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Widespread corruption and the collapse of PDVSA: The two main diseases undermining the Chávez revolution

By Gustavo Coronel

May 16, 2005 | An objective assessment of the Chávez regime suggests that Chávez is still very much in control of the main sources of Venezuelan political power: oil money, the Armed Forces and all State institutions, from the Supreme Tribunal of Justice to the National Electoral Council, whose members are in his pockets. As long as Chávez maintains sufficient control of these three components, he is going to remain in power. At the same time, however, there are increasingly clear indications that he is losing significant grip on military and bureaucratic institutions, while the source of his money, the petroleum industry, shows alarming signs of deterioration. His three sources of political power are under siege and, although the end of his run is not as near as the democratic opposition would like it to see, there is no doubt that he is losing appreciable political ground.

The underlying reasons for his problems are the greed and mediocrity of his team.

The underlying reason for the loss of power of the so-called "Bolivarian Revolution" is the greedy and mediocre group of followers that Chávez has chosen during the last six years. He has been left to "govern" with unsavory and colorless characters (some with criminal records), after most of the big names he attracted in the first months of his presidency gradually left him, convinced that his revolution was a fraud. People like Olavarria, Gaviria, Cervini, Escarrá, Mayz Vallenilla, Combellas, Rosendo, Salazar, Otero, Peña, Miquilena, left in disgust and most became active opponents of the regime. As a result, the intellectual quotient of the revolution decreased to levels dangerously close to mild mental retardation. Chávez's cabinet is made up of colorless and pliable people, who keep silent about what they (do not) do and who are happy enough to keep their jobs for a few months, in a very unstable bureaucratic environment that has seen close to one hundred different ministers play musical chairs or come and go in six years. A logical result of this intense rotation in top bureaucratic positions is the tendency among the bureaucrats to amass personal wealth "while the going is good." Ministers, presidents of state-owned companies and other top public officials realize that their jobs essentially depend on the state of the liver of the leader and that they might not have a tomorrow. Many of them are dedicated, therefore, to the tasks of enjoying and/or abusing the privileges of power, while they can, and of preparing financially for an uncertain future. They are clear that the business of building a better country will have to wait for others to contribute.

While the current bureaucrats merely strive to survive there are many other "revolutionaries" who are trying to replace them. This results in an atmosphere of intrigue and back stabbing which has become one of the main characteristics of the regime. This is true in the realm of civil administration and is also true within the top echelons of the military. In Quinto Día, political analyst Sebastiana Barráez reveals that General Raúl Baduel (who claims to have had six previous lives), wants to be the next Defense Minister and a three-star General, but that he is encountering much opposition from other Generals such as Vietri Vietri and Uzcátegui Duque, who refuse to take him into consideration. Barráez also says that Chávez refuses to talk with many high-ranked officers and that, as a result, many of them are actively plotting against him. In the Navy, Barráez adds, there is much infighting to control juicy procurement contracts due to the commissions involved. In the National Guard there is widespread discontent because of their low salaries ("Aguas revueltas en la FAN​," May 13, 2005). Another source of news and/or rumors about the military, even more alarming, comes from Chávez loyalist Miguel Salazar, who publishes a sensationalistic weekly tabloid. Salazar says that "there is a coup against Chávez already in motion," involving a member of the Military High Command, a member of the Board of the National Assembly and two ministers related to PDVSA (Las Verdades de Miguel, May 13, 2005).

In the civilian front there is a fight to the death between the two main political groups that claim to support Chávez: PPT (Patria Para Todos) and MVR (Movimiento Quinta República). This fight is ugly, based on mutual accusations of drug trafficking, bizarre sex practices and corruption. The Governor of Guarico, a member of PPT, is accused of coveting the presidency and has been denounced as a plotter against Chávez by Iris Valera, a very aggresive member of MVR. The governor has counter-attacked, taking full page newspaper ads to denounce several members of MVR as engaged in drug trafficking. Although the names of these people are only known in parochial circles and not relevant to an international audience, the fact that they are public officers involved in a public, dirty fight instead of serving their country should be of interest to impartial readers who want to obtain a better grasp on what the Chávez revolution is all about.

The spiritual advisor of Hugo Chávez says that corruption has taken over the revolution.

