Former Venezuelan Officials Charged with Bribery Linked to Oil Company

Corruption is Everywhere - Certainly Venezuela and Even Little Andorra

By Nicholas Sakelaris

More than two dozen people were charged with corruption linked to kickbacks taken in exchange for lucrative PDVSA contracts. Photo by Miguel Guitierrez/EPA

UPI -- More than two dozen people were charged with corruption in an alleged kickback scheme linked to Venezuela's state-run oil company.

On Thursday, a judge in Andorra, a tiny country located between France and Spain, charged 28 people, including former high-ranking Venezuelan officials, with receiving up to $2.3 billion in kickbacks to grease the wheels for the oil company, PDVSA. Prosecutors say the money was hidden in the Banca Privada d'Andorra, or BPA, a now-defunct bank linked to money laundering.

Half of those charged are from Venezuela. Nine are from Andorra and five are from Spain.

The list includes Nervis Villalobos and Javier Alvarado, former deputy energy ministers under former Venezuelan President Hugo Chavez's government. It also includes Diego Salazar, the cousin of former oil minister Rafael Ramirez.

The investigation will focus on bribes that were given in exchange for lucrative contracts between 2007 and 2012.

Judge Canolic Mingorance said the accused conspired to take control of PDVSA's energy infrastructure. She's been investigating the case since 2012.

Andorran authorities shut down BPA after the U.S. Treasury found the bank was laundering money to criminal organizations.

Several high-ranking Venezuelan officials already have sanctions on them or have their assets frozen.

U.S. Treasury official Marshall Billingslea recently accused President Nicolas Maduro of "rapacious corruption" and of operating a "kleptocracy."

Venezuela blames U.S. sanctions for the collapse of the country's economy and PDVSA's woes, saying it's under attack by "imperialist foes."

No Lessons Learned: Next Financial Crisis to be Much Worse with US Dollar Collapse – Peter Schiff

Meanwhile, as the Americas criticize and threaten Venezuela over its financial collapse, the USA itself is very vulnerable to financial meltdown.

© Dado Ruvic / Reuters

A decade after the global financial crisis, the world is facing another crash even bigger than the one in 2008, according to veteran stock broker Peter Schiff, CEO of Euro Pacific Capital.

“The too big to fail banks are now both bigger than ever, and more exposed than ever to rising rates and recession. So the systemic risks to the economy are greater now than they were in 2008,” said Schiff.

Such banks should have been allowed to fail a decade ago, he says. “The moral hazard associated with the government having made the mistake of bailing out banks that should have been allowed to fail. Unfortunately, no lessons were learned from the last crisis. We repeated, and expanded all the mistakes that caused the last crisis, ensuring the next one will be much worse,” he said.

According to the investor, all the problems that caused the 2008 financial crisis loom even larger now. “The even worse monetary and fiscal policy since the last crisis guarantees the next one will be much worse. The crisis will be similar in that government will be the cause, everyone will be caught by surprise, and capitalism will be the scapegoat, but it will be much different in that it will be much worse,” Schiff said.

However, the nature of the next crisis would be different, Schiff predicts. While the 2008 crisis was centered around mortgage debt, dollar rise and gold fall, the new one would be about the US Treasury debt crisis. “Treasury debt will be the focal point of the next crisis, and the dollar will collapse and gold prices will soar. The ensuing recession will be much worse as consumer prices will also rise sharply.”

America's spectacular debt leaves them vulnerable to countries that are not necessarily close friends. Saudi Arabia and China control considerable amounts of American debt. We treat the kingdom very well, but remember who was behind 911 - these people are not our friends. China is being bullied by the US, justifiably, perhaps, but there are also areas of potential serious military and political dispute. China is closer to Russia than it is the USA. What happens if those countries conspire to bring about rapid interest rate increases? Will America follow Venezuela's hyper-inflation pattern? It's a little disconcerting.

In Canada, the Liberal government is spending like a drunken sailor, rapidly increasing the national debt and leaving us far more vulnerable to financial collapse than we need to be. 

Military Intervention in Venezuela ‘On the Table,’ Says OAS Secretary General

Is it time to overthrow another elected government in the name of democracy?

Organization of American States (OAS) Secretary General Luis Almagro waves to people during his visit to the Colombia-Venezuela border at the Simon Bolivar international bridge in Cucuta, Colombia, September 14, 2018. © Carlos Eduardo Ramirez / Reuters

The head of the Organization of American States (OAS), accused by Venezuelan President Nicolas Maduro of being a “CIA agent,” says military intervention against Caracas should not be ruled out as a response to the ongoing crisis.

OAS Secretary-General Luis Almagro has hinted that the bloc may consider taking military action in Venezuela if it runs out of diplomatic options in its bid to alleviate the plight of people in the crisis-stricken country.

“With regards to a military intervention aimed at overthrowing the regime of Nicolas Maduro, I think we should not exclude any option,” Almagro said on Friday.

Venezuelans have been fleeing to neighboring countries in droves due to shortages of food and water, as well as soaring inflation and unemployment at home.

Almagro was wrapping up his three-day trip to Colombia, which has been heavily impacted by the inward movement of refugees from Venezuela. Some 3,000 Venezuelans are estimated to be crossing into the country every day. Brazil, Peru, Ecuador and Chile have also been sharing the refugee burden, with Brazil deploying troops to the border to restore order in the borderline state of Roraima after fierce clashes erupted between locals and migrants.

Almagro has frequently traded verbal blows with Maduro. Speaking in the Colombian border city of Cucuta on Friday, the OAS chief called the Venezuelan leader a “dictator” and Cucuta “the city that best exemplifies the lies of Venezuela’s dictatorship.”

