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PDVSA and Venezuela's Central Bank: Bonnie and Clyde

By Gustavo Coronel reprinted from Petroleum World

The newest financial mess created by this government has to do with the decision, reported by El Nacional on Saturday June 5th, to suspend the legal and mandatory deliveries of dollars obtained from the sale of petroleum, from Petroleos de Venezuela to the Venezuelan Central Bank, in favor to hand over this money directly to the government of Hugo Chavez for “social uses”, or, in simpler words, for the political and personal use of this money by Chavez and his accomplices.

This intolerable abuse of power is reported, as a matter of fact, by Rodrigo Cabezas, the President of the Finance Commission of the National Assembly and member of the government political party. Says Cabezas that the decision of PDVSA was taken in order to establish “a shorter route for the financing of public investment projects”. This measure, probably taken over a few drinks on a Saturday afternoon by a small group of ignorant people close to Chavez, is the equivalent to the elimination of the role played by the Federal Reserve and the Congress of the United States in the handling of public financial resources.

Cabezas reported, like if he was talking about peanuts, that some $2 billion would be handed over to the government by PDVSA, short circuiting the Venezuelan Central Bank which was supposed, according to the Law, to receive that money. Already $ 750 million have been diverted, in this fashion, away from the Venezuelan Central Bank to the Chavez government during the month of May, as reported by Central Bank Director Armando Leon.

The report by El Nacional adds that these illegal transfers explain why the international financial reserves of the Venezuelan Central Bank have been diminishing, in spite of increasing petroleum income. Although I am not a financial expert, it seems clear to me that the Venezuelan government has been stealing the money that belongs to the nation. Stealing, according to the dictionary, is to grab money or assets that do not belong to you. This is what Chavez has been doing.

Usually, stealing is a crime that the criminal tries to hide. But what is going on in Venezuela right now is government stealing in a gigantic scale, in the middle of the day, no matter who is watching. This is an intolerable situation and one that the current government officers will have to respond for in Venezuelan penal courts or in international courts. The money that belongs to the nation is being captured by the Chavez government to be spent in their political adventures, without accountability, with much of that money running the risk of staying in the hands of corrupt officers.

Venezuela is a country controlled by a bunch of adventurers. This is our main problem. The Chavez government is not functioning within the rules of democracy and financial transparency. This government is using the resources of the nation as if they were their own, This is a crime. For many months I tried to present this case to many of Chavez foreign followers without much success. I thought I could not put my point across clearly. Now I realize that these followers are not interested in the truth. In fact, the avalanche of dollars coming into Chavez’s pockets is paying them. This is why I have stopped preaching to these mercenaries. They will not listen because their main interest is filling their pockets.

Gustavo Coronel is a 28 years oil industry veteran, a member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), author of several books. At the present Coronel is the opinion-editorial editor of Petroleumworld en Español. Petroleumworld not necessarily share these views.

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