December 1, 2009   Praise dirty Venezuelan bankers you say? No- we really are not. Nor are we praising their overpaid lobbyists before the U.S. Congress, when quizzed about the dirty Venezuelan banking crimes, shucked and jived, on behalf of their paying clients....the Venezuelan Banking group, to under oath foreswear that the U.S. should never, ever look too closely at Venezuela because to actually do so might hurt the poor, poor struggling huddled masses, currently living off of state handouts. We have to say that this tour de force of Andean logic has cost Venezuelans not only their wallets but their integrity, if any ever had integrity. By semi-representing the Chavez extortion rackets- and making lots of ill gotten Chavista monies by converting Chavez's ridiculous money and never once insisting on the primary vehicle known to all banks everywhere- accountability and veracity- these Venezuelan banks broke their own charters that day with their hired lobbyists, such as Norman Bailey and every Soros-backed idiot who still yet enjoys lying a lot about Chavez. This string of lies about how much the USA must keep its hands off! Venezuela reminds us of another companion US Congressional hearing of about the same ilk when the US Energy Departments' Karen Harbert stated that the USA must always never look too closely at Chavez's wonderful corruption because.... Chavez was only "worrisome" and was helping the poor and of course the USA needed Chavez's oil when the fact is...it did not and does not and Harbert's lies should have been challenged just as the Venezuelan bankers lies should have been challenged. No one benefits when agents aid and abet corrupt regimes- no one.

Extortion and dirty money never leads to a good end. Have you got that, yet?

Sr. Fernandez was always a Chavez proxy for moving drugs and laundering dirty drug cash. Chavez needs his cash and moved in.

Fernandez, not even in the top five of Venezuela's banks, made almost $ 2 billion last year. No one made such kind of money last year unless their hands were dirty. Sr Fernandez made lots of dirty money of and with Chavez. Venezuelans have known that this man and his banks are dirty banks- dirty with drugs and criminal undertakings. Fernandez served Chavez well until he became an inconvenient truth and Chavez declared that the USA could not access these banks dirty money records because....they are now sovereign. Will Chavez refund the clients? He needs their quick cash and he needs to seal off the Fernandez drug king pin criminal evidence, clearly lied about by KPMG, in yet another disgrace.

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DECEMBER 1, 2009
Caracas Shuts Banks, Sealing Insider's Fall
Closure of Four Institutions, Owned by Venezuelan Billionaire With Ties to President, Suggests Showdown in Chávez's Circle
 
By JOSé DE CóRDOBA, DARCY CROWE and JOEL MILLMAN
CARACAS -- Venezuela said Monday it will liquidate two banks owned by businessman Ricardo Fernandez and temporarily shut two others, intensifying a showdown between President Hugo Chávez and a billionaire long considered a close ally.

Mr. Fernandez, who made an estimated $1.6 billion largely through government contracts, was seen by many Venezuelans as the epitome of the crony capitalism they say has flourished under Mr. Chávez.

It is unclear why the government moved against him. Some analysts here believe Mr. Chávez wants to be seen as tough on corruption amid an economic downturn. Others suggest the arrest and bank closures represent a behind-the-scenes battle over this oil-rich state's lucrative spoils.

On Sunday, Mr. Chávez suggested it was the former, taking to the airwaves to attack Mr. Fernandez and others who have profited from government connections. "There are people out there that say that they are revolutionary and are doing business. A true revolutionary is not going around doing business for profit," he said on his weekly television show.

Bank employees and customers outside a branch of Ricardo Fernandez's Banco Canarias, which Venezuela announced Monday it will liquidate.

Mr. Fernandez, 44, turned himself in to Venezuela's secret police on Nov. 20, hours after the government took over the management of four failing banks that he and a group of investors had bought over the course of the past year. He faces up to 10 years in prison on charges of illegally using depositors' money, self lending and criminal association.

The government says Mr. Fernandez's banks made illegal loans for as much as $846 million. The alleged violations were on record for months before the government's financial watchdog moved on them.

Antonio Guerrero, Mr. Fernandez's lawyer, says his client's legal problems are the result of an inaccurate audit of the banks books. "The charges are totally false and without foundation," he says.

In Caracas, depositors lined up outside the four banks, which were acquired by Mr. Fernandez and partners over the past year and account for about 6% of deposits in the country's banking system. About 750,000 people are affected by the announced liquidation of Banco Canarias de Venezuela CA and Banco Provivienda CA. The government says it wants to rehabilitate the other two, Bolivar Banco CA and Banco Confederado SA.

Many analysts and bankers in Caracas believe Mr. Fernandez's troubles signal a struggle between powerful factions in the Chávez government. "Something changed in his relationship with the Chávez power structure," said José Guerra, a former Venezuelan central bank director.

