Venezuela army traf­fick­ing food as coun­try goes hun­gry

Gen­er­als make huge prof­its as coun­try goes hun­gry

Kuwait Times - - FRONT PAGE -

PUERTO CABELLO, Venezuela: When hunger drew tens of thou­sands of Venezue­lans to the streets last sum­mer in protest, Pres­i­dent Ni­co­las Maduro turned to the mil­i­tary to man­age the coun­try’s di­min­ished food sup­ply, putting gen­er­als in charge of ev­ery­thing from but­ter to rice. But in­stead of fight­ing hunger, the mil­i­tary is mak­ing money from it, an As­so­ci­ated Press in­ves­ti­ga­tion shows. That’s what gro­cer Jose Cam­pos found when he ran out of pantry sta­ples this year. In the mid­dle of the night, he would travel to an il­le­gal mar­ket run by the mil­i­tary to buy corn flour - at 100 times the gov­ern­ment-set price. “The mil­i­tary would be watch­ing over whole bags of money,” Cam­pos said. “They al­ways had what I needed.”

With much of the oil coun­try on the verge of star­va­tion and mal­nour­ished chil­dren dy­ing in pe­di­atric wards, food traf­fick­ing has be­come big busi­ness in Venezuela. And the mil­i­tary is at the heart of the graft, ac­cord­ing to doc­u­ments and in­ter­views with more than 60 of­fi­cials, com­pany own­ers and work­ers, in­clud­ing five for­mer gen­er­als.

As a re­sult, food is not reach­ing those who most need it. The US gov­ern­ment has taken no­tice. Pros­e­cu­tors have opened in­ves­ti­ga­tions against se­nior Venezue­lan of­fi­cials for laun­der­ing riches from food con­tracts through the US fi­nan­cial sys­tem, ac­cord­ing to sev­eral peo­ple with direct knowl­edge of the probes. No charges have been brought. “Lately, food is a bet­ter busi­ness than drugs,” said re­tired Gen. Cliver Al­cala, who helped over­see bor­der se­cu­rity.

The late Pres­i­dent Hugo Chavez cre­ated a Food Min­istry in 2004. His so­cial­ist gov­ern­ment na­tion­al­ized and then ne­glected farms and fac­to­ries, and do­mes­tic pro­duc­tion dried up. When the price of oil col­lapsed in 2014, the gov­ern­ment no longer could af­ford to im­port all the coun­try needed. Hun­gry Venezue­lans be­gan ri­ot­ing, and so Maduro handed the gen­er­als com­plete power over food. The gov­ern­ment now im­ports nearly all the coun­try’s food, and cor­rup­tion drives prices sky-high, said Wer­ner Gu­tier­rez, agron­omy pro­fes­sor at the Univer­sity of Zu­lia. “If Venezuela paid mar­ket prices, we’d be able to dou­ble our im­ports,” Gu­tier­rez said. “In­stead, peo­ple are starv­ing.”


In large part due to con­cerns of graft, the three largest global food traders, all based in the US, have stopped sell­ing di­rectly to the Venezue­lan gov­ern­ment. One South Amer­i­can busi­ness­man says he paid mil­lions in kick­backs to Venezue­lan of­fi­cials as the hunger cri­sis wors­ened, in­clud­ing $8 mil­lion to peo­ple who work for the food min­is­ter, Gen Rodolfo Marco Torres. The busi­ness­man in­sisted on speak­ing anony­mously be­cause he did not want to ac­knowl­edge par­tic­i­pat­ing in cor­rup­tion.

He ex­plained that ven­dors like him can af­ford to pay off of­fi­cials be­cause they build large profit mar­gins into what they bill the state. A sin­gle $52 mil­lion con­tract of his to im­port yel­low corn last year, seen by AP, in­cluded a po­ten­tial over­pay­ment of more than $20 mil­lion, com­pared with mar­ket prices at the time. Marco Torres did not re­spond to re­quests for com­ment by phone, email and hand-de­liv­ered let­ter. In the past, he has said he will not be lured into fights with an un­pa­tri­otic op­po­si­tion.

