Monday, October 31, 2005

Nov 3/05 - On what happens to those who lie on camara: will Ted Koppel have to expose Hugo tonight?

First came the interview, tonight we should hear the thruth

PMBComments: as a response to my letter to ABC Nightline’s Ted Koppel, I have been in touch with members of his team and have a feeling that their patience with Hugo Chavez’s is just about to run out. Failure of his government to deliver the information he offered during the September 16th interview is not taken lightly by one of the most professional news teams in American TV journalism. In this regard, I suggest you tune in to tonight’s broadcast (11:30 PM EST on ABC) and find out whether the enfant terrible of Latin politics has been caught red-handed lying on American (and British) television as he does constantly, adroitly and shamelessly at home.

I understand that Mr. Koppel and his staff have been in constant contact with Venezuelan government officials to no avail (as of this moment). Documentation on the “Balboa plan” has not been made available, and the U.S. public is about to be let into the big truth we all have known for a long time. Hugo Chavez has very little – probably no - regard for the truth. He is simply out to awe and shock in a maniacal race to bring attention upon himself, distract it from his inept and crooked administration, and portray himself on a daily basis - a la Fidel - as the pious victim of a myriad of Bush-inspired murderous conspiracies, truculent plots and halloweenish sub-plots.

During the aforementioned interview, Chavez made the following offer about the US concocted invasion plans they (assume it includes his allies in Havana) had purportedly uncovered: “I can send it to you -- I can't send it all, but I can make sure I can send part of it to you. I can send it to you. … I can send you maps and everything and you can show it to the United States citizens. What I can't tell you his how we got it, to protect the sources, how we got it through military intelligence…But nobody can deny it, because (inaudible) the Balboa plan. We are coming up with the counter-Balboa plan”.

Mr. Koppel, who will be remembered as one of the greatest and most principled newsmen in America, will not retire (he does so on Nov 22) leaving his devout audience with the impression that he too was hoodwinked by this crude, human-rights-abusing-charlatan. While the likes of the NYTimes can continue to discredit themselves with adoring stories about the “poor loving” phenomena, Mr. Koppel’s viewers will be treated to a short but sweet taste of what happens to those who lie to journalists that take their job seriously. PMB

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Oct 31/05 - MANDATORY Reference Document for Policymakers, Journalists, Academics and all concerned with the faltering state of Venezuelan democracy


On the State of Venezuela’s Democracy: only the facts! is the best effort to date to document the systematic destruction of Venezuela’s democracy and rule of law by a corrupt, inept and perverse “revolution” that still pretends to be treated as constitutional, democratic and legitimate.


Chávez apologists beware: what you read will not only educate you, it should also shame you.


Prepared by NGO SUMATE, this important document can also be accessed via, or

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Sunday, October 30, 2005

Oct 30/05 - Yukos' Mikhail Khodorkovsky goes to Chita: will he have Venezuelan company soon?

Once powerful, now in a rotten prision…will some in Caracas make the connection?

PMBComment: two years ago Mikhail Khodorkovsky was the richest man in Russia and one of the richest in the world according to Forbes' Billionaires list. Today he sits in a remote (remote being an understatement as you will read below) Chita region jail cell serving an 8 year sentence for daring to challenge Vladimir Putin's stranglehold on Russia.

Yukos, the company that MK, as main shareholder and CEO, transformed into a well regarded juggernaut in the oil sector has been gutted and today it is nothing more than a bunch of possibly futile law suits all over the world. Its main productive assets have been "auctioned" to friendlier entities and state participation of the cash rich energy sector has swung back to where the one-day-progressive, next-day-ruthless Kremlin wants it.

Definitely, Mikhail Khodorkovsky was far - really far - from being a saint. He and his partners paid close to nothing for Yukos and their ruthless “transformational skills” had a great deal to do with luck, i.e. being in the right place during the right oil-boom. Prior to its fatal run-in with the punitive Putin, Yukos did make a serious push in the direction of more transparent western-styled corporate governance and its management team began to be upgraded with world class technical expertise. But meddling in politics trumped any corporate transformation and Yukos was effectively sentenced to death…and executed.

The story below, from the Moscow Times, is long but worth reading to understand how the mighty still fall in the land of czars past and present. The more things change the more they stay the same. PMB

PS: The oil boom that back-drops Mr. Khodorkovsky’s amazing rise and his astonishing fall, was partly manufactured in Venezuela by a gang of unrepentant thugs that jettisoned a well orchestrated expansion plan; gutted a once proud and professionally managed Petróleos de Venezuela; appropriated its cash flow and invented a new slogan which fallaciously claims that "PDVSA now belongs to all" when in fact it is in the rapacious hold of just a few. One day, not too far in the future, a new government in Venezuela might well have to lease cell space in the YaG 14/10 prison camp for the Chavez clique which continues to betray and defraud our nation at a rate - and with a degree of impunity - that would certainly shame both Vladimir and Mikhail.

The Moscow Times

Friday, October 28, 2005. Page 1.

A Desolate Place at the End of the Line

By Catherine Belton
Staff Writer

KRASNOKAMENSK, Chita Region -- A railroad crosses the desolate moonscape of this eastern Siberian region. Most days, oil tankers emblazoned with Mikhail Khodorkovsky's once-envied Yukos logo rumble through the steppe bound for China. The lucrative market on the other side of the Chinese border, which the jailed tycoon once blazed a trail to, is just hours away.

But even though the tankers still carry Khodorkovsky's logo, the oil inside them is no longer his. Ever since the Rosneft state oil company gobbled up his company's main production unit, Yuganskneftegaz, it has taken over the China route and the tankers.

As if adding insult to injury, Khodorkovsky was transported to prison in a railcar along much of the route by which he once sent that oil. The export route was one of the independent foreign economic policies he pursued, and one that may have sparked the Kremlin's anger.

After a six-day, 6,500-kilometer train journey from Moscow, alone in a windowless car, Khodorkovsky arrived on Oct. 16 at the YaG 14/10 prison camp near Krasnokamensk, a nondescript uranium-mining town just 60 kilometers from the Chinese border.

It's a forbidding place to serve out the remaining six years of a prison sentence.

Khodorkovsky and his business partner Platon Lebedev were found guilty of fraud and tax evasion in May after a highly politicized trial, and last month had their sentences reduced on appeal from nine years to eight. Lebedev is serving his sentence in a prison in the Yamal-Nenets autonomous district, near the Arctic Circle.

Krasnokamensk "is the most desolate place in the world," said Sasha, a former inmate of the YaG 14/10 camp.

"I've no idea why they sent him here. They must have wanted to hide him as far away as possible," he said, on condition that only his first name be used.

From Moscow, it's a six-hour flight to Chita and then a nine-hour drive across a barren wilderness of steppe and bone-jarring roads that turn at times into stone-filled tracks.