Mr. Chávez, who has been in power for more than a decade, has expanded the state role in the economy at the expense of the country's traditional business class. But his rule has created a class of connected businessmen who have won big government contracts -- derisively called the "Boliburgueses," or Bolivarian Bourgeois, a play on Mr. Chávez's self-styled Bolivarian revolution.

Mr. Fernandez was the most powerful of these, analysts say, and Mr. Chávez's favorite banker. State institutions account for more than 42% of Banco Canarias's deposits, or $2.13 billion.

These people also say Mr. Fernandez was close to power brokers including Diosdado Cabello, the public-works minister, and Mr. Chávez's older brother and mentor Adan, currently the governor of Barinas state. Spokesmen for Mr. Cabello and Adan Chávez declined to comment.

Mr. Fernandez, the son of a Spanish immigrant who owned parking lots in Caracas, became the prime provider of food products to Mercal, a government-run store chain that sells subsidized foods to poor Venezuelans. Now known as the "King of Mercal," he employs some 18,000 people.

He broke into the inner circles of Mr. Chávez's government in 2002 after Venezuelan business leaders backed an ill-fated general strike in a bid to topple Mr. Chávez. Mr. Fernandez offered his trucks to the government to help distribute foodstuffs.

He expanded his investments in food producers to meet government contracts. The government backed his group, which was a rival to Venezuela's largest private company, food producer Empresas Polar SA, which Mr. Chávez has threatened to nationalize.

By 2005, his net worth was $1.6 billion, according to a "statement of financial condition" drawn up by Caracas accounting firm Alcaraz Cabrera Vasquez, KPMG's Venezuela affiliate. The firm declined to comment, citing client confidentiality.

Orlando Ochoa, an economist critical of Mr. Chávez's economic policies, says Mr. Fernandez's arrest could suggest rising influence of Socialist ideologues within the government who disdain the Boliburgueses. The nod for intervention in Mr. Fernandez's banks came from Finance Minister Ali Rodriguez, a former leftist guerrilla and self-described Marxist.

Others in Caracas believe Mr. Fernandez's arrest is a pre-emptive strike by Mr. Chávez against legal moves by U.S. authorities against the businessman.

In 2007, the U.S. Drug Enforcement Administration confiscated a private plane belonging to one of Mr. Fernandez's businesses because it was incorrectly registered in the U.S. In an affadavit, the DEA said such registrations were typical of people involved in illegal activities who sought to minimize searches, letting foreign owners "use the airplane to traffic drugs, arms, or cash."

In 2008, Miami prosecutors fined Mr. Fernandez's U.S. company $1.1 million, saying the confiscation had been solely due to the faulty registration, and not because the aircraft was involved in illicit activities. Mr. Fernandez has also had his U.S. visa revoked, says Mr. Guerrero, his lawyer.

"Mr. Fernandez has been subject to sanctions because he is identified with President Chávez," said Mr. Guerrero.
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As far as telling tall tales before the public, as many Venezuelans and Ecuadoreans do, we are delighted that Amb. Reich stands up to canard-spreading liars:

As published in Foreign Policy

Otto Reich on Honduras' voteTue, 12/01/2009 - FOREIGN POLICY

This weekend, Honduran citizens voted Porfirio Lobo president, months after a coup ousted Manuel Zelaya. Here, Foreign Policy contributor and former U.S. Assistant Secretary of State for the Western Hemisphere Otto J. Reich replies to criticism of his FP article on the coup.

How does one rebut so many errors and distortions as those in Christopher Sabatini and Daniel Altshuler's response ("Calling a Coup a Coup," from Nov. 2) to my Foreign Policy article on Honduras ("Honduras is an Opportunity," from Oct. 27). Let us deal with just some of them.

By my count, Sabatini and Altshuler (hereafter, "SA") repeat the term "coup" 11 times, an incantation designed to cast a spell over the reader. But no matter how many times the liberal duo recite the mantra to misidentify the events that removed Manuel Zelaya from office, it was not a coup. Since the entire letter is based on that false premise, its conclusions are equally false.

SA accuse me of "ideological revisionism," for saying the U.S. should recognize the transitional government that is based on Honduran law, while they insist on calling a constitutional removal of a law-breaking president by a unanimous vote of a nation's Supreme Court, a "coup." Curiously, SA dismiss the Supreme Court action by citing two obscure U.S. academics' papers which portend to rebut a U.S. Law Library of Congress report that supported the legality of Zelaya's ouster. Is that ideological on their part, or just plain confused?

