On the letter signed by 70 defenders of the Venezuelan Maduro dictatorship

See the letter in: https://www.commondreams.org/views/2019/01/24/open-letter-united-states-stop-interfering-venezuelas-internal-politics

It is with sadness mixed with disdain that democracy-loving Venezuelans have read the letter signed by 70 members of academia and think tanks, mostly from the U.S. but some from other countries, about the current political and social Venezuelan situation. With sadness because universities and think tanks should be places inhabited by champions for the truth and for all the things that are just and noble, rather than by men and women who sacrifice truth and principles to their slavish adherence to political ideology. Disdain because the authors of the letter show intellectual dishonesty when they side with a government that violates the most basic human rights only to maintain their rigid attachment to political ideology or to their displeasure of the government of their  country.

The authors of the letter say:       

The United States government must cease interfering in Venezuela’s internal politics, especially for the purpose of overthrowing the country’s government. Actions by the Trump administration and its allies in the hemisphere are almost certain to make the situation in Venezuela worse, leading to unnecessary human suffering, violence, and instability.

We comment:

The rejection of the Nicolas Maduro regime by the majority of Latin American governments, Canada and the U.S. and the prevailing tendency shown by world nations to recognize the interim government of Juan Guaidó, the young president of the Venezuelan National Assembly, has only come after many years of watching on the sidelines how a country is being driven onto the ground by an increasingly corrupt, inept and abusive authoritarian regime

The authors of the letter say:

Venezuela’s political polarization is not new; the country has long been divided along racial and socioeconomic lines. But the polarization has deepened in recent years. This is partly due to US support for an opposition strategy aimed at removing the government of Nicolas Maduro through extra-electoral means. While the opposition has been divided on this strategy, US support has backed hardline opposition sectors in their goal of ousting the Maduro government through often violent protests, a military coup d’état, or other avenues that sidestep the ballot box.

Such a statement would sound logical to aliens landing on Earth today but they can only cause hilarity to those millions of Venezuelan and regional observers who have seen with their own eyes and heard with their own ears the increasingly fraudulent utilization of the electoral system by the Chavez/Maduro regime. With an Electoral Council totally in their hands and run by illegitimate members who obey orders from the Executive branch, the Chavez/Maduro regime has made a cruel mockery of elections in Venezuela. For a long time Venezuelans faithfully went to the polls only to see how fraud was committed before, during and after each election and how the will of the people was sacrificed to the rapacity and greed for power of the regime. If anything can be said of the manner the Venezuelan people and outside democracies have behaved in light of this systematic farce is that they have been too slow in reacting more vigorously.

The letter continues saying:

“Under the Trump administration, aggressive rhetoric against the Venezuelan government has ratcheted up to a more extreme and threatening level, with Trump administration officials talking of “military action” and condemning Venezuela, along with Cuba and Nicaragua, as part of a “troika of tyranny.” Problems resulting from Venezuelan government policy have been worsened  by US economic sanctions, illegal under the Organization of American States and the United Nations ― as well as US law and other international treaties and conventions. These sanctions have cut off the means by which the Venezuelan government could escape from its economic recession, while causing a dramatic falloff in oil production and worsening the economic crisis, and causing many people to die because they can’t get access to life-saving medicines. Meanwhile, the US and other governments continue to blame the Venezuelan government ― solely ― for the economic damage, even that caused by the US sanctions”.

The statements above are of an astonishing candor. Independently of what president of the U.S. has been in power since the so-called “Bolivarian revolution” took political control, the Venezuelan regime has been rejected as undemocratic and authoritarian by the U.S. and by a large majority of democratic nations of the planet. It is true that this current administration has been more assertive in its rejection. It was a matter of time before a largely passive critical posture gave way to more concrete measures to protect an increasingly defenseless population from the abuse of Nicolas Maduro has subjected them. It is amazing to hear surprise from the authors of the letter to the characterization of the Cuban, Venezuelan and Nicaraguan regimes as “tyrannical”, a definition that fits perfectly in the eyes of all democracy and freedom loving citizens of the Americas.

 U.S. sanctions against members of the Venezuelan regime engaged in drug trade and money laundering have been welcomed by most Venezuelans as an exercise of justice against the corrupt oligarchy dominating Venezuela. This is a justice which Venezuelans could not expect from a Venezuelan judicial system totally in the hands of the corrupt oligarchy in power. The collapse of the Venezuelan economy and the ruinous state of the country is not the product of U.S. sanctions but the end result of the incompetence and greed of the ruling regime. All over the world international justice is finding proof of the extent to which the Venezuelan national finances have been sacked by the members of a criminal gang in the name of a revolution that has ceased to exist, a ghost  which the signatories of the letter still believe in and defend against all evidence of its demise, being prisoners of their ideological strait jacket.  

The letter adds:   

Now the US and its allies, including OAS Secretary General Luis Almagro and Brazil’s far-right president, Jair Bolsonaro, have pushed Venezuela to the precipice. By recognizing National Assembly President Juan Guaido as the new president of Venezuela ― something illegal under the OAS Charter ― the Trump administration has sharply accelerated Venezuela’s political crisis in the hopes of dividing the Venezuelan military and further polarizing the populace, forcing them to choose sides. The obvious, and sometimes stated goal, is to force Maduro out via a coup d’état.

In these paragraphs the authors of the letter talk of the illegal recognition of the Juan Guaidó interim presidency by the OAS. We are no legal experts and will not argue this point but we rely on Venezuelan constitutional experts who say that the designation by the Venezuelan National assembly of its president, Juan Guaidó, as Venezuelan interim president was made in accordance to the Venezuelan constitution, articles 201,233,333 and 350. For any observer reasonably informed of the Venezuelan situation it is evident that the Guaidó designation was approved in the streets of the country and of the world by an immense majority of Venezuelans, while the parallel meeting convoked by the regime became a pathetic reunion of a few hundred red shirts that dissolved melancholically after a short while. When talking about legitimacy of Maduro or Guaidó there is no doubt that Guaidó’s presidency has overwhelming support in Venezuela and abroad, except in isolated and dark places such as the minds of the authors of this letter.   

