The office with the positions that take the treasury

Between 2007 and 2013, four military were continuously in charge of the National Treasury Office, and four of the last seven treasurers are sanctioned by the United States Department of the Treasury. Through Vendata.org it was possible to have a map of who accompanied them during their turbid stays in the treasury

By Katherine Pennacchio

Just a few months ago, the nation’s former treasurer, Alejandro José Andrade Cedeño, pleaded guilty to US justice for money laundering, in a case involving more than a billion dollars in bribes. He was formally charged under file number 18-cr-80054- ROSENBERG, and he had six properties in the state of Florida, 15 vehicles, 17 horses, 35 luxury watches and 9 bank accounts in the United States and Switzerland confiscated.

The former military has not been, neither the only one in green uniform within the treasury of the republic, nor the only one designated by corruption. Claudia Díaz Guillén, former nurse of President Hugo Chávez and treasurer during the 2011-2013 period, was arrested in Spain in April 2018 with her husband, Adrián José Velásquez, who was Chávez’s aide-de-camp.

The Venezuelan Office of the Attorney General requests, since the end of 2018, that Díaz be extradited for crimes of money laundering, illicit association and embezzlement, after her name appeared in the investigation of the «Panama papers» for hiding an undeclared fortune with the help of the Panamanian law firm Mossack Fonseca.

In March 2018, it was also announced that 16 companies registered in Panama, all related to the direct family of the nation’s former treasurer, Carlos Erik Malpica Flores, nephew of the first lady Cilia Flores, had been included in the list of those sanctioned by the Panamanian government, for being considered high risk in money laundering, financing of terrorism and financing the proliferation of weapons of mass destruction.

It is not surprising that four of the last seven national treasurers are sanctioned by the United States Department of the Treasury. These sanctions involve the freezing of all the assets they have in that country and the prohibition for all Americans to make transactions with them. According to the American government, these people have participated in corruption schemes by diverting billions of dollars from the Venezuelan public coffers.

The review of more than 3,000 official gazettes, belonging to the period 2006-2018, as part of the collaborative project of opening data Vendata  led by the Instituto Prensa y Sociedad de Venezuela (Venezuela’s Press and Society Institute, IPYS) and Transparencia Venezuela, allowed to have a map of the positions in the public administration occupied by former national treasurers and who accompanied them during their turbid stays in the treasury.

 

The treasury’s custodians

The National Treasury Office (ONT) is endowed with the national public sector’s administrative, budgetary and financial management capacity. It will be able to manage and have custody of the funds belonging to the republic, as well as to determine the needs of issuance and placement of the nation’s bank drafts, as established by the Organic Law of the Financial Administration of the Public Sector, disclosed on 30 December 2015 in extraordinary gazette 6210. The national treasurer is appointed by the minister of finances.

Basically, every state has to raise revenue for its operation. The main source is usually the collection of taxes, a function fulfilled by the National Integrated Service of Customs and Tax Administration (SENIAT). The second source of income is the issuance of public debt, which is the function of the National Office of Public Credit (ONCP).

All the money raised should go to an account in the Central Bank of Venezuela to be used for public expenditure. Finally, the state must organize how to pay its expenses and investments. That is the responsibility of the National Treasury Office and the treasurer. «The treasurer is the great custodian of everything that comes in and when payments should be made,» explains Christi Rangel, economist and doctor in economic and business sciences.

In Venezuela, those responsible for guarding wealth have been chosen more for their proximity to power and their loyalty to the revolutionary process than for their capacity for the position, based on administrative and financial skills. «Under the current regime, that office acquired a highly personality-centered tinge, without maintaining the hierarchical subordination with the minister, but instead became a trusted official of the President of the Republic,» explains Maximir Álvarez, former vice-president of monetary operations of the Central Bank of Venezuela.

The treasurers of the nation tend to have a longer tenure in their positions than the finance ministers and usually manage a low profile by not appearing in the media giving public statements. However, some of them have had public notoriety when leaving office and occupying positions of power. For example, Rodolfo Marcos Torres and Rafael Isea.

Not only the head of the National Treasury Office; assistant treasurers, directors of accounting, directors of expenditure, planning managers, commission chiefs and heads of units within the treasury have also gone through different positions of power and decision in the administration public.

«Treasurers have always been widely known (and wooed) by those who depend on their decisions: banks, contractors, governorates, municipalities and decentralized entities finance managers, to mention the most important ones. One of the usual businesses of private banking (at least until 2007), mainly medium and small one, is to finance contractors and suppliers of goods and services to the state. For this reason, banking is key for the ONT to order payments to its clients so that they in turn pay the credits without delay,» Álvarez explains.

The importance of the treasury as the entity responsible for the execution of such payments, carries the risk of succumbing to pressures and bribes that benefit the speed and discretion of certain payments. Also, within the funds of the republic, resources are found in foreign currencies, which in a nation hit by exchange rate crimes as a result of the imposition of a strict exchange control, places the ONT in the eye of the storm.

