Berlin Olympics had taken place not in the summer of 1936 but three years later, after the Anschluss and Germany’s annexation of the Sudetenland.

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A new statue of Putin, depicted as a Roman empire, near St. Petersburg

Putin has been rattling sabers for months. According to recent reports, he’s informed Ukrainian President Petro Poroshenko that if he wanted, he could have Russian troops not only in Kiev, but also in Riga, Vilnius, Tallinn, Warsaw and Bucharest” within two days. He also told European Commission President José Manuel Barroso: “If I want to, I can take Kiev in two weeks.” In mid May, the heads of the Baltic countries’ armed forces asked NATO to station on their territories “a new unit similar to the Berlin Brigade that was stationed in Germany during the Cold War.” The danger is real.

And yet even as things heat up along Russia’s western border, Putin’s apologists in the West hold firm.

MOSCOW, RUSSIA - MAY 9:  In this handout image supplied by Host photo agency / RIA Novosti, Actor Steven Seagal attends the military parade to mark the 70th anniversary of Victory in the 1941-1945 Great Patriotic War, May 9, 2015 in Moscow, Russia. The Victory Day parade commemorates the end of World War II in Europe. (Photo by Host photo agency / RIA Novosti via Getty Images)
Steven Seagal attending Putin’s VE-Day speech

Take action-film heavyweight Steven Seagal, who not only calls Putin a pal but considers him “one of the greatest world leaders, if not the greatest world leader alive.” This month, when Putin held a celebration of Russia’s World War II victory – at which he gave a speech accusing the U.S. of seeking “to create a unipolar world” – Seagal was there in the audience, cheering him on. We’ve already noted Seagal’s curious friendship with Putin, but recently there have been some fresh tidbits of news from that front. It was reported in April, for example, that Putin, back in 2013, asked the U.S. to recognize his movie-star buddy as an “honorary consul of Russia” who would act as “a potential intermediary between the White House and the Kremlin. (The U.S. response, according to one unnamed official, was: “You’ve got to be kidding.”) Although U.S. and European officials boycotted Putin’s VE-Day anniversary event in protest against his actions in Ukraine, Seagal was able to rub shoulders at the shindig with some of Putin’s other international comrades – including Raul Castro, Robert Mugabe, and Xi Jinping.

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Estonian President Toomas Hendrik Ilves

Even some people who don’t really seem to be full-fledged Putin fans have been infected by those fans’ disingenuous rhetoric. Take British journalist David Blair. He doesn’t appear to possess any great affection for Putin, but in a recent article, after snidely mocking Estonian President Toomas Hendrik Ilves for having grown up in New Jersey and for speaking English with an American accent (horrors!), Blair actually characterized Ilves’s distaste for Putin as rooted not in an understandable concern about Kremlin belligerence, but in an indignancy over Putin’s disregard for post-World War II international rules (and, by extension, his disrespect for post-Cold War American hegemony).

American hegemony. Yes, in the lexicon of Putin’s Western fans, that’s what this is all about. Not the reality of Russian aggression, but the fiction of “American hegemony,” a nonsense term used to make a good thing – the banding together of democracies for mutual protection against a warmongering tyrant – look like a bad thing.

Blair went on to note that even though the Baltic countries are full NATO members, no American or NATO soldiers are permanently defending the Baltics.” If Putin invaded, “these countries could not protect themselves” and “NATO would not be able to reinforce them. But while Ilves calls for NATO to put permanent NATO troops in the Baltics, Blair warned against it, maintaining that Russia would regard this as a grave escalation.” Again, Blair doesn’t seem to be a Putin fan, but he’s speaking their language – referring to a purely defensive measure as if it were an act of aggression. Nobody, including Putin, seriously believes that NATO would station troops in the Baltics with an eye to invading Russia. That being the case, the word “escalation” is utterly out of place here.

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Ashot Gabrelyanov

The hypocrisy factor in all this is through the roof. How many of the Western politicians, journalists, and others who defend Putin would want to ply their trades in Russia? Even one of Putin’s top domestic media stooges, it turns out, no longer lives in Russia but – guess where? In the U.S., naturally. We’re talking about Ashot Gabrelyanov, who, with his father, has “built a tabloid empire” and is believed to “wor[k] closely with Russia’s intelligence services” to promote the Putin regime and defame its enemies. A few months ago, as Mashable reported on May 1, the younger Gabrelyanov, founder of Russia’s top news (or “news”) site, LifeSite News, moved to New York City – and ever since then he’s been busy on social media gushing over the same country he routinely demonizes on his website. “NYC is incredible,” he enthused on Instagram. Meet the new poster boy for hypocritical Putin fandom. 

Shilling for Maduro

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Sean Penn, Hugo Chávez

Today the people of the United States lost a friend it never knew it had. And poor people around the world lost a champion.” That’s Sean Penn, Oscar-winning actor, political activist, and ex-spouse of Madonna, upon hearing the news of Hugo Chávez’s death. “I lost a friend I was blessed to have,” Penn lamented, adding that “Venezuela and its revolution will endure under the proven leadership of vice president Maduro.”

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Hugo Chávez, Michael Moore

On the same occasion, Michael Moore tweeted: “Hugo Chávez declared the oil belonged 2 the ppl. He used the oil $ 2 eliminate 75% of extreme poverty, provide free health & education 4 all. That made him dangerous. US approved of a coup to overthrow him even though he was a democratically-elected president.”

We’ve already surveyed Oliver Stone‘s tributes to Chávez, which included not only any number of embarrassingly fulsome press releases but two classic examples of film agitprop. But in addition to this trio of ill-informed Hollywood stooges (whose equally deplorable Fidel fandom we’ve previously covered), the putatively humble-yet-heroic Hugo – and his less colorful but equally vile successor, Nicolás Maduro – have also accumulated praise from people who actually should know better.

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Joseph P. Kennedy

One of them is ex-Congressman Joseph P. Kennedy II – JFK’s nephew; Bobby and Ethel’s oldest son – who today runs a green-oriented nonprofit called Citizens Energy. In February 2014, under the headline “A Kennedy Shills for Maduro,” Sohrab Ahmari reported in the Wall Street Journal that TV ads for Citizens Energy were praising Maduro for providing free heating fuel to underprivileged Bay Staters. Calling the commercials “an almost-perfect exercise in demagoguery,” Ahmari described one of them as follows:

The cold can overwhelm even the toughest amongst us,” Mr. Kennedy says, as a sad piano tune plays and images of children with cancer fill the screen. “The heating bills just keep piling on,” Mr. Kennedy goes on, and we see him hugging a young cancer survivor, who smiles but also seems slightly uncomfortable. Then, following a burst of upbeat music, Mr. Kennedy says: “The people of Venezuela and President Maduro are once again . . . the only country to answer our call to provide heating assistance to the poor.”

As Ahmari noted, the ads didn’t mention such “other hallmarks of the Maduro regime” as outrageous corruption, soaring crime, shortages of food and medicine, and the arrest of opposition leader Leopoldo López. “Given the situation at home,” Ahmari summed up, “Maduro must be thrilled that he can count on useful idiots like Joe Kennedy to sing his praises to the world.”

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Belén Fernández

Then there’s Belén Fernández, who in February 2014 published an article at the Al Jazeera website that was one long sneer at the “absurd hysterics that typify the Venezuelan opposition,” a.k.a. the “doom-and-gloom squawking of the elite.” Fernández’s case in point: a Caracas blogger, Emiliana Duarte, who’d written about having to visit ten different supermarkets in order to find all the ingredients she needed to bake a cake.

Duarte’s account nicely illustrated the impact of chronic shortages on everyday Venezuelan life; but for Fernández, it was nothing but an “elite right-wing…sob story” and a “less than persuasive evidence of the supposedly brutal tyranny under which Duarte and her socioeconomic cohorts are forced to reside.” Of course, the story wasn’t intended to provide evidence of brutal tyranny but of economic mismanagement; in any event, Fernández had nothing to counter it with but mockery. For her, plainly, any criticism of any aspect of chavismo is nothing but elitist treason, motivated by a longing for (as she put it) “the deliverance of Venezuela into the imperial [American] embrace.”

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Dan Kovalik

Or take “social-justice” activist Dan Kovalik, who has called Chávez’s Bolivarian Revolution “the most benevolent revolution in history.” In a piece that ran at Huffington Post on February 20, 2014, Kovalik spun chavismo this way: it’s benefited “the very poor and those of darker skin tone,” so if the U.S. government and media smear Venezuela as a “basket case” and condemn its “alleged lack of democracy,” it’s because they’re racists who “openly side with the white, wealthy elite – such as Kenyon and Harvard trained right wing leader Leopoldo López.”

Kovalik’s mention of López was, alas, not well-timed: two days before Kovalik’s article appeared, López was put under arrest; he’s been behind bars ever since, and both Amnesty International and Human Rights Watch consider him a political prisoner. (HRW described his detention as exemplary of “the classic tactics of an authoritarian regime.”)

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Venezuelans waiting in line outside a supermarket

As for the Venezuelan economy, Kovalik called “claims of ‘economic collapse’…quite exaggerated,” citing as evidence import and export figures that proved nothing. (The shortages went unmentioned.) And the country’s high level of violence? Kovalik attributed it – with a straight face – to opposition agitators, and even maintained that “the Venezuelan government has exercised great restraint” in its response to that violence.

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Empty shelves in a Venezuelan supermarket

Sheer fiction. Kovalik’s piece made one thing clear. For him, as for Fernández, any criticism of chavismo, however legitimate, should be recognized as part of a perfidious effort to “reverse” Venezuela’s “liberation” from U.S. domination – and, consequently, even the most deceitful response to such criticism is justifiable as a blow for the glorious revolution.

Oh, and by the way: in April, 2015, the Fusion website reported that some hotels in Venezuela were now asking foreign tourists to bring their own toilet paper and other basic supplies. “For over a year,” lamented one hotelier, “we haven’t had toilet paper, soap, any kind of milk, coffee or sugar. So we have to tell our guests to come prepared.” Another hotel owner admitted that in all good conscience, she couldn’t advise visitors from abroad to come to Venezuela: “As soon as they get off the plane they will encounter risks.” 

Welcome to “liberation,” chavista style.

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More Venezuelans queuing up to buy groceries

 

 

South of the border

We’ve met some of the corrupt characters who made up Hugo Chávez‘s inner circle – most of whom are today part of (or very close to) the government of Chávez’s successor, Nicolás Maduro.