Krasnokamensk, a gray mass of ramshackle five-story buildings where the streets have no name and the only way to navigate is by house number, is still reeling from the influx of people who have come to visit with or report on the prison's high-profile inmate.

Ever since it became known last week that he had been sent to serve his term here, Khodorkovsky's dapper Moscow lawyers, television crews and other press reporters have jangled this sleepy company town's nerves.

Until the mid-1990s, foreigners were banned from visiting the town, and in Soviet times any outsiders had to receive special permission before they could enter.

Prison guards have erected a second barricade in front of the camp in an effort to keep inquisitive reporters at arm's length.

With a population of 58,000, Krasnokamensk has been mostly known, if at all, for its uranium mine and plant, which is still Russia's biggest producer of uranium concentrate. Once a prestigious business, the end product filled the Soviet Union's nuclear warheads and workers enjoyed higher wages and more privileges than most.

Now, however, the town and the surrounding area appear to be a wasteland for the lost dreams of the Soviet empire. Production has fallen at the mine since its heyday, and the region is littered with abandoned Army settlements that once aimed to protect the Soviet Union's borders against its fellow Communist neighbor.

The Army, these days, has been drastically downsized in line with its reduced military clout, and the road from Chita to Krasnokamensk is pockmarked with empty barracks that lie gutted and in ruins.

Locked in his railroad car, Khodorkovsky figured out where prison officials were sending him only when he heard a station loudspeaker blare out the train's route -- "Moskva-Chita," -- said Anton Drel, one of his lawyers, who visited him this week in the prison colony.

Khodorkovsky's car was attached to one of the main trains on the Trans-Siberian railroad. In Chita the car was hooked up to a separate train that took him that last stretch to Krasnokamensk, Drel said.

Another Khodorkovsky lawyer, Albert Mkrtychev, said Khodorkovsky had managed to look on the bright side upon his arrival at the camp.

"He expressed his thanks to the Russian authorities for sending him to where the Decembrists served out their terms," he said.

Many of the Decembrists, a group of army officers who revolted against Tsarist power in the 1820s, were sent into exile in Siberia -- and some to Chita -- where their wives and families joined them. Few ever made it back to the imperial capital, St. Petersburg, and many did not even survive the arduous trip into exile.

Mkrtychev and Drel arrived with Khodorkovsky's wife, Inna, on Tuesday, and were immediately let in to see him. The lawyers met with their client for about three hours in a special visiting room, which, Drel said, appeared newly refurbished for the visit.

On Wednesday, Khodorkovskaya began a long-awaited, three-day svidaniye, or meeting, with her husband. A special two-bed room is reserved for such conjugal visits.

"For two years now they have only been able to speak to each other behind glass," Mkrtychev said, adding that their previous prison meetings often lasted for only 30 to 40 minutes.

Khodorkovskaya was expected to leave the prison Friday and travel straight back to Moscow.

"Conditions seem more humane the further away we are from Moscow," Drel said.

When Drel and Mkrtychev met Khodorkovsky on Tuesday, he was dressed in the standard prison uniform of black trousers and a black long-sleeved shirt. A badge with his surname and the number 8 -- that of his otryad, or barracks -- was sewn onto the upper-left corner of his shirt.

Khodorkovsky did not have any complaints about his treatment so far.

Local lawyer Natalya Terekhova, who has visited Khodorkovsky every day, said she had heard the other inmates were treating him well. "I heard some of them got together and gave him a box of chocolates to give to his wife," she said.

But Sasha, the former inmate, who said he served three years in the camp after being convicted of dealing drugs, said there could still be nasty surprises in store for Khodorkovsky.

The amount of attention he is receiving will not make it easy for him to settle into the prison's caste system, which goes from the blatniye, or bandits, to the opushchenniye, or humiliated ones, Sasha said.

Barracks No. 8 is normally reserved for the bandits, he said. "This is the barracks for those who live against the regime, who reject the system," he said.

The barracks system appears to be part of the caste system, which starts at the top with the blatniye. On the next level are the stremyashchiyesya, or young would-be bandits. One step lower are the muzhiki, who Sasha described as prisoners who "take care of themselves and don't let themselves go."

At the bottom of the heap are the opushchenniye, who he said were no better than bums and went around cleaning up after the blatniye and bringing them cigarettes.

Barracks No. 4 is known at the camp as "the Kremlin," Sasha said.

"These are the ones who watch over the zone," he said, using the slang term for the camp's territory.

How easily Khodorkovsky is accepted by the other inmates will depend on how he behaves, Sasha said.

"If the local bandits say they should eat him, they will," he said. "He is too visible. ... He can't lie low. If the bandits order the other cons to eat him, they won't beat him up -- that's not how they do things. ... But there will be constant provocations, so that his nerves fray. And then when they snap, he'll be punished for it."

Khodorkovsky's riches and notoriety could, however, also save him. The bandits will be hoping that he will be a source of income for them, Sasha said, adding that the prison trading system involved trading cigarettes and tea for other sought-after items.

"Five packets of unfiltered cigarettes and a packet of tea will get you a pair of new trousers," Sasha said.

One of the greatest problems in the camp, he said, was the lack of work. Out of 2,500 inmates, perhaps only 500 have work sewing or planting trees. The rest, he said, just lie all day in the barracks, where the electricity is switched off from 9 a.m. to 5 p.m. to cut costs.

Disease and poor health are also major problems.

"Everyone starts to rot there," he said.

Sores on prisoners' legs or elsewhere are another common ailment -- often leaving the skin discolored after they heal.

"It could be from the change in climate, or it could be the lack of vitamins," Sasha said. The food, he said, is awful, with most of the bread made by the inmates in the prison's bakery turning out only half-cooked.

Tuberculosis, which afflicts many prisoners in Russian jails, is also a big danger, with about 10 inmates in each barracks suffering from the disease, he said, and measures to combat it are inadequate.

Doctors visit the prison to carry out chest X-rays and check for tuberculosis symptoms only once per year, by which time the disease has taken hold in most cases, Sasha said. The sickest prisoners are transferred to Chita.

A prison official, speaking on condition of anonymity, said the camp was no worse and no better than any other in Russia.

Valery Zaitsev, spokesman for the Federal Prison Service, said Thursday that he did not know the number of tuberculosis cases at the Krasnokamensk prison colony. Zaitsev referred inquiries to the prison service in the Chita region, which could not be immediately reached for comment.

Drel said Khodorkovsky had not said anything about whether anyone was suffering from tuberculosis in his dormitory, in which about 100 other inmates are housed.

Khodorkovsky has said he intends to spend his time in prison writing a dissertation. Drel said Wednesday that it would likely be devoted to the subject of federalism.

When asked in an interview Thursday about conditions at the prison, Krasnokamensk's mayor, German Kolov, said the camp came under the jurisdiction of the Justice Ministry, not of the local authorities.