For being the custodian of, for example, bonds or public debt papers either from Venezuela or from other countries, which are valued in the main currency of exchange in the world -the US dollar-, this office can decide that those bonds be sold to make the payment of certain debts. And thanks to the exchange system, the buyer of that debt would be buying bonds payable in dollars but at the price that marks the official exchange rate.

What was presented as a lucrative business for different financial institutions, development and brokerage houses that could then sell those bonds at the price that marked the parallel market or black dollar, earning big dividends thanks to the exchange differential.

In the same vein, the ONT could also decide that the resources of the state will not only be under the protection of public financial entities, but also private ones that will receive dividends from these funds, as banking does. So the treasurer’s decision power could well be seduced by multi-million dollar bribes. As exemplified by Alejandro Andrade when he was sentenced by the US courts for participating in multi-million dollar bribes.

«In conclusion, the ONT controls the flow of government payments, which in a country with a state that represents a significant proportion of the economy, is a key function for many sectors. Under the current regime, that office acquired a highly personality-centered tinge, without maintaining the hierarchical subordination with the minister, but it became a trusted official of the president», Maximir Álvarez states.

 

An opaque fund

On 20 July 2005, the National Fund for National Development (Fonden, S.A.) was created, established by the Bolivarian government to invest the income Venezuela receives from oil exports. The Fonden was born in parallel to the budget of the nation. However, the funds did not pass through the Central Bank of Venezuela and could be expressed in another currency, besides the bolivar.

Created with the object of «financing projects of real productive investment of all the areas, in addition to the improvement of the profile and balance of the external and internal public debt», the Fonden «can additionally allocate its resources to the support of the government management in special situations that require it and the attention of eminent necessity and national conveniences or any other aspect that results in the economic and social development of the country». This is established by the website of the ministry of finances.

However, as there was no control over the implementation of expenditure, the fund became a nest of corruption. In March 2018, the deputy for the state of Zulia, Elías Matta, informed that the Energy and Petroleum Commission of the National Assembly will investigate the National Development Fund (Fonden) in which US$ 143.573 billion were wasted since the 2005 until the present moments.

Below there is a list of those who have held the reins of the Treasury Office, from 2006 to date, and who have accompanied them.

 

10 January 2007 (Alejandro José Andrade Cedeño)

Andrade Cedeño was appointed treasurer in the Official Gazette 38,601 of 10 January 2007. He is a retired lieutenant graduated from the army in the Tomás Montilla Class in 1987, the same one from which political figures such as Carlos Rotondaro, former president of the Venezuelan Institute of Social Security (IVSS), and Diosdado Cabello, president of the National Constituent Assembly, graduated.

Andrade was one of the officers who participated in the attempted coup of February 1992. He was also the principal director of the administrative board of the vice-presidency of the republic, president of the Bank of Economic and Social Development (Bandes), president of Banfoandes and vice-minister of financial management. He is currently serving a 10-year jail sentence in the United States for money laundering.

One of the names that stands out within his team at the time in the treasury office is José Alberto Obelmejías Machado’s. In 2008, the deputy Ismael García consigned to the general prosecutor’s office a complaint against acts of corruption involving Andrade and his trusted administrator, Obelmejias Machado.

Machado was also part of the team of former treasurer Claudia Díaz and held positions at the National Airport and Port Development Foundation, at the National Institute of Aquatic Spaces and at Bandes.

https://public.tableau.com/profile/kathypennacchio#!/vizhome/Andrade/Dashboard1?publish=yes

 

6 January 2011 (Rodolfo Marco Torres)

Military graduated in the Manuel Manrique Class of 1988, same class as Iván Rafael Hernández Dala, chief of the Nicolás Maduro’s honor guard. Marco Torres was appointed treasurer in the Official Gazette 39,588.

Marco Torres is the current governor of the state of Aragua, located in the center of the country. He was minister of food, director of the Banco de Venezuela, president of Banco Bicentenario and Banco del Tesoro, among other positions. In the portal Poderopedia he is mentioned as the «finance czar» for having held managerial positions in financial matters since 2001.

He was sanctioned by the United States Department of the Treasury in January 2018 for being involved in corruption cases.

His stay in the National Treasury Office was brief, only five months.

https://public.tableau.com/views/MarcoTorres/Dashboard1?:embed=y&:display_count=yes&publish=yes

 

16 May 2011 (Claudia Patricia Díaz Guillén)

Claudia Díaz Guillén is a retired military officer of the navy and was a nurse to former president Hugo Chávez. In addition to presiding over the National Treasury Office, position in which she was designated in the Official Gazette 39,674 on 16 May 2011, she was secretary of the Development Fund (Fonden) between 2011 and 2013. Díaz was sanctioned by the US Department of the Treasury in January 2019. She is wanted by the Venezuelan justice for money laundering and embezzlement.

During his tenure in the treasury she also counted on José Alberto Obelmejías Machado, trusted administrator of Andrade, who was her director of tax revenue collection. Pedro Ygnacio Lara Ceballos, who was an assistant treasurer during Diaz’s tenure, also worked with Andrade.