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 did busi­ness with Panama-reg­is­tered At­las Sys­tems In­ter­na­tional, which has all the hall­marks of a shell com­pany. Another gov­ern­ment food sup­plier, J A Comer­cio de Gen­eros Ali­men­ti­cios, lists on its web­site a nonex­is­tent ad­dress in an in­dus­trial city near Sao Paulo, Brazil.

The two com­pa­nies trans­ferred more than $5.5 mil­lion in 2012 and 2013 to a Geneva ac­count con­trolled by the brothers-in-law of the then-food min­is­ter, Gen. Car­los Oso­rio, ac­cord­ing to bank and in­ter­nal com­pany doc­u­ments seen by AP. Oso­rio, re­cently ap­pointed to over­see trans­parency in the mil­i­tary, did not re­spond to re­quests for com­ment, but in the past dis­missed charges of cor­rup­tion as per­sonal at­tacks from the op­po­si­tion. The so­cial­ist ad­min­is­tra­tion says it takes graft se­ri­ously. “The state has an obli­ga­tion to root out cor­rup­tion in all lev­els of pub­lic ad­min­is­tra­tion,” the de­fense min­is­ter, Gen. Vladimir Padrino Lopez, said this fall.

Dirty Deal­ing

And yet dirty deal­ing per­sists from the port to the mar­kets, ac­cord­ing to dozens of peo­ple work­ing in Puerto Cabello, which han­dles the ma­jor­ity of im­ported food. Of­fi­cials some­times keep ships wait­ing at sea un­til they are paid off, ac­cord­ing to a steve­dore who spoke anony­mously be­cause he feared los­ing his job. Af­ter the cargo is un­loaded, cus­toms of­fi­cials take their cut, re­fus­ing to even start the process of na­tion­al­iz­ing goods with­out a pay­ment, four cus­toms work­ers said, .

“It’s an un­bro­ken chain of bribery from when your ship comes in un­til the food is driven out in trucks,” said Luis Pena, a di­rec­tor at the Caracas-based im­porter Pre­mier Foods. If im­porters try to get through the process with­out greas­ing the wheels, food sits and spoils, Pena said. Rot­ting food is a prob­lem even as 90 per­cent of Venezue­lans say they can’t af­ford enough to eat. The de­mands for bribes de­lay ship­ments, and state of­fi­cials some­times ne­glect to dis­trib­ute what they im­port.

Puerto Cabello crane op­er­a­tor Daniel Arteaga watched last win­ter as state work­ers buried hun­dreds of con­tain­ers of spoiled chicken, meat and beans. “All th­ese re­frig­er­ated con­tain­ers, and mean­while peo­ple are wait­ing in food lines each week just to buy a sin­gle chicken,” Arteaga said. The cor­rup­tion doesn’t stop once cargo leaves the port, ac­cord­ing to truck driv­ers. The mil­i­tary has set up check­points along high­ways to catch food traf­fick­ers, and truck driv­ers say they have to pay bribes at about half of them.

At the end of the food chain, some sol­diers par­take in sell­ing food di­rectly to cit­i­zens, ac­cord­ing to busi­ness own­ers. Bak­ery owner Jose Fer­reira cuts two cheques for each pur­chase of sugar: One for the of­fi­cial price of 2 cents a pound and one for the kick­back of 60 cents a pound. He keeps copies of both checks in his books, seen by the AP, in case he is ever au­dited. “We have no other op­tion,” he said. —AP

CARACAS: In this Feb 14, 2004 file photo, the mil­i­tary cre­ates a perime­ter at a gov­ern­ment-sub­si­dized food mar­ket in the Venezue­lan cap­i­tal. The late Pres­i­dent Hugo Chavez be­gan hand­ing the mil­i­tary con­trol over food, and the wider econ­omy, fol­low­ing op­po­si­tion at­tempts to over­throw him in 2002. —AP

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