The comments come shortly after an explosive report in the New York Times, which claimed that the administration of US President Donald Trump has long conspired with a group of Venezuelan officers to depose Maduro. The clandestine negotiations, which involved US officials engaging with a military commander on their own sanctions list, reportedly kicked off in autumn 2017 and continued throughout last year.

According to the NYT, US officials eventually decided not to endorse the plotters, who had asked their US handlers to provide them with material supplies, including encrypted radios.

When confronted with the report, the White House did not outright deny that it had been engaged in secret talks with mutinous officers. “The United States government hears daily from the concerns of Venezuelans from all walks of life – be they members of the ruling party, the security services, elements of civil society or from among the millions of citizens forced by the regime to flee abroad,” the White House National Security Council (NSC) said in a statement.

Almagro and Maduro have been embroiled in a long-running war of words, exchanging insults and calling each other “traitors.” Back in 2016, Maduro accused Almagro of being a “CIA agent” and of turning the OAS into a US pawn. The OAS chief then fired back, denying that he was with the CIA and accusing Maduro of slander. “And your lie, even if it repeated a thousand times, will never be true,” he wrote at the time.

The US has been pushing for the suspension of Venezuela from the OAS, with US Secretary of State Mike Pompeo urging members to kickstart the procedure so it “would send a powerful signal to the [Venezuelan President Nicolas] Maduro regime.”

At the organization’s 48th assembly in June, Washington failed to secure enough votes needed for the proposed suspension, which was celebrated as a victory by Caracas.

Venezuela, however, wants to leave the bloc on its own terms. Back in 2017, it formally started a withdrawal procedure and will cease to be a member by 2019.

Does that mean that the OAS will have to invade Venezuela before they cease membership in the organization? Or do they think they will have the right to afterward?

To Understand Venezuela's Future, Look to the Bond Market, Not Politics and Protests

U.S. and Caribbean courts allow companies owed money by

Venezuela's indebted state to seize oil abroad

Chris Arsenault · CBC News 

A Venezuelan demonstrator stands in front of a fire, following clashes between police and anti-government

demonstrators in Caracas on July 30, 2017. The size and frequency of anti-government protests has

dropped in the past year, but opposition forces remain divided. (Ariana Cubillos/Associated Press)

Despite some of the world's worst inflation and an economic crisis so severe that 2.3 million people have fled the country in the past four years, Venezuelan President Nicolas Maduro isn't currently facing major street protests and his political opposition remains fractured.

Venezuela has the world's largest proven oil reserves, but shortages of food, medicine and electricity continue to ravage the country. The International Monetary Fund predicts inflation could reach one million per cent by year's end.

These conditions should be ripe for political unrest. 

But the demonstrations, which last year brought hundreds of thousands into the streets, have largely fizzled, and the socialist government's political opposition has weakened in the past year.

Political change over the next 18 months is unlikely as Maduro's United Socialist Party tightens its grip on the economy, the courts and the press, said Raul Gallegos, a Bogota-based associate director with Control Risks, a security analysis firm.

Rather than young activists protesting in public squares, some analysts believe the most likely force to spur serious political change in Venezuela comes from spreadsheet-wielding bond traders and well-heeled sovereign debt lawyers as they move to seize state-owned energy assets to recoup money owed.

Venezuela's government maintains it will pay all of its debts and is working to reform its economy by cutting fuel subsidies and changing how its currency is managed — all aimed at fighting what it calls an "economic war" being waged against the country by the U.S., neighbouring Colombia and domestic business owners. 

Uniquely vulnerable to asset seizures

Analysts, however, don't believe the government's economic measures will work and foresee creditors launching additional court action over outstanding debt.

"We are going to see the dam break," said Duke University law professor Mitu Gulati, who specializes in international arbitration and bankruptcy. "It's astounding how bad things are for a country that is so rich … this has to crash soon."

Venezuela owes about $65 billion US in outstanding bonds, according to Caracas Capital, a financial advisory firm based in the country's capital. That's in addition to other debts owed by the government and state companies — an estimated total of about $150 billion US.

Holders of that debt include some of the biggest names in U.S. finance, such as BlackRock, T. Rowe Price, Northern Trust and the U.K.-based Ashmore Group, Reuters reported in April. Venezuela also owes tens of billions of dollars to Russia and China, after borrowing heavily from the two countries in recent years, largely through oil-for-loan deals. 

Omar Mujica, a car mechanic, and other Venezuelans walk toward Lima, along the shoulder of the

Pan-American Highway, after crossing the border from Ecuador into Peru in August. The UN

estimates 2.3 million Venezuelans — about seven percent of the country's population — have fled

since 2014 as the country plummets into an economic crisis worse than the Great Depression.

(Martin Mejia/Associated Press)

With oil accounting for about 98 per cent of Venezuela's export earnings, the country is uniquely vulnerable to a debt default, Gulati said. That would allow creditors to seize oil shipments or refining infrastructure in the U.S. and the Caribbean, where much of Venezuela's oil is stored and refined before being sold on international markets.

These seizures are already starting to happen and are expected to intensify through September, Gulati added.

Court showdowns 

In August, a judge in the U.S. state of Delaware authorized the seizure of assets owned by Citgo, an affiliate of Venezuela's state oil company, to satisfy debts owed by Venezuela to Canadian mining company Crystallex.

Venezuelan-linked assets in the U.S. could be worth as much as $10 billion US, Gulati​ said.

The U.S. court action followed a similar move in Curacao, a small Dutch Caribbean island, where more than 15 per cent of Venezuela's crude exports were stored and refined before being sold to international customers.

Venezuelan oil production has crashed to a 50-year low, depriving the government of cash to pay its

debts and to import food, medicine and other necessities. (Fernando Llano/Associated Press)

In May, ConocoPhillips, a U.S. oil producer whose assets were expropriated by Venezuela's government in 2007, won an international arbitration action against Venezuela's state oil company, PDVSA. This allowed Conoco to start seizing Venezuelan oil in Curacao and other Dutch Caribbean islands in a bid to recoup $2 billion US.

"These oil seizures are a fundamental challenge to the government … it's a huge deal for them," said David Smilde, a senior fellow at the Washington Office on Latin America, who specializes in Venezuela.

"If [Venezuela's] defaults and different economic commitments get to a point where their facilities abroad get confiscated, that will make oil sales difficult."

Even in default, Venezuela should still be able to sell some oil by loading it directly onto customer-owned ships at domestic ports to avoid seizures, Smilde added, although this would significantly reduce the government's already sputtering revenue stream.

China is the largest holder of Venezuelan government debt; the world's most populous country has lent the oil producer about $62 billion US over the past decade, according to the Washington-based think-tank Centre for Strategic and International Studies.

With Venezuela unable to pony up the cash to pay, China has been receiving interest payments in the form of oil. This arrangement didn't stop at least one major Chinese oil company, Sinopec, from launching a lawsuit against Venezuela's PDVSA in a U.S. court last December for not fulfilling a contract. (It has since been settled.)

U.S. legal leverage

Following the May arbitration decision that led to asset seizures in the Caribbean, Venezuela agreed to pay Conoco $2 billion US over 4½ years in a settlement, and Conoco has suspended its confiscation campaign. 

The case, however, has made other companies owed money by Venezuela take notice, Gulati said. Lawyers across the U.S. are busy preparing claims against Venezuela on behalf of creditors, he said, fearing they will end up at the back of the line for getting paid if they don't move quickly.

Venezuela's President Nicolas Maduro and his wife, Cilia Flores, have blamed the U.S., Colombia

and domestic business owners for sabotaging Venezuela's economy. Maduro recently announced

what he says is a plan to tame hyperinflation, which included cutting five zeros from the country's

currency. (Ariana Cubillos/Associated Press)

Despite frosty relations between Washington and Caracas, the U.S. remains the largest buyer of Venezuelan crude, purchasing more than 30 per cent of its total exports, according to recent data from Bloomberg. This gives U.S. companies and other creditors significant leverage to sue Venezuela in domestic courts.

"Once litigation starts, it's going to make it infinitely harder for the [Venezuelan] government to do anything," Gulati said.

Domestic production decline

These moves to seize the country's assets are intensifying as Venezuela's oil production — the lifeblood of its economy and government treasury — hits a 50-year low, according to the Centre for Strategic and International Studies. 

Mismanagement of oil facilities and an exodus of skilled workers have been blamed for the collapse in production.

Venezuela has long been dependent on imports. But inflation, a lack of foreign currency, chronic insecurity

and other problems have virtually destroyed the country's industrial base. (Rodrigo Abd/Associated Press)

Long dependent on imports for food, medicine and industrial equipment, reduced oil production and mismanagement of the country's currency, means the state — which sets prices for basic goods and controls most of the economy — has cut back on buying necessities for domestic consumers.

In essence, Smilde said, bond investors in New York or Moscow are profiting from Venezuela's oil wealth that should be spent on food and medicine for average people.

Government blames 'economic war'

The government, for its part, contends Venezuela's problems are the result of sanctions imposed by the U.S., Canada, and the European Union and an "economic war" waged by domestic business elites. The country's economic problems have been compounded by speculation, the hoarding of basic products and sabotage targeting oil facilities, the government has said.

It has offered new measures, including pegging the country's inflation-ravaged currency, the bolivar, to a new cryptocurrency, the petro, which is allegedly backed by the country's untapped oil reserves.  

"We are moving from speculative capitalism — chaotic and criminal — toward an equilibrium economy," Maduro tweeted recently. "We will recover the course of sustained and sustainable growth, to give our people supreme happiness."

According to Venezuelan authorities, U.S. sanctions — long imposed in response to human rights violations and corruption — make it more difficult for the government to negotiate its debt load or restructure its payments to creditors.

'When the money runs out…'

Meanwhile, the exodus of Venezuelans continues as many see no hope of living a decent life in their home country. The UN's migration agency has warned that the human flood is building toward a "crisis moment" comparable to the migrant-crossings in the Mediterranean Sea.

Anti-government protesters work together to aim a giant slingshot at security forces in the capital of Caracas

in this May 2017 file photo. (Ariana Cubillos/Associated Press)

As the country's debts mount, oil production falls and pressure builds, analysts expect a bare-knuckle legal brawl through the end of 2018 between creditors over who gets what's left of Venezuela's once-prized assets. Venezuelan government debt is trading at less than 30 cents on the U.S. dollar, meaning investors believe a full-blown default is likely.

"We are going to see an active and conflictive disorderly default as it advances," said Gallegos, the risk consultant. "Bondholders can [then] seize assets owned by the Venezuelan government or any product owned by the Venezuelan government sitting in storage overseas.

"When money runs out, the government threatens people within its folds — including bureaucrats and the military."

'A Crisis Moment': Tracing the Origins of Venezuela's Spiraling Economy and its Human Toll

Here's how the country with the world's largest oil reserves

ended up in the midst of a refugee crisis

CBC News

A little girl lies on the ground at a camp in Cucuta, Colombia, near the border with Venezuela. Many of the Venezuelan children whose families have fled their home land are suffering from malnutrition or parasites. (Fernando Vergara/Associated Press)

Since 2014, the UN's International Organization for Migration estimates that 2.3 million Venezuelans have fled their country, desperate to escape economic and political turmoil, hunger and violence.

Here's a look at how the crisis has unfolded:

A Venezuelan migrant breastfeeds her baby at a centre on Peru's border with Ecuador on August 24, 2018. (Douglas Juarez/Reuters)

Venezuela was once one of the richest countries in Latin America, taking in thousands of refugees in the latter half of the 20th century. But there was economic inequality. The country was run by the wealthy, and the poor suffered.

Hugo Chavez was elected in 1998 on a pledge to change that. At the time, Venezuela's greatest commodity, oil, was selling for about $10 US a barrel. By the time he died in 2013, it was $100 US. The government provided better housing, healthcare, and education for the working classes — but it also fixed prices for some food products and other goods and set-up a complex system of currency controls. 

Chavez's socialism left the government in deep debt. And in 2014, the price of oil started to drop, eventually going as low as $26 US a barrel. Today, it hovers around $70 US, but the uptick in oil prices hasn't been enough to save the country from further economic turmoil.

Then-Venezuelan President Hugo Chavez, left, attends a ceremony for his re-election in 2012, with the man he would name as his vice president and eventual successor, Nicolas Maduro. (Ariana Cubillos/Associated Press)

Chavez's hand-picked successor, Nicolas Maduro, has been accused of mismanaging the oil sector. Oil production has fallen and the country has been unable to pay its debts. The economy has gone into free fall, leaving the government unable to pay for imports like food and medicine. 

Hospitals are overcrowded and short on supplies.

American sanctions contribute to these woes, but socialism is the main contributing factor, and possibly corruption and incompetence, as well.

The crisis has lead to a 30 per cent increase in child mortality, according to the most recent official sources. (Federico Parra/AFP/Getty Images)

Supermarket shelves are almost bare. Domestic farm production has dropped and the government can't afford to import enough food for its people. 

People shop at a near-empty supermarket in Venezuela's capital, Caracas. (Carlos Garcia Rawlins/Reuters)

Because of complex currency and price controls, the available food is often sold on the black market at prices average people cannot afford. 

In some cases, spoiled meat is being sold to consumers. But some Venezuelans buy it because it is all they can afford. 

A customer smells a piece of spoiled meat at a market in Maracaibo, Venezuela. It makes some sick, but at bargain prices, it's the only way many people can afford beef. (Fernando Llano/Associated Press)

In an attempt to deal with shortages and other economic problems, the government has continued to print money, causing hyperinflation which destroys purchasing power for many Venezuelans. According to a recent study by the opposition-controlled National Assembly, the annual inflation rate reached 83,000 per cent in July.

The International Monetary Fund says inflation could hit one million per cent by the end of the year.

A kilogram of tomatoes is pictured next to 5,000,000 bolivars, its price and the equivalent of about $1,

at a mini-market this month in Caracas. (Carlos Garcia Rawlins/Reuters)

Neighbouring countries, Colombia and Brazil, have seen thousands of Venezuelans pour over their borders seeking respite from the conditions at home. According to Colombia's immigration agency, that country alone has received nearly 900,000 asylum seekers in the past 18 months. Between 700 and 800 Venezuelans are arriving in Brazil every day. 

Nurses shout anti-government slogans during an August protest demanding higher wages amid spiralling inflation.

(Ariana Cubillos/Associated Press)

Those with greater resources are escaping to Spain, the United States, and Canada. According to the Immigration and Refugee Board of Canada, there has been a spike in refugee protection claims from Venezuela in the past five years, from 31 applications in 2013 to 1,240 in 2017. There have been 588 applications so far this year.

Tens of thousands of Venezuelans have crossed into Cucuta, Colombia across the Simon Bolivar International Bridge. Some work in Colombia illegally, while others come daily to buy food and return to Venezuela. (Luis Acosta/AFP/Getty Images)

Peru, Chile, Argentina, Panama, and Ecuador are also popular destinations for Venezuelan migrants. 

With Ecuador and Peru tightening their entry requirements, officials in Bogota worry that Venezuelans fleeing

the economic and political crisis could become stranded in Colombia. (Schneyder Mendoz/AFP/Getty Images)

Maduro's government blames the problems on an "economic war" waged by business owners, Colombia and the U.S. It blames "hoarding" by speculators for food shortages and has urged the population to rally to the defence of the state.

In mid-August, Maduro announced measures aimed at combating hyperinflation, including a plan to chop five zeros off the country's currency. The government is also raising the monthly minimum wage by more than 3,500 per cent. 

But part of what fuelled the economic crisis in the first place was inflation due to a heavily indebted government printing money ad nauseam. Critics worry the new measures will not be enough to fix the economy and some say the changes could actually exacerbate the economic crisis. 

On foot, by bus, or on the backs of trucks, migrant families slog for days along the Pan-American highway

through Colombia and Ecuador, in this case with the goal of reaching Peru. (Luis Robayo/AFP/Getty Images)

Two Venezuelan men wait to get food and shelter in front of the Migration Center in Cucuta, Colombia.

(Luis Acosta/AFP/Getty Images)

US, Canada, Latin American Group of Countries Won't Recognize Venezuelan Election

Corruption is Everywhere - Certainly in Venezuelan Elections

Voter turnout was under 50% as mainstream opposition boycotted the election

Thomson Reuters

Venezuela's President Nicolas Maduro and his wife Cilia Flores wave to supporters on Sunday in Caracas after the National Electoral Council said he was re-elected in a vote marred by opposition boycott. (Ariana Cubillos/Associated Press)

Venezuela's socialist President Nicolas Maduro faced international condemnation on Monday after his re-election in a vote foes denounced as a farce that cemented autocracy in the crisis-stricken oil-producing nation.

Maduro, 55, hailed his win in Sunday's vote as a victory against "imperialism," but his main rival alleged irregularities and refused to recognize the result.

In a blistering statement, the 14-nation "Lima Group" of countries in the Americas from Canada to Brazil, said Monday it did not recognize the legitimacy of the vote and would be downgrading diplomatic relations.

The group deplored Venezuela's "grave humanitarian situation" behind a migrant exodus and promised to help co-ordinate with international financial bodies to crack down on corruption and block loans to the government.

In a statement on Monday, Canada's Foreign Affairs Minister Chrystia Freeland called the election "illegitimate and anti-democratic."

"The Maduro regime has once again failed its people by restricting Venezuelans' rights and liberty and by preventing the free participation of opposition parties," she said.

"Canada rejects the Venezuelan electoral process and its results as not representing the democratic will of Venezuela's citizens."

Venezuela's mainstream opposition boycotted the election, given that two of its most popular leaders were barred from running; authorities had banned the coalition and its various parties from using their names, and the election board is run by Maduro loyalists. Turnout was under 50 per cent.

Thousands of Maduro supporters, many wearing red berets, hugged and danced outside the Miraflores presidential palace, showered in confetti in the yellow, blue and red colours of the Venezuelan national flag.

"The revolution is here to stay!" a jubilant Maduro told the crowd, promising to prioritize economic recovery after five years of recession in the OPEC nation of 30 million people.

"Let's go, Nico!" his supporters chanted until after midnight during party scenes in downtown Caracas.

"We mustn't cave to any empire, or go running to the International Monetary Fund as Argentina did. The opposition must leave us alone to govern," said government supporter Ingrid Sequera, 51. She wore a T-shirt with a logo featuring the eyes of Maduro's socialist predecessor, the late Hugo Chavez.

Senior U.S. State Department officials declared Sunday's vote a "sham" and repeated threats to impose sanctions on Venezuela's all-important oil sector, which is already reeling from falling output, a brain-drain and creaking infrastructure.

Spain, which has led European Union criticism of Maduro, also weighed in.

"Venezuela's electoral process has not respected the most basic democratic standards. Spain and its European partners will study appropriate measures and continue to work to alleviate Venezuelans' suffering," tweeted Prime Minister Mariano Rajoy.

However, regional leftist allies of Venezuela, from Cuba to Bolivia, sent their congratulations. China and Russia, which have both poured money into Venezuela in recent years, were also unlikely to join in the international condemnation.

'Tragic cycle' for Venezuela 

The election board said Maduro won 5.8 million votes, versus 1.8 million for his chief challenger Henri Falcon, a former governor who broke with the opposition boycott to stand.

Turnout was 46 per cent, the election board said, way down from the 80 per cent at the last presidential vote in 2013. Suggesting turnout was even lower, an electoral board source told Reuters 32.3 per cent of eligible voters cast ballots by 6 p.m. local time as most polls shut.

The government used ample state resources during the campaign and state workers were pressured to vote.

'Red spots' near polling stations

Falcon called for a new vote, complaining about the government's placing of nearly 13,000 pro-government stands called "red spots" close to polling stations nationwide.

Mainly poor Venezuelans lined up to scan state-issued "fatherland cards" at red tents after voting, in hope of receiving a "prize" promised by Maduro. The "fatherland cards" are required to receive benefits including food boxes and money transfers.

Some anti-government activists said the opposition coalition should have fielded a candidate regardless of how uneven the playing field might be. But the opposition coalition, which has been divided for most of the duration of the "Chavismo" movement founded by Chavez after he took office in 1999, appeared united after the vote and said its boycott strategy had paid off.

"I implore Venezuelans not to become demoralized, today Maduro is weaker than ever before. We're in the final phase of a tragic cycle for our country. The fraud has been exposed and today the world will reject it," tweeted opposition leader Julio Borges.

It was not yet clear what strategy the opposition would now adopt, but major protests seem unlikely given widespread disillusionment and fatigue. Caracas was calm and many of its streets were empty on Monday morning.

Protesters did, however, barricade some streets in the southern city of Puerto Ordaz, drawing teargas from National Guard soldiers, witnesses said.

Economic pressures

Maduro, who faces a colossal task turning around Venezuela's moribund economy, has offered no specifics on changes to two decades of state-led policies. The bolivar currency is down 99 per cent over the past year and inflation is at an annual 14,000 per cent, according to the National Assembly.

Furthermore, Venezuela's multiple creditors are considering accelerating claims on unpaid foreign debt, while oil major ConocoPhillips has been taking aggressive action in recent weeks against state oil company PDVSA, as part of its claim for compensation over a 2007 nationalization of its assets in Venezuela.

Though increasingly shunned in the West, Maduro can at least count on the support of China and Russia, which have provided billions of dollars' funding in recent years.

Maduro, still proclaiming 'the revolution', feeds off the American attempts to discredit and destroy the far-left government in Venezuela. It appears the American strategy is working against its purpose. If the US was to leave Venezuela alone, perhaps Maduro would be seen as the corrupt dictator he is rather than the skinny kid who stands up to the big bully.

IMF: Venezuela Inflation Will Increase 13,000% This Year

By Allen Cone 

UPI -- Venezuela's inflation will soar 13,000 percent this year, though other Latin American countries have much better economic prospects, the International Monetary Fund said in a revised forecast Thursday.

The increase -- 130 times greater than last year -- is more than five times the inflation previously projected by IMF.

Of course, this means the Bolivar is rapidly becoming worthless. In 2008, Venezuela issued new Bolivars - Bolivares Fuertes which was worth 1000 of the original Bolivars. Rampant inflation made it necessary, and will probably make it necessary again.

Last year, price increases were 2,400 percent -- the biggest in the world.

The IMF wrote in the report that the rise is "fueled by monetary financing of large fiscal deficits and the loss of confidence in the nation's currency."

President Nicolas Maduro's government has attempted to control inflation by refusing to loosen foreign-exchange controls and price caps that have increased the short supply of all sorts of products, including food to medicine.

Also, Venezuela's real gross domestic product is projected to fall by about 15 percent for a cumulative GDP decline of almost 50 percent since 2013. The growth forecast for 2019 is a 15 percent decline and 6 percent drop in 2019.

"This trend is the result of significant micro-level distortions and macroeconomic imbalances compounded by the collapse in oil exports -- initially from the sharp fall in oil prices in mid-2014 and, more recently, from the collapse in domestic oil production," the IMF said in the report.

The United States last month sanctioned Venezuela government and military officials accused of having associations with corruption and repression. The Treasury Department said "corruption and repression" has continued to grow under Maduro's regime.

The IMF revised its projections of other nations in Latin America with the GDP predicted to increase 1.9 percent in 2018 and 2.6 in 2019 after it was 1.3 percent last year.

Other Latin Americans in Central America and parts of the Caribbean will benefit from stronger U.S. growth, the report said. And South America's economy has increased due to the end of recessions in Brazil and Argentina, as well as higher prices for the raw materials to export, according to the report.

"Recent trends in the world economy and financial markets are good news for Latin America," Alejandro Werner, head of the IMF's Western Hemisphere department wrote in the report. "Global growth and trade are on an upswing, and we expect the momentum to continue in 2018. Stronger commodity prices have also helped the region rebound."

The IMF specifically was high on Ecuador after coming off its recession because of higher oil prices and greater acceptance to financial markets. IMF boosted its 2018 GDP outlook to 2.2 percent from 0.6 percent.

And the IMF cited Chile's growth prospects because of continued improvement in copper prices and business sentiment -- 2.2 percent in 2018.

Mexico's GDP is predict to grow 2.3 percent in 2018 and 3.0 percent in 2019 on the strength of higher growth in the United States, now pegged higher at 2.7 percent in 2018 and 2.5 percent in 2019.

Desperate Venezuela Tried to Buy Medicine with Diamonds, Gold

Venezuelan currency is bordering on worthless and it's just

getting worse as the economy appears to be in full collapse

By Sara Shayanian 

A group of people walk in front of a liquor store that was looted in Caracas, Venezuela.

Photo by Miguel Gutierrez/EPA

UPI -- Venezuela's struggles to front $5 billion in debt to pharmaceutical companies have gotten so dire the government tried to swap diamonds and other precious items for medical supplies.

The cash-strapped country proposed an exchange of diamonds, gold and coltan, a rare metal used to make cellphones, for medicines from foreign suppliers to combat a shortage of medical items in the nation's hospitals.

According to the Wall Street Journal, it's not clear the the pharmaceutical companies accepted the deal, but they told government officials they didn't have rules saying whether they could fill non-monetary purchases.

Nevertheless, the proposed exchange illustrates the struggle of Venezuela's President Nicolás Maduro to pay for goods as the country's economy collapses.

Venezuela, which has the largest known oil reserves in the world, is running out of money due to years of negligence and corruption that have resulted in $141 billion in debt to international bondholders and creditors.

The Venezuelan Bolivar weakened over 97 percent in relation to the U.S. dollar and inflation in the country has increased to 4,115 percent.

Bartering has become commonplace in Venezuela, especially in transactions between Venezuelans trying to acquire sought-after staple items.

Caracas store

"Money was created so that we could avoid having to barter for basics," Omar Zambrano, a Caracas-based economist, said. "But we've fallen so far that we're now going back in time."

According to Caracas-based economic consultant Orlando Ochoa, using commodities to settle debts to pharmaceutical companies is extremely rare.

"It feels like a bluff," Ochoa said. "It's as if they want to show off their assets to give the illusion that there's still an intention of paying even though they can't pay."

Economists are warning that the economic situation could get worse, as hyperinflation may pass 30,000 percent in 2018.

"Those who are now predicting that Venezuela will close 2018 with an inflation rate of 5,000 don't really understand what is happening," Francisco Ibarra, head of the Econometrica company, told the Miami Herald. "We could hit that 5,000 mark already in February."

Venezuelan Government in Debt Default

This would be cause for a responsible government to resign, but

the power hungry Maduro will see it as a need for more power.

The people are hungry and in need of medications and the

lunatic responsible for it is concerned about himself.

By Danielle Haynes 

Venezuelan President Nicolas Maduro (R) and Venezuelan Vice President Tareck El Aissami (L)

attend a ceremony near the Supreme Tribunal of Justice in Caracas, Venezuela, on January 15.

Standard & Poor's said the country is officially in default after it failed to make a debt payment.

File Photo by Miguel Gutierrez/EPA

UPI -- Venezuela and its state-run oil company, PDVSA, are in default after falling behind on debt payments, multiple credit agencies declared.

Standard & Poor's Global Ratings, Moody's Investors Service and Fitch Ratings declared the South American country in default all within a period of 24 hours, Bloomberg reported Tuesday.

S&P said Venezuela failed to make $200 million in payments on its foreign debt.

S&P defined Venezuela as being in "selective default," when a country fails to make a debt payment when it's due. The $200 million payment was due Sunday. The country also is overdue on about $420 million in bond payments but a 30-day grace payment has not yet expired on that amount.

Venezuela owes an estimated $140 billion in external debt.

Caracas officials met with investors Tuesday in an attempt to renegotiate the country's debt, BBC News reported. Investors said, though, the government of President Nicholas Maduro did not make any proposal on how to restructure its debt.

Vice President Tareck El Aissami read a statement during the meeting blaming U.S.-imposed sanctions on Venezuela. In July, the U.S. Treasury specifically named El Aissami and a dozen other current and former officials in sanctions for allegedly being involved in Maduro's violent suppression of protests, corruption and currency manipulation.

US sanctions on Venezuela do not prohibit the export of their oil but are focussed on access to capital markets like bonds making it difficult for Maduro to keep floating checks.

Venezuela - Videographer Chronicles Countries Descent into Hell

Empty supermarkets, drug stores with no drugs, hospitals with no supplies and the man responsible has succeeded in consolidating his power. He has totally destroyed his country and believes he deserves to be its leader forever.

It's a good thing he is broke or he would be another Kim Jong Un.

video 12:34

Elected Officials to be Charged with Treason by Unconstitutional Assembly

Venezuela lawmakers approve treason trials

for opposition leaders

By Andrew V. Pestano 

Venezuela's pro-government Constituent Assembly unanimously voted to put opposition leaders,

supportive of U.S. economic sanctions, on trial for treason. Photo by Cristian Hernandez/EPA

UPI -- Venezuela's Constituent Assembly, condemned as unconstitutional by the international community, has unanimously voted to put opposition leaders -- who support U.S. sanctions -- on trial for treason.

The pro-government legislative body's action came days after U.S. President Donald Trump imposed new sanctions last week against Venezuelan President Nicolas Maduro's regime.

The Constituent Assembly issued a decree Tuesday, seeking to "jointly initiate with the appropriate state organs an historic trial for treason against the homeland of those who may be involved in promoting these immoral actions against the interests of the Venezuelan people."

That would be themselves and Nicolas Maduro.

During a televised address, Diosdado Cabello, a key ally of Maduro, said the Democratic Unity Roundtable opposition coalition "worked in a sustained manner to achieve" the U.S. sanctions that harm Venezuelans.

Cabello did not reveal exactly how the treason trial process would move forward, nor was it said which opposition leaders will be put on trial.

Wednesday, the Office of the United Nations High Commissioner for Human Rights criticized the Venezuelan regime and the Constituent Assembly's Commission of Truth, Justice and Peace for "measures taken by authorities to criminalize leaders of the political opposition."

"The Commission, recently established by the Constituent Assembly, does not meet the basic requirements of transparency and impartiality, to conduct investigations that are independent and free from political motivation on human rights violations and abuses," OHCHR Commissioner Zeid Ra'ad Al Hussein said in a statement.

A report by the U.N. office said extensive human rights violations and abuses committed amid anti-government protests show "the existence of a policy to repress political dissent and instil fear in the population to curb demonstrations."

"The generalized and systematic use of excessive force during demonstrations and the arbitrary detention of protestors and perceived political opponents indicate that these were not the illegal or rogue acts of isolated officials," the report noted.

Venezuela's New Assembly, 1st Order - Remove Honest Bureaucrat

Venezuela assembly ousts attorney general

after guards swarm her office

By Daniel Uria  

Dozens of uniformed guards stood outside of Luisa Ortega Diaz's office in Caracas, Venezuela as the country's newly implemented National Constituent Assembly voted to remove her from the office of attorney general.Photo by Luisa Ortega Diaz‏/Twitter

UPI -- Venezuela's newly elected National Constituent Assembly voted unanimously to remove Attorney General Luisa Ortega Diaz from office.

The assembly voted to permanently remove Ortega Diaz from her Supreme Court position and replaced her with Tarek William Saab, Venezuela's human rights ombudsman and supporter of President Nicolas Maduro.

Prior to the vote on Saturday Ortega Diaz tweeted photos showing dozens of uniformed guards standing outside, in what she called a "siege" and an "arbitrary act" on her office in Caracas.

About three dozen troops stood outside the building and apparently stopped Ortega Diaz and others from moving in and out of the building.

Her office also tweeted that the department's employees were "victims of abuse" by the guards.

Ortega Diaz was a supporter of Maduro's predecessor Hugo Chavez, but clashed with Maduro about repression against street protesters and announced on Wednesday she had opened an investigation into the election that created the Maduro-backed National Constituent Assembly.

The London-based company that handled the election's polling technology has said they are sure "without any doubt" that the vote was manipulated.

A human rights commission of the Organization of American States asked that Venezuela's government guarantee the safety of Ortega and her family from prosecution following her removal from office.

Venezuela's Precipitous Descent into Autocracy

2 political figures killed as Venezuela holds

unpopular vote for new assembly

President Nicolas Maduro vows to go after political foes

after election with aim to rewrite constitution

The Associated Press 

Venezuela's President Nicolas Maduro greets supporters in Caracas on Saturday.

(Miraflores Palace/Handout via Reuters)

Gunfire has killed a candidate in Venezuela's controversial election for a new assembly tasked with rewriting the country's constitution, as well as an opposition activist, officials said Sunday.

Jose Felix Pineda, a 39-year-old lawyer described as a popular candidate for the Constituent Assembly, was shot in his home in Bolivar City on Saturday night, a tweet from the country's public ministry said.

