Venezuela forex officials removed on graft allegations
Reuters, 05.20.03, 3:14 PM ET By Ana Isabel Martinez
CARACAS, Venezuela, May 20 (Reuters) - Venezuela's currency control board said on Tuesday the agency had removed several officials from their posts after they were suspected of illegal practices in the allocation of U.S. dollars.
Edgar Hernandez, president of the state foreign exchange board Cadivi, told Reuters in an interview the agency planned to open more investigations into its staff to root out corruption. "We have changed three officials, without proof but under suspicion ... we will substitute all those about whom there are any doubts," the retired army captain said.
But Hernandez, who backed Venezuelan President Hugo Chavez when he launched a botched coup bid in 1992, admitted that it was difficult for the board to prove illicit acts and graft.
Accusations of corruption in Cadivi have recently surfaced after businessmen who applied to the currency board said they were approached by mysterious middlemen offering to help them access dollars. The "fixers" offered to cut through the red tape for a 12 percent commission.
Hernandez did not say whether the officials were transferred to other posts or were fired from Cadivi, which was created nearly four months ago to manage the supply of foreign currency to the private sector.
The Cadivi chief said the agency constantly monitors the bank accounts of its staff to check for unexplained deposits that could signal corruption.
"We are going to start a special operation to monitor our staff," Hernandez said.
FEW DOLLARS FOR THE ECONOMY
Legal access to foreign currency has been all but nonexistent since the controls were implemented at the beginning of February to cap dramatic capital flight and halt a sharp depreciation in the value of the local bolivar currency.
Many private local firms have been battered by the lack of foreign currency and others are facing bankruptcy because the government does not consider their products to be a priority for access to much-needed foreign currency.
Hernandez said Cadivi had authorized $205 million so far for priority goods, of which only $12 million has been handed over to companies. The economy has been starved of hard currency since Jan. 22 when the government closed the currency markets to prepare for the new controls.
The amount of dollars released in the last few months compares sharply with the $40 million to $60 million that flowed daily before the curbs were implemented. Venezuela imports about 60 percent of its goods and materials.
The lack of dollars has fostered a thriving black market which has oscillated between 2,100 bolivars and 2,400 bolivars to the dollar. The official fixed rate is 1,600 bolivars to the U.S. greenback.
Opponents of Chavez say that the government is using the currency controls to suffocate his political foes and bludgeon the private sector leaders who took part in a two-month strike that failed to remove the leftist leader from power.