The letter continues saying:

The reality is that despite hyperinflation, shortages, and a deep depression, Venezuela remains a politically polarized country. The US and its allies must cease encouraging violence by pushing for violent, extralegal regime change…. The US should have learned something from its regime change ventures in Iraq, Syria, Libya, and its long, violent history of sponsoring regime change in Latin America. Neither side in Venezuela can simply vanquish the other. The military, for example, has at least 235,000 frontline members, and there are at least 1.6 million in militias. Many of these people will fight, not only on the basis of a belief in national sovereignty that is widely held in Latin America ― in the face of what increasingly appears to be a US-led intervention ― but also to protect themselves from likely repression if the opposition topples the government by force.

Venezuela is no longer a polarized country if by this term an equal distribution of political forces is understood. Over 80% of Venezuelans openly reject the Maduro regime while much of the remaining 20%, in the government payroll, simply do not dare to do so openly, although they are equally fed up with the misery reigning in the country. The authors of the letter lie when they state, as a matter of fact, that many of the 235,000 members of the military and the 1.6 million members of the militia will fight to defend Maduro and his gang of thieves. The so-called military-civilian alliance typical of fascist regimes, advocated by Chavez’s adviser Norberto Ceresole, which served him to consolidate his political power, is rapidly melting away as salt in the ocean.   

The letter ends, predictably, as follows:

In such situations, the only solution is a negotiated settlement, as has happened in the past in Latin American countries when politically polarized societies were unable to resolve their differences through elections. There have been efforts, such as those led by the Vatican in the fall of 2016, that had potential, but they received no support from Washington and its allies who favored regime change. This strategy must change if there is to be any viable solution to the ongoing crisis in Venezuela. For the sake of the Venezuelan people, the region, and for the principle of national sovereignty, these international actors should instead support negotiations between the Venezuelan government and its opponents that will allow the country to finally emerge from its political and economic crisis.

I say this is a predictable end to the letter because it confirms the desperate situation of the Maduro regime. Reduced to a skeleton gang of supporters in Venezuela, Maduro is now asking his fellow travelers of the intellectual community in the U.S. to call for a negotiated solution that will allow him and his gang to step aside in freedom and with their ill-obtained wealth intact. An estimated $300 billion have been put away by the 600 or so main members of the Chavez/Maduro gang. Only one man recently captured in the U.S., Alejandro Andrade, a semi-illiterate Treasurer of Venezuela during the Chavez era, has confessed to “distracting” one billion dollars from the national treasury.  Another billion was taken by a contractor to the state oil company, PDVSA, also in the hands of the U.S. justice. Not all of the members of the regime are big leaguers but they all have filled their pockets with money that belonged to the Venezuelan people. To negotiate with such people what some call a silver bridge, “un Puente de Plata” to freedom would be immoral and would almost guarantee that the monies stashed away by these criminals would serve to finance, in the medium term, their return to power.

One such example is already in evidence. Rafael Ramirez, one of the three main accomplices of Hugo Chavez, now ostracized by Maduro, is using his considerable “savings” in financing an attempt at recapturing power, claiming to represent Chavez’s true legacy, a fight among hyenas painful to witness and of which these U.S. academics seem to have no knowledge.

Finally, I would like to add a comment on the authors of the letter. Some of the names are well known to me because they have been fellow travelers of Chavez from the start and still are, although there is no longer a revolution (did it ever exist?) but a rogue and failed government in place. Chomsky, Grandin, Tinker Salas, Ellner, Weisbrot,, have written extensively in favor of the Venezuelan socialism of the XXI century. Most are unknown to me and I can only evaluate them in my mind on the basis of the ignoble cause they defend. I do not know how many of them have ever been in Venezuela during the Chavez/Maduro years and have firsthand knowledge of the Venezuelan situation and of the overwhelming rejection of the Maduro regime by the Venezuelan people. In any case I feel sorry for them because they obviously feel obliged to defend a criminal regime only because it fits their ideological straitjacket. If they know the real Venezuelan situation they are being dishonest but, if they don’t know it, they have committed the major intellectual sin of giving an uninformed opinion, in violation of a cardinal rule of academics.    

Gustavo Coronel

If anyone of these ladies and gentlemen think it desirable, I would be available for a public debate with them on this subject at a place of their choice.    

A small group of Maduro admirers send a letter to the U.S. Congress

They want Maduro here

An open letter to the U.S. Congress is only the latest in a series of shameless publications by a small group of university professors and Hollywood figures that support the Venezuelan narco-dictatorship. The same persons appear repeatedly in the diverse documents generated recently. They all share enthusiasm for the Cuban and the Venezuelan totalitarian governments. Although living in a democracy, they inexplicably support these autocratic regimes for reasons that properly belong into textbooks about Psychological Pathology.

The list of signatories of this open letter is:

Danny Glover, Oliver Stone, Tom Hayden, Fr. Roy Bourgeois, Lisa Sullivan, Antonio Gonzalez, president, William C. Velasquez Institute; George Ciccariello-Maher, professor of Political Science, Drexel University; Arturo Escobar, professor of Anthropology, UNC, Chapel Hill; James Counts Early, Institute for Policy Studies Board of Trustees; Sujatha Fernandes, acting associate director, Center for Place, Culture, and Politics, Queens College and the Graduate Center, City University of New York; Daniel Hellinger, professor of International Relations, Webster University; Dan Kovalik, professor of International Human Rights, University of Pittsburgh School of Law; Steve Ellner, professor of History, Universidad de Oriente, Venezuela; Nicole Phillips, human rights lawyer, Institute for Justice and Democracy in Haiti, Port-au-Prince, Haiti; John Womack, Jr., Harvard University Robert Woods Bliss professor of Latin American History and Economics, emeritus; Miguel Tinker Salas, professor of History, Pomona College; Sinclair Thomson, professor of History, New York University; T.M. Scruggs, professor emeritus, University of Iowa; Gilbert M. Joseph, Farnam professor of History and International Studies, Yale University; Gerardo Renique, associate professor, Department of History, City College of the City University of New York; Greg Grandin, professor of History, New York University.

