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Venezuela: Economic Office of the National Assembly dismantled

By Miguel Octavio

During the Rafael caldera Government in 1997 Congress created the Economic Advisory Office of Congress, later converted into the Economic Advisory Office of the National Assembly. The Office was created as part of a Cooperation program with the Interamerican Development Bank (IDB). The idea was to create an autonomous office that would evaluate the impact of new legislation from an economic point of view to help out decision making by the Legislature. Given that IDB would be providing the funding, the Office would be able to pay international salaries to attract Economists with Ph.D.’s and Masters Degrees and would function independently of the Assembly.

The office began functioning under the direction of Economist Gustavo Garcia, a Professor from IESA, the most prestigious business and management school in Venezuela. When Hugo Chavez was elected Garcia began issuing reports that were too critical of the Government, thus, taking advantage of the new constitution and the change from a bicameral Congress to National assembly, the office was declared under reorganization, shutdown and then reopened with Economist Tobias Nobrega, currently the Minister of Finance, designated as the temporary Head of the Office in charge of reactivating the office as well as opening the process to hire the most qualified Economists for this “new” stage in the life of the office.

In September 2000, self-described “left-wing” economist and then Chavez defender Francisco Rodriguez was named to Head the office in this new stage. Rodriguez had obtained a Ph.D. in Economics from Harvard University in 1998 where he had specialized in studying economic policies for the redistribution of wealth. At that time, Rodriguez was Professor of Economics at the University of Maryland.

In time, Rodriguez became an uncomfortable source of strong opinions for the leadership of the national Assembly and the Government. During the scandal of the FIEM, where US$ 1.9 billion went “missing” , former Minister of Finance Merentes “explained” in Congressional testimony how these funds were spent to pay for Christmas bonuses and salaries, “accepting” his responsibility for spending these funds without authorization. Except that Rodriguez came out the next day and showed how all of the funds to pay for these expenditures had been approved from other sources. The mystery of the missing funds was never resolved.

Since that scandal Rodriguez became a harsh critic of the way public funding was being mismanaged, issuing very critical reports about the violations of the rules of the FIEM (Macroeconomic Stabilization Fund), suggesting there was corruption in the direct sale of Government bonds to local broker CEDEL by the ministry of Finance, writing a report which said the general strike in December 2002 was much smaller than the Government was saying and finally writing a number of reports very critical of Chavez’ request for the Venezuelan Central bank to give the Government US$ 1 billion.

But what really incensed the current leadership of the National assembly were two recent reports by Rodriguez’ office accusing the leadership itself of irregularities. In one, Rodriguez accuses that the Government is ready to pay US$ 300 million of fraudulent Bandagro bonds. Rodriquez says that the person who supposedly had signed these bonds has sworn that the signature is not his and it was fraudulently forged. A foreign group has been asking the Government to pay it US$ 600 million in capital and interest from these bonds.

This week the President of the National Assembly suspended Rodriguez and the second Economist of the Office, informing all of the other economists that from now on they would be working for the National Assembly and that they no longer had stability as their position were now positions of “trust” and thus subject to removal by the leadership of the Assembly. When Rodriguez complained that these decisions were invalid, the issue was brought to the Assembly itself that today ratified the disappearance of the Office as it was functioning. The decision was made only with the votes of the pro-Chávez Deputies

Rodriguez says that this violates the agreement with the IDB and he will go to the Supreme Court to ask that the Office be reestablished as an independent entity.

In contrast, the proposal to censor Minister of Health Roger Capella for saying that anyone that signed the petition against Chávez was a terrorist, did not receive sufficient votes for approval. Such is justice and morality in the Vth. Republic.

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