Adamant: Hardest metal

As the words fly, Venezuela corruption keeps creeping along...

Venezuela's Electronic News
Posted: Thursday, June 19, 2003
By: Gustavo Coronel

"From Paraguay, President Chavez claimed that the State should be strengthened in order to be able to fight corruption in the hemisphere. The judicial power, he said ... was infiltrated by corruption in Venezuela..."
Union Radio, June 18, 2003. commentarist Gustavo Coronel writes: Visiting a country perceived as the most corrupt country in Latin America (Paraguay), the President of the country perceived as the second most corrupt in Latin America (Venezuela) ... according to Transparency International and to the work just published by University of Santiago de Chile's Raimundo Soto ... saw fitting to speak about how to fight CORRUPTION.

On this occasion the Venezuelan President offered his recipe: To strengthen the power of the State.

How is this accomplished?
The State becomes strong when its institutions are strong and, in turn, they are strong, when they are staffed by the best candidates, according to the proper rules of selection and when they are truly autonomous and independent. Only efficient and independent institutions can be strong.

In the Venezuelan case this is not what has happened ... the Executive power has had excessive discretionary power and has "captured" all other institutions ... there are no independent government institutions: the members of the Supreme Tribunal of Justice (TSJ) were named at will by Chavez and Luis Miquilena.

Later on ... when Chavez and Miquilena split ... the Supreme Tribunal of Justice became a battleground between these two persons' followers. Today, the government is attempting to pass a new Law on the composition of the Tribunal, which would increase the number of its members to 30 ... so that these new members are Chavez followers and can guarantee that all decisions satisfy the desires of the President?

This is what the President seems to understand by "strenghtening" the judicial system ... but, of course, the results of this maneuver will not help the fight against corruption, but will, in fact, reinforce it.

Similarly, the National Assembly is still in the hands of the President, although his originally ample majority has dwindled to one or two votes. Since the government block does not practice votes of conscience and always votes according to the desires of the President, there is no democratic discussion on any topic.

Whatever is needed by the President is offered to him at the earliest possible moment by the Assembly.

This state of subservience can not but result in higher corruption levels, as there are no checks and balances on Executive power. We have recently seen how internal debt has been increased to $11 billion by the Minister of Finance, with the bulldozing approval of the Assembly ... a move which puts the country closer to financial bankruptcy.

The Ombudsman, the Comptroller General and the Attorney General are only sad figureheads doing the President's bidding. To me, this is the reason great amounts of national financial resources can be utilized by the Executive power in anti-constitutional and illegal ways without any objection from those officers. It's obvious that, under this state of affairs, corruption will flourish rather than decrease, since the Executive power has no restraint.

The Armed Force is currently under a military high command that is not loyal to the nation and to the Constitution but to one man, the President. An independent high command would not accept the use of military force to support vandalism, as recently took place in the Petare area of Caracas. Similarly, an institutionally-oriented high command would have to remind the President that he can not rule until 2021 ... as he keeps boasting he will do ... unless he violates the laws of the country. In order to keep the members of this high command loyal to him, the President could be forced to give the group privileges which are not permissible under the law. This abnormal bond promotes corruption since the armed forces should exclusively be loyal to the Constitution and the Law.

The President's words during his visit to Paraguay have been most unfortunate ... they describe a theoretical model to fight corruption which he is not in practice following. As his words fly all over the world from Paraguay, corruption inexorably creeps up and takes firm roots among members of his government. Scandals take place almost around the clock.

This was to be expected, as corruption flourishes in those governments in which words do no fit deeds ... when there is a gap between what its is said and done, the politician or the bureaucrat loses credibility. Today, very few still believe the words of the President because they have seen that what is taking place is very different.

Citizens' tolerance of the issue of corruption is very low because this has been a problem for many years now ... and they had hoped that this President would have had the will to eradicate it. But this will does not exist. If it did, Venezuela would not still possess one of the most corrupt states of the western hemisphere.

Two cases of high level ... presumably corrupt ... practices have been denounced in the last weeks. One is the situation in the State of Barinas, where the Governor, President Chavez' father, has been the object of a highly-incriminating report by the State Comptroller describing how more than 50% of the total State budget has been wasted or pilfered.

As a result the State Legislative Chamber has rejected the Governor's Annual Report and elevated their charges to the attention of the Comptroller General who, it is expected, will promptly ... do nothing.

