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CORRUPTION in VENEZUELA 2017 with Freedom,Equityand Respectforrights

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CORRUPTION in VENEZUELA 2017 with Freedom,Equityand Respectforrights Annual Report of corruption in venezuelaXXXX2017 INTRODUCTION 3 1 Most relevant corruption cases in 2017 7 2 Odebrecht: A Company That Builds Corruption 35 3 Arbitrariness prevails in the management of public resources 71 4 Justice. Unusual ally of corruption in Venezuela 87 5 Venezuela’s Comptroller General Sets a Bad Example 97 6 National Assembly and its circumstances 107 7 Venezuelan Armed Forces has its own light in corruption 113 8 General Prosecutor of the Republic A change of path that impacted the country 139 9 CNE, elections and corruption. A clean electoral system is essential in democracy 153 10 Corruption has caused the humanitarian crisis and human rights violation 161 11 Opacity, a Government-imposed Rule 179 12 2017 CORRUPTION IN VENEZUELA The international community, crisis and corruption in Venezuela 195 2 INTRODUCTION The most important event that undermined justice, the fight “Large-scale corruption” has taken hold in Venezuela. In against corruption, and worsened impunity in 2017 was the fact, the nation meets all the defining criteria: 1. Top gov- creation of the Constituent Assembly by Maduro’s govern- ernment officials at different agencies are involved; 2. Cas- ment, a parallel legislature that ended up destroying the es of corruption impact large sectors of the population be- independence and autonomy across branches, an indis- cause people do not receive the expected benefits, cannot pensable condition to guarantee equity and the rule of law. access services, lose their jobs or are victims of repression While Latin American countries are working to improve and injustice; 3. Corruption mechanisms cross borders and plans and implementation of open governance and the fight are linked to international networks to laundry monies and against corruption, Venezuela returned to the pre-demo- assets resulting from corruption or because international cratic state of defenselessness under a powerful group that companies or groups are involved in different ways; and 4. uses the state and its institutions at their discretion, tailoring They act with absolute impunity thanks to their control over laws and even the Constitution to their power needs. the justice system. Venezuela’s drama is that corruption has become institu- In this report, we present a selection of cases from 2017, tionalized. Against this backdrop, of an undermined struc- some notable areas with the greatest risk of corruption ture of justice and oversight agencies in our country, a huge during the period, which show how opacity, impunity, and commitment is necessary, as government decisions at lo- political control operates, especially over branches of gov- cal, regional, or even national level are simply not enough. ernment that should be autonomous and independent, and We need an international effort. how these impact the lives of Venezuelans. In the next 12 chapters we present the most outstanding cases, based It is not just about shady dealings or petty scams which on the high profile of the people involved, the impact on may also take place in many countries of the region. It is society, the whopping amounts, or the political cost of each much more than those little ploys that convinced Vene- dealing. We included an analysis of the National Armed zuelans they must pay a “little extra” for a procedure at a Forces (FAN), because the military has expanded its con- government agency. It is much worse than this “small-time trol over government entities, in dealings where there is an corruption,” although this makes the relationship with the increased risk of corruption, such as the food sector – pro- state very expensive and creates distrust in the democratic duction, manufacturing, distribution, import and social pro- system as a political model that guarantees the rule of law CORRUPTION IN VENEZUELA 2017 CORRUPTION IN VENEZUELA grams – and the mining and hydrocarbons sector. with freedom, equity and respect for rights. 3 Odebrecht is an emblematic case where there have been verse relationship between votes and the right to receive accusations – with no proceedings and no ongoing inves- benefits from the State. Similarly, this entity is responsible tigation – of bribery of top government officials, all the way for the loss of public trust in voting, especially after the re- up to the President, for millions of dollars, probably involv- gional elections of October 15, 2017, where Tomás Guani- ing many more people than those who confessed in a New pa and Andrés Velázquez were stripped of their rightfully York court, seeking favorable deals in public procurement. won governorships of Zulia and Bolivar, respectively. It is the shady dealings network with the greatest impact We invite you to read the chapters on the actions of the not only in the nation, but also in the hemisphere, because Prosecutor’s Office, the Comptroller’s Office, the Nation- of the amount of money involved in each contract and the al Assembly, which has been stripped of its parliamenta- high profile of the people involved. The damage caused to ry powers, and opacity as a state policy. These chapters Venezuelans is evident, not only based on bribes and over- provide evidence to understand the extent of corruption prices, but on the major works that were never built. in Venezuela. There are many cases, many sectors, many We also present an analysis of the weakness in budgetary corruption mechanisms not mentioned here, as this re- matters. The 2017 budget, which completely disregard- port does not pretend to be exhaustive, but to shed light ed the control exercised by the Constitution through the on what we consider most shocking cases of corruption in National Assembly, went from 8 to 56 trillion bolivars with 2017. We are sure that readers could think of their own ex- the indiscriminate “approval” of additional appropriations, periences as victims or witnesses of abuse of power, where without any sort of control. a few benefit from that which belongs to all. The Judiciary, as an instrument of impunity, is the main sub- Not surprisingly, the Corruption Perceptions Index ranks ject of this analysis. An autonomous, independent system Venezuela last among countries of the Americas. An effec- of administration of justice, with resources and capabilities, tive anti-corruption strategy requires a huge effort by the would enable the necessary sanctions and the recovery of government, citizens and the international community, in misappropriated funds. As long as corrupt officials are not order to identify the network of accomplices and interna- afraid of prosecution and are able to enjoy ill-gotten assets, tional collaborators who have concealed the product of corruption will find a breeding ground. corruption under a blanket of legality, accounts, assets, We have focused our attention on the social and political and privileges, receiving great benefits in return, but at the subjugation exercised through social programs, which cost of the misfortune, hunger and death of thousands of finds its clearest expression in the use of the “Carnet de la Venezuelans. CORRUPTION IN VENEZUELA 2017 CORRUPTION IN VENEZUELA Patria” ID card as an instrument of citizen control. Another It is time to think of an anti-impunity and anti-corruption branch that requires autonomy and independence, and is agency in Venezuela with a close relationship with the in- 4 also the subject of this report, is the Electoral Branch, due ternational institutions that oversee areas where money is to its use of public funds and its endorsement of the per- handled. It is a herculean task that requires re-engineering of the justice, general comptroller and policing system, to achieve autonomy, independence, resources and the par- ticipation of the most capable individuals. The crisis in Ven- ezuela requires efficiency and clarity in the distribution of spending, so that the benefits reach those who need them most. If we fail in the fight against corruption, we will not be able to access loans, negotiate debt, or receive humanitar- ian aid, which is vital at the moment. CORRUPTION PERCEPTION INDEX 2017 2017 2017 2016 2015 2014 2013 2012 Country Region Rank Score Score Score Score Score Score 169 Venezuela 18 17 17 19 20 19 Americas CORRUPTION IN VENEZUELA 2017 CORRUPTION IN VENEZUELA 5 Most relevant corruption Cases in 2017 CORRUPTION CORRODES PUBLIC ADMINISTRATION Pdvsa, Cencoex, The Office of the Comptroller General of the Nation, the Judiciary, the Public Prosecutor’s Office, the Saime and the Governor’s Office of Aragua, are just some of the instances of the State that are immersed in the perversion of corruption in Venezuela. Processes and cases arise every day. Many more are those who are decked or uncovered CORRUPTION IN VENEZUELA 2017 CORRUPTION IN VENEZUELA 8 1. CORRUPTION INSIDE PETROLEUM INDUSTRY PDVSA 1.1. Case of acquisition of vehicles with surcharge On July 10, 2017, the Public Mi- nistry, PM, the former internal di- rector of Pdvsa and former presi- dent of the Venezuelan Petroleum Corporation (CVP for its acronym in Spanish) , Orlando Enrique Chacín Castillo, was accused by the alleged irregular acquisition of two vehicles with surcharge, during his management as exe- cutive director of exploration of PDVSA.1 According to Public Ministry’s re- port, the two vehicles acquired transgressed the Public Procurement Law, specifically, by In the investigation, was also determined that in august of direct contracting when a public tender had to be held, a 2016, the vehicles were not in the name of Pdvsa, but of the specific vehicle brand “Honda” was established in the con- company Petroequipos Sucre, C.A. Adding to this, one of tracting conditions and the payment in foreign currency, the vehicles acquired was assigned to Chacín Castillo for despite not settling that condition in the terms of contrac- his personal use.2 ting and finding vehicles in the domestic market.
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