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Hugo Chávez

A few months after Chávez’s 2013 death, the consequences of his and his cronies’ corruption were deftly described in the British Spectator by James Bloodworth. Under the headline “Venezuela: a shining example of how not to help the poor,” he summed up these leeches’ dubious achievement:

While Brazil is on the verge of global power status…15 years of “21st century socialism” has left Venezuela with one of the world’s “highest inflation rates, worst misalignment of the exchange rate, fastest-growing debt, and one of the most precipitous drops in productive capacity,” according to former Venezuelan minister Moises Naim. The country is also a more dangerous place to live than Iraq….

The real shame is that Hugo Chávez is no longer around to witness the Venezuelan masses pay for his government’s idiocy.

Michael Moynihan, writing last year in the Daily Beast, had a few questions for Western chavistas. To begin with: how would they react if the U.S. president, say, arrested an opposition leader, or shut off the Internet in politically unreliable cities, or had demonstrators murdered, or jailed a judge who ruled against his intelligence operations? How long would Americans allow their president “to run up massive inflation?” Or:

How long would it be considered reasonable – and not the president’s responsibility – to preside over 23,000 murders in a country of just under 30 million people, a rate that would horrify the average resident of Baghdad? How long could supermarket shelves remain bare of basic staples like bread and milk before The Nation or The Guardian would gleefully decide that America was a failed, kleptocratic state? Or if Bush or Obama’s economic policies meant that toilet paper could no longer be found on the open market?

Every word, as they say, is true. And then some. Yet there’s been no shortage of “cheerleaders” (as Bloodworth put it) willing to set the facts aside and sing the praises of what Bloodworth (quite properly) calls Chávez’s “clownish revolution.”

Consider these excerpts from a piece that ran on CNN’s website, no less, after the caudillo’s death:

Hugo Chávez was beloved by millions around the world. He changed the course of a continent and led a collective awakening of a people once silenced, once exploited and ignored. Chávez was a grandiose visionary and a maker of dreams.

An honest man from a humble background ….Chávez dreamed of building a strong, sovereign nation, independent of foreign influence and dignified on the world scene. He dreamed of improving the lives of his people…

President Chávez made those dreams come true.

The author concludes by recalling a statement by Chávez to the effect that he was “just a soldier.” Her comment:

Yes, Chávez, you are a soldier, a glorious soldier of a dignified, proud and kind people. And you are a maker of dreams for millions around the world.

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Eva Golinger

The piece – with its over-the-top, Pyongyang-style encomia for the Dear Leader, its mastery of the good old Stalinist cult-of-personality style – precisely exemplifies the kind of rhetoric about Chávez that his own regime promoted. No surprise, then, that its author, Eva Golinger, turned out to be a longtime professional chavista – a policy adviser to the Venezuelan government, editor of a newspaper published by the Venezuelan government, and a former head of the New York-based Venezuela Solidarity Committee.

But what is surprising – or should be – is the number of people who presumably aren’t on the government payroll but who, despite the disastrous repercussions of Chávez’s rule, have persisted in praising him. Among them are reliable Hollywood lefties Oliver Stone, Sean Penn, and Michael Moore.

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Hugo Chávez, Oliver Stone

We’ve seen how Stone – a writer and director of considerable talent but staggeringly poor political judgment – made not one, not two, but three documentaries in praise of Fidel Castro; as it happens, he’s also directed two pictures about Chávez, South of the Border and My Friend Hugo, the latter of which was released last year on the first anniversary of the dictator’s demise. The New York Times reported that the problems with South of the Border

begin early on, with his account of Mr. Chávez’s rise. As “South of the Border” portrays it, Mr. Chávez’s main opponent in his initial run for president in 1998 was “a 6-foot-1-inch blond former Miss Universe” named Irene Sáez, and thus “the contest becomes known as the Beauty and the Beast” election.

But Mr. Chávez’s main opponent then was not Ms. Sáez, who finished third, with less than 3 percent of the vote. It was Henrique Salas Romer, a bland former state governor who won 40 percent of the vote.

The Times’s Stephen Holden called South of the Border a “provocative, if shallow, exaltation of Latin American socialism”; Entertainment Weekly called it “rose-colored agitprop.” Confronted with a series of discrepancies between the historical record and the film’s account of it, Stone’s co-writer, Tariq Ali, explained: “We were not writing a book, or having an academic debate. [Our goal] was to have a sympathetic view of these governments.”

Yes, whether the facts warranted it or not.

stone_chavez2Time film critic Richard Corliss’s review of South of the Border was headlined “Oliver Stone and Hugo Chávez: A Love Story.” Commenting that Stone “sees the geopolitical glass as all empty (the U.S. and its world-banking arm, the International Monetary Fund) or all full (Chávez and his comrade Presidentes in South America),” Corliss summed up the film as follows:

Every step of the way, Stone is by, and on, on the President’s side. He raises no tough issues, some of which are summarized in Amnesty International’s 2009 report on Venezuela: “Attacks on journalists were widespread. Human-rights defenders continued to suffer harassment. Prison conditions provoked hunger strikes in facilities across the country.” Referring to the 2006 election in which Chávez won a third term, Stone tells viewers that “90% of the media was opposed to him,” and yet he prevailed. “There is a lesson to be learned,” Stone says. Yes: support the man in power, or your newspaper, radio station or TV network may be in jeopardy.

