Posted on Tue, May. 27, 2003 ALEXANDRA OLSON Associated Press

CARACAS, Venezuela - President Hugo Chavez applauded an agreement on plan for a referendum on his rule, saying he hoped his foes had shed what he called their "coup-plotting" tendencies.

The deal, due to be signed Thursday, was brokered by the Organization of American States in a bid to bring stability to the oil-rich nation, which in the past 13 months has seen a brief coup and a strike that devastated the economy amid the dispute between Chavez and the opposition trying to remove him.

"I feel very satisfied," Chavez said during a speech to indigenous supporters in southern Amazonas state.

The agreement between his government and the opposition does not immediately provide for a referendum - instead, it binds both sides to follow the constitution's procedures for calling such a vote.

The constitution would allow a referendum by August, the midpoint of Chavez's six-year term, if the opposition can gather 2.5 million signatures. The next scheduled elections are in 2006.

The pact prohibits any amendments to election laws while authorities prepare for balloting, and it urges Congress to swiftly name election authorities, who must validate the signatures.

The accord also addresses possible referendums on other elected officials - something Chavez supporters have sought against several anti-Chavez legislators.

"I hope the agreement will create a better climate than the one we have in the country today," said OAS Secretary-General Cesar Gaviria.

Venezuela's opposition has been left leaderless and demoralized since it led a two-month strike aimed at forcing Chavez's resignation. The strike collapsed in February, succeeding only in devastating the economy and costing Venezuela $6 billion. The economy shrank 29 percent in the first three months of 2003.

The strike followed an April coup that briefly toppled Chavez and exposed Venezuela's deep divisions over the former paratrooper's leftist economic policies and irreverent rhetoric.

Wearing an indigenous necklace and red wreath on this head, the president said Tuesday the agreement was reached thanks "to the patience that we have had with this opposition, many times irresponsible, coup-plotting and fascist."

"The important thing is that they accept, as they seem to have accepted, that if they want me to go ... they will have to follow the constitution instead of going crazy and desperate seeking coups," Chavez said.

Diplomats from the United States, Brazil, Chile, Mexico, Spain and Portugal, the countries that helped mediate the deal, will attend the signing ceremony Thursday.

Chavez's first election in 1998 ended the 40-year hold on power by two traditional parties accused of squandering Venezuela's vast oil wealth and leaving 80 percent of the population in poverty.

He pushed through a new constitution that paved the way for his own re-election in 2000 and elections that gave his allies control of Congress.

Chavez says he is leading "social revolution" against corruption and inequality. Adversaries - business leaders, labor unions and the two traditional parties - accuse him of grabbing power and ruining the economy with leftist policies.

The opposition says it has already gathered the required signatures, but the government argues that the signatures are invalid because its opponents should have waited until August to begin collecting them. The Supreme Court is to decide on the issue.

To remove Chavez if a referendum is held, the opposition must garner more votes than Chavez did in the last election: more than 3.7 million, or almost 60 percent. Recent polls suggest Chavez's approval ratings range from 30 to 40 percent.

ALEXANDRA OLSON, Associated Press Writer Tuesday, May 27, 2003
(05-27) 15:46 PDT CARACAS, Venezuela (<a href=www.sfgate.com>AP) --

President Hugo Chavez applauded an agreement on plan for a referendum on his rule, saying he hoped his foes had shed what he called their "coup-plotting" tendencies.

The deal, due to be signed Thursday, was brokered by the Organization of American States in a bid to bring stability to the oil-rich nation, which in the past 13 months has seen a brief coup and a strike that devastated the economy amid the dispute between Chavez and the opposition trying to remove him.

"I feel very satisfied," Chavez said during a speech to indigenous supporters in southern Amazonas state.

The agreement between his government and the opposition does not immediately provide for a referendum -- instead, it binds both sides to follow the constitution's procedures for calling such a vote.

The constitution would allow a referendum by August, the midpoint of Chavez's six-year term, if the opposition can gather 2.5 million signatures. The next scheduled elections are in 2006.

The pact prohibits any amendments to election laws while authorities prepare for balloting, and it urges Congress to swiftly name election authorities, who must validate the signatures.

The accord also addresses possible referendums on other elected officials -- something Chavez supporters have sought against several anti-Chavez legislators.

"I hope the agreement will create a better climate than the one we have in the country today," said OAS Secretary-General Cesar Gaviria.

Venezuela's opposition has been left leaderless and demoralized since it led a two-month strike aimed at forcing Chavez's resignation. The strike collapsed in February, succeeding only in devastating the economy and costing Venezuela $6 billion. The economy shrank 29 percent in the first three months of 2003.

The strike followed an April coup that briefly toppled Chavez and exposed Venezuela's deep divisions over the former paratrooper's leftist economic policies and irreverent rhetoric.

