In the wake of the March 29 dissolution of Venezuela’s National Assembly, an act that was widely condemned as a coup by President Nicolás Maduro, the economy of that poor, socialism-ravaged country has continued to circle the drain even as opponents of Maduro have taken to the streets day by day to demand their nation back, shouting “No more dictatorship!” Hundreds of thousands of protesters have filled the streets of Caracas and other cities; on Wednesday of last week, which saw the country’s largest protests in years, over 300 protesters were arrested, and pro-Maduro cops, gangsters, and soldiers have caused several deaths. (As of last Friday, the number of fatalities had risen to at least twenty.) Increasing, the capital has resembled a battle zone, with protesters setting up “burning barricades in several neighborhoods” and the military patrolling the night streets in “light-armored vehicles.”
Maduro himself, who has rejected the idea that the dissolution of the legislature constituted a coup, has said that, on the contrary, the protests against him – which in any free country, of course, would be protected by the right of assembly – amounted to a coup attempt. Vice President Tarek El Aissami has called Maduro’s opponents “terrorist leaders” and accused their followers of “fascist violence.” Another recent Maduro move was barring Henrique Capriles, the top opposition leader, whom Maduro has called “trash,” from running for public office.
Late last week, engineering student David Marval, one of the protesters in Caracas, told Bloomberg News: “Everyone is asking what the plan is….For me, you have to paralyze the entire city.” Informed observers ventured that “Maduro’s grip on power is weakening.” At a press conference, opposition legislator Freddy Guevara said: “Twenty days of resistance and we feel newly born.” Raquel Belfort toldTime Magazine: “This is the moment….People are sick of this….we’ve touched rock bottom. I think if we take to the streets every day we’ll end this government.”
Yet in an April 21 article for The Week, Pascal-Emmanuel Gobry suggested that an end to Maduro’s tyranny is not yet in sight. Venezuela, Gobry lamented, “cannot wake up from its socialist nightmare.” Maduro, he maintained “increasingly looks like a ‘Bolivarian’ version of Vladimir Putin, holding power through corrupt patronage, fear, and the smothering of alternative voices and power centers.”
Gobry served up a welter of chilling statistics about Venezuela’s “rotting” economy: “The economy shrank by 18 percent last year, with unemployment at 25 percent, and inflation slated to be 750 percent this year and 2,000 percent the next.” The very real human toll of this socialist disaster is reflected in the fact that during the past year, “74 percent of Venezuelans lost an average of nearly 20 pounds each.” Also, “children are suffering from malnourishment for the first time in the country’s modern history” and “hospitals are running out of even basic drugs.” On April 20, the Wall Street Journal reported that many Venezuelans are, quite simply, too hungry to join in the protests.
Among the recent casualties of the economic free-fall was an announcement on that same date that General Motors, in reaction to a government seizure of one of its factories, was withdrawing entirely from the country, where it has thousands of employees. Oh, and let’s not forget that Caracas is now “the murder capital of the world.” All this in a country with extraordinary human and natural resources that was once, hard as it may now be to believe, on the verge of having a First World economy.
Tom Bower is an English investigative journalist who for more than three decades has been winning plaudits for his eye-opening books about such figures as war criminal Klaus Barbie, newspaper baron Robert Maxwell, business tycoon Richard Branson, and Labour MP Geoffrey Robinson. In 2003, he won the William Hill Sports Book of the Year Award for an exposé of corruption in English soccer.
Now (speaking of corruption) he’s publishedBroken Vows – Tony Blair: The Tragedy of Power, which tears back the curtain on the former British prime minister. Several excerpts from Bower’s book have been serialized in the Daily Mail, and they’re all of immense interest, probing Blair’s incompetent moves on education, health, and immigration, his missteps on Afghanistan and Iraq, his bellicose relationship with Gordon Brown, and much else. But three excerpts contained revelations about Blair the post-Downing Street wheeler-dealer – the useful stooge par excellence – that will be of special interest to readers of this website.
Bower takes us back to 2007, when Blair resigned from the top post and took up the role of Middle East envoy for the U.N., E.U., U.S., and Russia. Unfortunately, that position – however prestigious – was unpaid, and Blair, after living on a prime minister’s modest salary for a decade, was ready to be rich.
Very, very rich.
He mentioned this desire to his former chief of staff, Jonathan Powell. Powell then spoke with a headhunter, Martin Armstrong. He, in turn, had a meeting with the CEO of J.P. Morgan, Jamie Dimon, who, meeting with Blair, offered him $100,000 to sit on the bank’s board. But Blair was insulted. $100,000? For an ex-PM? Hewanted more. Lots more. Forty times more. Specifically, he wanted “at least £3 million a year, a five-year contract as an adviser and a percentage of every contract he initiated.”
He got it. For whatever reason, Morgan agreed to give him pretty much everything he wanted. And that was just the start. He also got a £180,000-a-year stint as climate-change advisor to a Swiss insurance firm. Plus another “advisory” gig on the payroll of Bernard Arnault, the richest man in France. And yet another job “representing” – whatever that means – “a wealth fund based in Abu Dhabi.”
While busying lining up these income-generating activities, Blair did something else: he set up (and hey, which one of us hasn’t, at one time or another?) a complex maze of limited-partnership shell companies through which to collect and channel cash from these and other paymasters – and to hide from authorities the true dimensions of the wealth he was now beginning to accumulate. This network of phony firms was, and is, no different from those set up by various crooks in places like Venezuela and Argentina whose hijinks we’ve recounted on this site over the past few months.
We’re talking about people like Tarek El Aissami, the thuggish governor of the Venezuelan state of Aragua, who, it will be remembered, lifts massive amounts of money from his state’s treasury and launders it through a vast network of shell companies, the chart of which, as we’ve noted, “looks more complex than the organization of the U.S. government itself.” And then there’s shipping magnate Wilmer Ruperti, who, in order to fool a Russian ship-rental enterprise into thinking it was chartering oil tankers to PDVSA, the Venezuelan national petroleum firm, set up a web of shell companies, to one of which he gave a name similar to PDVSA. Leasing a fleet of tankers from the Russian outfit, Ruperti then rented them to PDVSA at a profit. (And what does your dad do for a living?)
These are the kind of lowlife scum whose shabby stratagems Tony Blair, the former prime minister of the United Kingdom, has plainly studied up and imitated. Following their example, he’s lined his pockets magnificently.
But as we’ll see tomorrow, his similarity to these useful stooges goes beyond the mere setting-up of fake front companies. Tune in.
Last time around we offered an overview of that species known as the bolifunctionario – thesmall-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.
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.
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.
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.
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.
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.)
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.
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.
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.]
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.
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.
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.
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.
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.
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.
In 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.