<a href=www.vheadline.com>Venezuela's Electronic News Posted: Tuesday, May 20, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: Tuesday, May 13 was the date, aptly chosen, to publish the Regulations to the Law of Public Bidding (Licitations) in the GAceta Oficial (Venezuela's Official Gazette) ... this is a true horror story, as readers will soon appreciate.

In the acquisition of goods and services in both the private and public sectors, the prevailing mechanism is competitive bidding. This is done all over the world, except in very backward countries or where the dictator has the last and only say.

When constructing a public highway or buying a new airplane, transparency dictates that a competitive bid be conducted. The winner is not necessarily the company that offers the lowest price but the best combination of price, technical excellence, quality of product and the best management.

To be true, it is not a simple procedure ... it tends to be lengthy, is not corruption proof and could become a very tangled affair. However, it represents the least imperfect system, allowing for optimum transparency and accountability. In fact, Venezuela is internationally committed to the procedure under the terms of the Interamerican Convention Against Corruption, sponsored and signed by the Venezuela government ... a refusal to adhere to this policy is an open invitation to hyper-corruption.

This is exactly what the government of Hugo Chavez has just decided, violating Article III, points 1, 5, 6, 10 and 11 of the Convention. They have decided to allow all government agencies and enterprises to dispense with bidding for the acquisition of goods and services for the next 6 months ... on the grounds that a fast track is required to expedite an "exceptional" plan of economic and social development that no one knows about, not even themselves.

This anarchic measure will justify the acquisition of more than $2 billion worth of goods and services from "small, medium sized companies and cooperatives."

At the threshold of a referendum which might well result in the ousting from power of this government, this regulation clearly appears to be the starting point of an immense fraud. Companies and cooperatives mentioned above will probably be made up of friends and relatives. To add insult to injury the regulation allows the government to pay for the goods and services in advance if so required.

In Venezuela we have a saying: "Musica pagada no suena" ... Paid for music will not sound.

Of course this is not candor or naivete on the part of the government ... this is a conscious effort to walk away with bulging sacks of money when the time comes. I have seen a lot of corruption in Venezuela, but this new example comes at the top of the list, right there with Lusinchi's RECADI program.

I have to ask:

Have you ever seen a government which pretends to be honest and clean act in this manner? There is no transparency here. There is no accountability here. There is no regard for public opinion here. There is no respect for the institutions here. What we have is a bunch of crooks...

And you might ask: What do the comptrolling institutions say to this? The General Comptroller, Ombudsman, Attorney General, National Assembly, Police, the Pest Control Division?   Absolutely nothing ... everybody is silent and watching the spectacle which is being put on by the very same people that four years ago came into power waving the flag of Anti-Corruption.

I tell whoever wants to listen: this a very corrupt government, not only because of what they are now trying to do but because of what they have already done.  The Real Estate agencies in Florida already have many revolutionary clients ... you can look them up on the Internet.

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 gustavo@vheadline.com

By Elizabeth Bryant <a href=www.upi.com>United Press International From the International Desk Published 5/11/2003 4:26 PM

PARIS, May 11 (UPI) -- It sounds like a John Le Carre novel: Spies and Swiss bank accounts; envelopes full of cash handed out to politicians regardless of creed or political color; luxury Paris apartments, and mansions in Corsica; bribes in Africa, and treachery in France.

But it's real enough. For the uninitiated, it's the sprawling, four-month trial of ex-heads and associates of the former French oil parastatal Elf Aquitaine.

This week the trial produced a new sensation: Alfred Sirven directly accused former Elf head Loik Le Floch-Prigent of pocketing some $2.5 million related to business dealings in Venezuela a decade ago. Sirven was Le Floch-Prigent's one-time right hand man.

"I'm going to say something very important ... more than important, serious," Sirven told the Paris court Wednesday, detailing the Venezuela side deal. Sirven also admitted that another $2.5 million found its way to his own Swiss account.

So goes France's largest corruption case in recent history. The trial debuted in March and runs through early July. It took two investigative magistrates eight years of pre-trial work to detail charges in a 657-page report.