He denied press reports that inmates in the colony had once been forced to work in the uranium mines or that radiation levels in the town and around the camp exceeded permitted limits.

Kolov said his town had one of the lowest infant mortality rates in the Chita region.

He said he had been caught off guard by the arrival of Khodorkovsky, but that he and other town officials were trying to make provisions for the influx of visitors and that he had personally arranged a hotel room for Inna Khodorkovsky.

Kolov declined to comment on the politics behind Khodorkovsky being sent to Chita, but he said with a smile, "This region has always played a key role in the nation's history, and I'm sure it will continue to do so."

Staff Writer Carl Schreck contributed to this report from Moscow.
© Copyright 2005 The Moscow Times. All rights reserved

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Saturday, October 29, 2005

Oct 30/05 - On a Washington Post Editorial on Human Rights in Venezuela: the moral imperative of leadership

PMBComments: today's Washington Post editorial echoes my previous post as it focuses the attention of its readers on Human Rights as the fundamental issue of Venezuela. In 1948, the UN adopted the Universal Declaration on Human Rights. Today almost every one of these inalienable Rights is being violated by a government that has chosen to drag our nation down the alleyway of corruption, lies, neglect, discrimination and intimidation in a sure-to-eventually-fail effort to hold on to power in spite of both the glaring contradictions between "revolutionary" mantra and "revolutionary" deeds, and the mounting impatience of the citizenry.

Venezuela 's Democratic façade is made of papier-mâché. It pretends to convey legitimacy, but it is simply a sham that allows many around the World to continue dealing with the regime without remorse (France comes effortlessly to mind and makes me wonder – once more - what on earth they teach at ENA), or ignoring its consequences without shame or forethought – the preferred stance of many Latin "leaders".

Domestically, the present stratum of self-proclaimed leaders of Venezuela's so-called opposition continue to play along –callously turning a blind eye to abuses of all sorts - because they only aspire to bits and pieces of power appreciatively ceded by the abusive regime to those that tag along. They – the self proclaimed - know perfectly well that any real, principled and popular solution necessarily excludes them because of their undeniable role as the root cause of a deep and tragic involution. Keep in mind that Hugo Chavez and cronies may be dangerously dangerous and ineptly inept, but above all they are ill-willed consequences unable and unwilling to distinguish Rights from wrongs, and therefore justifiably afraid to cede an ounce of power to anyone not tainted like them.

It is for this reason that all eyes – and much hope - must be placed on those that maintain a moral high ground – fighting not for ephemeral power – but for Rights that are universally proclaimed and therefore never negotiable or surrenderable. PMB

Washington Post

Venezuela's Conscience
Sunday, October 30, 2005; Page B06

ONE OF THE BEST measures of freedom in any country is the existence, independence and effectiveness of human rights groups. They are something of a bellwether: In autocratic states, their appearance can be an early sign that a political liberalization, or democratic revolution, is on the way. That's why the recent sprouting of human rights groups in places such as Egypt and Jordan is encouraging. Conversely, the intimidation or elimination of such organizations is a sure sign that political rights are being constricted; that is what has happened in Russia, for example. Now, according to testimony presented this month before the Inter-American Commission on Human Rights, Venezuela's human rights community is under siege. Its troubles ought to send a message to anyone who still wonders whether President Hugo Chavez intends to preserve the democratic system that brought him to power.

Unlike most of its neighbors, Venezuela maintained a real if imperfect democracy for 40 years before Mr. Chavez's election, and so its human rights community is well-developed. The seven organizations that testified before the commission, an arm of the Organization of American States, have been active for many years. It's not new for them to be at odds with Venezuela's government. What is new, under Mr. Chavez's regime, is the targeting of the groups themselves. Not only are their reports on such problems as government manipulation of the Venezuelan judiciary, police brutality and intimidation of the press dismissed or ignored; they themselves are labeled traitors and coup plotters for having spoken out.

One conspicuous victim of this phenomenon is Carlos Ayala, who testified before the commission about the growing threat to journalists and press freedom. One of the most respected human rights lawyers in Latin America, Mr. Ayala is a former president of the Inter-American Commission as well as the Andean Commission of Jurists. When dissident military leaders tried to stage a coup against Mr. Chavez in April 2002, Mr. Ayala not only denounced the plot, which eventually failed, but intervened with police to free a militant pro-Chavez legislator. Yet, last April, after he brought human rights cases against the Chavez government, prosecutors announced that they had opened a criminal investigation against Mr. Ayala for allegedly supporting the coup. Charges are still pending.

Such attacks are widespread. Government representatives and supportive media, including an "information office" in Washington that has spent millions in an attempt to influence U.S. opinion, routinely refer to human rights groups leaders and other civil society activists as coup plotters. The Venezuelan government has meanwhile rejected the judgments of the Inter-American Commission as a violation of its sovereignty. The commission has already issued a couple of critical reports of Mr. Chavez's human rights record; its members could only have been sobered by what they heard from the veteran Venezuelan activists. The question is whether the OAS leadership, and the governments that stand behind it, will have the courage to recognize Mr. Chavez's campaign against human rights monitors for what it is -- and for what it portends.

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Sunday, October 23, 2005

Oct 23/05 - On the human wrongs of a fraudulent “revolution”: the dreadful state of Human Rights in Venezuela

PMBComments: last week a little noticed set of events took place in Washington. Seven highly respected Venezuelan Human Rights NGOs presented - in public at a WOLA sponsored event and in private in a formal hearing of the Interamerican Commission on Human Rights - a wretched picture of how little universal rights and individual life are respected by the so called "Bolivarian revolution."

In front of both audiences, a sobering picture was documented that stripped the current government of any moral authority to chastise the past, or even condemn the "evils of capitalism" within and beyond our borders. Seven years after he was first elected, President Chávez presides – like an autistic tribal chieftain - over a criminally negligent state apparatus that has turned it attention obsessively towards power preservation and turned its back repeatedly on hard earned citizen's rights and the indisputable duties of any democratic government.

Just a few days ago, OAS Secretary General, José Miguel Insulza, stated in a speech that "an effective protection of all human rights, including those of an economic, social and cultural nature, an independent judicial branch and a free and pluralistic press, are basic, indispensable factors for consolidating the rule of law and democratic governance, as well as strengthening the confidence of citizens in democratic government".

It was within this context, that representatives from Provea, Cofavic, Observatorio Venezolano de Prisiones, Centro de los Derechos Humanos de la Universidad Católica Andrés Bello , Instituto Prensa y Sociedad (IPYS), Vicaría de los Derechos Humanos e Instituto de Estudios de Derechos Humanos de la Universidad Central de Venezuela, denounced the "endemic impunity" that defines Venezuela today.

Thousands of forced disappearances, tens of thousands of unsolved murders, soaring mortality rate among the ill-treated prison population, continued attacks against journalists, increasing persecution of Human Rights defenders, complete obliteration of the country's judicial system, and multiple threats against freedom of expression are just some of the dishes in the wicked smorgasbord that Mr. Chávez pretends to conceal by repeatedly screaming such imbecilities as "death to capitalism" and "the US has plans to invade us."