  • The document is so explicit in its allegations that members of the government party in the State Legislature did not vote in favor of Governor Chavez.

The other case involves the Minister of Finance, Tobias Nobrega, denounced by Francisco Rodriguez (the main financial advisor to the National Assembly) for managing the sale of millions of dollars of Venezuelan debt bonds without Assembly approval and in a manner described as "uncompetitive bidding" which totally lacks transparency. By means of this mechanism the debt paper is sold to private investors for a pre-established top price which is lower than face value, only to be re-bought later at face value by the government.

Rodriguez' accusations, seconded by economist Gustavo Garcia and politician Carmelo Lauria suggest that these operations are conducted to satisfy the personal interests of government officers, including the Minister.

I do not know, of course, if such charges are true, since no proper investigation has been made. But what is beyond doubt is that excessive discretionary power among government bureaucrats and their lack of accountability inevitably leads to high levels of corruption.

Corruption can not be fought with empty and hypocritical words but with decisive action, even if (or, specially if) relatives or close friends are involved.

Our national poet Andres Eloy Blanco wrote a poem about the chief of police of a small town being forced to put his lifelong friend in prison for breaking the law but, then, going everyday to cultivate his friend's patch of land while he was in jail.

If the President wanted to be true to his creed, he would take action against the questionable activities of his circle of friends and relatives even while he keeps loyal to them.

Because, Loyalty is one thing and Complicity is quite another...

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. You may contact Gustavo Coronel at email

International squabble locks up art
Posted June 12, 2003

MIAMI -- A Spanish art-gallery owner claims she owns two paintings worth $10 million that were seized in a drug investigation considered bizarre even by Miami standards.

"It is obviously a very interesting case," said U.S. Magistrate Judge Robert Dube. "I know a lot more about art than I did before."

He said he would issue a recommendation after mid-July on a request by Barcelona gallery owner Helena De Saro to undo a court order blocking her from claiming the paintings by Goya and the Japanese artist Tsuguharu Foujita.

De Saro insists she had been holding the Goya since 1990 and the Foujita since 1989 as investments and shipped them from Geneva to New York for possible sale in 2002.

They wound up in a Miami art-storage center for inspection by possible buyers through a Spanish financier, Jose Maria Clemente, who prosecutors say owed a $10 million debt to drug traffickers.

Clemente has been jailed while under investigation in Spain since December and was indicted last year in Miami.

Clemente is charged along with a banker who married into the Saudi royal family and the banker's ex-girlfriend in a 2-ton Colombian cocaine shipment from Venezuela via Saudi Arabia to Paris on the banker's private jet under diplomatic immunity in 1999.

Prosecutors say the banker, Nayef Al-Shaalan, is a prince, but the Saudi Embassy denies that.

The ex-girlfriend, Coral Gables real-estate agent Doris Mangeri Salazar, is the only one in U.S. custody in the case.

De Saro said she didn't have a bill of sale, invoice or other sales records to prove she owns the paintings but has their certificates of authenticity.

"It made absolutely no sense," prosecutor Jacqueline Arango said of De Saro's explanation.

Arango indicated that De Saro "could be a confederate of an indicted defendant."

"It's a classic situation where you have people out there who are nominee owners of property," she said.

De Saro's attorney, Sharon Keggeirs, argued the paintings may be in a legal limbo forever.

The government wants them to be forfeited by Clemente, but decisions on forfeiture are made only after defendants are convicted, and Spain has rejected U.S. extradition requests before.

De Saro's attorney said: "The government's taken $10 million of Ms. De Saro's property. She may not get an opportunity to have her day in court, and the government says, 'So what?' "

No reason why Hyundai shouldn't be handed ID card contract

Venezuela's Electronic news
Posted: Tuesday, June 10, 2003
By: Patrick J. O'Donoghue

El Universal has published several reports about Venezuela's chaotic Passport & ID Office (Oni-Dex) and renewed the debate on modernization of the thoroughly corrupt system. In February, 2001 then Interior & Justice (MIJ) Minister Luis Miquilena suspended the signing of a modernization contract with South Korean Hyundai Information Technology Company.

In the meantime, a report from the Oni-Dex Legal Consultation Department issued on March 13 2003 was allegedly silenced.