Some of the members of this group are well-known to us, due to their dedication to sing the praises of the Venezuelan narco-dictatorship. Some of them have actually received significant amounts of money from the deceased dictator, Hugo Chavez. One, Danny Glover, received about $18 million from Chavez to do a picture about Haitian historical figure Toussaint Overture, no doubt promising him that the picture would be a subliminal pro-Chavez message. This film is still “in the makings”, after nine years or so, and we reasons to suspect that it will never be finished. Another, Oliver Stone, is the author of a documentary on Chavez for which he received a significant amount of money, in the millions of dollars. Others are university professors such as Daniel Hellinger, Steve Ellner, Miguel Tinker-Salas and Greg Grandin or authors of laudatory books about Chavez, such as George Ciccariello-Maher. Tom Hayden is a social activist, better known for having been married to Jane Fonda during her pro- Hanoi years.

This is the letter they sent to Congress, which I would like to comment:    

Dear Members of Congress,

We write to you out of a deep concern over the recent tragic events in Venezuela and because we believe that recent congressional action in response to these events is misguided and could actually worsen the situation. On Mar. 4, the House of Representatives passed Resolution 488 "Supporting the people of Venezuela as they protest peacefully for democratic change and calling to end the violence." The resolution is right to condemn violence and call for dialogue, but incorrectly portrays the government as the sole party responsible for the violence that has taken place and also paints an inaccurate picture of protestors' demands.

My comment: It would seem obvious to anyone that violence following peaceful protests by thousands of students, house wives and, even, children, is generated by the reaction of the armed forces of the regime. The protesters did not and do not   have weapons. The rubber bullets, the toxic gas, the rifles, the armored tanks, are all in on the camp of the regime. The graphic material that proves the repression by the armed forces and by bands of thugs controlled by the government is absolutely overpowering.  It was very revealing that Mr. Nicolas Maduro’s op-ed in the New York Times complained about the coverage of these events by the international press, which is unanimously critical of government brutality.  The international press is not subjected to censorship as is the case in Venezuela.

 

As The New York Times, Reuters and other outlets have reported, opposition protestors have engaged in acts of violence that have resulted in loss of life and injury. Rather than merely "protesting economic, social, and political concerns," as the resolution text states, many of these protestors are blocking roads, damaging public and private property and carrying out violent acts in a stated effort to provoke the immediate removal of the country's elected government. Given the passage of this resolution and the recent introduction of legislation that mandates targeted sanctions against Venezuelan officials (H.R. 4229), we wish to share with you a few well-documented facts about these protests in the hope that you can help promote a more balanced vision of the situation in Venezuela within Congress.

My commentary: These paragraphs grossly distort the facts. International reporting coincides in the repressive nature of the government forces. This is very well documented and the U.S. Congress should not be led astray by these irresponsible allegations. Repression came first, then, came barricades.

In the last five weeks, over two-dozen people have been killed in violent incidents related to opposition protests. Some of these have been opposition protesters and some of them appear to have died due to the actions of government forces. However, it is important to note that more than half of the dead (as of Mar. 13), however, have not been opposition protesters, but have either been government supporters, National Guard officers, or people who have been killed at the barricades - either driving into them, or shot while trying to remove them. A few ghastly cases resulted in the decapitation of motorcyclists who rode into wire that opposition protesters had tied across the road. All such deaths and violence are lamentable. But recent statements and the text of H. Res. 488 focuses exclusively on violence carried out by those in the employ of the Venezuelan government, while ignoring the equally lamentable deaths of those who support the government, or who were essentially bystanders.

My commentary: The truth about the deaths is, again, very well documented. They number 39 people, many more than as reported in the letter.  About 75% of the victims belong in the opposition camp. Only one motorcyclist has been killed in the manner mentioned. Armed motorcyclists, by the way, represent one of the main weapons of the regime. They are civilians trained to kill and harass Venezuelans and have been called “main defenders of the revolution” by the government. 

It is also commendable to denounce actions by the Venezuelan government or any other government that infringe on human rights such as freedom of association and freedom of speech. H. Res. 488 notes the number of people "unjustly detained" in connection to the protests, including opposition leader Leopoldo Lopez, condemning "politically motivated criminal charges to intimidate the country's political opposition." Yet many protesters have not been peaceful, as clearly shown by much of the media coverage. Protesters have shot and killed people trying to remove barricades, including Chilean national Giselle Rubilar Figueroa on March 9, National Guard officers and others. They have burned buildings and Metro stations. They have assaulted journalists (as Reuters reported on March 12).

My commentary: Killing, torturing and repression are being carried out by the Police, the National Guard and the urban thugs mentioned above. The evidence is so overwhelming that there is no need to report a few specific cases.  Senator Marco Rubio already showed some of this material in a recent speech on Venezuela. Foro Penal Venezolano, a human rights organization in Venezuela, see http://mashable.com/2014/02/24/report-venezuela-tortured-18-arrested-protesters/ , reports 18 cases of torture and 539 arrests, including the case of Juan Manuel Carrasco, sodomized by members of the National Guard. The United Nations, see: http://www.vanguardia.com/actualidad/mundo/254380-la-onu-expresa-su-preocupacion-por-muertes-en-venezuela,  reports 39 deaths, 608 wounded and 192 people in prison as of today and its Secretary General Ban Ki-moon demands the protection of human rights.  About 120 cases of human rights  violations have been reported by the Foro Penal Venezolano from the State of Táchira, one of the many areas of the country where protests are taking place (El Nacional, April 4, 2014).        

Considering that not all the protesters in Venezuela are peaceful and engaged in lawful activity, the Venezuelan government may have legitimate reasons for arresting and detaining a number of them. This includes some higher-profile opposition figures. The Venezuelan government sought the arrest of retired General Angel Omar Vivas Perdomo in relation to his Tweets advising protesters to string wire across streets at a height of 1.2 meters in response to pro-government motorcyclists. After the deaths of two motorcycle riders from riding into wires, security forces went to Vivas Perdomo's house. He emerged on his balcony carrying a large assault rifle and engaged in a stand-off, and ultimately the officers left without arresting him.

My Commentary: the case of general Angel Vivas Perdomo is very illustrative. This military officer was actually dismissed from the Armed Forces when he refused to salute: “Fatherland, socialism or death”, since he considered this partisan salute to be incompatible with the constitutional mission and apolitical nature of the Armed Forces. The letter fails to report that when the government tried to put him in prison the entire neighborhood defended him and forced the Venezuelan military/police to retreat.  