At the WOLA event, the Venezuelan team was vehemently attacked by stooges of the Venezuelan Information Office which were commissioned by the Venezuelan Embassy to disrupt the event. They attacked the messengers with all sorts of groundless accusations but failed to dent any of the gruesome facts and arguments presented.

At the CIDH, the mood was somber and the commissioners where clearly shaken by the scale of the abuses presented and documented. It is very likely that sooner rather than later the CIDH will be forced to declare that the situation in Venezuela constitutes an extremely serious violation of the right to life (Article 4), the right to security and integrity of the person (Article 5) and the right to personal liberty (Article 7) under the American Convention on Human Rights, to which Venezuela is a party. And when this happens, Chávez's apologists and leeches alike will have to come to terms with the fact that elections are not the only thing that matters in democratic societies. PMB

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Saturday, October 22, 2005

Oct 22/05 - Answers to concerns and accumulated questions....

PMBComments: I would like to thank those of you who have contacted me over the last days inquiring about my 13-day blog-silence. Rest assured all is fine. I was simply traveling in Venezuela with less than optimal access to Internet, and upon my return to the U.S. I have been flooded with all sorts of stuff, including the dizzying task of keeping up with what is going on in Venezuela and with Chávez’s blablabla while he travels the old Continent in Sheik-style. Thanks for the concerns…and keep in mind that, under normal circumstances, no news is usually good news.

Before proceeding with my postings, let me answer a number of questions that have been accumulating over the last few weeks:

  1. Q: Why write a Blog about Venezuela in English?

A: When I started leveraging on e-mail to disseminate information about Venezuela, I was trying to call the attention of a diverse group of geographically dispersed editors, policy makers, journalists, bureaucrats, academics, business folks and opinion makers or influencers. Back in 2002 – when I started mailing information to 100 or so individuals around the world - not that many people were concerned about Venezuela. Over time the interest grew and the distribution list broaden significantly to include many more that have come to care, sometimes quiet a lot, but who still do not speak Spanish. Therefore, I stuck to English. I know this leaves out many who do not speak English inside, and outside, Venezuela, but here I take my hat off to those inside Venezuela who assume the risk to continue to report and opine on the slippery road towards unabashed authoritarian rule.

  1. Q: Where do you stand politically?

A: I do not think anyone can be indifferent to the wanton destruction of one’s own country. I think all Venezuelans have a duty to fight against inept, corrupt, cynical, and ruinous governance. I understand that, first and foremost, many in Venezuela associate these traits with the past. And I cannot blame them because dereliction of duty and purposeless leadership preceded and explain Chavez’s rise quite well. What Lt. Col. Chávez failed to understand is that he embodies – like nothing or nobody else - a tragic involution, and as such has little to do with the solution of our systemic failings. His is the proof not the solution. As a matter of fact, I believe – and the numbers begin to bear this out – that every single crisis has aggravated. Our country is highly and dangerously polarized; the future is pretty bleak for almost every single Venezuelan; human rights have never been trampled upon like they are today in every nook and cranny in our society (more about this in my next post); corruption has never been practiced with such dexterity, in such scale and with so much impunity; and our affairs have never been at the mercy of foreigners like they are today. So yes, I think this government has to be brought down sooner rather than latter. But I am firmly behind the notion that you do not solve the problem by striking its consequence and ignoring it cause. Many who have grand designs for “our” future sans Chávez were key architects of our nation’s destruction; as a matter of fact they gave Hugo a leg up and provided him the tools for the ONLY thing he has done well - destroy the future for 25 million Venezuelans. Most Venezuelans know, factually or intuitively, who these characters are and they fear their cockroach-like resilience to such degree that one can state that Chávez is actually in power because he has been able to convince a majority of Venezuelans that the future without him is indeed a return to the past. It is this notion that I am willing to fight as hard as I fight this retrograde and ruinous pseudo revolution.

  1. Q: Don’t you think Venezuelans should be patient till they have the opportunity to vote Chávez out of office?

A: The problem is that if they are too patient and naïve they will not have elections to vote in. Let me state it unequivocally: Hugo Chávez will not leave the stage due to an electoral defeat! His Cubans handlers will not allow that after what happened in Nicaragua and El Salvador. Revolutions do not lose elections. Much less when they have become the lifeline of the longest and most brutal dictatorship in the Americas. I always poked fun at the “democratic, constitutional, peaceful and electoral” solution hapless former presidents Gaviria and Carter sought for Venezuela (it is indeed amazing to stop and admire the extent of their combined naiveté). Those who were on my list then will remember that I used to add “no-cholesterol and low calorie” to the list because if we must be wishful thinkers we might as well go for the big prize. Why hold back? The risk is that if we proceed down that path we would be ignoring the lessons of history. After running and ruining a country the way they have, jail is the only option under OUR laws for Chávez and his cronies. That, my dear friends, will trump any lingering desire to test luck and fate with fair and transparent elections. More so if they are reading the most recent polls.

  1. Q: In your opinion who can replace Chávez?

A: That is a veritable $64,000 question. My $1, knee-jerk, answer is that none of the people that have thrown their hat into the “electoral” (what elections?) ring will make it. The problem, at this late stage in the demise of a country and its institutions, is not one of competence or organization. Even assuming that these attributes were present (certainly not too obvious however hard Borges, Smith, Petkoff and a few others try), failed States always end up being pulled up from the ground by individuals that are endowed – one way or another – with tremendous moral authority. Degrees in Public Administration and prior experience are not as important as the ability to earn the people’s trust and patience. This type of figure do not self promote, they live earnest lives, they suffer unjust persecution and punishment. Furthermore, they do not see themselves as saviors, it’s the people who perceive, or come to perceive them, as such and are therefore willing to suspend judgment for enough time to allow them to assemble solutions around unassailable moral principles and broadly shared objectives. So, my real answer is: I have not idea who is next, but I think searching for him or her inside the ruins of the political infrastructure of Venezuela might be a fruitless task.

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Sunday, October 09, 2005

Oct 9/05 - On paid rebuttals and false claims on fight on poverty: No Bernardo, China and Venezuela are "millions" of miles apart

An upside-down Nobel prize for the anti-Midas,
anti-gravitational, anti-darwinian revolution?

PMBComment: in response to a Sep 20th Op-Ed by Jackson Diehl of the Washington Post ("Buying Support in Latin America"), Bernardo Alvarez felt duty bound to request from the folks of the Venezuela Information Office - the “gringo-staffed-ragtag-parallel-embassy” he has set up in D.C. – a response which the could send to the Post. Titled Yes, Venezuela Is Reducing Poverty”, the rebuttal letter, which the paper duly published, is leaps ahead of pathetic, it actually demonstrates, beyond any doubt, the intellectual dearth of the sycophants Chávez pays to “represent” our country and the lack of integrity of the “lobbyists” they in turn hire to sell the “wonders” of a revolution that has done nothing but divide and marginalize our country.

