By Aleksander Boyd
London 16 Apr. 04 – Further to what Reuters described as ‘unearthing’ evidence about US funding of opposition groups revealed by Brooklyn resident Eva Golinger I would like to make some comments. The FOIA (acronym for Freedom of Information Act) is indeed a great piece of legislation that makes the covering of governmental maladministration somehow difficult. In the USA the FOIA applies only to federal agencies and does not create a right of access to records held by Congress, the courts, or by state or local government agencies. Each state has its own public access laws that should be consulted for access to state and local records. Conversely in the UK the FOI, having been passed in Parliament already in the year 2.000, it will not come into full implementation until 2005. It contains 23 exemptions from the general rights of access including information on national security, international relations, commercially sensitive data and confidential information. The Act will also allow access to information by public authorities regardless of when it was created or how long said information has been held.
Quite clearly it is possible for people such as Ms Golinger to ‘unearth damaging evidence’ solely due to the fact that legislators in the US deemed appropriate to bring transparency to the running of public institutions, much the same way that English and other European counterparts felt. Making use of such a novel and brilliant idea I did some research on my part in the European Commission and in the Security Exchange Commission. No connections are to be found between the two bodies, however I consider fitting to once again call the bluff of the salaried chavistas whose only intent seems to be to deviate the public attention from more urgent matters (read the recall referendum). The findings shocked me. Here’s an excerpt of some of them:
Co-operation is currently carried out under the above-mentioned Framework Agreement between the EC and the Andean Community.
Venezuela, due to its abundant natural resources, did not need to turn to foreign aid until it was hit by an economic crisis in 1989. Between 1994 and 2002 an amount of €130 Million has been committed. The EC is carrying out technical and financial co-operation projects in the areas of education, health, prison conditions, regional development, environment and the fight against drugs.
In the year 2000 and first semester of 2001, the EC implemented the emergency aid, € 7.15 million, allocated to assist victims of the severe floods in December 1999. They ravaged some of the coastal regions of northern and north-eastern Venezuela with an estimated 15,000 to 20,000 deaths, more than 8,000 homes affected, with total damage amounting to between €2 and €4 billion. The floods contributed to a fall of 6.1% in GDP for that year. A total of €63.8 M have been earmarked for Venezuela for the period 2000-2006 for technical and financial co-operation and rehabilitation and reconstruction: out of which the recently Country Strategy Paper and signed Memorandum of Understanding cover an amount of €38.5 M in technical and financial co-operation. A further €25 M was allocated in 2001 to support the rehabilitation process after the floods. (See also - European Parliament resolutions on reconstruction and rehabilitation of the areas affected by the catastrophic floods of December 1999 in Venezuela: January and July 2000 and Commission working document "Programme to support regions affected by the floods of December 1999" SEC(2000) 1571 final."
Out of the total budget, two projects were approved in 2001 for the State of Vargas, the main region affected by the floods; the central objectives of which are both reconstruction and prevention. Another project amounting to €20 M was approved in 2002, focussing on disaster prevention for the areas of Miranda, Falcon and Yaracui. Besides, Venezuela also benefits from other funds such as the ones provided for NGOs, environment and Science and Technology.
In December 2002 the Commission approved a € 600,000 project to assist the OAS in its efforts to implement possible agreements reached between the parties of the OAS-mediated dialogue. The project has three main components: support for free and fair elections; investigation of the events of April 2002 (failed coup); and disarming the civilian population. The three components are included in the 29 May Agreement.
Venezuela also benefits from NGO's co-financing projects.
As you can see the EU has given a rather considerable amount of millions, earmarked as aid, to Venezuela. Since I left the country in February 2.000 I never had the chance to go and see the sheer destruction that the floods brought to La Guaira so one of the first things I did last August during my visit was to drive around Vargas State to see how the ‘Bolivarian Revolution’ tackled the immense problems for the residents of the area. Much to my surprise there were not construction developments undergoing to palliate the housing needs of the disenfranchised. Apart from road works nothing has been built in La Guaira. It is therefore sound to affirm that the regime has pilfered, for not saying stolen, not only the funds granted by the EU but also the stipend earmarked by the regime. Obviously it is rather difficult to explore the whole area in a week’s trip, therefore I had a conversation recently with MD Ricardo Gonzalez who works in one of the hospitals of La Guaira and has been an active member of the medical community there for over 14 years. He said that the only building that has been constructed since the floods is the unmistakable multi-coloured edifice right in front of the airport. To his account residents of the said building are not victims of the floods but chavistas. The EU put the government’s profile in blunt terms:
The authorities – particularly the highest levels – seem to have some difficulty fulfilling their role of administering efforts and prioritising needs. There is, for example, still no real overall reconstruction programme which includes long-term planning for all the necessary activities and efficiently combines the concepts of land management and natural risk prevention. This situation constitutes a sizeable obstacle for the donors, faced with multiple but isolated calls for assistance which are difficult to evaluate outside a global context and may lead to duplication of efforts.Comment made in 2.000
