Becoming a traitor

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J. Edgar Hoover

After World War II, there would be much talk about the “paranoia” about Communism that supposedly could be found in the corridors of power in Washington, D.C. But during the years between the world wars, the problem in the nation’s capital was the opposite. Almost anybody working at, say, the State or War department could easily access classified documents. Communist sympathies on the part of high-level officials were accepted with a shrug by the FBI and other agencies. J. Edgar Hoover and his men were all but oblivious to the danger of Soviet spying.

In fact there were plenty of Soviet spies in Washington, some of whom held very high-level positions in the U.S. government. Those who worked for the NKVD (the forerunner of the KGB) reported to J. Peters, a Hungarian who had been born Sándor Goldberger and who worked out of the American Communist Party’s offices in New York. In 1934, Peters sent one of his underlings, Hede Massing, to Washington to try to enlist State Department official Noel Field, as Kati Marton reports in her fascinating biography of Field. As it happened, Field was also being wooed by a friend at State, Alger Hiss, who worked for the Kremlin’s military intelligence agency.

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Hede Massing

Field hesitated, then finally signed up with the NKVD in the fall of 1935.

Spying proved easy. These were days, he later recalled, when the “most secret documents… circulated from hand to hand.”

His new NKVD colleagues noticed several things about Field. One was his incredible naivete. Another was the “innate need for a guiding faith to imbue his life with meaning”: this “made him a devoted Communist.” Yet another was his desperate need to obey orders: he was a follower, not a leader or original thinker. “Noel could be strong only when he was doing what his superiors told him to do,” his friend and fellow spy Paul Massing later observed. Then there was his absolute belief in the goodness and rightness of Stalin and the Party. “For Noel,” Massing said, “the leaders of the Revolution can do no wrong.”

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Noel Field (right) at the League of Nations, 1939

Leaving the State Department in 1936, Field went to Geneva to work for the League of Nations – and to continue his espionage work. The next year, this young man who’d been drawn to Communism by a desire to usher in a better world was an accessory to the assassination of Ignaz Reisz, a veteran Soviet spy chief who’d dared to complain to Stalin about the show trials and executions of loyal Communists that were then underway in the USSR. Field had no remorse about this coldblooded murder. “He was a traitor,” Field said. “He deserved to die.”

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Gen. Walter Krivitsky

Field wasn’t troubled by the show trials, at which heroes of the Russian Revolution were railroaded and condemned to death. Other Communists, however, were outraged. Among them was Field’s handler, General Walter Krivitsky, who defected to the U.S., wrote exposés of Stalinism in the Saturday Evening Post, and ended up being murdered by Soviet agents in a Washington hotel room – a victim of Western officials’ unawareness of just how brutal the Kremlin was. (Krivitsky had actually told British Intelligence about the spies who’d later be known as the Cambridge Five, but they, like the FBI, had responded with a shrug.)

In 1938, a former colleague told the House Un-American Activities Committee that Field was a Communist. But thanks to official Washington’s – and America’s – lackadaisical attitude toward Communism during the FDR years, nothing happened to him. At about the same time, Field’s State Department friend Larry Duggan was also revealed to be a Soviet agent, but he, too, got away with it. Indeed, instead of being arrested or at least fired, Duggan was – incredibly – promoted: during most of World War II he served as assistant to Secretary of State Cordell Hull, a position that provided him with access to the nation’s most secret documents.

More tomorrow.

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.]