Among those the Venezuelan authorities have arrested are 14 members of the security forces. It is also notable that as soon as evidence emerged that members of Venezuela's intelligence service (SEBIN) had been involved in shooting at protesters - apparently killing one - President Maduro fired the head of the agency and eight other officers were arrested. In another case, the driver of a truck who struck and killed a student protester was arrested and charged with homicide.

The concern for human rights in Venezuela expressed in the resolution is admirable, but to only focus on the deaths of protesters while ignoring the killings of pro-government and other individuals by protesters politicizes and undermines effective promotion of human rights. Targeting only the Venezuelan government and condemning it while depicting the protesters as uniformly "peaceful" and "non-violent" is akin to saying you want to break up a fight by holding back the arms of one brawler while the other continues to throw punches at him. This is undoubtedly why the U.S. administration's proposals for action on Venezuela at the OAS have fallen on deaf ears: the U.S. government's version of events seems far removed from reality and what has been reported in the international media.

My Commentary:  The brawl in Venezuela involves someone armed to the teeth (the regime) and another unarmed (the protesters) , a highly asymmetrical affair. The shameful event at the OAS, where Deputy Maria Corina Machado was not allowed to speak, has a different explanation. The OAS today is an organization controlled by the Venezuelan regime through the votes of the ALBA countries and of the members of the Caribbean Community, CARICOM.  The Venezuelan regime provides them with subsidized oil at a huge loss to the nation. Such handouts have converted them into political satellites. This is why the OAS is now a totally discredited organization.

Portions of the letter have been omitted due to its irrelevancy.

…..If U.S. members of Congress want to assist Venezuela in resolving this current situation of violent unrest, they should urge other opposition leaders to come to the table in good faith.

Venezuela is a democracy, as former Secretary of State Hillary Clinton recently affirmed in public statements on the situation, saying, "No one would argue that it isn't." Voter enfranchisement and participation has greatly increased in recent years, and former president Jimmy Carter has called Venezuela's electoral system "the best in the world." Freedom of the press is also alive and well in Venezuela, where the vast majority of media (including TV stations) remains privately owned and regularly gives voice to the opposition, as the New York Times recently admitted in a correction.

My Commentary: These paragraphs actually border on the dishonest. The letter quotes a selected portion of what Mrs. Clinton said. Her complete sentence was: “It’s a democracy. No one would argue that it isn’t,” Clinton said, but she added:  “But a democracy doesn’t just mean an election. A democracy means a free press. Protecting the rights of opponents. Protecting a free economy. Having an independent judiciary. So other than elections, there aren’t very many characteristics of a real democracy right now in Venezuela.” We can add that even elections are mostly controlled by the regime since the Board of the National Electoral Council is made up of government followers. The letter repeats Carter assertion to the effect that the Venezuelan electoral system is the best in the world. I say, once more, that Carter is a bad word in Venezuela, a persona non grata, since the Carter Center is perceived to be in bed with the Venezuelan regime. Recently a sugary book on Chavez by Mr. George Cacciarello- Maher, one of the persons signing this letter, was presented in an event at the Carter Library, next door to the Center. Congress should ask if they have received donations from the Venezuelan government.   

Finally, we feel that targeted sanctions against the Venezuelan government - as stipulated in H.R. 4229 (introduced on March 13, 2014) - is both a gross over-reaction to the alleged repression in Venezuela and uncalled for given that, as mentioned earlier, authorities have taken judicial action - including arrests and investigations - to address alleged abuses carried out by security agents. Rather than contribute to peace and dialogue, this legislation will only create more tension between the U.S. and Venezuela and will weaken U.S. efforts to promote constructive dialogue between government and opposition actors. Thank you for your concern for human rights, peace and democracy in Venezuela.

My Commentary: I hope the U.S. Congress will see through this letter since it represents a highly biased position by a group of friends of Latin American dictators. The admiration of leftist university professors and some Hollywood actors for strong men and autocratic governments is not new. Similar groups existed in support of the criminal Cuban “revolution”. This letter points to a resurgence of this aberrant posture, a proof that ideological fanaticism can destroy true academic values, which include the search for truth in a free and democratic intellectual environment.   

The half-billion dollars fraud in Petroleos de Venezuela

Coronel: Venezuela's Latest Half-Billion Dollar Scandal


Over $500 million of PDVSA Worker's Retirement money seems to be missing. Two of the three people arrested by the SEC and FBI have now pled guilty. The latest was Juan Carlos Guillen Zerpa, an accountant in Venezuela who the SEC says was paid $1 million to cover for $275 million in missing funds. "Guillen was not a lowly accountant, " says former PDVSA Director Gustavo Coronel. "He was the Head of BDO Guillen, Martinez & Asociados, the Venezuelan affiliate of BDO International, the world’s fifth largest international accounting and financial consulting firm."

A May 4, 2011 newspaper report in the Stamford Advocate brought news from Bridgeport, Connecticut about a Venezuelan accountant admitting in federal court to his role in a Ponzi scheme that “cost investors in a Stamford-based hedge fund hundreds of millions of dollars over five years.” The accountant was identified as Juan Carlos Guillen Zerpa, 44, and the fund was the Stamford-based Michael Kenwood Fund. Guillen plead guilty to one charge of conspiracy to obstruct of justice by defrauding the Securities and Exchange Commision.

In Connecticut, the name of Juan Carlos Guillen is not a household word and the fraud, although very significant, sounds like a local affair. However, in distant Venezuela, this is developing into one of the many major financial scandals connected with the Hugo Chavez government and Petroleos de Venezuela (PDVSA), the Venezuelan-owned state petroleum company.

The essence of the story is as follows, as described in the WARRANT FOR ARREST DOCKET NUMBER 3://mj 31(w/&)of the District Court of Connecticut:

“This is a fraud scheme occurring in Connecticut and elsewhere from approximately 2006 to
2011 to defraud investors and creditors of various hedge funds advised by these and related entities. Part of the investigation is focused on a person who will be referred to herein as a confidential human source (the "CHS") [known to be Venezuelan principal owner of the funds, Francisco Illaramendi, who turned State's Evidence], Guillen and others, including a former Venezuelan banker living in Florida who will be referred to herein as the "Middleman." Guillen, the Middleman and others all participated in a conspiracy to falsify an asset verification letter on behalf of STLF that purported to verify that Illaramendi’s Short term Liquidity Fund [STLF] was owed money by various Venezuelan companies. The letter attested that the loans in total amounted to at least approximately $275 million, when the CHS, Guillen and the Middleman all knew that no such loans were owed to STLF.
The letter, which will be referred to herein as the "Fictitious Asset Verification Letter," was false.
The conspiracy included providing the Fictitious Asset Verification Letter to the SEC in the course of its official investigation. The co-conspirators also caused the Fictitious Asset Verification Letter to be supplied to the business advisers appointed by the district court in connection with a civil suit filed by the SEC and styled SEC v. Illarramendi , et al., 3:11-cv-00078 (JBA) (hereafter, the "SEC Action")”).

