Is Petroleos de Venezuela burning?

www.vheadline.com Posted: Thursday, January 30, 2003 - 5:02:49 AM By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: Loyalty to an Institution is one of the rarest qualities of Venezuelan bureaucrats. Traditionally, loyalty among this personnel has been reserved for a man or a group with political power. The Venezuelan bureaucrat is frequently a client and serves a patron. By doing so, he or she obtains the favor of the powerful.

Although this is not new in Venezuelan politics, it has become overpowering during the current government. This is yet another sign that we are dealing with an authoritarian regime. Personality cult  and loyalty to patrons usually reaches very high levels during authoritarian governments. Citizens are either classified as unconditional followers of the leader or as enemies of the regime.

• I am enemy 985 of the regime in the latest ranking of the revolution as published by La Razon ... followed by Cardinal Velasco, at 986 ... all of this comes to mind when considering the tragedy of PDVSA.

I said in my last commentary that the reason for Chavez' merciless attack against PDVSA was his urgent need to politically control this institution and dispose (without limitations) of the $20 billion or so that the corporation generates every year for the Venezuelan nation.

When he arrived in power, he immediately started working towards that goal ... he fired the President of the institution and replaced him with another technocrat, who he felt would be more flexible.

Six months later, he realized that this new technocrat was loyal to the institution, but not to him. Therefore, he dismissed him in favor of one of his most loyal servants, Hector Ciavaldini. It did not matter that he was incompetent and mentally unbalanced, because all he was asked was to be faithful. He was so faithful that he wanted to outdo the master and decided he would annihilate the oil labor unions.

But the unions gave him a sound trashing. So, he also had to be removed.

Chavez then sent a fully-fledged, uniformed Army General to lead the corporation and to do his bidding ... General Lameda ... a man apparently loyal to Chavez ... did something unexpected. Once within the organization, seeing how the professional management behaved, he was won over to their side, becoming loyal to the corporation and not to the man.

At this point in time, Chavez became really enraged. As General Lameda was being driven to his office one morning, he heard on the radio that he had been removed from the presidency of PDVSA and that yet another President had been named in his place ... Gaston Parra,  a Marxist professor at a Maracaibo University.

Parra had spent most of his life writing articles about the need to purge PDVSA of anti-patriotic managers and to staff the company with real patriots. He did not know how oil was found, or produced, or refined, or transported, or sold in the world markets.  He did not have empathy with the managers he was going to supervise. In fact, he hated their guts.

But, he seemed to be a loyal follower and Chavez hoped he would not be a nitwit like Ciavaldini.

I wonder what Peter Drucker would think of this manner of selecting top officers for the most important company of a nation?

At this moment all hell broke loose. PDVSA managers, who had been outraged by the manner with which Chavez was trying to intervene the company; who had seen the arrival of political commissars and spies in their midst; who had silently suffered the verbal abuse of Chavez when he spoke of the need to audit the performance of PDVSA, intimating dishonest dealings, now refused to roll over and play dead.  They rejected the new president and the new board, stacked with friends of the government.

This rebellion actually ousted Chavez from the Presidency in April 2002, until he was brought back, not by the people but by General Baduel, the man who claims to have lived several lives and is now emerging as the strong man behind the puppet ... a kind of Venezuelan Noriega.

For the fourth time, therefore, Chavez was defeated in his attempt to control PDVSA. So he tried just one more time. From Vienna, he brought in Ali Rodriguez Araque, his former Minister of Energy.  A former guerrilla fighter during the 1960s, Rodriguez  had specialized in kidnapping and sabotage of oil facilities.

As a technical staffer for Shell in those years, I remember that the criminals' wrath was reserved for US companies. We kept putting up signs on our pipelines saying : "The Exxon pipelines are the others.... these are ours!" in the hope that they would spare ours ... and they did. They were selective!

So, Rodriguez came in and ... for a brief period ... things came back to "normal." He projected a suave, civilized image and tried to speak the proper language of business. But not for long. Chavez wanted a servant, not a manager ... and he got one. Rodriguez Araque opened the doors of PDVSA to the Bolivarian Circles ... he refused to dismiss the spies and commissars imbedded in the organization ... he promoted unworthy persons to positions of authority ... he became an instrument for the politicization of PDVSA ... and the managers would not accept it.

The managers of PDVSA went on strike ... not asking for bigger salaries, not asking for privileges, not asking for power. They went on strike, they put their jobs and future on the line to try to preserve the institution, to defend the institution against the desires of Chavez for political and financial control. This is what they were supposed to do as professional managers, as trustees of the institution and this is exactly what they did.

Their loyalty was not for one man, or one ideology, or one political tribe ... their loyalty was to PDVSA.

Today PDVSA is burning. I do not know if it will burn to the ground ... I hope not ... I trust PDVSA will be reborn after this nightmare.

I still hope we are not ... as the hobbit  Merry said in "The Two Towers" ... engaged in " a meaningless journey in a hateful dream."

I trust that the house of Mordor will fall, and that the Venezuelan people will be ... once again ... homeward bound.

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve