The Venezuelan military makes bank on food crisis
The AP uncovers the sordid tale of the world's largest bozal de arepa. (And no —alas, this is not a Día de los Inocentes prank.)
“Lately, food is a better business than drugs,” retired Gen. Cliver Alcala.
Back in July we wrote extensively about what seemed as an important move by one of the country’s main power groups. The Military strengthened its link with the Executive, as General Vladimir Padrino López was appointed as a sort of Prime Minister. Later, Padrino López named a bunch of men in olive green to a sort of parallel cabinet to control the whole food distribution chain.
There were two ways of interpreting those events. The hopeful reading was that the Armed Forces had had it with the nonsensical way chavismo was running the country. The darker view was the one Hannah Dreier and Josh Goodman from the AP just uncovered in this soul-grinding piece: Maduro’s plan to maintain power was centered on letting the army steal as much as they wanted.
The institutionalizing of the proverbial “100 bolos pal fresco” in maxi-corrupt chavista terms.
So, were to start?
From the top, I guess.
One South American businessman said he paid millions in kickbacks to Venezuelan officials as the hunger crisis worsened, including $8 million to people who work for the current food minister, Gen. Rodolfo Marco Torres. The businessman insisted on speaking anonymously because he did not want to acknowledge participating in corruption.
Last July, he struggled to get Marco Torres’s attention as a ship full of yellow corn waited to dock.
“This boat has been waiting for 20 days,” he wrote in text messages seen by AP.
“What’s the problem?” responded Marco Torres.”
It was clear what was the problem. The kickbacks weren’t juicy enough.
And just how big are those kickbacks? Here’s a taste.
Bank documents from the businessman’s country show that he was a big supplier, receiving at least $131 million in contracts from Venezuelan food ministers between 2012 and 2015…
…For example, his $52 million contract for the yellow corn was drawn up to be charged at more than double the market rate at the time, suggesting a potential overpayment of more than $20 million for that deal alone.”
And then, there’s the good old Cadivi guiso, these never get old.
One major scam involves the strict currency controls that have been a hallmark of the administration. The government gives out a limited amount of coveted U.S. currency at a rate of 10 bolivars to the dollar. Almost everyone else has to buy dollars on the ever more expensive black market, currently at 3,000 bolivars to the dollar.”
Just a lucky few get the licenses to import food and benefit from the coveted 10 bolivar rate. People like General Osorio and Co.
Some contracts go to companies that have no experience dealing in food or seem to exist only on paper. Financial documents obtained by AP show that Marco Torres gave Panama-registered company Atlas Systems International a $4.6 million contract to import pasta. Atlas has all the hallmarks of a shell company, including no known assets and the use of secretive shares to hide the identity of the company’s true owners. Another government food supplier, J.A. Comercio de Generos Alimenticios, lists on its website a non-existent address on a narrow, partially paved street in an industrial city near Sao Paulo, Brazil.
The two companies transferred more than $5.5 million in U.S. dollars in 2012 and 2013 to a Geneva account controlled by two young Venezuelans, according to bank and internal company documents seen by AP. The Venezuelans were Jesus Marquina Parra and Nestor Marquina Parra, brothers-in-law of the then-food minister, Gen. Carlos Osorio. Efforts to reach the brothers were unsuccessful.
Osorio is no longer food minister, but has an even more important role in overseeing food. He was promoted in September to inspector general of the armed forces, with the mission of ensuring transparency in the military’s management of the nation’s food supply.
The whole scheme seems to be set up to spread wealth, unevenly of course, across the whole armed institution, from the top ranking General who now can afford the Hatteras he had been eyeing for a while, to your regular roadblock grunt who’ll be able to buy a couple more empanadas for lunch: the world’s largest bozal de arepa.
I’m just going to drop the link here again so you can click through and read the whole thing.
These are the Spoils of the Economic War, and when you see who is reaping them… well, just let’s say that whoever’s waiting for a military uprising: mejor que espere sentado.
(Final note, if there are any patriots out there who wish to cooperate with some additional info on this developing story, para nadie es un secreto that Hannah is on Twitter — @hannahdreier.)
Caracas Chronicles is 100% reader-supported.
We’ve been able to hang on for 19 years in one of the craziest media landscapes in the world. Now, the difficulty level was raised abruptly with the global pandemic. We’ve seen different media outlets in Venezuela (and abroad) cutting personnel to avoid closing shop. This is something we’re looking to avoid at all costs, and it seems we will. But your collaboration goes a long way in helping us weather the storm.Donate