Wearing an indigenous necklace and red wreath on this head, the president said Tuesday the agreement was reached thanks "to the patience that we have had with this opposition, many times irresponsible, coup-plotting and fascist."

"The important thing is that they accept, as they seem to have accepted, that if they want me to go ... they will have to follow the constitution instead of going crazy and desperate seeking coups," Chavez said.

Diplomats from the United States, Brazil, Chile, Mexico, Spain and Portugal, the countries that helped mediate the deal, will attend the signing ceremony Thursday.

Chavez's first election in 1998 ended the 40-year hold on power by two traditional parties accused of squandering Venezuela's vast oil wealth and leaving 80 percent of the population in poverty.

He pushed through a new constitution that paved the way for his own re-election in 2000 and elections that gave his allies control of Congress.

Chavez says he is leading "social revolution" against corruption and inequality. Adversaries -- business leaders, labor unions and the two traditional parties -- accuse him of grabbing power and ruining the economy with leftist policies.

The opposition says it has already gathered the required signatures, but the government argues that the signatures are invalid because its opponents should have waited until August to begin collecting them. The Supreme Court is to decide on the issue.

To remove Chavez if a referendum is held, the opposition must garner more votes than Chavez did in the last election: more than 3.7 million, or almost 60 percent. Recent polls suggest Chavez's approval ratings range from 30 to 40 percent.

Tue May 27, 2003 06:34 PM ET

CARACAS, Venezuela (<a href=reuters.com>Reuters) - Venezuela's government and opposition will sign an accord on a possible referendum on Hugo Chavez's presidency Thursday which offers the hope of a peaceful solution to their long-running conflict, the chief international mediator said Tuesday.

"The signing will take place Thursday ... I believe that this will help to improve the political climate," Organization of American States Secretary General Cesar Gaviria told reporters in Caracas.

After more than a year of often violent feuding over his rule, left-winger Chavez's government and its foes last week reached an accord in which they accepted the idea of a referendum after Aug. 19. They also agreed to shun violence and support a plan to disarm their supporters.

The agreement was welcomed Tuesday by the six-nation "Group of Friends" -- Brazil, the United States, Chile, Mexico, Spain and Portugal -- which had backed Gaviria's efforts to achieve a solution to the crisis in the world's No. 5 oil exporter.

"We think it's important they've taken this step," State Department spokesman Richard Boucher said in Washington.

Venezuelan opposition leaders, who accuse Chavez of ruling like a dictator, say they fear he may still try to avoid a referendum.

After Aug. 19, which marks the halfway point of Chavez's term, Venezuela's constitution allows for the holding of a recall vote on the president's rule.

But the accord, which recognizes this constitutional right, does not automatically guarantee a referendum. His opponents must first collect signatures from 20 percent of voters.

"If they want me to go, they are going to have to work hard in the streets, they are going to have to collect signatures," Chavez said Tuesday in a speech in south west Venezuela.

For a vote to be held, the National Assembly, where Chavez supporters hold a slim majority, must also first appoint a new electoral authority to set a date for the poll and oversee the referendum process.

The signing of the accord will go ahead despite violence over the weekend in which gunfire disrupted a rally by opposition supporters in a pro-Chavez district of Caracas. One person was killed and 22 injured. The government and opposition blamed each other.

Tiana Perez, NewsMax.com May 2003

Editor's note: Tiana Perez, NewsMax's Venezuelan correspondent, will offer dispatches on the turmoil in this crucial and often-overlooked part of the world.

Mediation Ends With Accord in Venezuela

May 30: After six months of international mediation in Venezuela, opposition and government signed Thursday a 19-point accord to end violence and find a constitutional and electoral solution to the political crisis that undermines the legitimacy of President Hugo Chavez.

The government’s negotiating committee arrived in a red bus to the negotiations table after having rejected the agreement’s first two drafts during the past weeks. Chavez is said to feel happy about the document, which puts an end to expectations of violence in the country. He also is said to be glad that former strategies of economic and political devastation such as the general strike or coup attempts were over now.

The agreement text is respectful of the basic powers and of the National Electoral Council, the latter being a way to organize the referendum that would questions the president’s stay in power. The "international community" now has a mechanism, says the opposition, to ensure that the constitution shall not be violated and that elections will take place.

The National Assembly (Congress) will, once again, take its turn to try naming the five permanent and 10 temporary members that will constitute the National Electoral Council. The government, having somewhat more than 50 percent in Congress, will depend on political negotiations to grant a two-thirds majority for each of the members. The first vice president of the National Assembly affirmed “we shall be sure that the decision will be taken in Congress or in the Supreme Courts.”

The opposition, embodied in the Democratic Coordination Committee, which took a day to carefully review the accord, is still worried about the text not including a settlement for the fired workers of PDVSA, the state-owned oil company. Chavez himself fired the workers, who strongly protested during the strike, reducing the workforce of the company by around 17,000 people or 30 percent.