What makes this fraud a major scandal in Venezuela has to do with six main aspects:

(a), The money defrauded by the Funds essentially belonged to the Employee’s Pension Fund of Petroleos de Venezuela, some $500 million;
(b), This fraud had been going on from 2006 to 2011, six long years, under the very eyes of the Board of Petroleos de Venezuela that, by statutes of the Pension Fund, is obliged to approve every movement made regarding the investment of the money;
(c), the Pension Fund was under the direct responsibility of Petroleos de Venezuela’s Finance Director, Eudomario Carruyo, who is well-known to the principal owner of the hedge funds, Francisco Illaramendi; (d), Illaramendi had, in fact, been retained by the Venezuelan Petroleum company in 2004 to oversee the management of the pension fund, precisely the year the fraud started;
(e), the president of the state-owned petroleum company, Mr. Rafael Ramirez, has inexplicably denied that the Board of the company had any involvement in how the pension fund was managed; Mr. Ramirez also inexplicably denied that Mr. Iallaramendi had ever any relation with the company, when, in fact, he had been hired by the company in 2004;
(f), the “accountant” mentioned in the Connecticut press is far from being an ordinary accountant. He is a Managing Partner of BDO Guillen, Martinez & Asociados, the Venezuelan affiliate of BDO International, the world’s fifth largest international accounting and financial consulting firm.
In their website, this Venezuelan affiliate of BDO describes its philosophy of doing business as follows: “ In the ever-changing business world, it is important to have the services of reliable professionals, prepared to develop creative solutions to a wide variety of economic situations. That is why BDO Guillén Martínez & Asociados is always striving for the total satisfaction of its clients, by offering them high-quality professional services with a highly trained staff employing the latest methods”. Guillen proved to be very creative, indeed, and no doubt employed the latest methods.
We are not suggesting that BDO International had anything to do with this disgraceful affair. This could well be a personal initiative of Guillen with no relation to his company. What this scandal shows is that Venezuela has become a moral cesspool, not only restricted to the public sector but to the private sector as well. Money is dancing like a devil in Venezuela, without control, without accountability. Those who are well connected with the regime have thrown the moral compass by the side. What prevails today is a dance of million promoted by a despot.
Venezuelan justice will not move a finger. Fortunately, U.S. justice will.

Gustavo Coronel was on the Board of Directors of PDVSA from 1976 to 1979. He was Chief Operations Officer (COO) and acting CEO of the Corporacion Venezolana de Guayana (CVG), the $35 billion Venezuelan government conglomerate designed to exploit and run all of Venezuela's mineral, metal and mining operations, from 1994-1995. He was President of Puerto Cabello -- Venezuela's main port -- from 2001 to 2002.
Coronel was author of the Cato Institute study "Corruption, Mismanagement and Abuse of Power in Hugo Chavez's Venezuela" and was the Venezuelan representative to Transparency International from 1996 to 2000. In 1994, he founded Pro Calidad de Vida, an NGO promoting anti-corruption techniques in government and civic education for children in Venezuela, Panama, Paraguay, Mexico and Nicaragua.

A new letter to FAO, Italy about its Caracas, Venezuela Representative

I just sent this second letter to the Rome FAO headquarters about its Venezuelan Representative. This gentleman is  overly solicitous with a regime that maintains Venezuelans without access to the most basic food and medicines. He claims, in the name of the international organization, that the government is doing a very good job. I found this claim very cynical and request an investigation by the FAO's headquarters,
Gustavo

From: gustavocoronelg@hotmail.com
To: fao-hq@fao.org
Subject: FW: A new Letter to FAO headquarters about the FAO Office in Venezuela
Date: Mon, 16 May 2016 18:21:54 -0400

Dear Sirs:

Two months ago I sent your Washington office and, later to you, a letter about the reprehensible behavior of the FAO representative in Caracas. This letter has not had any answer from you. I find that an international organization such as yours should be more careful about handling the comments from citizens with legitimate issues to discuss. 

I find in your silence an evidence of complicity with the sad posture of your Caracas representative,

Gustavo Coronel 

The letter said:

                                                                                                             March 13, 2016

Food and Agriculture Organization,

Washington DC Liaison Office

2121 K St NW #800b, Washington, DC 20037

FAOLOW@fao.org

Luego enviada directamente a FAO-HQ@fao.org

Dear Sirs:

I hope you will convey this letter to its appropriate recipient, since I am not sure which office should be the one to consider its contents.

My name is Gustavo Coronel. I am a Venezuelan citizen, now living in Virginia, USA. I am not an expert in your field, just an observer of the current Venezuelan reality in the food and agricultural sector. As you probably know the availability of food and the situation of the agricultural sector in Venezuela has become critical, to the point that the Venezuelan National Assembly has declared a state of emergency to exist in these areas. Due to the disastrous policies generated by the government that has been in place for the last 17 years, Venezuela, in spite of the highest oil income in history, has become a country where markets lack all essential foodstuff and where the Venezuelan people have to stand in line for hours to obtain the most meager food items, just barely enough for day to day subsistence. The country depends heavily on food imports, largely controlled by government agencies. This has generated significant corruption since tons of food, grossly over-billed, have been imported already in rotten conditions and have been found abandoned and hidden. These imports are mostly done through mafias made up of government bureaucrats and its friends. The cases are numerous and I am sure you will be able to find them in the Venezuelan and international press, see just one example:http://www.maduradas.com/lo-que-vtv-no-cuenta-hallan-45-toneladas-de-comida-podrida-en-camiones-de-pdval-en-falcon/

  

In parallel with this tragic situation your organization maintains a representative in Venezuela, Mr. Marcelo Resende, at least since 2013, who has become a prominent supporter of the Venezuelan government policies related to food availability and distribution. His laudatory comments have been abundant and defy the reality which is evident to the eyes of anyone living in Venezuela today. Last year, in April 2015, he publicly declared (my translation):

“Venezuela is an example of good public policies to combat hunger, not only in our region but in the whole world. FAO recognizes these efforts. He added: “Venezuela is one of the countries with the largest public food distributing network: Mercal, Mercalito, PDVAL, Bicentenario and FAO can see this and congratulates the Venezuelan people. You can always count with FAO’s support”.  And went on to say (abbreviated):  “In name of the United Nations I want to congratulate you. Here we have a vivid example of how communes and government are winning food security and sovereignty”.