Other columnists claim that rival Spanish Indra Company has been trying to muster support for its tender and entered into contact with opposition deputies.

Returning to August 2001, the National Assembly (AN) came out against Hyundai for 10 technical reasons, despite freebies for deputies to visit Korea to investigate Hyundai's ability to get the job done.

In 2001 it was Indra Systems subsidiary, IMA-2001 that set the cat among the pigeons providing Miquilena with technical arguments against Hyundai. At the time, columnists alleged that slush funds had been set up as part of the bidding process ... after all, the project itself was worth $227 million for the winner.

In March, 2003 then Oni-Dex president, Alfredo Gil Romero, computer chief, Ademir Carpio and fingerprint department director, Manuel Julian Hernandez traveled to Korea to check out the original 10 AN objections to Hyundai getting the contract and returned with the conclusion that there are no reasons why Hyundai shouldn't get the contract.

Venezuela woos Iran on possible alumina investment

Reuters, 06.09.03, 1:41 PM ET
CARACAS, Venezuela, June 9 (Reuters) - Venezuela, responding to Iranian interest in buying its bauxite, has proposed setting up a joint-venture alumina plant on Venezuela's Orinoco river, state industrial holding company CVG said on Monday.
A spokeswoman for the company, Corporacion Venezolana de Guayana, told Reuters its President, Francisco Rangel, outlined the proposal to Iran's government and aluminum industry during a visit to the Gulf state at the end of May.
"The Iranians want to buy bauxite, but (Rangel) explained to them that CVG doesn't want to just sell bauxite," the spokeswoman said. CVG operates Venezuela's state-run aluminum industry located in mineral-rich southeastern Bolivar state.
The spokeswoman said Rangel had made clear CVG was only interested in selling bauxite through a strategic alliance with Iran, involving setting up a joint venture in Venezuela to produce alumina which could be shipped to Iran for smelting.
"The idea is that the Iranians make the investment in the plant, and then they would be paid back through production," the spokeswoman said.
CVG had identified a possible site for the proposed plant at Caicara on the Orinoco river, which would make it easier to transport bauxite from Venezuela's huge Pijiguaos mines.
It was not immediately clear what response Rangel had obtained in Iran to his proposal. Iranian embassy officials in Caracas were not immediately available for comment.
According to CVG, Iran has plans to increase its installed primary aluminum production capacity to more than one million tonnes in the next 10 years from the current 140,000 tonnes. It is looking for fresh sources of raw material to do this.
Venezuela's fiercely nationalist left-wing president, Hugo Chavez, has made clear his government does not simply want to export raw materials. He says he prefers forming alliances with major foreign producers to develop value-added processing, smelting and manufacturing ventures inside Venezuela.
As examples of this kind of preferred association, the CVG spokeswoman mentioned existing contracts with Swiss-based Glencore International AG and France's Pechiney <PECH.PA>.
Glencore is leading a consortium in a $650 million project to build a fifth production line at CVG's Alcasa smelter.
Pechiney is proceeding with a $210 million project to expand production at an alumina plant operated by CVG-Bauxilum to 2.2 million tonnes a year from 1.6 million tonnes.
CVG is seeking foreign partners to participate in an ambitious expansion plan that foresees increasing its primary aluminum output capacity by more than 400,000 tonnes to more than one million tonnes at the end of the decade.
Since Chavez, a populist former paratrooper, was elected in late 1998, the world's No. 5 oil exporter Venezuela has moved to strengthen ties with states seen as hostile by the United States, such as Iran, Libya, Cuba and previously Iraq, when it was ruled by the now toppled Saddam Hussein.
This has irritated Washington, although the United States remains the single biggest buyer of Venezuelan oil.