Just one sentence illustrates my point and spares you having to link to the letter. The last sentence reads “Venezuela's economy is growing at the second-fastest rate in the world, topped only by China”. My question is: Bernardo, what does China’s continued growth have to do with Venezuela’s growing poverty?

The answer is nothing, nada! And this is the point of Andres Oppenheimer’s latest column. Having recently returned from China, he has a field day pulverizing Alvarez’s rebuttal. Enjoy the facts. PMB

The Miami Herald

Hugo Chávez deserves prize for economic bumbling
By Andres Oppenheimer
Sunday, October 09, 2005

|Somebody should create a new international award for economic incompetence -- which could be called the Lebon Prize, or Nobel spelled backward -- and give it to Venezuelan President Hugo Chávez.

Whatever you think of his politics -- and he has some redeeming points, such as having given a voice to the large masses of poverty-ridden Venezuelans who were largely ignored by a corrupt political class -- Chávez can claim the dubious achievement of having increased Venezuela's poverty despite the country's biggest oil boom in recent decades.

Indeed, since I disclosed in this column in March that Venezuela's official National Institute of Statistics (INE) had reported that poverty rose by 10 percent during Chávez's first five years in office, several international institutions have reported equally negative figures.

The INE, you may recall, said that poverty in Venezuela rose from 43 percent to 53 percent between 1999 and December 2004. Subsequently, Chávez lashed out against the INE, saying that it reflected the international ''neoliberal'' standards of measuring poverty, which according to him were not suitable for a ''socialist'' country such as Venezuela.


But now, other international organizations -- including the United Nations and the World Bank -- are painting a similar picture of Venezuela's social involution.

As strange as it sounds, they say poverty is rising in Venezuela despite the fact that world oil prices have soared from $8 a barrel when Chávez took office in 1999 to about $62 a barrel today. That's no minor detail; 80 percent of Venezuela's foreign income comes from its oil exports.

Among the latest statistics:

• The United Nations Development Program's Human Development Report: 2005, a publication that ranks countries according to their life expectancy, literacy and per-capita income, downgraded Venezuela from 68th place last year to 75th place this year. U.N. economists say much of the decline was due to a drop in the country's per-capita income, which fell from $5,380 to $4,900 during the past two years, in part because of an opposition-led strike.

• The U.N. Economic Commission for Latin America and the Caribbean said in its recent ''Millennium Development Goals'' report that extreme poverty in Venezuela -- the poorest of the poor -- soared from 15 percent of the population in 1992 to 23 percent in 2002. The percentage of the Venezuelan population that is undernourished rose from 11 percent to 17 percent in the same period, the report says.

• The World Bank's latest poverty figures, in turn, show that the percentage of Venezuelans living in poverty rose from 15 percent in 1990 to 33 percent in 1999, and that it has remained largely stable at that level since, despite the increase in the country's oil exports.

So why is it then that Chávez is so popular in Venezuela, you may be asking . The latest polls show that the leftist president is likely to win, hands down, upcoming legislative election and the 2006 presidential election.


Many opposition leaders say the polls are controlled by the government, or reflect widespread intimidation, and that Chávez won the 2004 referendum thanks to fraud.

But while it was definitely a fraudulent electoral process, in which the rules were bent to favor Chávez, there is no smoking gun yet to contradict Carter Center and Organization of American States election observers' assessment that Chávez won the actual vote.

Chávez may still be ahead in opinion polls because, with a nearly eight-fold increase in his country's oil income, he is giving out tons of money in monthly cash bonuses for the poor, and in subsidized food for the working class through the government's popular Mercal supermarkets.

Sure, his fiery anti-capitalist rhetoric has caused massive capital flight, the closing of more than 7,000 private companies, hundreds of thousands of layoffs and higher poverty rates.

But it would be a mistake to conclude that growing poverty will hurt Chávez politically. On the contrary, the more the poor depend on his financial largess, the more political control he has over them. As long as our potential ''Lebon Prize'' winner is awash in petrodollars, poverty may even play in his favor.

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Friday, October 07, 2005

Oct 7/05 - Open letter to Ted Koppel, from ABC's Nightline: Follow up to another unsubstantiated Chávez dream-plot

Mr. Chavez, Where's the evidence?

October 7th, 2005

Mr. Ted Koppel

N.Y., N.Y.

Dear Mr. Koppel,

During your September 16th Nightline interview with President Hugo Chávez, as a response to his startling - but oft repeated accusation - that the U.S. has a plan to invade our country, you requested the evidence. His response was “I can send it to you -- I can't send it all, but I can make sure I can send part of it to you. I can send it to you. … I can send you maps and everything and you can show it to the United States citizens. What I can't tell you his how we got it, to protect the sources, how we got it through military intelligence…But nobody can deny it, because (inaudible) the Balboa plan. We are coming up with the counter-Balboa plan”.

The purpose of this letter is straightforward. Can you confirm if you have received such information from President Chávez? If you have, when do you plan to “show it to the United States citizens” as he considerately requested? If you have not received the material offered, could you describe the efforts you, or your research staff, have made to obtain it.

I think it is not necessary to tell you how newsworthy such information would be not only to the American public, but also to millions of Venezuelans increasingly skeptical about both Mr. Chavez’s and his numerous, outlandish and unsubstantiated “victimization” stunts.

While I understand that it was important for the ABC Network to redress the ill will it justifiably earned by permitting a garish Pat Robertson the use of its affiliate ABC Family Channel to call for the assassination of Mr. Chávez, it would also be important to make sure that Mr. Chávez does not walk away having used your highly reputable program to once again propagandize and lie to the world at large.

I look forward to your prompt response.

Sincerely yours,

Pedro M. Burelli

PS: I am posting this letter in my Blog PMBComments ( and I will be more than happy to post your response when I receive it.

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Oct 7/05 - Is this the new flag of the People's Democratic Constitutional Bolivarian Revolutionary Republic of Venycuba?

Fidel and Hugo tossed a coin to determine whose triangle
would go on the left. The coin was stolen before it hit
the ground but the CNE declared Cuba the winner, Carter applauded!

PMBComments: I few days ago I read on of the most farcical statements ever to be attributed to a Cuban official. Carlos Lage, Cuba’s youngish Vice President, once considered to be a moderate reformer said:

Cuba is the most democratic country in the world. Indeed we are the most democratic country, because we have two Presidents: Fidel Castro and Hugo Chavez"

This statement was a knee jerk response to Hugo Chávez’s audacious proclamation (or admission) that “our two nations are deep down essentially one”.

