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Venezuela: Magna Carta and the Subtle Art of Chavista Budgeting

From Francisco Toro, Caracas Chronicles

Call me a pedant, but I've always found it obnoxious seeing the way the Venezuelan press uses the phrase "Magna Carta" as a synonym for "constitution." As anyone who knows anything should realize, Magna Carta is a specific historical document, a kind of "Pacto de Punto Fijo" signed in 1215 by King John of England and his aristocrats. The charter for the first time limited the rights of the monarch, established trial by jury, the beginnings of habeas corpus, and the principle of parliamentary control over state spending - the power of the purse-strings. 600 years ahead of the pack, the brits started to move away from the principle of absolute monarchy, and towards a system where the executive power was accountable to a body other than itself.

Probably the most radical departure in Magna Carta was this idea - revolutionary for medieval Europe - that the King needed to get permission from another body in order to levy taxes and spend state money. By starting the long process it took to shift the "power of the purse strings" from monarch to parliament, Magna Carta radically altered the notion of state power. Kings could no longer spend autonomously - spenditure had to be justified, argued over, haggled over and agreed with an assembly the King could not always control. It was this reform, arguably more than any other, that started the long process of declawing the British monarchy. You can't have absolutism if you don't control your checkbook.

Slowly but surely the principle of parliamentary control over state spending spread throughout the world, first establishing itself in the U.S. constitution, and from there, to the rest of the world. Today, every democracy in the world works on the basis of a State Budget Law, approved like any other law by the legislative branch. The haggling process it takes to approve budget laws is a key check against the accumulation of undue power in a single set of hands.

Alas, 800 years of British common sense and the worldwide trend in its direction are just two of the victims of the chavista revolution. In Venezuela, parliamentary control over state spending is a dead letter - just another of the many articles written into the constitution and swiftly forgotten - and exhibit A in the case for those who argue Chavez is an autocrat.

The political takeover of PDVSA ought to be seen in this light. Under the old system, PDVSA would sell oil, take the earnings and transfer them over to the state through royalties, taxes and dividends. Once that money had come into state coffers, the government would spend them through its usual budgeting procedures - which would allow the formal parliamentary control of state spending. The new system, on the other hand, does an end run around normal budgeting procedures. In fact, standard procedure now is for PDVSA to sell oil, take its earnings and spend it directly, in accordance with the president's instructions, without ever going through state coffers or normal budgeting procedures. There is no chance for the people's elected representatives in the National Assembly to question the discretionary use of these monies. Behind the lofty rhetoric about the revolution's liberation of the oil company hides an assault against one of the most basic principles of democratic coexistence.

As Pompeyo described in the article I posted yesterday, this trend reaches its most grotesque extremes on "Alo Presidente", where Chavez tosses around state money like it's going out of style, without even a pretense, a fig-leaf of parliamentary control. It bears noting that this is openly illegal and unconstitutional - Article 162 of Chavez's beloved little blue book clearly establishes Parliamentary control over spending. Like many other similar, blatant violations of the constitution, this one does not prevent Chavez from using the little blue book propagandistically, as the rhetorical cornerstone of his entire governing project. It's pretty rhetoric, but it's also an unambiguous, bold-faced, zero-shame lie, with a cherry on top.

But do we hear any sign of dissent from the president's fans on this matter? Not a peep!



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