Hugo Chavez using proxies to prosecute critics in US Courts

London 19.11.2011 – Imagine a rock solid, private bank, led
by a reputed and prudent banker. While much of our world is yet to
come out of a financial crisis caused by irresponsible bankers, who
were ultimately bailed out at huge cost to taxpayers, there’s this
guy in Venezuela, trying to avoid a government-led raid on his bank’s
His name is Oscar Garcia Mendoza, the bank he directs Banco Venezolano de Crédito (BVC), and the assault he’s trying
to fend unprecedented.
Since 2011, Venezuela’s Central Bank has been lowering reserves
requirement (or liquidity ratio). The aim is to free cash held with
the Central Bank, so that private banks can in turn purchase
government bonds issued to fund housing projects (Misión Vivienda).
In four separate issues since 2011, the Chavez regime has raised in
excess of $9 billion from Venezuela’s private banks.
So far, so capitalist, right? Not quite, financial institutions that
refuse to risk it with Chavez bonds are effectively penalised by an
unexplainable increase in liquidity ratio.

Garcia Mendoza leads the only
“non-compliant” bank. He is challenging the punitive measure in
Venezuela’s kangaroo courts.
So what’s Chavez
to do, with the oddity of a responsible banker, trying to protect his
clients’ money? He will probably be made an example, just like RCTV.
Locally, there’s not a single chance that chavista judges will rule
in his favor. But how about assets and funds held abroad? Enter
Derwick Associates.

Derwick Associates shot to fame in
August 2011, when Cesar Batiz, an investigative journalist working at
Ultimas Noticias (Venezuela’s largest newspaper), exposed Derwick’s
inexperience and lack of track record,
in relation to 12 public contracts for procurement and installation
of power plants awarded by the Chavez regime in a 14-month period.
In September 2011, Batiz published a second article, where he exposed
overpricing in the contracts.
Two days later, the editor of Ultimas Noticias, Eliazar Diaz Rangel,
formally requested that the Venezuela’s Comptroller’s Office launch an investigation into the affair.
The story was to take another twist though: a telecom impresario
tried to bribe Batiz, offering hush money and shares of,
a site critical of the Chavez administration. Batiz then introduced
his own FOIA-like request with the Supreme Court, after failing to get any information about contracts from chavista officials.
Predictably, judges quickly dismissed Batiz’s request.

So why would an obscure, fly-by-night
company have the temerity to sue Venezuela’s most solid bank and its CEO? In Florida? How come none of the other parties that have either
republished, or expanded on Batiz’s original investigation, been sued
by Derwick anywhere? The corruption trail goes cold once it reaches
the Chavez government. Other investigations related to previous
corruption scandals led nowhere. Prior to the Derwick caper, its
founder, Alejandro Betancourt Lopez, was the star in a different
scandal involving a “lost” $500 million wire. His fax number was used to issue the instructions to wire $500 million worth of payments
to a numbered-account in Gazprom Bank Lebanon controlled by Rodolfo Sanz, former head of Corporacion Venezolana de Guayana. Betancourt’s Gazprom connections already speak volumes about the man.

The most plausible explanation, in my
opinion, is that Team Chavez is orchestrating the whole thing, for
financial and political reasons. The first clue, is the decision by
Venezuela’s Central Bank to target “non-compliant” banks, read
Garcia Mendoza’s, by imposing a 6-point liquidity ratio increase,
forcing a huge spike in cash held by the Central Bank. Refusal to
purchase Mision Vivienda-bonds could, potentially, end up costing
Garcia Mendoza’s bank hundreds of millions in loss revenue from funds
that could have otherwise been used for more sound investments with
higher returns. Purchase of bonds is equally risky, for what official
institution will guarantee funds and returns if the regime decides to
default, or renege his debt with Venezuelan banks? A no-win

The second clue to this working
hypothesis are statements from Jose Vicente Rangel, former VP of
Venezuela, trusted advisor and confidant of the caudillo, taking
Derwick’s accusations against the banker at face value, repeating it
almost verbatim. It would appear that chavismo has already taken
sides in this dispute. Rangel, however, went further, and announced that Derwick would also sue Garcia Mendoza and Venezolano de Crédito in Venezuela.
How can he be privy to such information, when not even those accused
by Derwick in the Florida lawsuit are aware of legal actions against
them in Venezuela? Rangel is a Chavez enforcer and Venezuelans know
that Rangel’s TV programs are a taste of what the government is
thinking and where the sabres are rattling.

Garcia Mendoza could well find himself
in the near future with a besieged bank on its way to expropriation.
The $300 million defamation suit is likely to fail, inasmuch as truth
is a defense to libel, and Team Derwick has a lot to lose in any
discovery process -their connections to Davos International Bank may surface. With their lawsuit, Derwick has
unnecessarily alerted the American authorities that they want high
profile attention. American authorities would do well investigating
Derwick Associates sudden wealth and use of US stream of commerce
instead. The lawsuit has opened a wide door for that. Special
attention should also be paid to Chavez attempts at using the US
judiciary to: a) corner his critics, and b) misappropriate millions
of dollars through proxies. If the Venezuelan State is afflicted by a
housing crisis, which it is,
surely the solution, after nearly a decade of record oil prices,
ought not be to raid private banks. The whole thing is a disgusting
travesty, monetary mechanisms used in perverse ways to punish, an
abuse of courts’ roles. Beyond probable violations to recently
revised Foreign Corrupt Practices Act,
Derwick was incorporated in Florida after all
and has business relations with American companies (ProEnergy Services
and FTI Consulting
for instance), it seems unthinkable that individuals with such
disreputable credentials can take advantage of the US legal system to
advance their fraudulent agendas under the guise of defending their

Cesar Batiz collaborated with this article.

Tomado de Hugo Chavez using proxies to prosecute critics in US Courts