Bandes's not-so-great overseas adventures


202949497_640Back in 2006, the Venezuelan state’s development bank BANDES decided to expand its operations overseas by starting a commercial branch in Uruguay.

Five years later, Bandes Uruguay announced an internal reorganization, but reaffirmed its committment to continue working, to the point of reopening its main headquarters.

There were reports at the time that the bank was only making huge losses. Confirmation of this came in February as the Uruguayan state-owned Banco República (BROU) took over nine branches of Bandes Uruguay and has absorbed 146 of its employees.

This is not the only major problem for Bandes these days, as a huge scandal involving the artificial sale of bonds by some employees became public. This New York Times story on the scheme is just priceless.

Meanwhile, former Deputy Foreign Minister Temir Porras is Bandes’s new president, but the fact that he holds three major posts in the government at the same time doesn’t bring much confidence. Neither does the fact that Edmee Betancourt (who headed the bank in 2010, and was involved in the reorganization of the bank in 2011 as Commerce Minister) has just been promoted to become President of the Central Bank of Venezuela (BCV).

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  1. The Bolivarian Revolution perhaps has to be more careful about who is does corruption with.

    What gets me is the favourable response to a request for a kickback to cover taxes on the kickback. It has that weird bureaucrat bananero logic of engaging in lawless behaviour while at the same time being a stickler for conforming to administrative detail.

  2. Thanks for posting about the Bandes scandal. Some thoughts:

    – In any other country there would have been much bigger repercussions by now. This scandal broke a couple of weeks ago. There was some minor coverage in the Venezuelan media but nobody has been making a big deal of this. This is not chump change we are talking about (I mean maybe for this government’s level of corruption it is). Why don’t we know more about this woman Ms. Gonzales yet? Who she has ties to? I am sure this is just the tip of the Iceberg of the level of corruption in BANDES.
    – The Bandes officer was arrested in Miami. You don’t want to go hang out in Miami when you are being bribed by employees of a US company. That is probably lesson 1 in the “foreign corrupt government official” training manual.
    – I know the opposition has been pretty busy dealing with the Mario Silva scandal, but why hasn’t this been highlighted? This is a clear case with solid evidence of how the “enchufados” are bleeding this country dry.
    – How did they think they would not be caught making these evidently suspicious trades? These guys were not very sophisticated. Which makes you wonder what level of control there is at BANDEs and at the Wall Street brokerage. Unbelievable that this was happening over several years.

    • Question is: why is the Venezuelan press not covering this scandal thoroughly? I learned more about corruption in Bandes from the New York Times than from any other Venezuelan media outlet.

      • It seems to me that self-censorship is the issue.

        You guys are just about IT. The NY Times is busy with other stuff as well. We need you.

      • It wasn’t just 3 people involved, obviously, and logically. It had to have been more. If not directly involved, people who saw the trades and who were then summarily bribed to keep their mouth shut. So I think the media is keeping its mouth shut because they don’t know who or who isn’t going to be involved at a top level so just for self-preservation they shouldn’t investigate. It’s not as if the media ever investigates the corruption that much anyway. The Aben Pearl comes to mind…

    • This is a minor scam in the scale of what is going on. The media does not dig into it because they know quite well who is above these characters and you dont mess with them.

      • Yeah, I guess it is business as usual. In Venezuela, corruption is only investigated as part of political vendettas. Well, at least the US justice system is involved so there will be punishment for those directly implicated.

  3. Just a conceptual question: is Bandes an actual ‘development’ bank or just a bank? The use of branches makes me think commercial bank unless we are talking micro-financing which some may argue still has a commercial underpinning. Not trying to be picky but there are different dimensions to the scandal depending on which type of entity we are talking about.


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