When the trial finally got under way the French knew what to expect: this was in effect Elf II. The sensational, and separate Elf I trial in 2001 riveted the nation. It involved company executives, former French Foreign Minister Roland Dumas and his ex-mistress, Christine Deviers-Joncour.

The defendants in the first trial were all given prison sentences and hefty fines, though an appeals court later acquitted Dumas. But the notoriety had payoffs for Deviers-Joncour -- a former lingerie model-turned-author, who published several books detailing her dealings with Elf and the French government, including one called "The Whore of the Republic."

That the latest court proceedings are again making press headlines offers at least one indication that life is returning to normal in France, after weeks of coverage monopolized by the Iraq war and deteriorating relations with the United States.

Other political scandals are again offering fodder for the French press as well. Among them: the ongoing saga related to tens of thousands of dollars allegedly spent on food and wine when President Jacques Chirac was mayor of Paris.

But critics see the Elf trial as perhaps best illustrating the political excesses and illicit deals between government and private sector in France, during the late 1980s and early

'90s.

A total of 37 people are on trial, for alleged payoffs and illicit funding involving tens of millions of dollars.

Elf was later privatized, merging into Total-Fina-Elf. And this week, the company announced it was now simply called, "Total."

The trial's highlights include a former French secret service agent. Pierre Lethier was wanted for years in connection with bribes allegedly paid to acquire an eastern German oil refinery in 1992. Lethier finally turned himself in last month, after hiding out in Switzerland and Britain.

Then there is former Elf energy director, Andre Tarallo. Nicknamed "Mr. Africa" because he directed many of the company's extensive dealings on the continent -- including alleged payoffs to African leaders such as Gabon's Omar Bongo. Tarallo bought a mansion in Corsica with $11 million, allegedly skimmed from Elf profits.

Perhaps most inflammatory are unfolding stories of the tight relationship between Elf executives and top French politicians. In early April, Le Foch-Prigent detailed how top members from several parties regularly picked up cashed-stuffed envelopes as "campaign contributions."

For a while, the former Elf head said, the largest slice of the $5 million annual political cake went to Chirac's former Rally for the Republic party. But that changed, he said, after then French President Francois Mitterrand ordered a more balanced distribution of the spoils.

For his part, Sirven admitted to paying off former French Prime Minister Edith Cresson, along with two former German ministers, for the acquisition of the eastern German Leuna oil refinery, more than a decade ago. At the time, Cresson said her payment was for work done by a business she managed.

There have been scattered apologies for the excesses.

Le Floch-Prigent admitted been swept away by "the folly of grandeur," underscored by his luxurious, $9.3 million apartment in Paris' elegant 16th arrondissement. An apartment, again allegedly bought with funds skimmed from Elf.

"I'm ashamed of participating in this trial," Elf's refinery director, Alain Guillon, said this week.

But there have also been colorful excuses. Asked to explain some $100,000 spent to equip Le Floch-Prigent's kitchen, his former wife Fatima Belaid shrugged. "My ex-husband loved cooking," she told the court.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, April 28, 2003 By: Patrick J. O'Donoghue

Venezuelan Confederation of Tourism Chambers (Conseturismo)  has criticized the National Tourist Board (Inatur)  for restricting a PR program promoting domestic tour deals to Venezolana de Television (VTV) and Las Ultimas Noticias tabloid . 

Conseturismo president, Alvaro Montenegro says he agrees with the government proposal to offer off-season deals to boost the domestic market but disagrees with the PR campaign worth 3.2 billion bolivares. 

"Only 2% of inhabitants watch State VTV ... other television channels should be allowed to place TV ads as well, based on the percentage of viewers ... and the same goes for print media."

The initiative to boost domestic tourism and lift the sector out of the doldrums is an initiative coming from Tourist Minister,General Wilmer Castro Soteldo.  

Inatur director, Silvia Arteaga says the board is considering the private sector's objectives and will reach a decision soon. 

Consecomercio also objects to the approval under the last Minisiter of $106,000 to be spent on salaries of Cuban tourism coaches and teachers saying it is a waste of time since no concrete project has been presented on the matter.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, April 20, 2003 By: Patrick J. O'Donoghue

According to a Delta Amacuro State non-government organization (NGO), corruption in the Lower Delta Antonio Diaz municipality is a major reason why Warao indians are emigrating to Caracas and other Venezuelan cities to beg and waste away their lives. 

