Don't Forget About Alex
We’ll head Down The Rabbit Hole shortly but first, the news feed…We haven’t talked about Alex Saab in a while…remember him? The guy that was the architect of Maduro’s fraudulent CLAP government food program and other shady deals? After being detained in Cape Verde, Africa he was extradited to the US in a move that got a lot of high-ranking Chavistas, including Maduro, kinda’ nervous because, as they say, he knows where the bodies are buried. The Chavistas used his fraudulent (we use that word a lot with the Chavistas) diplomatic status as a reason to throw up their hands and walk away from negotiations with the opposition in Mexico for free and fair elections…as if they needed a reason. Well, here we go again with the leftists playing the “sovereignty” card.
Dissident Voice had an article claiming that the imprisonment of Alex Saab is “an attack against Venezuela…against anyone who has the courage to defend their country’s” sovereignty”. The attack on “sovereignty” is what authoritarians and their defenders use just like Democrats in the US use “racism”…”He’s a racist” is their fall back position when they don’t want to address the real issue.
The article sarcastically said the US’s “official narrative is that Saab had bilked the Venezuelans in a vast corruption network and repeated the Maduro regime’s claim that Alex Saab was going to Iran for humanitarian purposes. Sarcasm aside, exposure and prosecution of Saab’s corruption network with Nicolas Maduro isn’t just a “narrative”, it’s a purpose.
Saab’s (and Maduro’s) fraudulent CLAP food network was uncovered by investigative journalists with Armando.Info years ago and they were forced to flee Venezuela to escape reprisals. Quick refresher…through a Maduro shell company in Mexico, the Venezuelan government drastically overpaid for food items of inferior quality and/or past their expiration dates to be contained in CLAP food boxes to feed the poor in Venezuela. After the network was exposed by Armando.Info the whole operation in Mexico was shut down and the food items were subsequently sourced from Turkey. Oh, and at the same time Maduro announced increased ties between Venezuela and Turkey. Their work has been corroborated in subsequent findings by UNOHCHR (United Nations Office of the High Commissioner for Human Rights), the OAS (Organization of American States), and others. (FYI, I have seen those food boxes myself)
They went on to say two things that, while true, are taken out of context and are legally defensible. They say Cape Verde has no extradition agreement with the US and that the US dropped 7 of 8 charges against Alex Saab retaining only the criminal conspiracy charge which they say is “difficult to disprove”.
First, Cape Verde doesn’t have an extradition agreement with the US but it does have an extradition policy and their actions in this case were in compliance with this policy. It is this same policy that caused the US to drop 7 of the 8 charges against Saab. The Cape Verde extradition policy only allows extradition on one charge, not multiple charges.
As far as the conspiracy charge being difficult to disprove…well…that’s exactly the point. It’s a “connect the dots” strategy that was employed to convict and rightfully imprison mafia figures in organized crime. In short, “If it looks like a duck, walks like a duck, and quacks like a duck, it’s a duck!”
Next up we have the Coalition for Human Rights and Democracy telling us that two hearings were delayed in Venezuela, one because the order to move the prisoner never arrived (cause for dismissal in legitimate proceedings) and the other…the court wasn’t working that day…huh? (Just another day in the Chavista justice system)
Then we have Caracas Chronicles telling us that a group of NGOs report 1 in 4 Venezuelans can’t afford feminine hygiene products, 33% of women and children didn’t receive medical attention for chronic problems, and 28% didn’t receive medical attention for acute problems.
And we have Reuters reporting that in a public statement (which surprised on one), the Venezuelan government objected to US District Court Judge, Leonard P. Stark’s decision to let the auction schedule for sale of CITGO shares move forward. “Venezuela categorically rejects this reckless decision, this irritating decision, in violation of international law, and constitutes a new escalation of illegal maneuvers”. (BS translator : We hate it when we have to pay our debts!) For his part, Judge Stark said, “All objections… are hereby overruled and denied on the merits with prejudice.” Venezuela should be happy he didn’t say “Get the hell out of here and quit wasting the court’s time!”
Then we have FX Empire reporting that the former head of Venezuela’s soccer (futbol) Federation received a 5 year FIFA ban and a $410,000 fine after being found guilty. We here at TFT don’t care much about soccer but it shows that Chavista corruption is everywhere and touches everything.
On that note…lets head Down The Rabbit Hole….
Chapter 3/ continued…
…The situation for the ordinary Venezuelan in 1998 definitely needed improvement as is obvious when the poverty rate is in the 50% range. (Today, under Chavismo, it’s 96%) The news was not all bad though. We will get into a then versus now conversation later regarding society as a whole but it’s important to know that Venezuela had a growing middle class and the minimum wage was between $200 – $250 a month. That’s not much by our standards and admittedly it’s not that much but it did allow the average Venezuelan to provide for the essentials and afford a few luxury items. PDVSA employees fared much better. They had houses, cars, and took vacations. The higher up the food chain you got in PDVSA the better the lifestyle as is true in any company or developed economy. Keep that $200 – $250 minimum wage number in the back of your mind as it will come into play, not just in the overall societal conversation but in the PDVSA story.
In the first couple of years of his tenure Chavez allowed PDVSA to continue operating more or less autonomously and although he was getting the expropriation train rolling in various sectors he hadn’t yet cranked it into high gear and PDVSA was still prospering as was the government. As we saw in the discussion of the hospitals, there was plenty of revenue to address many of the inequities in a balanced and sustainable manner. In 2002 all that ended and in his third year in power Chavez went off the rails.
In 2002 PDVSA workers as well as others in Venezuela went on strike. Chavez used this as an opportunity to fire a lot of people. Estimates vary from 13,000 to 19,000 firings but regardless, with a workforce of 40,000 it was a huge number of employees. Then came the really big news. Chavez boisterously announced “PDVSA will be red!” (The color of Chavismo) In no uncertain terms the priority was first and foremost party loyalty which translates to loyalty to Chavez. Business acumen and technical expertise would be secondary.
The fired employees left Venezuela for greener pastures in the US, Canada, and around the world, a harbinger of things to come, not just in PDVSA but in all sectors of the economy (and life) in Venezuela. The good news was there was a wealth of talent at PDVSA and the upper management was still primarily in the hands of experienced professionals. The bad news was that Chavez got on an expropriations binge in all areas of the economy and PDVSA would be no exception. Over the Chavez years Ecuador, also a socialist country, expropriated just over a hundred companies. In roughly the same time frame Chavez expropriated over 1,200 (and there are much higher estimates).
Important strategic partnerships with large multinational oil companies like Exxon Mobil and Conoco Phillips went by the wayside. The lawsuits surrounding these expropriations and others would go on for years (decades?) and continue to this day. This was another opportunity for Chavez to fill the ranks with party (Chavez) loyalists and over a period of years he tripled the PDVSA payroll to 120,000. Normally that might put a strain on cash flow but as this was happening oil prices went on an historic run reaching all time highs and remaining elevated for years.
It is important to understand a couple of things about the oil business in general and Venezuela in particular. Oil is a rigorously capital intensive business. It costs a lot of money to keep those existing wells maintained and pumping. It costs even more to keep exploring for sites for new wells and getting them operational once the site is determined. Depending on a number of factors related to accessibility it can take five to ten years to get a new well online. In keeping with our good news/ bad news presentation, while it’s expensive and time consuming it’s also very lucrative, especially in a rising oil price environment.
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