 Coming at a time in which Venezuelan suffer a tragic food crisis and when corruption in those governments institutions mentioned by Mr. Resende are very well documented, these expressions of support by FAO’s Caracas representative have been considered by Venezuelans as extremely cynical.  In fact, PDVAL and Bicentenario bureaucrats have been found to be involved in massive corruption, see:http://www.eluniversal.com/nacional-y-politica/160130/presos-presidentes-de-abastos-bicentenario-y-cval-por-hechos-de-corrup

 By coincidence, in those same days of 2015, the Venezuelan government had transferred $12 million to the FAO’s Caracas office to finance a program to “eradicate hunger”.

In the last few days, March 2016, Mr. Resende has, again, made extremely laudatory comments about the Venezuelan food disaster. He has said, see: http://www.noticierodigital.com/forum/viewtopic.php?t=20944 :  My translation: “I congratulate the people and government of Venezuela for the existence of the best public food distribution network and for structuring an active social participation and organization [in this sector].

Mr. Marcelo Resende has probably been in Venezuela too long and has been clearly co-opted by the Venezuelan regime to become one of its most ardent supporters. His pro-government bias is not only unjustified but cruel, in light of the Venezuelan reality. I, as a Venezuelan citizen, protest against this unprofessional posture by the FAO Caracas office representative. I think this deserves an investigation by FAO’s highest authorities since the name of the organization is being invoked to support what is, in fact, a major tragedy.

I am at your service in case you need further information,

Sincerely, 
Gustavo Coronel

8360 Greensboro drive #710

McLean, Virginia 22102

703-2567470

A letter of Chavez envoy to the U.S.

Chavez's house in Washington DC.

Mr. Bernardo Alvarez Herrera, Chavez's representative in the U.S. has written a letter to the U.S. Senate in reply to the remarks about Venezuela made by Mr. Dennis Blair, Director of U.S. National Security. I comment below on some of Mr. Alvarez assertions:

My comments on a letter by Chavez’s representative to the U.S.

A letter has been sent by Mr. Bernardo Alvarez, the Chavez’s envoy to the U.S., to Senator Dianne Feinstein, as an answer to the comments made about Venezuela by the National Security Director, Mr. Dennis Blair. The letter by Mr. Alvarez deserves a few comments from a Venezuelan citizen who knows what the Venezuelan reality is.

Alvarez. “As in years past, the report is full of politically motivated and cynical accusations against my country”. Readers will have either accept or reject this assertion by Mr. Alvarez, depending on the trust they have on the U.S. National Security Director. I find Mr. Blair’s comments on Venezuela quite objective and, if anything, rather benign in its assessment.
Alvarez. “Let me start by stating that Venezuela is a sovereign country that demands respect for its right to chart its own destiny”. Talking about cynicism, this is a very cynical statement by Mr. Alvarez. Although Venezuelans would like to be sovereign and to chart their own destiny, the reality is that today the Venezuelan government is deeply contaminated by a Castro Cuban invasion, present in highly sensitive Venezuelan bureaucratic levels: intelligence, documentation, police. A “hero” of the Cuban revolution, Mr. Ramiro Valdes, is currently in Venezuela, ostensibly serving as “electricity adviser” to the regime. As Mr. Valdes is no electricity expert but a master on political repression his activity in Venezuela is certain to be of a more sinister nature. There is no doubt that Venezuela is under a dictatorship, as defined by the lack of institutional checks and balances, persecution of dissenters, a one-man rule and a total lack of transparency and accountability in the management of national resources.
Alvarez. “The report states “President Chavez continues to impose an authoritarian populist political model in Venezuela that undermines democratic institutions.”On the contrary, Venezuela is in the process of extending democracy to all of its people. This includes finding a balance between the state and the market that allows us to guarantee the welfare of our people and overcome the historical wrongs of poverty and inequality”. This statement is a lie. Venezuela is in the process of restricting, not extending democracy. The middle-class and large sectors of the poor are being excluded on political considerations. The nation is in political and economic chaos; electricity and water services are collapsing, the oil company is engaged in tasks different from their core business, the military are politicized, crime is rampant and food shortages are evident.
Alvarez. “Over the last decade, Venezuela’s ranking on the UN’s Human Development Index has risen by 10 spots, as levels of poverty have dropped and access to social services increased. In fact, political participation and consciousness in Venezuela have expanded dramatically over the last decade. These advances have occurred within what we call “Socialism of the 21st Century”, a democratic political process centered around fostering the well-being of our people as an alternative to the capitalist model currently in crisis”. Again, Mr. Alvarez lies audaciously. While it is true that the Venezuelan Human Development Index has increased in absolute terms, as it has happened in most of other countries in the middle level range of the HDI, the ranking of Venezuela has gone from position 48 in 1999, when Chavez arrived in power, to position 58 in 2008. What this means is that other countries are developing faster than Venezuela, without the need for a “socialism of the 21st Century”. The creator of this highly nebulous ideological doctrine, Mr. Heinz Dieterich, has just published an article to the effect that Chavez is bound for disaster since he has become more radical while the country lacks governance (see my blog http://www.lasarmasdecoronel.blogspot.com/, for February 6, 2010).
Alvarez. “The report also states that Venezuela has “curtailed free expression and opposition activities by shutting down independent news outlets, harassing and detaining protestors, and threatening opposition leaders with criminal charges for corruption.” Venezuela has not shut down any independent media outlets, but rather has applied relevant laws and regulations to outlets operating in the country, just like any other democracy”. In this respect the strategy of Mr. Chavez has been simple and brutal. He enacts a law or a regulation tailor-made to suit his political objectives and then applies it under the pretense that the victims are “breaking the law”. This has been the case in the closing of RCTV International, a cable station that did not broadcast Chavez’s political harangues. Chavez compulsory media hookups, called “cadenas”, amount to some 2000 hours of broadcasting during his 11 years in power. This is a Guinness record.
Alvarez. “Anti-government protestors continue enjoying their constitutional rights to peaceful assembly. Moreover, many members of the Venezuelan opposition travel freely around the world promoting their political agenda, including to the U.S., and return to Venezuela to exercise the political rights that the 1999 Constitution grants them”. Graphic records about the repression exercised by the Chavez’s National Guard are self-explanatory, including the presence in their hands of a medieval weapon called a “grappling hook”. The harassment of dissenters, both Venezuelan and foreign, when traveling out or into the country is also a matter of record. The rights of opposition leaders are systematically violated, as has been the well-documented case with dozens of popular candidates being “suspended” from running for office by the dishonest Attorney General, Mr. Clodosbaldo Russian.
Alvarez. “Venezuela only recently averted a financial crisis when it took steps to stop a number of banks from threatening the integrity of the country’s financial system. Two people charged in this case were very close to government officials. Both were detained and will stand trial for their crimes”. The truth is that these two persons, Mr. Arne Chacon and Mr. Ricardo Fernandez Berruecos, became instant millionaires (Chacon) and billionaires (Fernandez) under the Chavez regime, before Mr. Chavez’s very nose. In fact, they have been denounced for being members of mafias that include Chavez’s brother Adan, former vice-president Jose V. Rangel, Minister of Public Works Diosdado Cabello and other Chavez favorites. Prison for the two gentlemen mentioned by Mr. Alvarez was just a pre-emptive measure designed to protect the bigger fish.
Alvarez. “The report also claims that President Hugo Chavez, along with his counterparts in sister nations in the region, “are likely to oppose nearly every US policy initiative in the region, including the expansion of free trade, counter drug and counterterrorism cooperation, military training, and security initiatives, and even US assistance programs.” This is totally true. This is so well documented that no further support is necessary. Mr. Blair is right on the mark on this issue. Chavez has spent billions of our money and much effort in the creation of a global anti-U.S. alliance. He has not hidden this objective from anyone, except perhaps, from Mr. Alvarez.
This letter by Chavez’s envoy to the U.S. does not resist the slightest critical examination.