Hernan Rosas and Delta councilor, Luis Rodriguez say they have studied the matter and have attempted to investigate where State resources set apart for the indigenous group have gone. 

Both accuse pro-government Mayor Amado Antonio Heredia Bolano of corruption and confirm that they sent a dossier to the National Assembly  public expenditure control subcommittee in March 2001. 

The subcommittee recommended that Mayor Heredia be held publicly responsible and for the Citizen Power to open an investigation. 

The NGO leaders admit that the first state prosecutor sent to investigate, Jesus Molina undertook a  decent investigation ordering State Political & Security (DISIP) Police to start an audit. 

Molina was replaced by Ana Cecilia Mora, who ordered a physical inspection of the works (housing and sanitary). In July 2002, auxiliary prosecutor Ermilo Dellan allegedly placed obstacles in the investigation. Rodriguez says, "despite complaints, the municipality was then granted 20 billion bolivares for indigenous peoples projects ... only 3 million have been used and used badly."

Our editorial statement reads: VHeadline.com Venezuela is a wholly independent e-publication promoting democracy in its fullest expression and the inalienable  right of all Venezuelans to self-determination and the pursuit of sovereign independence without interference. We seek to shed light on nefarious practices and the corruption which for decades has strangled this South American nation's development and progress. Our declared editorial bias is pro-democracy and pro-Venezuela ... which some may wrongly interpret as anti-American. --  Roy S. Carson, Editor/Publisher  Editor@VHeadline.com

forbes.com What's Hot Now Martha Lufkin for The Art Newspaper

A Connecticut art broker is awaiting sentence after pleading guilty to involvement in a money-laundering scheme intended to exchange illegal drug proceeds for art. Two New York art dealers charged in the case have not been scheduled for trial.

The federal indictment charges Shirley D. Sack, 74, and Arnold K. Katzen, 63, with conspiring and attempting to sell two paintings for $4.1 million in cash to an undercover agent posing as a drug dealer.

According to the defendants, the paintings in question are Amedeo Modigliani's "Jeune femme aux yeux bleus," valued at around $2.5 million, and a pastel by Edgar Degas, "La Coiffure," valued at around $1.6 million. These were seized by the U.S.

"Katzen and Sack indicated to the undercover agent that they could resell the paintings overseas as part of the money-laundering scheme," said the U.S. Attorney for the District of Massachusetts, Michael J. Sullivan. The undercover sting investigation, apparently prompted by an informant's tip, was conducted by the U.S. Customs Service and the FBI.

The U.S. alleged that the Connecticut art broker, Alan M. Stewart, who pleaded guilty in December 2001, acted in the money-laundering transaction. The defendants face maximum sentences of 20 years in prison and $250,000 fines.

Under U.S. law, it is a crime to conduct a financial transaction involving the proceeds or represented proceeds of an illegal activity with intent to conceal the nature and source of the illegal proceeds.

The indictment says that Sack and Katzen promoted themselves as fine art dealers who were "capable of selling various works of art to be paid for in cash, as a way to launder money earned through illegal drug trafficking. The pair "offered to resell overseas any works of art first sold by them," the indictment says. One of the acts alleged as part of the conspiracy was the purchase of a cash-counting machine to sort out any counterfeit bills from the millions the pair expected to receive, the indictment says. The conspiracy took place in New York, Connecticut and Massachusetts, the U.S. says.

The allegations were supported by an affidavit of a U.S. Customs agent, which states that he had received information about Sack.

According to the affidavit, Sack, seeking a buyer for a $12 million painting supposedly by Raphael, stated that she did not care "if the money was drug money, Russian organized crime money or mafia money; she just needed a buyer," and gave the name of Alan M. Stewart as her agent.

In March 2001 in Boston, meeting with an undercover agent posing as a drug dealer who showed interest in buying the putative Raphael, Stewart said he could move cash, exchange cash for gems in addition to art, and handle the resale of the Raphael, the agent's affidavit says. Eventually, the deal shifted to the Modigliani and Degas, the affidavit says, and Stewart fell out of the transaction.