What the aforementioned evidences is the total disregard of Hugo Chavez for the poor. If I remember correctly victims were taken to temporary accommodation in Maiquetia’s airport, to be transferred at a later stage to El Poliedro. The President even prompted them to leave Caracas for good asking them to move to relatives’ houses in other parts of the country. The disgusting conditions of El Poliedro forced some of them to take the presidential advice whilst others returned –amazingly enough- to their old shacks or ranchos to commence the reconstruction. To this day, as official figures show, the total number of units constructed for social housing needs has decreased. In 1.998 the total number of units built was estimated at 90.000; at the end of 2.002 the number was less than 10.000. I’ll decline to further comment on the €600.000 for “support for free and fair elections; investigation of the events of April 2002 (failed coup); and disarming the civilian population.” So much for the social vocation of Chavez…
The Security and Exchange Commission
PDVSA was in the hands of unpatriotic technocrats and the Creole Robin Hood came to the rescue for the greater benefit of the nation. Thus verses one of the two commandments of chavistas. The unpatriotic technocrats embarked for 20 years in a very aggressive expansion campaign that transformed the State company in one of the most productive oil conglomerates worldwide. They acquired refineries in the US, the Caribbean and Europe to guarantee output placement in the market. CITGO makes a perfect case-study of what the technocrats achieved in the international arena; taking into account its parent company, Petroleos de Venezuela (PDVSA), and its participation in several joint ventures, it has an effective refining capacity of more than 1.1 million barrels per day [source CITGO]. None of the success of the company is attributable to the present regime. What is the unavoidable responsibility of the current administration is the filling of financial reports to the Security and Exchange Commission (SEC) since the company offers, to international investors, securities for which there is a reporting obligation. Last year for the first time since the commencement of said public offering PDVSA Finance provided a financial report that has not been audited. The following is an example of an independent auditor’s report:
To the Board of Directors and Shareholder of PDVSA Finance Ltd.:
We have audited the accompanying balance sheet of PDVSA Finance Ltd. (a wholly owned subsidiary of Petróleos de Venezuela, S.A.—PDVSA) as of December 31, 2000, and the related statements of income, changes in shareholder's equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of PDVSA Finance Ltd. as of December 31, 2000, and the results of its operations and its cash flows for the year then ended in accordance with International Accounting Standards.
KPMG Alcaraz Cabrera Vázquez /s/ GUSTAVO GONZÁLEZ BRACHE
Similarly ESPIÑEIRA, SHELDON Y ASOCIADOS (independent accountants) produced that year a report whose content approved the accounting practices utilised by PDVSA’s management which were in accord to International Accounting Standards (IAS). The situation has changed though. This year’s report has not been approved or audited by anyone and investors are meant to trust the accounting practices of the new management (remember ENRON?). Said situation has some worrying ramifications. Firstly, as PDVSA’s fails to fulfil the requirements of the SEC, the credibility of the company erodes, which in turn means that its ability to raise much needed capital for exploration and augmentation of production decreases. Secondly, in light of the dodgy nature of the new PDVSA and that of the government, how can investors expect that the company will meet contractual obligations? American legal jurisdiction does not apply in Venezuela, should they disregard rules and regulations –as they so often do- where can investors honour their contracts? Thirdly, taking into consideration; the drop in production and lack of investment towards it, the usage of company’s funds to ‘buy out’ the electorate, the injurious deals with other countries (i.e. Cuba), the closure of R & D departments, the dismantlement of alternative oil-derivatives production plants (i.e. Orimulsion), the selling of parts of the international distribution and refining network (i.e. PDVSA – Veba Oel refinery), the introduction of free agents in the commercialisation of crude oil (i.e. Free Market Petroleum), how can rationally be alleged that what Hugo Chavez has done to the only profit generating enterprise of the Venezuelan State will bring greater benefits to the People?
The information gathered is there for anyone to see. In Venezuela, however, there’s no such thing as the Freedom of Information Act. No one knows what the government did with the humanitarian aid provided by the EU; equally disappeared monies from the FIEM or PDVSA are subject of much speculation due to the lack of transparency that has become second skin of the regime.
“Independent thinkers” will come to the defence saying that it has happened before and it has happened somewhere else – as Colin Forbes rightly put it- nevertheless the allegations of Ms Golinger are preposterous as any other for not only has Chavez emptied like never before the country’s coffers, furthermore he has stolen humanitarian aid, both national and international, that had it been used in sensible fashion it could have well benefited those in need. The take away message for investors doing business with the government of Venezuela is be aware. There is not one single institution that has not been permeated by chavista thugs and they certainly don’t understand about honouring agreements.
Ms Golinger: since you are purportedly a legal professional that has benefited from the FOIA, how about taking advantage of your connections within the Revolution to propose to your revered charismatic leader for the immediate implementation of a Freedom Information Act in Venezuela –via presidential decree-, so that the whole world can see how transparent this administration truly is? In that way we can all find out the final destination of European monies or those of the FIEM or the ‘Plan Bolivar 2000.’ Furthermore baseless accusations about the finances of Venezuelanalysis, Vheadline and Aporrea or the source of funds for the Bolivarian celebrations can be silenced once and for all, don’t you reckon it’s a wicked idea? Please extend this innocent proposal to Mr Greg Wilpert…
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