. .

Este es un review del libro de Bill Browder sobre sus aventuras financieras y políticas en Rusia y de como se enfrentó a Vladimir Putin, logrando que los Estados Unidos pasaran una ley para sancionar a unos 60 violadores de los derechos humanos en Rusia. También vale la pena leerlo por la similitud existente entre los regimenes forajidos de Putin y de Chávez/Maduro en Venezuela.
Gustavo

BOOK REVIEW

TRAGEDY AND MURDER IN PUTIN’S RUSSIA

• Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice
• By Bill Browder
• Simon & Schuster, New York, 2015
• HB, 396 pages, US$28.00
• 978-1-4767-5571-7
• 
  Click here to buy Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice
• Reviewed by Gustavo Coronel | May 11, 2015

What starts as an entertaining, almost comical account of the early incursions of Bill Browder into the world of Eastern European finance rapidly develops into a story of unparalleled success as an investor in Russia and, finally, into a drama that ends in the death of a courageous man and the conversion of Browder into a formidable human rights activist. This testimony by Browder includes parallel financial, political and human narratives linked together by his perseverance and creativity, his “never quit” attitude.

Background

Bill Browder grew up in a highly talented family. His grandfather, Earl Browder, was the head of the Communist Party USA during the 1930s who ran twice for president. Ironically, Bill became a “black sheep” in the leftist, academically oriented family, applying for an MBA at Stanford in his desire to become a capitalist.

In his search for a job he looked for a company that could send him to Eastern Europe. Joining Boston Consulting Group he was sent to the London office where he became the only member of the Eastern European “Division.” His arrival coincided with the fall of the Berlin Wall and with the end of much of the Soviet influence within Eastern Europe. In 1990, he got his first opportunity when he won a contract to advise AUTOSAN, a Polish bus company being re-structured with the help of a World Bank loan. His brief stay in the town of Sanok makes for one of the most entertaining chapters of the book, an often hilarious narrative reflective of the times about the scarce facilities of the town, the poor food and his comic interaction with his interpreter, Lescheck Sikoski. While doing his job, Browder found that Polish companies were starting to be privatized, their shares being sold at incredibly low prices as compared to earnings. His back of the envelope calculations revealed that by buying into them an investor could get his money back in six months. Using his life savings, $2,000, he bought his first shares of Eastern European companies. After one year he doubled his investment and after the second year he again doubled it. Ultimately, he says, they went up ten times.

He had found his calling.

After this success he felt he needed more intensive exposure to Eastern Europe and joined the corporation of Robert Maxwell, who, at the time, was the most important foreign investor in the Soviet bloc. When Maxwell was found dead in the sea, the company collapsed and Browder went to work for Salomon Brothers.

Seeing the light in Murmansk

As his first assignment with the company, Browder advised the employees of a Russian trawler company in Murmansk on whether to exercise their right to buy part of the company under the Russian privatization program.  He soon noticed the company had between one and two billion dollars worth of ships and was willing to sell 51% of its shares for about $2.5 million.  He felt he had found a potential treasure. Instead of returning to London he went to Moscow where he arranged some 30 meetings on the topic of Russian company privatizations. The Russian government had decided to turn over part of its property to the people, issuing vouchers to every one of its 150 million citizens. Together, these vouchers could be exchanged for about 30% ownership of all Russian companies. Since the market value of each voucher was about $20, this meant that the Russian state was valuing 30% of its total assets at only $10 billion, only one sixth of the value of Walmart. Russia had about 24% of the world’s reserves of natural gas, 9% of the world’s oil and produced about 6.6 % of the world’s steel and, yet, was willing to let go a third of the ownership in these resources for only $3 billion. Even more astonishing was the fact that anyone could buy these vouchers. There was a Moscow Exchange Center where packets of vouchers could be traded.

