2.08

It’s a good thing we have Setty to remind us. Otherwise, some of us might forget to flip through PDVSA’s always revealing yet seldom well pondered Annual Report.

This year, I want to pull just one number out of the smouldering wreckage of PDVSA’s financials. According to the report, PDVSA’s Hanky Panky Spending ( a.k.a. its parafiscal contribution, a.k.a. its situado-skirting shenanigans, a.k.a. its plainly illegal appropriations) more than doubled its Zanahoria Fiscal Contribution (a.k.a. its quaintly legal contribution to the state in the form taxes, royalties and dividends.)

El cuerpo del delito is on page 158. It shows that PDVSA spent $24.9 billion directly on a smattering of government-backed “social initiatives,” misiones, and “funds”, including a cool $4 billion for Gran Mision Vivienda Venezuela, a yummy $4.3 billion for something called the Fondo Miranda (!?), and a mouth-watering $5.0 billion for the Cuento Fondo Chino.

On top of that, there’s our old friend Fonden, which gets a downright delectable $14.7 billion cash injection, money which will surely never be heard of again.

Overall, PDVSA spent a total of $39.6 billion on stuff that, in any sane country, elected legislators would have to debate and appropriate through a budget resolution.

In contrast, it contributed just $19.0 billion directly to the national treasury through taxes, royalties and dividends…y’know, the stuff that generates automatic transfers to state and local governments, some of which are controlled by the opposition (thank you, Tibisay!)

It strikes me that you can compute a kind of fiscal lawlessness ratio from those two numbers: just divide PDVSA’s illegal outlays by the legal ones. The higher the number, the more crooked the reds.

As of 2011, Venezuela’s Petrocaudillism Index stood at 2.08: for each petrodollar spent lawfully, $2.08 was spent in open violation of the constitution’s article 314.

46 thoughts on “2.08

  1. What a great statistic to sum up chavez’ venezuela: over two thirds of funds are spent without any reference to due process.

  2. I don’t know, article #314 is pretty vague:

    “Artículo 314. No se hará ningún tipo de gasto que no haya sido previsto en la ley de presupuesto. Sólo podrán decretarse créditos adicionales al presupuesto para gastos necesarios no previstos o cuyas partidas resulten insuficientes, siempre que el tesoro cuente con recursos para atender a la respectiva erogación; a este efecto, se requerirá previamente el voto favorable del Consejo de Ministros y la autorización de la Asamblea Nacional o, en su defecto, de la Comisión Delegada.”

    What stands out to me is”…o, en su defecto, de la Comisión Delegada.”
    Leaves a lot of wiggle room.

    • The comisión delegada is composed by the President of all the Permanent Commissions and exercises the powers of the National Assembly when the Assembly is not in sessions, which is for about 2 months per year around August and January. The point of the article and I completely agree is that the principle of the budget legality is pretty much a joke right now (like the Assembly itself)

      • Sorry I did not make my point clear, what I meant is that the Comisión Delegada can only approve something during this short hiatuses of the Assembly not when is in Sessions, during the other 10 months there is no Comisión Delegada, and I guess that all that money was not only expend in December and August.

        • Thanks for that clarification. Now the opposition should be explaining this kind of things by distributing flyers in buses going to Acarigua and Punto Fijo: “why you don’t have the hospitals and schools you need in Acarigua?”

        • The other point is that if the Comisión Delegada approves something, it still has to approve it as part of a Budget Resolution published in Gaceta Official, it still generates Situado Transfers, and is still subject to parliamentary scrutiny when the Assembly is back in session. None of these things happen.

  3. One thing that gets me is that PDVSA, in the name of sovereignty, is contributing billions of dollars to a fund whereby foreign officials get tutelage over what Venezuela spends its oil money on.

    Think about it: the Fondo Chino receives funding from both PDVSA and China and spends it on “development projects” inside Venezuela (like that Tinaco-Anaco train) chosen and supervised by a high level commission including officials from both countries.

    That means that Chinese government officials now have more say into what we spend some of our own oil money on than our own elected parliamentarians!

    With sovereignty like that, who needs imperialism?

      • In truth, this one’s not so hard for him.

        I’m guessing it’ll be something like.

        You retrograde running dogs of imperialism hate to think of oil money going to build poor people’s houses instead of financing horsewhips for you to beat your servants! For forty years, 100% of oil money paid exclusively for whiskey imports, Masseratis, Channel #5 and lapel-pin U.S.A. flags! Now, when we use them to buy pennicilin, it’s illegal all of a sudden!

        He’ll hardly break a sweat…

        • You’re feeding the troll, and the troll ain’t even here! That’s just wrong on so many levels.

          • Wait… maybe Quico is the troll… throwing in a little antagonistic flare to make things interesting Mr Toro???

            • hee hee…I’m bad at immitating his style, really. For instance, you’ll notice my pastiche made a direct reference to the actual argument advanced in the main post (“it’s illegal all of a sudden!”) That’s a peine Chris would never step on…

            • Chris doesn’t use “running dogs” either. That and words like “compradores” were for other trolls. Chris focuses on insults around the concepts of stupidity and ignorance.

          • The troll feeding have been out of control these past few days. The other excuse you get is that separation of powers is an invention of the bourgeoisie to oppress the poor and that by concentrating all powers Chávez have liberated us.

        • I think he/she will tell you how you do not have enough evidence….and then will start with the “lacayos del imperio retagila”

          • GaC is actually pretty naive. Leave him/ her alone. For some reason he/she feels emboldened to hold Quico to a standard of journalistic rigor that no Chavista media would even dream of meeting. It’s really funny. It’s like Mario Silva one day decided to lecture on jounalistc ethics. But it’s good that GaC feels free and emboldened in this blog. After all, that’s a luxury he/ she can’t enjoy hanging out with his rojo rojito pals over at aporrea. I bet you he/ she would never demand balance or rigor from articles there. GaC is a talking propaganda panflet with a double standard.