Jesuit priest Jesús Gazo, chaplain of the Catholic University and the confessor of Hugo Chávez, just made public his concerns about the corruption that has taken over Chávez's "Bolivarian Revolution" ("La Corrupcion puede acabar con Chávez," El Universal, May 13, 2005). He says that the worst vices prevail today in the Chávez regime. Coming from a Chávez follower his statements carry great weight. He says: "I am convinced that the highest levels of the government are corrupt, including ministers and National Assembly members. If nothing is done this can end the revolution." Although he hates the U.S. and admires Chávez and Castro, he says: "Chávez knows about this corruption. He knows he has to fight against it." When he is asked what Chávez could do he replies: "He should dismiss the incompetent ministers who are not able to do the job." When the journalist replies that "These people were designated by Chávez!" The priest answers: "Yes, Chávez has made many mistakes . . . Chávez has not acted against corruption because he has so many problems! When I told him that, from corruption to treason, there is only a single step he replied that he could not trust anyone."

Asked about the infighting and the backstabbing prevailing among Chávez's followers father Gazo said: "I think this is a sad spectacle. They are fighting each other to see who is going to be the next president. The manner PPT and MVR are fighting is shameful . . . their members are trying to grab positions and authority, forgetting that they would be nothing without Chávez." Obviously the good father considers Chávez a demigod who can do no wrong, while his collaborators are very mediocre and corrupt. I agree only partially with father Gazo since I also include Chávez with the mediocre. In his admiration, Gazo also goes to the extreme of justifying Castro's cruel and bloody dictatorship, saying: "Castro is a dictator according to the criteria of Western Democracy. . . . He has stayed in power because the people of Cuba want him."

The interview with father Gazo is very revealing because, as his confessor, he is very close to Chávez. In this interview Chávez comes across as a man who is not on control of his mediocre and corrupt followers. He comes across as a man who distrusts everyone in sight and feels sad about the disaster his henchmen have caused, forgetting that he is the one who put them in the position of doing that harm.

The collapse of Petróleos de Venezuela is accelerating.

From January 2004 to the present I have written 15 articles in this site about the decline of Petróleos de Venezuela (PDVSA) in the hands of Hugo Chávez. The reader is referred to them for details of this tragic march into disaster of the main source of income for Venezuela. Although the high prices of oil in the world markets have done much to counter this decline, the fact is that PDVSA is no longer a reliable company and that much of Venezuelan production, almost half, is now generated by international contractors, due to the loss of management and technical capabilities in the company. To complicate matters, Chávez has recurrently threatened the best client of Venezuela, the U.S., with cutting oil supplies. This is part of Chávez's strategy of regional hegemony, a strategy that also includes the delivery of increasing amounts of oil to Cuba, the use of oil as a political tool to buy loyalties among the governments of Latin America and the Caribbean and the abusive use of oil monies to lubricate his control on Venezuelan institutions and the Armed Forces.

This suicidal strategy is harming the Venezuelan people. Immense amounts of money are being diverted away from the fundamental tasks a Venezuelan government should undertake, including well-planned education, health and the building of new infrastructure. Harassing our best petroleum client, the U.S., will do our nation more harm than it would to the U.S. A decision to stop supplying oil to the U.S. would backfire on our nation, as there is no short-term alternative for the selling of Venezuelan exports. It would take at least two years or more, for significant volumes of Venezuelan oil to be diverted from the U.S. to China or India. Although our monetary international reserves are significant, of the order of USD 28 billion, they would only buy one year or so of national requirements in the absence of a continuous outflow of oil exports. As it is, the Chávez regime is already spending all the oil income, has doubled our national debt and is trying to put their wasteful hands into our international reserves, in spite of the protests of respected Central Bank Director Domingo Maza Zavala, another Chávez follower who is increasingly repentant. The incompetence and corruption prevailing in the regime is such that, no matter how much oil income the country gets, it seems insufficient for the voracity of a regime dedicated to dreams of world hegemony.

This explains why the regime is weakening.

This explains why, in spite of the apparent strength of the regime, there are serious cracks starting to appear in the Chávez revolution. The democratic Venezuelan opposition is slowly re-organizing, popular dissatisfaction with the regime is growing (Chávez is still very popular but his regime is not) and international opinion already sees Chávez in his true light as a fascist political figure, as a Mussolini "made in Cuba." In the minds and hearts of Venezuelans, electoral solutions are out and all-out civil disobedience is on the way in. This is so because there are no guarantees of transparency and honesty in the electoral sector. In Venezuela no more Carters need to apply!

I can see how a new stage of resistance to Chávez is now starting, characterized by the creation of parallel civic, independent organizations (A Congress of Free Citizens) as an alternative to the rotten Chávez institutions. This strategy is important and should be supported since it will further weaken the regime.