The good news about South of the Border? It tanked in – guess where? – Venezuela. “Despite round-the-clock promotion on Venezuelan state television and government-subsidized screenings in the capital of Caracas,” Stone’s nauseatingly hagiographic pic “grossed only $18,601 on 20 screens in the 12 days after its June 4 debut.”

stone_chavez3(By comparison, at around the same time, the Michael Jackson documentary This Is It took in $2.1 million from Venezuela audiences.)

Not that this poor showing dampened Stone’s outsized cariño for Chávez. When His Holiness kicked off, Stone eulogized him as follows: “I mourn a great hero to the majority of his people and those who struggle throughout the world for a place….Hated by the entrenched classes, Hugo Chávez will live forever in history.”

Yeah. Just like Hitler, Stalin, and Mao.

Rogues’ gallery

Last time around we offered an overview of that species known as the bolifunctionario – the small-time, big-ticket racketeers with whom Hugo Chávez and his successor, Nicolás Maduro, have surrounded themselves, and who have become billionaires at the expense of Venezuelan voters. Now, let’s look at a few of these hooligans individually.

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Alejandro Andrade

Alejandro Andrade is an old pal of Chávez for whom an injury in a game of “chapitas” (a variation on baseball) turned into riches. In the game, Chávez threw a soda or beer cap which Andrade was supposed to hit with a broomstick; instead, the cap struck Andrade in the eye, half-blinding him for life. Chávez paid Andrade back by putting him in charge, in turn, of various public funds and, eventually, the National Treasury; while in these jobs, according to investigations by the FBI, DEA, SEC, and State Department, Andrade stole billions of dollars, which he spent on (among other things) a Florida mansion, a South Carolina farm, a Lear jet, some 150 thoroughbred horses, and a majority stake in a major TV channel.

To read through the list of Andrade’s ploys is to admire his ingenuity and versatility. For example, while head of the country’s Social Development Bank (a.k.a. Bandes), he made at least $66 million in kickbacks by selling Venezuelan bonds to a New York broker and buying them back at inflated prices. Andrade also put together a system that managed to provide funds for the ruling PSUV party while also enriching him and his confederates in the scheme. He’s so good at sponging up cash, indeed, that Chávez, just before his death, paid him the ultimate compliment – he wrote a letter placing his daughters’ future economic security in Andrade’s hands.

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Alejandro Betancourt, Pedro Trebbau López

Pedro Trebbau López and Alejandro Betancourt are the quintessential bolichicos – co-founders of Derwick Associates, a company that materialized out of thin air in 2007 and almost immediately began winning government contracts to build power plants, an activity in which neither Trebbau nor Betancourt had any expertise whatsoever. The firm is accused of having overbilled the government by some $3 billion and of paying at least $50 million in bribes, and together or separately its two principals own a Falcon plane, a Bell helicopter, a home in Miami, an office on Park Avenue, and a farm in Spain.

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Diosdado Cabello

Chávez crony Diosdado Cabello is President of the National Assembly, which he runs like a thug – silencing, intimidating, and even, on one occasion, ordering the beating of opposition legislators right there in the chamber. Known unaffectionately as “The Godfather,” he owns a slew of banks and insurance firms and also supposedly has his hand in some shady companies that run the Caracas ports. At last count, he was the defendant in at least 17 corruption cases, one of which accuses him of having received at least $50 million in bribes from Derwick Associates.

Also worth a mention is Cabello’s brother José David Cabello, who has served as head of the international airport in Caracas, Minister of Infrastructure, and President of the National Customs and Tax Administration (Seniat), without having a background in any of these fields.

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Rafael Ramírez

Rafael Ramírez held several high-level energy posts before serving briefly last year as Foreign Minister; he’s now UN ambassador. While head of the state oil firm, PDVSA, he ordered employees “to vote for Chávez or else.” With three cronies, he rearranged the processing of Venezuela’s oil income to make it utterly lacking in transparency, resulting in a system that one industry source called “rotten to the core” and that ultimately achieved the impossible: bankrupting the state oil firm of one of the world’s leading oil powers.

Then there’s Ramírez’s cousin Diego Salazar, who – thanks to a multimillion-dollar insurance policy Ramírez took out on PDVSA – went in a trice from being a lowly insurance salesman to being one of the richest men in the country, owning a private plane, a private orchestra of some 100 musicians, “almost all the apartments” in a Caracas luxury complex, and much else. He’s been investigated by the U.S. Senate for corruption – but it would take more than that to cramp his style.

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Tarek El Aissami

We’ve already mentioned Tarek El Aissami, governor of the state of Aragua and head of the ruling PSUV party. The American Enterprise Institute has called him “thuggish,” but this seems like a polite understatement. It may sound like a joke, but Aissami’s dad actually ran the Venezuelan branch of Saddam Hussein’s Baath Party, and Aissami himself – who was a college friend of Chávez’s brother – came to be known as Chávez’s personal link to Hezbollah, Hamas, and Islamic Jihad.

Aissami has funneled cash to these groups, and when he was head of the agency that produces national ID cards, he provided Venezuelan cover identities to some of their members. As if that weren’t impressive enough, he also recruited young PSUV members to train in Lebanon for guerrilla war against the U.S.