Browder returned to London “a man possessed,” only to find that no one at Salomon Brothers seemed to be interested in this unbelievable opportunity. He was finally contacted by another “weird guy” in the company called Bobby Ludwig, who listened to what he had to say and managed to obtain $25 million from the firm to invest in Russia.  Browder went back to Russia and, based on his recommendations, Salomon Brothers participated in the acquisition of shares from Lukoil (oil & gas), United Energy Systems (electricity) and Rostelecom (telecommunications). Within a short time, their $25 million investment turned into $125 million. This made a hero of Browder at Salomon Brothers. However, he says, the firm was not geared to react quickly to this new business opportunity in Russia.  Therefore, he quit the company and founded his own investment company, Hermitage Capital.

Hermitage Capital:  From financial success to enemy of the Russian state

After a few unsuccessful efforts to raise the required seed capital, Browder found a partner, Edmond Safra, who committed $25 million to the new company. His initiative and enthusiasm led him, uninvited, to the World Economic Forum in Davos. Sleeping on the floor, sharing a room with an equally entrepreneurial friend, they somehow managed to arrange a dinner for Russian presidential candidate Gennady Zyugnov, so that he could meet with a group of powerful international investors as well as members of the Russian financial oligarchy. During this dinner, Zyugnov made the startling statement that Communism was “just a label” in Russia and that, if he won the presidency, privatization of Russian state-owned companies would continue. Simultaneously, the Russian oligarchs present at the dinner told Browder that Boris Yeltsin would easily be re-elected. Reassured from both sides, Browder went on to Moscow and opened his office. The first company he targeted for acquisition was the Moscow Oil refinery, MNPZ. In researching this company he found out about “preferred shares,” those given to the workers during the privatization process. Not only were these shares cheaper than ordinary shares but they had recently earned dividends while the others had not. Their only limitation was that they did not allow voting rights. But, who cared? Foreign investors never voted their shares anyway.

Browder had found a gold mine. He promptly started buying preferred shares and, after Yeltsin was re-elected, he saw his investment grow by 125%. Almost immediately he found another huge opportunity with a little known oil company called SIDANCO, its shares being sold at an extremely low price. Browder invested $11 million in this company, paying $4 a share. Soon afterwards BP bought 10% of the company at a 600% premium. By 2000, Hermitage Capital had become the most successful investment company in the world.

Russian oligarchs did not like Browder’s success

The Russian oligarch who owned most of SIDANCO did not like to see a foreigner  profit so much from his company, so he advanced a plan to dilute the company shares without allowing Hermitage to buy into the new stock issue. This would have generated a loss of some $87 million to Browder’s company.  Against all advice from friends and partners Browder decided to fight this move and he won.

The 1999 Russian economic crisis was misread by Browder and nearly wiped out Hermitage. However, his perseverance found another gold mine: Gazprom. His research found that this company had been divesting of its assets at ridiculously low prices to benefit Russian oligarchs, while still retaining significant value due to its oil and gas reserves. He decided to buy into Gazprom and, at the same time, leaked information to the press about what he considered to be a stealing of its assets by the oligarchs. As a consequence of his actions, the Russian state acted to fire the management of the company and to recover Gazprom’s stolen assets. Gazprom shares went up a hundred times (not a hundred percent, a hundred times).

Departing, perhaps unwisely, from his role as a financial investor, Browder decided to go after corruption in other Russian companies such as the National Electricity Company, UES. These moves went against Russia’s corrupt oligarchs and happened to coincide with Vladimir Putin’s interests. In fact, for some time Browder was mistaken by many to be “Putin’s guy.” This situation changed dramatically, when Putin imprisoned YUKOS chairman Mikhail Khodorkovsky. Browder claims Putin had decided to become the main oligarch and, as such, was prepared to destroy all rivals in his path. Browder’s Hermitage became one target.

Tragedy strikes

President Putin’s new posture was the reason why Browder was listed as a threat to Russian national security and expelled from Russia, a decision that would lead to tragedy and death. After being expelled, Browder was able to help most of his closest collaborators to leave the country, but his tax lawyer Sergei Magnitsky decided to stay since he candidly believed Russian justice would work in his favor. He claimed he had nothing to hide and had done nothing wrong.

Sergei Magnitsky was a superb lawyer and did a great job of destroying the official accusations against Browder and his company. In fact, he uncovered major tax fraud through which Russian bureaucrats had pocketed $230 million that belonged to the Russian state. In retaliation he was sent to prison, where he was denied his rights, tortured and eventually assassinated by the Russian police. He never surrendered.

Magnitsky’s heroic death in 2009 triggered Browder’s conversion, from financier to human rights activist. He became determined to make Sergei’s torturers and killers pay for their crimes. Finding little support from the government in London, he decided to ask for help in Washington. He found a champion in Kyle Parker, at the U.S. Helsinki Commission. Parker took up Magnitsky’s case with passion and persuaded Senator Ben Cardin to send a letter to then-Secretary of State Hillary Clinton asking for sanctions against those responsible for the Magnitsky’s death. This letter was an unprecedented step, a U.S. senator calling for sanctions against 60 Russian officials. The State Department dragged their feet and even convinced Senator Kerry to obstruct the move in Congress. However, a strong show of solidarity involving both sides of the congressional aisle pushed it through. Co-sponsored by Senators Cardin (MD-D), McCain (AZ-R), Wicker (MS-R) and Lieberman (CT-D), it received so much support that it was passed in 2012 and became known as the Sergei Magnitsky Rule of Law Accountability Act, the result of the titanic efforts by Browder and his group of activists.

The Magnitsky Act represented a major victory for justice against a rogue Russian state that had been transformed into a Putin-led crime syndicate. It was an example of the democratic process at its best and proved that perseverance, good strategy, media support and the goodwill of top level members of Congress could result in the passing of a law against corruption and international human rights violations.  Putin’s machine tried hard to retaliate but failed.

Bill Browder was judged and sentenced to prison in absentia by the Russian authorities. He probably will never feel safe anywhere as long as he lives. But his fight and victory are proof that when an evil deed takes place there will be a consequence.

The words of Andrew Jackson come to mind: “One man with courage makes a majority.”

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Gustavo Coronel, who served on the board of directors of Petróleos de Venezuela  (PdVSA), has had a long and distinguished career in the international petroleum industry, including in the USA, Europe, Venezuela and Indonesia.  Mr. Coronel was also the Venezuelan Representative of Transparency International, a Berlin-based organization fighting corruption. He is an author, public policy expert and contributor to SFPPR News & Analysis.