    • Yeah, I was wondering if any defenders of the current constitutional “order” would come out on this one. Hard to argue about what’s the highest authority in the land in the face of stuff like this.

      Kudos on the index – I really do like the concept. Can we graph this over time? I think it started in 2004, maybe 2005.

  4. his job is done. We fed the troll in absentia!
    Much like the way Chavez runs (Sic) the country!
    Is there a patern here?

    We also are so involved and attached, even though most of us no loger live in the country…
    Food for thought.

  5. OT, Kiko also remember the operational costs (Drain) to maintain 100 thousand leeches in the Nueva PDVSA Payroll.

    Another interesting Metric, would have to be Barrels sold per employee. (Sold and collected if you want to me malo malo!)

  6. Kidding aside, today’s topic is at the top of my list of reasons why I don’t like Chavez. I live in the U.S and work with people from all over the world. When they find out I’m from Venezuela they ask what I think of Chavez, how bad is he really, do people like him, etc…

    I tell them people do like him, specially the poor… in some cases they like him a lot. I tell them he’s a political genius who has managed to reinvent himself several times to survive an antagonistic opposition that has done what it can to get rid of him.

    Usually this leads to them asking him if I like him. I say no. They ask why not? He’s popular, savvy, what is there not to like? My 20 second elevator speech is that I don’t like him because he has created a system in which he runs my country the same way a 13 year old king would run a kingdom in the middle ages. He does as he pleases; sometimes he’s a nice guy who cares, Sometimes he’s not. He’s great to those who are close to him and terrible to those he perceives as enemies. He controls the purse of the country with the largest oil reserves in the western hemisphere with a clear allergy to accounting. In his mind, control is something someone invented to fuck him up. THIS is the main reason why I don’t like him.

    • Kudos for having the stomach to go through this rigamarole each time: I usually just say I’m from Paraguay. Stops the conversation, right there: nobody has anything to say about Paraguay.

      • Not so! In the original Charlie and the Chocolate Factory, the fake Golden Ticket was made by…someone in Paraguay! And in “Grosse Pointe Blank,” John Cusack plays a hitman who once killed the President of Paraguay. (With a fork, no less.) I’ve heard other amusing references to it as well, just can’t recall them at the moment.

      • But then they ask you “Oh, what’s Paraguay like?”… Then you have to mumble something and say: “In reality, I’m from Venezuela”. Then they ask “What do you think of Chavez?”………………………………….

      • I usually mention oil price in 1998 and now and the murder rate. If there is more time, I mention the primary-city-secondary-city divide.

        • As people in the US is particularly sensitive to politically incorrect language, I always bring up Chavez’ comment about Condoleeza Rice, when he called her mujercita and told Aristóbulo to do her the “favor”. And then I say that I can’t support a President who manages to be both misogynistic and racist in one sentence.

    • I just give ‘em the ol’ “yeah, he is Jesus Christ himself… He just isn’t very good with money.”

      • I jumped on a taxi in Sydney and the dirver was from Russia, the conversation went along these lines:

        Russian cab driver: where are you from?
        Me: “Venezuela”
        RCD: “Oh.. what his name!?… Chavez! Nice guy! right?”
        ME “Not really!”
        RCD: “Ugh! you must be one of the rich Venezuelans that do not like Chavez!!”
        Me: “Ugh! You must be one of the poor Russian that like him!”

        We did not talk again during the ride…

        • When the person who asks what I think of Chavez shows some kind of social sensibility I use my most demolishing line…”I hate the way he manipulates, disrespects and offends the dignity of the poor of my country”. And I mean it. I personally could care less about Chavez. After all, I had the privilege to get an education and a good life elsewhere. The problem is my poor connationals that have no option but to put up with the guy, laugh at his bad jokes, wear a red baret and t-shirt bacause they need the benefits from the misiones to survive. I tell them…Brazil, Chile, Uruguay, Costa Rica in my opinion have done a much better job than Venezuela at lifting people out of poverty and none of those countries has brought people on their knees professing idolatry to an ideology or a caudillo. None of these countries has hijacked the institutions, destroyed the economy, allienated the country’s customers or investors, driven professionals and entrepruneurs out of the country, or instigated hatred and division amongst its citizens. Each of these countries has had at least two presidents during Chavez’ tenure, and none of them has had nearly as much power or money at their disposal than Chavez. At this point I usually don’t need to tell the person that Chavez regime is a total failure, even from the social development standpoint and by Latin American standards.

  7. My first thought is if the financial reports of the groups they gave money to are available on line or otherwise (I know). If not this would be a good opposition project to access even one of them. Even if they were all legal, the commissions at say just 10% would be Two Billion USD! Somewhere must be rooms full of facturas, accounting for all this money, just waiting to be counted if they have not been recycled into papel sanatario!

  8. Venezuela has gone full circle again… Back to being managed like the personal “pulperia” (or is it canteen?) of some Barracks Bully, in the second decade of the 21st. century.

    Excuse me while I blaspheme and imprecate loudly, hideously and copiously for a minute or so… done.

    Now, try to come to terms with the fact that we are back to where we were a hundred years ago, only people were not being killed on the streets of every town, the President did not subscribe a ludicrous ideology, and oil production was managed according to a sane set of incentives. Back to blaspheming…

    • Coincidentally Chavez did run a canteen for the army, and promptly bankrupted it.
      So now he’s bankrupted Venezuela, big surprise

    • How much worse can things get?

      Let me remind you that Venezuela, is currently not equipped to produce enough food to feed its population. It relies on imports for between 70% – 90% (I have heard varying figures) of the food consumed. I think that should answer your question.

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