By defining democracy as a system with a two headed monster at the helm, Lage is simply reflecting the awful qualities of Cuba’s educational system where State sponsored ignorance - and idolatry of despots- trumps fact or logic. And by continuing to drag Venezuela into the eager arms of Cuba, Hugo Chávez continues to indict himself of the unforgivable crime of treason. PMB

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Thursday, October 06, 2005

Oct 6/05 - On peering into a dangerous man's mind for a peek into the future: Seth Antiles warns us all

It is Hugo's turn to be in the driver's seat, but
one day
he too might have to be digged out from a "rat's hole"

PMBComment: in a number of my previous comments I have referred to the troubled psychological persona of Hugo Chávez. Because this is essential to comprehend both the Why? and the What next? for Venezuela, and the region, I am posting a fascinating piece by my good friend Seth Antiles that appeared today in

Seth, a former analyst at Citigroup, is one of the most respected Latin America specialists on Wall Street. He also relies on the theories of Dr. Jerrold Post to highlight the fact that history has witnessed this type of character before and we should be prompt to incorporate this most Human of dimensions into our political strategy to deal with the VERY REAL threat posed by Hugo Chávez. PMB

Hugo Chavez and the Danger of Silence

By Seth Antiles

06.10.05 | Accurately Assessing the Challenge. We who think about Venezuela are quick to criticize the opposition for failing to articulate a hopeful vision of the future and offering little other than criticism of Chavez. Those of us who write about Venezuela share a characteristic with the opposition—we too have done little other than criticize. We focus most of our efforts discussing the abuses of the Chavez regime. The intense criticism of Chavez, and the lack of positive results to show for it, is quite revealing. Had large segments of Venezuelan society not been excluded from economic development for decades, perhaps a critique of Chavez’s failed and authoritarian policies would have been sufficient to remove him from the presidency. Had large segments of Venezuelan society not felt rage from being alienated by the old economic and political elites, Chavez’s message of revenge would not have resonated with so many Venezuelans in the first place, and he would never have been elected president.

Chavez’s ability to hang on to power and spread his influence throughout Latin America despite the appalling deterioration in economic, political, and social conditions suggests an explanation far more complex than an incompetent opposition movement. In fact, when we chalk Chavez’s durability up to a horribly incompetent opposition, we minimize the enormity of the challenge that confronts not only Venezuela but all of Latin America. To understand the challenge before us it is helpful to try to better comprehend the psychological grip Chavez holds on a large segment of Venezuelan society.

Chavez—A malignant, narcissistic, charismatic leader—and his bond with Society

Chavez’s supporters are comprised of those living in the developing world (mostly in Latin America) and those living in the developed world. The overwhelming majority of those in developed countries who admire Chavez do so either because he effectively sells his Robin Hood image abroad, or because he is fearless and relentless in his attacks against President Bush, a highly appealing target at the moment. Chavez’s supporters living in the developed world are either so enthralled by his verbal attacks against Bush that they are willing to avert their eyes from Chavez’s authoritarian lurch or they are ignorant of the economic, political, and social destruction that he has waged.

The grip Chavez has on his supporters in Latin America, and Venezuela in particular, is more difficult to understand because his domestic supporters are also the victims of his destructive policies. Dr. Jerrold Post provides important insights on “malignant, narcissistic, charismatic leaders” in his book titled “Leaders and Followers in a Dangerous World.” [1]

The relationship between a “malignant, narcissistic, charismatic leader” and his followers in society is similar to the codependent relationship between an alcoholic and his/her spouse. Just as a codependent personality is likely to seek out an addict, an “ill” society is likely to seek out a messianic leader. Those segments of society who have been alienated because their basic social needs have been left unsatisfied are ill. These alienated, ill segments have a tendency to be drawn to messianic leaders. The messianic leader, hungering for an admiring response to counteract his inner sense of worthlessness, masks his profound sense of inner doubt by conveying a sense of grandeur, conviction, and certainty. There is a quality of mutual intoxication between the leader and his followers, but the power of hypnosis ultimately depends on the eagerness of society to cede their independence to their savior.

The “malignant narcissist” intuitively understands that his supporters’ basic social needs have gone unfulfilled. He knows he can harness their rage to enhance his power. Filled with paranoia, he cannot tolerate capable, autonomous, and strong people around him because he ultimately sees them as threats. Therefore the leader is unable to devise good policies that deliver better living conditions to his supporters. Similarly, a profound sense of insecurity makes the malignant narcissist unable to accept responsibility for his mistakes and failed policies. Instead, the leader is in constant search for enemies to blame for his failures, knowing that his base will accept the destruction of the enemy as a substitute for a better quality of life.

Such leaders are perceived by their followers as superhuman. Followers suspend judgment and do not question his actions. The ill segment of society gives their leader unqualified emotional support, complying unconditionally with all their leaders’ directives.

Post considers Hitler, Kim Jung Ill, Saddam Hussein, and Fidel Castro to be “malignant, narcissistic, charismatic leaders”. Anyone who has observed Chavez and his relationship with his followers will recognize that he too fits this leadership profile. Regarding Castro, Post writes that he has demonstrated a remarkable perseverance when other leaders would have given up. He demonstrates an ability to improvise and manipulate facts which enable him to turn embarrassments into victories. Post poses the question, what happens when a revolutionary personality like Castro (or for our purposes Chavez) succeeds in overthrowing the establishment, eliminates or minimizes the ability of opposition forces to function, but still confronts internal criticism and loss of support due to domestic failures? In the absence of domestic enemies, he searches for external enemies, blames the United States for the country’s economic problems, and seeks to export the revolution in search of sympathizers abroad. Post concludes his section on Castro, stating that driven by dreams of glory he will not yield the seat of power.

Making the Proper Historical Comparisons

When seen through the analytical lens of Jerrold Post it appears that the challenges that confront the Venezuelan opposition may be far more difficult than many believe. It has been tempting to draw lessons from the democratic transitions that have taken place in Eastern Europe and in Latin America, but the Chavez regime shares more in common with the regimes Jerrold Post considers than with many of the past authoritarian regimes in Eastern Europe and Latin America. Those authoritarian regimes (with the exception of the Pinochet regime) were bureaucratic in nature—they did not depend on the connection between a charismatic leader and his needy, deluded mass followers. When bureaucratic-authoritarian regimes failed to satisfy basic economic and social needs, the overwhelming majority of society rebelled as opposed to being spell bound by the lies and manipulations of their “savior”. The overwhelming majorities living under bureaucratic-authoritarian regimes were willing to embrace alternatives, even if those alternatives were not phenomenally charismatic or inspiring. In contrast, much of Venezuelan society is “ill” and they yearn for a messiah to save them. The “ill” sector of society includes the 10% to 20% of hard core Chavistas and perhaps as many as the 30% to 50% of those that can be considered “resigned” Chavistas. The latter are less devoted to Chavez than the hard core but they will not abandon him unless they see a truly inspirational alternative. If most of Venezuelan society were “healthy”, then any mediocre alternative would have been attractive in comparison to Chavez.