But aiding and abetting terrorism is just a sideline for Aissami, whose main activity, it seems, has been sponging up taxpayer money and laundering it through his “multilayered and vast network of shell companies,” the chart of which looks more complex than the organization of the U.S. government itself.

(Bonus factoid: Aissami’s brother Firaz is involved with drug trafficking and has over $21 million in a Swiss bank.)

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Wilmer Ruperti

Shipping magnate Wilmer Ruperti, who thanks to “illegal deals with corrupt thugs” became “the go-to guy for nearly all PDVSA-shipping needs,” provides a fine example of the cartoonish extent to which Venezuelan self-enrichment schemes can go: in order to fool a Russian firm into thinking it was chartering oil tankers to PDVSA, Ruperti set up “an elaborate network of shell companies,” giving one of them a name very close to that of PDVSA, and leased tankers from the Russian firm, then rented them to PDVSA at a hefty profit. Alas for him, U.S. and U.K. authorities got wind of his dodge and took him to court; in the U.K. case, he had to pay $59 million in damages. But he’s not suffering: he owns a bulletproof BMW, a jet, a veritable palace in Caracas, and a Miami Beach mansion that, on paper, is owned by (of all people) Gloria Estefan’s husband.

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Victor Vargas

Victor Vargas, who runs several banks and companies around the world, has long been known as the “Chávez Banker.” Translation: he’s said to have “made a backroom deal with Chávez’s government to handle some of the revolution’s murkier financial transactions.” As we’ve noted, Vargas may or may not own Cadena Capriles, Venezuela’s largest media conglomerate, which was purchased through a proxy on the island of Curaçao; if he does own it, moreover, he’s probably a front for the government, which has an interest in controlling as much of the nation’s media as possible. Vargas owns a major polo team, a stable of 60 ponies, a private fleet of jets, two yachts, a helicopter, homes in Europe, a huge estate in Venezuela, and mansions in Santo Domingo and Palm Beach.

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Luisa Ortega Díaz

Luisa Ortega Díaz is Venezuela’s General Prosecutor, a position she’s used to undermine media rights and to imprison journalists and politicians (notably opposition leader Leopoldo López). In 2009 she proposed a Media Crimes Law to curb “the irrational use of power by the media” and “regulate freedom of expression.” While ignoring the embezzlement by officials of truckloads of cars, motorcycles, computers, cameras, and other government-owned items, she’s used forged evidence to prosecute opposition legislators; and while threatening to “severely punish” so-called “hoarders” of basic foodstuffs – a widespread and thoroughly understandable phenomenon in Venezuela, where things are so screwed-up that you can’t be sure you’ll be able to buy bread, butter, or milk any time in the next few weeks – she’s been photographed shopping at high-end boutiques on the Rue Saint-Honoré in Paris.

All this, note well, is just a small sampling of the sleazy operators who make up the Maduro regime.

[NOTE: Corrected on December 22, 2015, to reflect the fact that Rafael Ramírez, at the time this post went up, was UN ambassador, not Minister of Finance.]

Supermarket sweep

Historically, we Americans – regardless of sex or region or ideological orientation or economic status or educational background – have tended to be suspicious of politicians. We’re not in a hurry to trust them. We see them as a necessary evil. Many of us assume they’re corrupt.

And indeed many of them are.

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Nicolás Maduro

But when it comes to corruption, the great majority of U.S. politicians look like total amateurs compared to pretty much everybody in the government of Venezuelan president Nicolas Maduro, heir to Hugo Chávez. These guys often seem like competitors in some perverse, hyped-up version of that old game show Supermarket Sweep, on which contestants raced up and down the grocery aisles at top speed, dumping as much merchandise as they could into their shopping carts before the buzzer went off.

(This comparison is perhaps especially apt given the way in which chavismo corruption has emptied Venezuelan supermarket shelves.)

In short, chavista politics is a grotesque grabfest – a hustle wrapped in a dodge wrapped in a racket. The shame factor is at zero. One after another chavista politician has been all but penniless when he took his first oath of office – and next thing you knew, the dude had a parking lot full of cars, a fleet of planes, and a half dozen mansions in as many countries. Rarely, moreover, does anybody raise an eyebrow about any of this obvious criminality, let alone look into the source of the lucky guy’s newfound lucre.

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Hugo Chávez

In chavista culture, grotesque corruption is taken for granted.

When Hugo Chávez became President in 1999, he rechristened the country as the “Bolivian Republic of Venezuela,” in honor of the noble nineteenth-century revolutionary Simón Bolívar, who is universally known as the “George Washington of South America.” Chávez claimed Bolívar as a hero, but Bolívar himself would doubtless have been appalled by pretty much everything about Chávez.

In any event, the nation’s newly minted name spawned a number of corollary monickers: bolichicos, a label for young Chávez-connected businessmen in a hurry; boliburgueses (i.e., boli-bourgeoisie), a term for supposedly socialist Chávez loyalists who are also suspiciously successful big-time capitalists; and bolifuncionarios, that is, pals of Hugo who were handed top jobs for which they had absolutely no visible qualifications and who proceeded to steal pretty much everything that wasn’t nailed down.

No, let’s not put it quite that way. Describing these crooks as mere sticky-fingered second-story men isn’t giving them enough credit. After all, they don’t just back up the truck and start loading it; they work hard at their thievery. Indeed, some of them have come up with such ingenious money-stealing stratagems that you can’t help thinking that if they’d devoted a fraction as much intelligence and energy to something that would benefit (rather than rip off) the Venezuelan people, the country’s economy would be thriving, rather than in the toilet.