Zambrano, one of the Democratic Coordination Committee’s leaders, assures that the PDVSA issue will be resolved by giving back the jobs once the president steps out of office.

Juan Fernandez, the president of the Workers’ Union of PDVSA, complained about the accord not including articles related to the disarmament of violent groups or the role of the "international community" in appeasing violence.

The six-month mediation assistance by Gaviria, general secretary of the Organization of American States, ends with the agreement, thus cutting future interference by the world. Carter Center, however, will establish a branch in Caracas to help open roads toward electoral observations.

Charles Shapiro, U.S. ambassador, said that “the U.S. believes the agreement to be positive” and thinks that it was written in "good faith."

Argentina’s New President Will Use All Available Recourses

May 28: A few weeks ago, a protester stood in front of the presidential palace in Buenos Aires waving a sign that said, “Mr. President, the helicopter is waiting for you at the exit.”

The historical lack of faith of the population deepened with the presidential turnover unleashed by Menem’s involvement in a corruption scandal that set the stage for the social and economic collapse of the country. Since 1999, Argentina has had seven presidents.

Nestor Kirchner, the president-elect, skipped the second round after Menem, who on April 24 surpassed Kirchner in the first round of presidential elections by 2 percent with 24 percent retired from the race. Kirchner is scheduled to hold the post until December 2007.

Kirchner, a veteran of the Peronist Party's (Partido Justicialista) center-left wing announced in his inauguration speech that he would work to combat poverty and hunger by implementing economic and not social policies. He had said earlier that his government would not significantly depart from the direction the administration took with Duhalde, who was in power for 18 months and that it would work on increasing government spending through improved infrastructure projects.

Duhalde, who supported Kirchner all along his campaign, inherited a broke country with a debt burden equivalent to 114 percent of GDP. After defaulting on the debt, Duhalde soon started negotiations with the IMF to rollover its debt and qualify for an initial loan package that would stabilize the economy. His main achievements were the floating of the peso and the liberalization of frozen deposits.

Kirchner will most definitely continue with reforms required by the IMF to assure the country a feasible repayment schedule of its debt burden. IMF conditions include the reform of the banking system to assure creditor and investor protection, as well as structural changes to the inter-governmental lending and tax systems. The failure to collect taxes from the provinces and limitless borrowing from the different provincial governments represented a big leak for central funds during Menem’s period.

It would be natural to expect resistance in Congress as budget cuts to the provinces are ahead. Kirchner’s uncertain support by the majority of Argentina’s population may also tip municipal and other local elections coming ahead to the advantage of populist governors opposing austerity measures.

Kirchner’s handicap at the beginning of the presidential campaign had been the lack of support from provincial governments, around which Menem usually built his support base. Menem being out of the game does not mean that he will not come back or at least that those who worked around him will unite to back Kirchner with a single voice, especially now that the Peronist Party (Partido Justicialista) is fractured after it suspended internal elections to have three different candidates run for the presidential election on its behalf.

Kirchner, of Swiss and Croatian ascent, received international support on Sunday. Regarding internal conflicts, he mentioned in his speech, “I will use all available recourses in the constitution to pass needed reforms.”

Tough Election for Chavez

May 27: Less than 100 days from the referendum that would question the Venezuelan president’s term, all roads seem to be pointing to the Supreme Court for a decision.

The Supreme Courts of Justice may be undergoing the change that Hugo Chavez had long announced to be a milestone of his revolutionary plan. It is not certain, though, whether it is he who prompted the change, but in any of the cases, it comes at an awkward moment.

Chavez’s promise to "reform" the Supreme Courts of Justice has started to materialize with the approval of a procedure by Congress’ Interior Politics Committee to bypass the needed approval by two-thirds majority in Congress for the appointment of 12 more judges.

The breaking of the president’s support base had brought the Supreme Courts of Justice to a 10-10 balance, putting an end to the remarkable unanimity of the past.

The reform package consists not only of an expansion of the Supreme Court but also includes a law that would legally forbid annulling appointments of judges.

Implications of this law range from a quick sentence to the dissident generals accused of treason for rebelling against the government during the general strike to ultimate manipulation of the referendum conditions.

The rocky road to the referendum lead to the assignment of an ad-hoc commission assigned to appoint the five members of the Electoral Council that would be responsible for assuring smooth elections. The commission had been put in charge of breaking the stalemate in Congress, where a two-thirds majority to approve the five members has not been possible so far. Thursday the commission declared it failed to meet its objective after having extended its initial deadline.

The Supreme Courts of Justice could now be the only alternative left to name all of the Electoral Council or just the fifth, tie-breaking member by omission.