None of the leaders considered by Post were overthrown by internal forces. Those who were removed were ousted through external force. This fact not only demonstrates the hypnotic control these leaders have over substantial portions of society, but also their paranoiac need to exert absolute personal control over all institutions in society, including legal, political, economic and military institutions. Making the challenge especially difficult for the opposition is the fact that modern day authoritarians have become more sophisticated and subtle in their mechanisms of control and intimidation, having learned from the mistakes of the authoritarians of the past. [2]

Putting Venezuela in the context of Latin America

Chavez’s broad appeal and growing influence throughout Latin America suggests that Chavez should not be seen exclusively as a Venezuelan problem. Leaders of Latin America have refused to criticize Chavez in large part because they understand that the economic and social policies of the 1990s broadly embodied by the “Washington Consensus” have not significantly improved the living conditions of many of the poor, leaving millions of people feeling alienated. Consequently, many if not most of Latin American society is susceptible to falling for the manipulations of a malignant, narcissistic, charismatic leader. Latin America’s leaders fear that Chavez’s charismatic radicalism and autocratic political model may appeal to large segments of their societies. They fear that by criticizing Chavez they may undermine support for their fragile democracies.

Chavez’s enhanced standing in Latin America is reinforced by his anti-U.S. rhetoric at a time when anti-imperialism has great appeal throughout the world. His confrontation with the United States gives him a natural entrance into adversaries and critics of the Bush administration in the United States and Europe as well.

Faded Hopes for Lula and the Moderate Left

When President Lula of Brazil was elected to office he offered the promise to bring a new, more inclusive model of development that combined sound economic policy with clean and democratic government. His policies had the potential to have a moderating effect on the left across Latin America, and the power to hold Chavez’s radical, undemocratic model from gaining broader appeal. However, Lula's capacity to reinvent the left has been dealt a tremendous blow by the corruption scandal that has severely tarnished the image of his administration. There is little hope that Lula can recover the legitimacy to overhaul Brazil’s political system that benefits certain industrial and agricultural groups while excluding millions of people. At best, Lula will finish his term, maintaining high interest rates and tight fiscal policy to preserve the confidence of financial markets and maintain modest GDP growth rates of 3% to 4%. [3]

With little hope for economic and political inclusion under Lula, there is indeed a risk that the underclass of Brazil and Latin American may suffer from “democracy fatigue.” Chavez’s messianic, revolutionary solutions and his thirst for revenge against the enemy may become increasingly enticing. Chavez’s Bolivarian movement is an international force with an increasingly attractive ideology. With Venezuela’s massive oil revenues he even provides an alternative source of financing from the IMF, and at easier terms.

A Dangerous Silence

Chavez, with Castro’s help, is engaging the world in a battle of ideas and he is winning hearts and minds among sectors of Latin American society who feel they have not benefited from democracy and free markets. Throughout Latin America those who support democracy and free markets treat Chavez as a Venezuelan problem, refusing to engage in a battle of ideas. While it is possible that “good” messianic leaders will emerge and mesmerize the desperate segments of Latin American society, this is unlikely. After all, how many Gandhi’s, Mandela’s or King’s have appeared throughout history?

A more realistic approach would be for those in Latin America who believe in free markets and democracy to engage Chavez in a battle of ideas. Positive and inspirational messages require far more creativity than does mere criticism. Leaders, political parties, and members of civilian groups who believe in freedom must reach across borders to one another and work to find new ideas and inspirational messages. They must promote policies and offer solutions to citizens that will be seen as improving their day to day lives. [4]

The poor image of the United States in the world means that it is not in a position to engage Chavez alone. The democratic countries of Latin America must vigorously engage. The phenomenon of an ill society that is susceptible to the draw of dangerous, charismatic leaders is not uniquely Venezuelan. Chavez is devoting vast resources toward spreading his venom beyond Venezuela’s borders. Continued silence on the part of Latin America’s leaders and societies is the equivalent of submerging one’s head in the sand, simply wishing the threat away.

seth_antiles at


1. Jerrold Post is Professor of Psychiatry, Political Psychology and International Affairs and Director of the Political Psychology Program at George Washington University. He is the founder and former director of the Center for Analysis of Personality and Political Behavior at the CIA.

2. Bruce Bueno de Mesquita from NYU and George Downs from the Hoover Institution describe the growing sophistication of authoritarian regimes in their article “Development and Democracy”, which appears in the September/October, 2005 issue of Foreign Affairs.

3. For a discussion of Lula’s failures see Alvaro Vargas Llosa’s article “Lula’s Demise”, September 23, 2005.

4. The best hope for political alternatives to Chavez inside of Venezuela may come from local level politicians. A good example is Leopoldo Lopez, mayor of the municipality of Chacao in Caracas. Lopez, has successfully implemented programs that have improved education and health services, and he has brought down crime rates. His local successes have occurred despite continuous threats against him by Chavez’s security apparatus.

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Wednesday, October 05, 2005

Oct 5/05 - On banter as a predictor of action: Hugo Chávez and Co. vs. Democracy in the region

Two guys in a hurry: past, present and future (?) dictators discuss the future of Latin America

PMBComments: Hugo Rafael Chávez Frias, the best know member of the upwardly mobile Chávez clan from Sabaneta, Barinas State, Venezuela, is still a revolutionary wannabe when compared to his “Latin idols”: Che Guevara, Salvador Allende, Fidel and Raul Castro, Daniel Ortega and Shafik Handal.

Even so, it becomes clearer everyday that he too aspires to historical prominence and is more than willing to use (misappropriate?) his only differentiator - millions of our country’s bountiful oil wealth - to buy a cozy niche in the wicked pantheon of contemporary tormentors of democracy and freedom. This, and most certainly not the prosperity of the mounting poor of our country (10% more poor since 1999 according to the same Government that has received upwards of US$300 billion in oil revenues during the same period), is what really explains his restless meddling in other countries’ affairs and his frantic “anti-imperialist” banter.

In the Oct. 10, 2005 issue of Newsweek, Chávez responds candidly to Lally Weymouth’s pointed questions on friendships, leaving no doubt as to why Monday’s Washington Post Editorial on "Nicaragua’s creeping coup" is so on the mark (read both below).