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Tarek El Aissami

Most of these creeps’ careers have followed essentially the same basic pattern. They started by being lucky enough to run across Chávez (or some Chávez intimate) in their youth. In addition to knowing Chávez, many of them have (to put it mildly) shady pasts: at college, Tarek El Aissami, current head of the ruling PSUV party, ran the dorms like a prison warden, using them to hide stolen cars, carry out drug sales, and house guerrillas. But such dicey résumé items are never held against these scoundrels.

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José David Cabello

Routinely, these chavistas started out in government at the very top – going straight from a job as (say) an ordinary accountant or farm worker to becoming the #1 guy at the state oil or transport or telecom firm, or serving as Minister of this or that. Also routinely, they jump from one of these top jobs to another – or even, in some cases (in defiance of both the Venezuelan Constitution and good administrative policy), hold more than one top job at the same time. For example, current Minister of Industries José David Cabello has previously served as head of the state tax agency (Seniat), as a board member of the state agency for international commerce (Cencoex), as head of the national airline (Conviasa), and as Minister of Infrastructure.

These top jobs all have two things in common: first, they require skills, education, and/or experience that none of these well-connected appointees has ever had; second, they give these guys access to piles and piles of dough. This combination of stellar incompetence and magnificent opportunities for corruption is exactly why the country is now a shambles.

Now, as to the specifics of their larceny. As noted, they don’t just walk off with sacks of cash. No: they devise baroque ripoff schemes that are more complicated than the plot of a Renaissance play. These subterfuges typically involve the creation – for purposes of money laundering – of any number of fake banks and holding companies in places like Luxembourg, Switzerland, Belize, and the Cayman Islands.

They also often involve the creation of fake companies that are awarded lucrative no-bid contracts for government projects, which are then subcontracted to real companies for lower sums, with the bolifunctionario pocketing the difference. Some of these guys are especially ambitious in their perfidy: in order to make it harder to follow the trail of stolen taxpayer cash, Aissami runs a “multilayered and vast network of shell companies” that are based in a range of countries and, on paper, are run by various friends and relatives.

Broad-scale nepotism and kickbacks are a standard part of the picture, too. Several of these guys, moreover, own sports teams, which provide a whole separate – and wonderfully rich – set of opportunities for illegal enrichment. Indeed, these gangsters have their fingers in all kinds of pies one didn’t even realize existed.

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Victor Vargas

The result of all this masterful duplicity is that it can be difficult, in Venezuela, to know who really owns what, how much money they have, where it came from, and where exactly they’re keeping it. Victor Vargas, a bank president popularly known as the “Chávez banker,” is “widely believed to own Cadena Capriles,” the country’s biggest media conglomerate – but since it was purchased abroad through a proxy firm, nobody can be sure whether he owns it or not.

Eventually, many of these sleazeballs have been fingered as crooks, either by opposition politicians or by foreign governments, or both; in some cases, Venezuelan prosecutors have actually gone after them, with two or three of them becoming defendants in a dozen or more corruption-related lawsuits at a time. When they are caught red-handed, none of these guys ever evinces remorse or shame; the typical move, instead, is to denounce one’s accusers as enemies of the revolution and tools of American imperialism.

VENEZUELA-ELECTIONSIn any event, however much public attention is drawn to these flimflam men’s irregular activities, almost none of them ever loses his job. Yes, once in a long while one of them is actually fired for corruption – perhaps to make the regime look above-board, or perhaps just because the person in question has crossed the Dear Leader or become inconvenient to him. But for the most part, these malefactors enjoy absolute impunity.

Next time around: a rogues’ gallery of bolifuncionarios.

Meet Georges Ugeux, Wall Street’s fan of tyrants

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Georges Ugeux

At one time he was the NYSE’s senior managing director for international relations – “the face of the New York Stock Exchange outside of the United States.” But he left the Big Board, along with a couple of other higher-ups, in the wake of a controversy over compensation packages. Today, after decades at places like Morgan Stanley and Kidder Peabody, the Belgian-American investment banker Georges Ugeux runs his own store, Galileo Global Advisors, in New York.

He also contributes regularly to both Le Monde and The Huffington Post – and the first thing that needs to be said about his contributions to the latter organ (his Le Monde pieces are presumably run past an editor before they see print) is that the prose is downright execrable. It’s riddled with grammatical errors and, even when he’s apparently making a simple point, can be hard to make total sense out of.

Take a March 2014 HuffPo piece about the dust-up in Ukraine. “Does the Parliament votes [sic] to join Russia?” he wrote. “It is illegal. Will Crimea, who [sic] disposes [disposes?] of a special status, vote whether they [sic] want to be reunited with Russia or not?” There’s more: “For all its weaknesses,” he writes, “Europe has to live with borders with Russia and Ukraine. It has to resolve its neighborhoods [sic] problems. There is no need, however, for them to supersede what the Crimea’s people will decide.”