Washington Housing Plan Is Building a High Profile
By: David Lombino 06/06/2003
Although the development plan, as designed by local landscape architect Dirk Sabin, details extensive efforts to protect the fragile area, including the donation of more than 60 percent of the property to a land trust through a conservation easement, some critics assert that the project is too ambitious, will threaten an important ecosystem and sets a dangerous precedent.
An ad hoc town commission designated the area as critical habitat because state-designated species of special concern live near the site and there is a diversity of amphibians. In addition, the property contains the headwaters of Sprain Brook, along with clusters of vernal pools and a closed-canopy forest.
The designation is not meant to prevent development, but to draw attention to environmentally sensitive areas and to encourage good plans that will not have a negative impact on the area.
On May 28, the Inland Wetlands Commission voted to continue the public hearing on the application for a fourth session, set for Wednesday. Board member Mark Picton cast the only vote against continuing the hearing.
All board members were contacted for telephone interviews, but only Mr. Picton and Candace Korzenko were available, and Ms. Korzenko explained that commission members could not discuss the issue outside of the public hearing.
The applicants are Roxbury builder Ed Cady, who is known for the en vogue building method of importing materials from antique barns from other regions and using them to create houses in Litchfield County, and Roxbury resident Maria Eugenia Maury. She is the wife of Diego Arria, Assistant Secretary-General of the United Nations under UN Secretary-General Kofi Annan, and a former governor of Caracas, Venezuela.
Mr. Cady constructed a home for the Arrias' 66-acre Roxbury property that they purchased for $1.6 million in March 2001, to go alongside a restored Federal-style farmhouse.
The sale of the Washington estate where the development is proposed, from George Murphy to Ms. Maury and Mr. Cady is contingent on approval of the application by the town's land-use commissions.
The 73-acre tract, which borders property owned by Mayflower Inn owners Robert and Adriana Mnuchin, makes up part of the headwaters of Sprain Brook, which meanders down Nettleton Hollow Road toward Woodbury, where it feeds the Weekeepeemee River, which eventually meets the Pomperaug River, both highly touted trout streams.
In a telephone interview, Mr. Sabin explained that the plan proposes to take three existing parcels and combine them into two, accessible from one driveway. It then aims to place more than 60 percent of the property, or about 43 acres containing the vernal pools and central wetlands, into a conservation easement that would be held by the town, the Steep Rock Association or another entity.
The two housing lots will be developed, and two ponds will be constructed from wetlands and upland areas, for protection from fire, to add esthetic value and to create habitat diversification. The larger, 0.8-acre pond would disturb around half an acre of existing wetlands, and the smaller, 0.4-acre pond would disturb between a quarter and a third of an acre of existing wetlands.
The conservation easement would connect to an existing easement that belongs to Steep Rock, directly to the south. Susan Payne of the Steep Rock Association said that the organization had a preliminary discussion with Mr. Sabin, but no formal application had been submitted, no review had been undertaken and no decision made.
Mr. Sabin, who has served on the Inland Wetlands Commission, the Conservation Commission and was chairman of the ad hoc committee that created the town's natural resource inventory report, has contended that the plan is preferable to another potential application to put six houses on the property, with up to four wetlands crossings.
He has submitted documentation asserting that the town's soil-based zoning regulations permit up to six lots, with more wetlands crossings and less land in easement on the property than is proposed.
At the most recent public hearing, he said the commission should not compare this application to an alternative of no development.
"I suppose no development is an option, but I don't see anyone lining up to donate this to the town," he said at last week's hearing. "You need to consider potential development scenarios in a spot like this."
Janet Hill, Washington's longtime zoning enforcement officer and former wetlands enforcement officer, said in a telephone interview she could not think of a project of this scale proposed for as sensitive an area during her tenure.
Mike Ajello, Washington's wetlands enforcement officer, has visited the site and said he could not predict the direction of the commission's vote.
"From my point of view there are some wetlands we don't need to spend a lot of time protecting. And there are pristine wetlands that have never been impacted or touched ... and much of the Maury/Cady site are of the latter description," he said in a telephone interview. "Protection is relative. We can never do too much, but we have to do what's reasonable. From my experience, a little bit of protection is almost worthless in the sensitive areas. A lot is necessary. How much is too much? Everything you do will have some impact."
"The most difficult thing a commissioner faces is weighing those two things-how much can be accomplished before we impact the wetlands, and [balancing] that against a homeowner's personal rights to do what they want to do with their property," he said, explaining the philosophical dilemma. "Mr. Sabin has done an excellent job representing it and doing as much as he can possibly do to secure something for the town. Is it enough? What's enough? Then it's a judgment call."