Jennifer Quintero and Adriana Carolina Golding Bello, who were also part of her team, later worked with Carlos Erick Malpica during his tenure in the treasury.

Current legal adviser in the capacity of officer in charge, in the Ministry of Economy and Finance, Golding Bello has been in several institutions of the public administration: Contracts Commission of the National Budget Office (Onapre) in 2008, Contracts Commission of the Foreign Trade National Center (Cencoex) in 2015, National Superintendency of Agrifood Management (Sunagro) in 2016 (alternate director), Commission for Reorganization and / or Restructuring of the Ministry of Food in 2016, among others.

https://public.tableau.com/views/ClaudiaDiaz/Dashboard1?:embed=y&:display_count=yes&publish=yes

 

18 Abril 2013 (María Elisa Domínguez Velasco)

Vice-admiral of the Bolivarian Navy María Elisa Domínguez Velasco was Director of Human Resources of the Office of Internal Management of the Office of the Presidency in 2003 during the administration of Hugo Chavez, and held several positions in the management of Tareck El Aissami, both in the Ministry of the Interior and Justice as in the governorate of Aragua. She was also the head of the National Budget Office.

She was named treasurer in the Official Gazette 40,150, dated 18 April 2013. She had as Line Director in National Currency Nelson Lepage, who then in 2016 held the position of national treasurer. Her assistant treasurer was Carlos Erick Malpica, who subsequently replaced her.

A name that stands out in her team, not because he is known, but by the number of positions he has held in public administration is Hazel Dely Chaudary Zambrano. He has been in the General Directorate of Investment Promotion of the Ministry of Tourism in 2008, in the Contracts Commission of the Intermediate Industries Corporation of Venezuela, S.A. (Corpivensa) in 2010, of the Ministry of Communication and Information in 2012 and of the National Institute of Tourism (Inatur) in 2014. He was also director of the minister’s office at the Ministry of Communication and Information in 2011 and General Manager of Venezolana de Teleféricos (Ventel CA) in 2013.

Domínguez Velasco headed the treasury only for five months.

https://public.tableau.com/views/DominguezVelasco/Dashboard1?:embed=y&:display_count=yes&publish=yes

 

27 September 2013 (Carlos Erik Malpica Flores)

Nephew of the first lady Cilia Flores, during chavismo-madurismo, Malpica Flores was vice-president of Finances of Pdvsa and held positions in the National Assembly, Ministry of Foreign Affairs and Vice-presidency of the Republic.

On 30 March 2018, he was sanctioned by the government of Panama, as well as companies related to their close relatives, because he is considered a high risk for money laundering, financing of terrorism and financing the proliferation of weapons of mass destruction. Previously, in July 2017, he had been sanctioned by the United States Department of the Treasury.

In his tenure as treasurer of the nation, in which he was designated in Official Gazette 40,260 dated 27 September 2013, he maintained a low profile. He never showed himself in public or was photographed. There were several persons who accompanied him in his two and a half years in front of the office, including family members.

https://public.tableau.com/views/MalpicaFlores/Dashboard1?:embed=y&:display_count=yes&publish=yes

 

8 January 2016 (Nelson Reinaldo Lepaje Salazar)

Nelson Lepaje was appointed treasurer in the Official Gazette 40,824 of 8 January 2016. In 2006 he served as director in charge of the Administrative Management Office of the National Contracting Service and in 2010 he was part of the Ministry of Foreign Affairs.

At the beginning of 2018, he was sanctioned by both the US Department of the Treasury and the government of Panama.

He served as assistant treasurer in the Malpica Flores tenure and part of his team remained in the office. Some of the names that are repeated in this administration are: Blanca Albanis Gómez Briceño, Rubens Martin Soto Malpica and Nancy Ninoska Gómez Alamo.

https://public.tableau.com/views/LepajeSalazar/Dashboard1?:embed=y&:display_count=yes&publish=yes

 

15 March 2018 (Rainier Alejandro Merentes)

Son of former president of the Central Bank of Venezuela, Nelson Merentes, Rainer Alejandro Merentes was appointed treasurer in Official Gazette No. 41,631, dated 15 March 2018.

Según su perfil publicado en poderopedia, Rainer Merentes fue director de la Oficina Estratégica de Seguimiento y Evaluación de Políticas Públicas y director alterno de la junta directiva del Banco de Desarrollo del Caribe (BDC). También es director de Prodem, banco que opera en Bolivia del que el Banco de Desarrollo Económico y Social de Venezuela (Bandes), desde 2008, es el mayor accionista.

According to his profile published in Poderopedia, Rainer Merentes was director of the Strategic Office of Monitoring and Evaluation of Public Policies and alternate director of the board of directors of the Caribbean Development Bank (BDC). He is also director of Prodem, a bank that operates in Bolivia of which the Bank of Economic and Social Development of Venezuela (Bandes), since 2008, is the largest shareholder

https://public.tableau.com/views/Merentes/Dashboard1?:embed=y&:display_count=yes&publish=yes