Meeting with the undercover agent in May 2001, Katzen suggested exporting the Modigliani and Degas out of the U.S. for resale, which could take "six months to one year," the indictment says. Katzen proposed to the agent that they build up an inventory in Europe to be marketed "creatively" and that they establish a long-term relationship in moving "large amounts," the indictment says. To assure the would-be buyer, documents were sent to establish authenticity, the indictment says.

The dealers met the undercover agent at the Ritz-Carlton Hotel in Boston, where they had stored the paintings, and confirmed that the bill of sale was made out to a "straw" company, Universal Investments.

The curtain closed at the Boston Seaport Hotel, where in the final scenes of the crime, according to the indictment, Sack and Katzen "unwrapped and displayed for the undercover agent the Modigliani and the Degas," and put the money-counting machine to work, counting $300,000 in cash.

At that point, apparently federal agents arrested the dealers and seized the paintings.

Sack discussed transferring the proceeds from the resale to an offshore account, the agent's affidavit says, and the dealers explained that the buyer would see a net loss in funds. When the undercover agent mentioned normally paying "10% to 15%" to launder money, Katzen said the works could easily be sold at a 10% discount, the affidavit says. Katzen said he would move the money very, very slowly, the affidavit says, and told the agent he had a client in Europe who was ready to buy the Modigliani "under these circumstances."

The Saudi Prince, The "Goya" And The "Foujita" Four people, including a Saudi prince, were recently indicted on narcotics charges in Miami. The indictment cites one of the defendants with money laundering and seeks forfeiture of two works of art in connection with the deal. The oil paintings, seized by the U.S. in New York, are "Bandits attacking a coach" attributed to Francisco de Goya and "Buste de jeune" attributed to Tsuguharu Foujita. Both works are also known by other titles. The indictment charges one José Maria Clemente with financial transactions designed to conceal the source of illegal drug proceeds.

At a hearing in Miami in July 2002 on whether another of the defendants, Doris Salazar, should be freed on bail, Assistant U.S. Attorney Jacqueline Arango gave a glimpse of the government's case.

She alleged that in 1999 a drug transaction took place in which two kilos of cocaine were flown from Caracas, Venezuela, to Paris on a private jet owned by Nayef Al-Shaalan. He is believed to be "a Saudi Arabian prince who is not in direct line for the throne" and who was also Salazar's lover and owner of Cannes Bank in Switzerland, Arango said.

The deal was to yield about $20 million in cocaine proceeds as Al-Shaalan's 50% share, Arango said. She described Clemente as a Spaniard and banker in Switzerland who was the drug group's "European money launderer" who had been "organizing their drug money and laundering it through banks in Europe and Switzerland."

The drug deal was planned on a trip organized by Prince Al-Shaalan to an encampment in the Saudi desert, featuring tents, Humvees [all-terrain vehicles], and "horses and camels," Arango said.

In Paris, the cocaine was taken to "a nice villa in the suburbs of Paris," Arango said. A seizure of 190 kilos of cocaine off the Spanish border led authorities to the stash in France, she said.

Arango said that two cooperating witnesses were "very involved in," and that Prince Al-Shaalan and Clemente knew "a lot" about, "the art world," saying that "some of their investments were made in art." As a result of a money-laundering debt, the "two paintings arrived in Miami" to repay a drug debt, she said.

The paintings were sent "in respect to a money-laundering transaction," which was "related to this drug deal," she clarified, adding that "it was the money-laundering debt that Clemente was repaying." The U.S. Drug Enforcement Administration believes that oil paintings are "a way in which drug dealers launder money. It is an investment for their drug transaction proceeds," she said.

Telling the court that Salazar might flee if allowed out on bail, Arango said that Salazar had various different passports and a number of original oil paintings at her house. But at a later detention hearing on August 7, Arango said that the oil paintings had been examined and were found to be worthless reproductions.

Of the four defendants, Salazar is in federal custody in Miami; Clemente was arrested in Spain in mid-December and is awaiting extradition, either to Switzerland or the U.S.; Ivan Lopez Vanegas was arrested in early February in Columbia and is awaiting extradition to the U.S., while Prince Al-Shaalan has not been arrested.