The ousted president, Manuel Zelaya, had violated several articles of the Honduran Constitution (as documented in the aforementioned Supreme Court decision), and therefore according to Honduran law (not my opinion) he was no longer president of Honduras when he was deported (the deportation was not legal, but it occurred after the legal removal from office). Further evidence that Zelaya's removal was not a coup was the ratification of his removal by a nearly unanimous vote of the Honduran Congress. SA gloss over Zelaya's violations of the law and focus instead on his subsequent -- and inexcusable -- deportation.

SA claim that "Reich vigorously defended Micheletti's assumption of power as the victory of the rule of law and a stand against Latin American leftists." False. I not only did not defend (or condemn) Micheletti, I mention Micheletti only once in my article, in passing, acknowledging that he replaced Zelaya. This is only one example of the paucity of facts in SA's article. I am not sure whose article they were rebutting, but I don't think it was mine. Their allegations are directed at "conservatives," "Micheletti apologists," and others -- people I know did not write my FP article.

Attacking "conservatives" put SA in a bind. They charge that "U.S. conservatives have argued that Barack Obama's administration should recognize the Nov. 29 elections in Honduras as a way out of the political crisis." Actually, it is not only U.S. conservatives, but also the Obama administration that has come to that conclusion, as evidenced in the agreement brokered by Assistant Secretary of State for Western Hemisphere Affairs Thomas Shannon in late October. It was Zelaya who renounced the agreement just days after he had signed it. Shannon then said the U.S. would recognize the winner of the Nov. 29 elections as the legitimate head of the next Honduran government.

In their letter to FP, SA praise the U.S.-brokered accord as follows: "[Most] importantly, the prospective settlement sets the stage for internationally recognized elections that will transfer power to a new president and help the country move forward." I agree. And contrary to SA's implication, I support that accord and think it is the best way out of the current crisis. I would hope that Zelaya's retreat from it has not caused SA to reverse course.

Although most of their letter can be dismissed as confused and self-contradictory, Sabatini-Altshuler's ideological motivation in attacking "U.S. conservatives'" position on the Honduras electoral crisis (as embodied by me, I assume) is serious. In concluding, SA claim that the "conservative" posture on Honduras they have attacked in their letter "would have mirrored the United States' foreign-policy blunders in Central America in the 1970s and 1980s. During this period, the United States supported façade democracies -- deadly authoritarian regimes that held civilian elections to legitimize their rule -- to pursue questionable geopolitical aims. This position cheapened elections and weakened nascent democracies."

This not only reveals a clear leftist ideological direction by SA, but also a revisionism resulting in crass historical distortion. This is a contemptible and ignorant slap at Ronald Reagan, the president in "the 1980s," under whom unprecedented progress was made in hemispheric democracy. When Reagan took office in 1981, a majority of Latin Americans lived under military dictatorships. When the conservative Reagan left office eight years later, the situation had been reversed: An overwhelming majority of our neighboring countries had transitioned to democracy after long and brutal dictatorships, such as Argentina, Brazil, Peru, Guatemala, Uruguay, and Chile. Which of those governments were "façade regimes," as in SA's accusation? Which were U.S. policy blunders? In which of those countries did the U.S. weaken "nascent democracy"?

As someone who worked for Ronald Reagan for those eight years, I can attest that democratic progress was no accident. It was the result of a policy designed and implemented to bring freedom and democracy to our hemisphere. That two American liberals attempt to re-write history and thus demean the U.S. role in the advance of freedom in this region, imperfect as it was but one that came at a high cost in lives and treasure, is an obvious illustration of the moral bankruptcy of American liberalism today.

But SA are not satisfied with running down their country: Their despicable and rude anti-Reagan screed reaches another ridiculous nadir with the statement that those (1980s) U.S. policies were based on "the pursuit of questionable geopolitical aims." Really? What aims were those? The main geopolitical aim of Ronald Reagan, as I remember, was the defeat of communism. The policy succeeded. And with it came an unprecedented global spread of freedom, human rights and prosperity. By whose standards was this policy "questionable?" I do recall it was questionable to the Kremlin, many western Marxist "intellectuals," and most Third World socialist despots and guerrilla leaders. It was not questionable to the hundreds of millions of people of Eastern Europe or the Soviet Union whom it helped to liberate from oppression. We now know they supported Reagan. As did the other hundreds of millions people who benefitted from the end of the Cold War a! nd from the ensuing prosperity resulting from the "peace dividend".

Why does U.S. Cold War policy appear to be a "blunder" to Sabatini-Altshuler? For the same reason they cannot see why the U.S. should support free elections in Honduras. Historical ignorance and political ideology blinds them.

Otto Reich has served three U.S. presidents in the White House and State Department, including as U.S. Ambassador to Venezuela and assistant secretary of state for Western Hemisphere affairs.

What we say at ECrisis is the same: get the facts. Know the truth,

-Pedro Camargo for ECrisis