A group of people broke into his residence and "fired several shots," it said.

Ricardo Campos, a youth secretary for the opposition Democratic Action party, was shot and killed during a street protest in the same city early Sunday, said Henry Ramos Allup, a deputy in the National Assembly and the party's national secretary general.

Two other men were shot and killed during a protest on Saturday night in the town of Chiguara in Merida State in the country's northwest, Venezuelan newspaper El Universal reported.

The violence came before voting began in an election held after four months of political upheaval, which has left about 100 people dead and thousands injured and detained.

President casts pre-dawn vote

President Nicolas Maduro asked for global acceptance on Sunday as he cast an unusual pre-dawn vote for an all-powerful constitutional assembly that his opponents fear he'll use to replace his country's democracy with a single-party authoritarian system.

Accompanied by close advisers and state media, Maduro voted at 6:05 a.m. local time — far earlier and less publicly than in previous elections.

In one of the latest clashes between protesters and the government, a 61-year-old nurse was shot and killed by men accused of being pro-government paramilitaries during a protest at a church, close to the school where Maduro voted.

Maduro and his socialist administration deny links to violent paramilitaries and say the political opposition is responsible for the violence that has left at least 113 dead and nearly 2000 wounded in four months of protests.

"We've stoically withstood the terrorist, criminal violence," Maduro said. "Hopefully the world will respectfully extend its arms toward our country."

Venezuelans living in Bogota, Colombia, demonstrate against the constitutional assembly promoted by President Nicolas Maduro's government. The sign reads, 'Out with Maduro, no more dictatorship.' (Jaime Saldarriaga/Reuters )

The opposition is boycotting Sunday's vote, contending the election has been structured to ensure Maduro's socialist party continues to dominate; all 5,500 candidates for the 545 seats in the constituent assembly are his supporters and the vote's success is being measured by turnout.

The government is encouraging participation with tactics that include offering social benefits like subsidized food to the poor and threatening state workers' jobs if they don't vote.

'Hoping for housing'

Opinion polls say more than 70 per cent of the country is opposed to Sunday's vote and by mid-morning, turnout appeared light in a dozen sites visited by The Associated Press, with dozens or hundreds of voters lining up at polling sites that saw thousands by the same time in previous elections. Some were frank about their motivations for voting: staying in the government's good graces to receive aid.

"I'm here because I'm hoping for housing," said Luisa Marquez, a 46-year-old hairdresser.

Others said they were there out of conviction that the constitutional assembly would help the government fend off what they called an international capitalist conspiracy to undermine Venezuela's socialist system with the help of the domestic opposition.

Communist paranoia, apparently, stems from socialist paranoia.

"The crisis, the shortages of food and medicine, that isn't the government's fault," said Luis Osuna, a 42-year-old private bodyguard. "Those who are attacking us to kill us with hunger and blame the government are the same enemies the government's always had."

Once one of Latin America's wealthiest nations, Venezuela has spiraled into a devastating crisis during Maduro's four years in power, thanks to plunging oil prices and widespread corruption and mismanagement. Inflation and homicide rates are among the world's highest and widespread shortages of food and medicine have citizens dying of preventable illnesses and rooting through trash to feed themselves.

The special assembly being selected Sunday will have powers to rewrite the country's 1999 constitution but will also have powers above and beyond other state institutions, including the opposition-controlled congress.

Opponents have 'prison cell waiting' 

While opinion polls say a vast majority oppose him, Maduro made clear in a televised address Saturday evening that he intends to use the assembly to govern without limitation, describing the vote as "the election of a power that's above and beyond every other. It's the super power!"

He said he wants the assembly to strip opposition legislators of their constitutional immunity from prosecution and indicated he is eager to prosecute many more members of the opposition parties that control a handful of state governments along with the National Assembly, providing one of the few remaining checks on the power of the socialist party that has ruled this OPEC nation for nearly two decades.

A demonstrator looks on during a rally against Venezuela's President Nicolas Maduro's government in Caracas on July 28, 2017. (Andres Martinez Casares/Reuters)

"The right wing already has its prison cell waiting," the president said. "All the criminals will go to prison for the crimes they've committed."

And the number one crime in Maduro's eyes is, not supporting Maduro.

Saying the assembly will begin to govern within a week, Maduro said its first task in rewriting the constitution will be "a total transformation" of the office of Venezuela's chief prosecutor, a former government loyalist who has become the highest-ranking official to publicly split from the president.

There is no room in Maduro's Venezuela for an honest bureaucrat.

The Trump administration has imposed successive rounds of sanctions on high-ranking members of Maduro's administration, with the support of countries including Mexico, Colombia and Panama.

Vice-President Mike Pence promised on Friday that the U.S. would take "strong and swift economic actions" if the vote went ahead. He didn't say whether the U.S. would sanction Venezuelan oil imports, a measure with the potential to undermine Maduro but cause an even deeper humanitarian crisis here

Maduro's supporters on the Supreme Court set off the protests and clashes between police and demonstrator when they tried to strip the National Assembly of its powers in April.

The opposition has organized a series of work stoppages, as well as a July 16 protest vote that it said drew more than 7.5 million symbolic votes against the constitutional assembly. It called Saturday for roadblocks to start before dawn Sunday and a mass march on Caracas' main highway.

"A new stage in the democratic struggle starts tomorrow," Julio Borges, the president of the National Assembly, said at a news conference called by Democratic Unity, a coalition of some 20 opposition groups. "This new stage will need more courage ... street protests will get stronger."

This deplorable situation will certainly get much worse before it gets better; if it ever gets better.