Support given to the Venezuelan dictatorship by multinational corporations is bad business strategy

The period 1999- 2017 has been tragic for Venezuela. The state has become a narco-state and the government an open dictatorship, while rampant corruption has run the country into the ground. More than $300 billion have gone into the pockets of the members of the regime and their accomplices in the country and abroad. Countries such as Cuba, Nicaragua, Bolivia, Brazil under Lula and Rousseff, Argentina under the Kirchners, El Salvador under the Front Farabundo Marti, Dominican Republic and small Caribbean countries members of Petro Caribe have enjoyed the prodigality of the Venezuelan dictators Chavez and Maduro, giving them, as payment,  their unconditional political support. Political leaders such as Lula da Silva, Daniel Ortega, Evo Morales, the Kirchners, Dilma Roussef, Raul Castro and organizations such as ALBA, UNASUR, ALBANISA in Nicaragua, have received significant amounts of money from the Venezuelan dictators. Latin American presidential candidates of similar political ideology to the Chavista dictatorship have received money for their presidential campaigns.

This orgy of political corruption, involving significant, illegal financial transfers, has left the country in ruins, forced to get in debt to survive. Today, Venezuelan total debt is six times higher than when chavismo came into power, in spite of having received the highest oil income in Venezuelan history. The only way the Venezuelan dictatorship can currently avoid default is by getting new loans from China and/or Russia while incessantly printing new money, which has led to hyperinflation. In addition to those two countries which have supplied the Venezuelan dictatorship with about $85-90 billion in loans in the last seven years, there is another important source of money for the regime, some of the oil companies active in the country. Oil companies such as Russia’s Rosneft or China’s CNPC are two of these companies supplying the Venezuelan regime with money. They are geopolitical tools of their governments. But there other companies, such as ChevronTexaco, Schlumberger and Halliburton, which do not have a political motivation for doing so but simply follow what they consider to be good business strategy. By staying in chavista Venezuela and financing its dictatorial regime these companies believe they can survive and prosper in the country, while exhibiting disregard for business ethics. Not only they have given cash or received promissory notes from the regime to continue operations in the country but they have accepted to partner with the state oil company, Petroleos de Venezuela, a company ripe with corruption, being investigated internationally for money laundering. In working with the corrupt Venezuelan oil company their international prestige has suffered. The same considerations apply to multinational financial auditors, such as KPMG, which continue to validate the financial results of the Venezuelan state oil company, in spite of their increasing suspicions that something is rotten in La Campiña (the site of the company’s headquarters in Caracas, Venezuela) or Goldman Sachs, the financial company that recently acquired over $2 billion in tainted Venezuelan bonds from the Maduro regime.   

There was a time in which international companies claimed that a lack of heart was acceptable and that they were businessmen, not politicians, and could do business with the worst governments in earth. This is no longer the case. The issue of business ethics is becoming much more important and moral and, even, legal sanctions are emerging against companies that “get in bed” with dictators and corrupt regimes. Most, if not all, big corporations have included good business ethic practices in their mission statements. Solid business ethics are not only a moral imperative but they represent good business strategy. Multinational corporations have to realize that they cannot be good guys in country A and bad guys in country B and that good business ethics should be consistently applied across the board. They cannot play the Dr. Jekyll and Mr. Hyde game with impunity.  In the case of Venezuela those corporations that have become cozy with the Venezuelan dictatorship, believing this regime will be in power forever, run the risk of losing credibility with future democratic governments and the public at large. They are using a two-edged sword that cuts both ways.