Look at those last two sentences. Presumably both “it” and “them” are meant to refer back to “Europe.” Okay. But “supersede”? What does it mean to say that Europe doesn’t need “to supersede what the Crimea’s people will decide”? None of the accepted meanings of “supersede” makes sense here. You can kind of guess what Georges Ugeux is driving at, but this isn’t a paper for a remedial high-school English class – it’s an opinion on international events delivered by a world-class thinker, a guy with a stellar CV, someone we’re supposed to take seriously as an authoritative voice on these matters. This being the case, wouldn’t you think a dude at this level would give his own prose a careful read-through before sharing it with the world? Or hire somebody competent to do so?

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To be sure, the thrust of his March 2014 piece was clear enough. In the conflict between Putin and Ukraine, Georges Ugeux stands with Putin. No, really. He also sympathizes, as he put it, with “the people of Crimea who do not want to remain under the fascists who dominate Ukraine and prohibit them from speaking Russian.” As if all that weren’t enough, he took the opportunity to smear Russia’s anti-Putin opposition as being “under the influence of extreme right and neo-Nazi groups” and to describe Putin as having been “legitimately elected.”

All of which raises the question: is a guy with this kind of political acumen and moral judgment – to say nothing of his slovenly prose – somebody you’d ever want to trust with your money?

Another example. In September 2013, Georges Ugeux weighed in on Obamacare:

The Republicans do not seem to understand that when Congress votes [sic] a law, it is the law of the land. It is sacred in a number of ways that they like. When they don’t like it, they ignore their obligations.

Yes, tea party blackmailers, the Affordable Health Act is the law. By using budget or debt ceiling to trap the credit of the United States of America, you are being in-civic.

Some writers manage – every now and then, anyway – to hit on le mot juste; Georges Ugeux repeatedly misses it by a mile. “Trap the credit”? (And this is a financial expert?) “In-civic”? And of course the law is called the Affordable Care Act, not the Affordable Health Act. He goes on:

You are guilty of not respecting the United States institutions, and the value of your own votes. This creates in turn a total discredit of congressional votes and the institution of Congress in the eyes of our citizens and the world.

Time and again, reading Georges Ugeux’s prose, you get the impression that it’s gone through at least two incompetent translations, from language A to language B to language C, before it ended up in English – or a rough approximation thereof. Think this is unimportant? Think again. Clear, coherent prose reflects clear, coherent thinking. Prose like his is the mirror of a more than moderately muddled mind.

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Georges Ugeux (center) with fellow investment bankers Yves-André Istel and Jean-François Serval

Which brings us to his financial commentaries. Georges Ugeux has written about a number of topics related to international finance, but of late he’s made a specialty of slamming the so-called “vulture funds” and the U.S. courts that have ruled in their favor in the matter of Argentina’s sovereign debt. “Are Sovereign Ratings a Legacy of Colonialism?” asked the headline of one piece he published in 2011. In another article, deploring the judiciary’s support for the “vulture funds,” he actually compared the U.S. Supreme Court to Pontius Pilate. But he reserves his real venom for Paul Singer of Elliott Management, whom he accuses of having brought grief to the Argentinian people by insisting that their government pay Elliott the entire amount owed to it.

Georges Ugeux, you see, is deeply concerned about the Argentinian people. Yet instead of getting exercised about the wholesale corruption committed by the regimes of the late President Néstor Kirchner and his wife and successor, Cristina Férnandez de Kirchner, as well as by their shameless (and, it sometimes seems, countless) cronies – who have ripped off billions upon billions of dollars from that once-prosperous country’s hapless citizens – Georges Ugeux places the blame for Argentina’s suffering squarely on the shoulders of Singer, whose activities he condemns as “the capitalist system at its worst.” Not only is he quick to join the vile Cristina Kirchner in using the term “vulture funds”; he also calls Singer & co. “scavengers” and accuses them of “heinous behavior” – all this for the supreme offense of purchasing debt fair and square and expecting to have it paid back in full.

Kyle Bass: the best friend an Argentine autocrat could have

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Kyle Bass

Michael Lewis, the financial writer, has said that when he first met Kyle Bass, “I had an experience I’ve often had while listening to people who seem perfectly certain about uncertain events….One part of me was swept away by his argument….The other part suspected he might be nuts.”

Lewis isn’t the only financial insider who’s had a mixed reaction to Kyle Bass. The Dallas hedge-fund manager has, it must be acknowledged, won his share of praise. Once upon a time, indeed, he was considered something of an instant legend. Only two years after launching his own hedge fund in 2006, he struck it rich as a result of having predicted the subprime mortgage crisis.

For fifteen minutes, he was the hottest guy in the game.

Since then, however, things haven’t gone very smoothly for Kyle Bass. Far from it. In recent years – not to put too fine a point on it – his fund, Hayman Capital Management, has often performed disastrously. It’s had its ups, but some of its downs have been headline-making. In April 2012 alone, it lost 29% of its value. During the first quarter of 2014, it dropped by over 6%.

Time and again, Kyle Bass’s confident forecasts have proven wrong – often catastrophically so. Most famously, he’s been saying for years that the Japanese economy is an immense Ponzi scheme and that any minute now the market will catch on – leading inevitably to a debt crisis that sends bond yields sky-high and makes the yen all but worthless. In July 2013, he warned that this implosion would come within about two years – and would rock international markets so dramatically as to force the Western world to reconstruct its economic order from the ground up.