It is possible that whomever the judges end up assigning will be considered a transitory solution. The opposition is wary of transitory government officials, especially after having lost the opportunity to vote on a non-binding referendum in January because Chavez did not consider the Electoral Council’s director's term, elected by the Interim National Assembly, legitimate.

The now-dissolved Interim Constitutional Assembly had also appointed the twenty Supreme Court judges who now sit at the Supreme Justice Council in 1999. The transitory body acted in lieu of Venezuela’s Congress for close to two years. Its main task had been the approval of a new constitution. The Chavista vote reaching 98 percent of the Interim Assembly, it was not surprising that the constitution got approved with hardly any debate surrounding the major event.

Though still powerless, if spirits persist in spite of having to stand in long lines to buy food products worrying about unemployment and crime, the opposition will stage a constitutional debate. Chavez takes pride in following the constitution to perfection, but the clumsy drafting of the statutes of the Supreme Courts of Justice and the by passing of majorities in Congress could prove him at fault after all.

All being said, the new episode in Venezuela’s political struggle will give the opposition and the government time to rethink strategies for the referendum amid constitutional debates. The opposition may nominate one candidate to run against Chavez, and the president will fine-tune his party politics and feed his supporters to assure the 30 or 48 percent that he says is his piece of the universe of voters.

It may get complicated.

southflorida.bizjournals.com 4:36 PM EDT Tuesday Jim Freer

Ocean Bank of Miami reported earning $10.1 million for this year's first quarter ended March 31, according to the bank's quarterly Call Report to the Federal Deposit Insurance Corp.

Those earnings are a 17 percent decrease from Ocean Bank's $12.1 million profit for last year's first quarter.

Ocean Bank had $4.1 billion in assets as of March 31, making it the largest commercial bank based in South Florida.

On May 1, Ocean Bank client Terremark Worldwide (Amex: TWW) announced that the bank had agreed to convert a portion of the Miami-based computer networking firm's loans into equity and to extend the term of its remaining loans to Terremark.

Bankers in South Florida have been wondering whether Terremark's financial problems might have an impact on Ocean Bank, which is the largest lender to Terremark.

Ocean Bank executives were not available for interviews, according to a spokesman for the bank.

The bank's latest report to the FDIC shows a continuation of two recent trends - profitability, but a ratio of non-performing loans that are more than twice the banking industry average.

Ocean, which is privately held by owners based in Venezuela, had a 2.1 percent ratio of non-performing loans and real estate owned to total assets on March 31.

Non-performing loans are loans that are delinquent for 90 days or more and no longer accrue interest.

Ocean Bank's non-performing ratio was 2.4 percent on Dec. 31.

The bank's non-performing loan ratio has been above 2 percent for each quarter since the quarter ended June 30.

The national average was .9 of a percent for commercial banks and savings and loans as of Dec. 31 - the latest date for which data is available.

Ocean Bank's report for March 31 listed $525,000 in loans 90 days or more past due and $87.9 million in loans not accruing interest.

The report also indicated Ocean could soon be dealing with additional non-performing loans.

The bank's loans between 30 and 89 days delinquent increased from $29.2 million to $134.3 million during this year's first quarter.

The report did not identify any non-performing loans or borrowers on those loans. But in a Feb. 14 filing with the Securities and Exchange Commission, Terremark said it was negotiating restructuring $44 million in debt it owed Ocean Bank. Terremark added it owed $1 million in unpaid interest on that credit.

On May 1, Terremark said that Ocean Bank had agreed to convert $15 million in Terremark debt to equity at 75 cents a share.

Terremark also said the bank extended the terms of its remaining $28.9 million in debt to Ocean Bank for three years - until April 30, 2006.

Despite its problem loans, Ocean Bank has continued to generate significant income on loans that are current, and thus report quarterly profits.

The bank reported earning $45.5 million in 2002, with a profit in every quarter.

For this year's first quarter Ocean Bank reported interest income of $57.3 million - primarily interest earned on loans. That compared with $62.5 million in interest income for last year's first quarter.

Ocean Bank added $11 million to its loan loss reserves during this year's first quarter. That put the bank on a pace similar to 2002, when it added $47 million to its reserves.

Analysts do not regard those additions as alarmingly large for a bank of Ocean's size. Large additions to reserves can significantly reduce a bank's net income for a quarter.

Ocean Bank had $80.9 million in loan loss reserves on March 31.

That gave Ocean Bank a reserves-to-problem loans ratio of 92 percent - a level regulators consider very strong for covering potential losses.

During this year's first quarter, Ocean Bank's equity capital declined from $334 million to $329 million.

As of March 31,the bank's ratio of equity capital to assets was 7.72 percent - almost twice the 4 percent regulators require for a bank to be considered adequately capitalized.

For the remainder of this year, rival bankers will be watching Ocean to see if it can resolve problems with its delinquent borrowers - and thus continue its run of profits.