The corruption of democracy in Venezuela: under Pres. Hugo Chavez's regime the last nine years, corruption has reached heights undreamed of by even the greediest of despots, as the people of Venezuela have been fleeced out of billions of dollars

According to a Jan. 31, 2006, story in the Financial Times, a select group of Venezuelan bankers, including those at Banco Occidental de Descuento and Fondo Comun, has profited from the acquisition of Argentinean bonds by the Venezuelan government, at the expense of the national treasury. The bonds are bought at the official rate of exchange and sold at black market rates, at considerable profit. Venezuelan journalist Carlos Ball estimates that bankers loyal to the government could have profited by up to $600,000,000 as a result of the differential between the official and the black market rates. Former Chavez Minister of Finance Jose Rojas has predicted that "the loss of autonomy of the Venezuelan Central Bank and the disorder in the management of the financial resources on the part of the government will lead to a significant financial crisis."

The nine years of Chavez's presidency have led to the highest levels of government corruption ever experienced in Venezuela. The main reasons have been: the record oil income obtained by the nation, money going directly into Chavez's pockets; a mediocre management team working without transparency or accountability; the ideological predilections of Chavez, which have led him to try to play a messianic role in Latin America, and even world affairs; and the policies of handouts put in place by Chavez to keep the Venezuelan masses politically loyal.

Corruption, Inc.

Three major areas of corruption have emerged during the Chavez presidency: grand corruption, derived from major policy decisions made by Pres. Chavez; bureaucratic corruption, at the level of the government bureaucracy; and systemic corruption, taking place at the interface between the government and the private sector.

Examples of grand corruption include:

The acceptance by Chavez of foreign contributions for his presidential campaign and even after his election. In 1998 and 1999, the Spanish bank BBVA (Banco Bilbao Vizcaya Argentaria) allegedly contributed substantial amounts of money to Chavez's presidential campaign and, later, after he already had been inaugurated as president. The former president of the bank, Emilio Ibarra, admitted authorizing two deposits, one for $525,000 in 1998 and another for $1,000,000 in 1999, to finance Chavez's political activities. In 2006, the government of Spain tried Ibarra for these and other irregularities.

Expenditures and promises made to political leaders and countries of the Western Hemisphere, in order to buy their political loyalties. The Chavez government has disbursed or promised an estimated $70,000,000,000 to foreign leaders and their countries. These expenditures include some $2,000,000,000 per year in oil subsidies to Cuba; about $4,000,000,000 in the acquisition of Argentinean commercial papers; an estimated $300,000,000 in cash donations to Evo Morales in Bolivia; the promise of building up to $20,000,000,000 worth of refineries in Jamaica, Paraguay, Nicaragua, Brazil, Ecuador, and nine other countries and a $25,000,000,000 gas duct from Venezuela to Argentina; and acquisitions of about $6,000,000,000 worth of sophisticated weaponry from Russia, China, Belarus, and other countries. Many of the promises never will be fulfilled, but the fact remains that these expenditures and promises have been made directly by Chavez, without consulting the people of Venezuela or following normal administrative procedures.