Curtis Read, a water specialist who serves on the Bridgewater Inland Wetlands Commission and the Pomperaug River Coalition, and is chairman of the Northwest Conservation District, spoke against the project at an April 23 public hearing. He argued the plan would permanently change the habitat by causing the water to get warmer, damaging breeding ground for salamanders, fish, frogs and mosquitoes.
"In my presentation, I likened it to the SUV of development in that, unfortunately, they are proposing activity in upland wetlands that is critical habitat for known endangered species, and they are proposing to change that with ponds, grading, swimming pools and tennis courts," he said in a telephone interview. "I would think, when there is this kind of sensitive area, they would at least pull back out of the wetlands areas and maintain as much environmental integrity as possible. ... But the sense is, it's Washington, Connecticut and you need to pile on the amenities to make the house attractive."
Mr. Read said he hopes the commission will consider other less harmful alternatives and weigh the long-term effects of accepting the plan. "The impact is fairly major. It's indicative of the building pressure in the county that we are going to sites like this to build McMansions," he explained.
Betsy Corrigan, a Conservation Commission member and a neighbor of the proposed development, argues that the project is too big and has too many unknowns. Even though she claims she will not be able to see the development, and its acceptance may actually make her property value rise, she is asking the commission to deny the application without prejudice and ask the applicants to reapply with a scaled-down plan. She believes the commission is fearful of litigation.
"If this thing passes as is, it will set a bad precedent and clear the way for other people to do the same. It will have historical repercussions for the region in similarly sensitive areas," said Ms. Corrigan in a telephone interview. "I really thought that Washington had a big conservation ethic-a big proposal like this comes around and no one turns out for it."
Mr. Sabin admits that the project is getting "a hard look" by the wetlands commission and its consultants, but he argues that it is not because it's a "huge project," or really complex, but because there are natural resources present.
"Obviously I'm asking for some regulated activity. I've made no bones about it from the beginning that there are going to be impacts ... but we are very cognizant of the wetlands and watercourses ... " he explained at the hearing last week, arguing for the commission to close the hearing that night and make a swift decision.
The commission sought the advice of Michael Klemens, a herpetologist and a consultant whose fee was paid by the applicants. Mr. Klemens made a site visit, submitted a written report and attended the April 23 and May 14 meetings. Mr. Klemens noted the importance and fragility of the property's vernal pools, and he advised commission members to make sure the planned ponds do not compromise Sprain Brook with an inflow of nutrients or through thermal alterations. He also worried that a proposed driveway came too close to a vernal pool.
In response to Mr. Klemens' suggestions, Mr. Sabin said he has altered the original plan, moved and reduced the size the ponds, lessened the wetlands impact and added an additional natural wetland filtration area.
At last week's meeting, commission member Marguerite Purnell questioned whether an owner would actually comply with regulations and keep extensive protective measures, or just mow and fertilize green lawns right up the banks of ponds. Mr. Sabin answered that owners would be aware of complex management plans, and deed restrictions could force future owners to comply.
Commission members also wondered whether there was any way to ensure that the owners would only build two houses, and not subdivide down the road.
Mr. Arria said later in a telephone interview that Ms. Maury and Mr. Cady could ensure that only two houses are built with a deed restriction.
In May, 2001 Roxbury's Inland Wetlands Commission issued notices of violations to the Arrias for cutting trees within a 200-foot buffer along the Shepaug River without a permit. Banks were denuded and trees were placed across the river so workers could reach an island in the river to mow and selectively cut trees and shrubs. An estimated 100 tress were cut down.
Mr. Arria hired an environmental firm, ESM Associates of Danbury, which submitted a environmental review and impact assessment report to the Roxbury's wetlands commission. Commission chairman Russ Dirienzo said at the time that the commission probably would have granted the necessary permit had the applicant originally filed one. Mr. Dirienzo was so pleased with how the Arrias mitigated the problem, he later singled them out as models for how to deal with wetland violations.
In a telephone interview from Manhattan, Mr. Arria emphasized that the Carmel Hill Road project in Washington belonged to his wife and Mr. Cady. But since his wife was unavailable, Mr. Arria pointed out that she and Mr. Cady had opted to build only two homes instead of six, and hired Mr. Sabin because of his reputation in the area as a highly respected landscape architect. He noted that more than 60 percent of the Washington property was to be preserved, and said that he and his wife were undecided about whether to sell their property in Roxbury and move into one of the houses in Washington, if the project is approved.
The wetlands commission is to discuss the project again Wednesday at 6 p.m.

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