His doom-and-gloom prophecies for Japan, however, have yet to be fulfilled. And as time has gone by, more and more observers have clobbered his analysis. In May 2012, Joe Weisenthal of Business Insider called Bass’s take on Japan “totally simplistic and incorrect.” Noting that Bass bases his forecast largely on Japan’s debt-to-GDP ratio, Weisenthal pointed out that debt-to-GDP “is a lousy measure of anything” because it “just doesn’t tell you anything about interest rate risk or credit risk.”

bass5After all, argued Weisenthal, foreigners hold plenty of U.S. debt, but this hasn’t sent the American economy into a tailspin; by contrast, Italy’s public debt is mostly held domestically, yet that country is headed down the tubes. Yes, Weisenthal acknowledges, “there are a lot of yen floating around the world,” but ultimately “that currency will find its way home.” This, in Weisenthal’s view, is what Kyle Bass doesn’t get:

For a country that borrows in its own currency, government spending finances borrowing! If Japan spends 100 billion yen on something, that’s 100 billion yen out there in the world that will eventually wind up in a financial institution, where ultimately 100 billion yen worth of JGB will be purchased.

Weisenthal also made this observation:

True sovereign bustups are not the result of accounting or numbers, but the result of some kind of social/political dysfunction. Japan is arguably the most stable society in the world, with low unemployment and a functioning economic and political culture. Thanks to the country’s population dynamics, Japan isn’t a growth dynamo, but there aren’t even the vaguest hints of instability. It’s not the kind of place where you’d see a meltdown.

Another expert who’s disputed Kyle Bass’s Japan scenario is Jesper Koll, head of Japanese equity research at J.P. Morgan Securities Japan. In Koll’s view, as paraphrased by Stephen Harner of Forbes, “Kyle Bass has not fully thought through some of his points, or has ignored contrary indications.” Yes, wrote Harner, the economic policies of Prime Minister Shinzō – who set a 2% inflation target and decreed a “Keynesian deficit spending stimulus” – might raise interest rates, but “there will be no crisis, and there may not be higher rates.”

bass3Koll’s view, in short, is that Japanese government bonds “remain an attractive asset.” Koll made a number of cogent points – among them, that deregulation in several sectors of the Japanese economy could send productivity soaring and significantly boost the country’s economic health.

Curiously, while sounding a death knell for Japan, Kyle Bass has been bullish on – of all countries – Argentina. In September 2014, the BBC reported that unlike Moody’s and other ratings agencies, which were “very critical” of the regime of Cristina Fernández de Kirchner, “Kyle Bass believes that the current economic policy of the Argentinian government is the correct one.”

So gung-ho, in fact, has he been on investment in Argentina – which, it will be recalled, defaulted on its debt last year for the second time in thirteen years – that The New York Post commented on August 28, 2014, that Kyle Bass, addressing this subject on the previous day, had “sounded more like Argentina’s leftist economy minister Axel Kicillof than a U.S. hedge-fund manager.”

Was the Post on to something? Throughout Argentina’s debt crisis, Kyle Bass did come off not like a responsible financial manager but like a paid spokesman for the Casa Rosada (Argentina’s White House). As the BBC noted, Hayman Capital has a “good relationship” with Fernández – a leader who, like her late husband and predecessor, Néstor Kirchner, is notorious for her destructively socialist economic policies and her government’s staggering levels of corruption. The ruling by a New York judge that Argentina couldn’t dodge its debt to holdout creditor Paul Singer of Elliott Management was legally solid, but Kyle Bass wasn’t having any of it: Singer, he charged inappropriately, was “holding poor countries as hostages.”

Then there is his perplexing enthusiasm for General Motors. It’s been his biggest position for some time, although he admitted himself that a massive GM recall made 2014 “a tough year” for his firm. Still, he insisted that GM’s management was “doing a great job” and that the company was “much leaner” than in the 1990s. “By every metric” except the recall issue, Kyle Bass claimed, GM is “doing great.”

In February 2015, all his major moves having failed him, Kyle Bass tried a new tack: selling pharmaceutical companies short and then exploiting a relatively new process, “inter partes review,” to challenge their patents. First he went after Acorda Therapeutics, whose major product is Ampyra, a treatment for multiple sclerosis, and whose stock fell nearly ten percent as a result of his challenge. It remains to be seen how this new move will pan out.

bass1Meanwhile, Kyle Bass finds himself entangled in what may be America’s least enviable legal battle. A few years back, he went into business with the late Chris Kyle, subject of the recent film American Sniper and now a posthumous national hero; the enterprise has since gone bankrupt, and Chris Kyle’s widow, Taya, has sued a Hayman Capital attorney, making a host of serious charges, among them that he pressured her husband to surrender the rights to his firm’s now-iconic logo and that (in violation of Texas law) the lawyer never made clear that his ultimate loyalty was to Hayman and not Kyle. Also at issue are a loan on the Kyle family home and the profits from his bestselling memoir. However you cut it, it’s a shabby situation for a hedge-fund superstar to find himself in.

Briefly put, Kyle Bass’s star has slipped considerably since he made his name – and his fortune – on the subprime mortgage crisis. It seems fair to say that what looked for a while there like a Midas touch has turned out to be something more like a case of first-time gambler’s luck giving way to the usual Vegas pattern of loss after loss after loss.

Sure, he could still turn things around. Who knows? Stranger things have happened. But given his recent record, we wouldn’t bet on it.