For a man that has persecuted and cornered his opponents at home by branding them, among others: coupsters, non-democrats, possessed-by-the-devil, and corrupt, it is quite an act to ignore – and pretend others do also - the irony of the perverse ménage à quatre that links him with the no-need-to-define Fidel Castro, devilish Daniel Ortega and convicted peculator Arnoldo Aleman in a shameless effort to undermine the democratically elected government of President Bolaños. Particularly ironic since the only line Chávez’s apologists have left in their discredited arsenal is that “Hugo Chávez was elected democratically and deserves to be left alone”. So Hugo, keep telling us who your friends are and we will predict what you are up to…and when caught and convicted, please don’t blame others for your demise. PMB

Note: All this brings to mind - once again – the fact that a former U.S. Ambassador to both Nicaragua and Venezuela used to dismiss suspicions of Chávez real persona and intentions by stating “Do not judge him for his words, judge him for his deeds”. Today it would be interesting to hear John Maisto, now serving as the U.S. Representative to the OAS, apply his eponym and infamous Doctrine to events unfolding in Managua. They sure look like deeds to me; serious enough to merit a trip to Managua by State’s #2 Robert Zoellick to read the riot act to Chávez’s Nica cronies.


October 10, 2005 / Print Edition

Excerpts from Interview with Hugo Chávez by Lally Weymouth


Reportedly, one of your best friends is Cuba's Fidel Castro. Is that true?

He is one of my best friends.

Why do you admire him?

His valor, his courage, the way he has led the revolution for more than 40 years—in spite of a blockade and an embargo. Fidel is going to be 80 very soon, but this guy is filled with vitality. He is totally devoted to solving people's problems: health, education and work.


Experts in Washington claim you are encouraging radical groups throughout Latin America; that you're helping the FARC in Colombia; Daniel Ortega in Nicaragua; Shafik Handal and the FMLN in El Salvador, and Evo Morales and the MAS in Bolivia. Are you?

Shafik is a great friend. We are together in this same revolutionary effort, of course. Daniel Ortega is a close friend, and I think he will be a candidate in the next election. Evo Morales is my friend, another great guy and an Indian leader. Do you want me to support the extreme right wing? I am a revolutionary. Latin America today is going to the left and not to the right.

The Washington Post

Nicaragua's Creeping Coup

Monday, October 3, 2005; A16

MANY PEOPLE outside Latin America probably assume Daniel Ortega's political career ended 15 years ago when his ruinous attempt to install a Marxist dictatorship in Nicaragua ended with an election he decisively lost. The slightly better informed might suppose that his two subsequent electoral defeats, the allegations of corruption and child molestation that haunt him, or his single-digit rating in opinion polls have made him a marginal figure in Nicaraguan politics. Sadly, the truth is otherwise: Thanks to the weakness of the country's new democratic institutions, Mr. Ortega is close to regaining power and to broadening the Latin alliance of undemocratic states now composed by Cuba and Venezuela.

Mr. Ortega's comeback has been accomplished through a brazenly corrupt alliance with a former right-wing president, Arnoldo Aleman, who was sentenced to 20 years in prison in 2003 for looting the national treasury. Mr. Ortega's Sandinista Party supported the prosecution, then abruptly switched sides and formed a pact with Mr. Aleman against President Enrique Bolanos, a member of Mr. Aleman's Liberal Party who bravely chose to tackle government corruption. The left-right alliance has used its majority in the National Assembly to rewrite the constitution and stack the Supreme Court. In the past week it has begun stripping the members of Mr. Bolanos's cabinet of immunity so that they can be prosecuted before Sandinista judges on bogus charges. If this power play succeeds, Mr. Bolanos will be next. Meanwhile, Mr. Aleman, who stole tens of millions from one of Latin America's poorest countries, was freed from house arrest last week.

Mr. Ortega's goal is to force Mr. Bolanos to accept his constitutional rewrite, which transfers almost all presidential powers to Congress. That would effectively deliver Nicaragua to Sandinista control without one of the elections that Mr. Ortega keeps losing. Scheduled elections next year could then be manipulated. Already, the corrupt alliance has lowered the percentage of the vote a presidential candidate needs to be elected to 35, and criminal charges have been brought against one of the leading candidates. The Sandinistas will have plenty of money to spend, thanks to Hugo Chavez. Mr. Ortega recently announced that he had arranged with Venezuela's self-styled "Bolivarian revolutionary" for a supply of subsidized oil.

Compared with Mr. Chavez's aggressive intervention, attempts by the Bush administration and other outsiders to save Nicaraguan democracy so far look feckless. The new secretary general of the Organization of American States, Jose Miguel Insulza, tried to broker a political compromise but pronounced himself frustrated when Mr. Ortega ignored his appeals to stop undermining Mr. Bolanos's government. The Bush administration managed to win congressional passage of the Central American Free Trade Agreement this summer, but Mr. Ortega has blocked its ratification by Nicaragua.

Deputy Secretary of State Robert B. Zoellick is due to visit Managua this week in what officials say will be an attempt to bolster Mr. Bolanos and persuade Mr. Aleman's right-wing supporters to abandon their self-destructive alliance with the Sandinistas. As happens so often in Latin America during the Bush administration, high-level intervention arrives late. It does have one thing going for it: Eighty percent of Nicaraguans say they oppose the Ortega-Aleman pact. Nicaragua's rescue will depend on people power, inside or outside the polls.

© 2005 The Washington Post Company

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Saturday, October 01, 2005

Oct 01/05 - On the decision to move Central Bank Reserves out of U.S. Banks: commissions as policy imperative

PMBComments: Goldman Sachs' Latin research team posted a short note on President Chávez's threat to move Central Bank reserves from U.S. banks to other friendlier - ? - locations. While the move was announced by Chávez in Brasilia, it has not been confirmed by anyone at the “autonomous” Central Bank.

Some see this as a precursor to the also threatened break of diplomatic ties between Venezuela and the U.S. However, the explanation might be more humdrum: commissions, commissions, commissions. Qatari, Chinese and Russian banks where Chávez has been told he can “park” these funds will probably turn a blind eye, and also lend a hand, to generous distribution of commissions to the “financial wizards” within Chavez’s inner circle that came up with this brilliant strategy to punish the U.S. for planning to invade Venezuela. PMB

Goldman Sachs

Government Moves Reserves out of U.S. Banks

In another sign of the gradually deteriorating relationship with the United States, President Chávez announced that the government decided to move the foreign exchange reserves that were deposited in US banks into European banks. Furthermore, the government claims to have sold all holdings of US Treasury securities; these funds were also deposited in Europe and other countries.

The immediate reason for the move was unspecified threats against the Venezuelan regime.

A high ranking central bank director did not confirm the move but cautioned that reserve management should follow eminently technical, not political, criteria, and that the bank is an autonomous institution in its reserve management.

President Chávez has also reiterated his long-held proposal to create a South American central bank that would hold the reserves of all regional banks and announced the disposition to transfer immediately US$5 billion of reserves to such an entity if created soon.

Comment: (-) It is unclear whether the transactions announced by President Chávez actually took place, or they are just representative of the somewhat confrontational rhetoric that has characterized recent public statements by the regime.

However, whether the transactions took place of not, the reality is that the autonomy of the central bank continues to be eroded, not only through statements by government officials over policies and actions that are under the jurisdiction of what on paper should be an autonomous central bank, but also by actions that force the bank to accommodate the fiscal needs and political aspirations of the government.

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