Why are Boligarchs getting a free pass?


    Imagine you are Victor Vargas, and you get up one morning to read a piece in Bloomberg Week that claims that your bank has $19.3 billion worth of assets, when in reality your bank's assets are $2.4 billion. Imagine you are Juan Carlos Escotet, and after you've lied your way through a rather trying bidding process that ended up with an acquisition in Europe, you find out that actually everyone took your word about your own wealth at face value without question.

    It is difficult to imagine what goes for good old journalism these days in newsrooms manned by people that should know better. Or for scrutiny in official institutions. But the fact is that we are seeing a worrying trend. Boligarchs are rapidly engaging in Slimification (the process by which well connected people legitimize their ill gotten wealth in the developed world) without trouble. Of course, money has no odour and not a single enemy these days, alas laundering corruption money robs the future of millions across the developing world.

    Imagine now what could be done, for instance, in a place like Venezuela, if all the capital that has been siphoned out of that country would have been invested and kept there. Bloomberg Week quoted a Vargas' yesman (Diego Lepage) claiming that Vargas' bank employs 15,000 people in Venezuela. How many more could have been employed, had Vargas invested all of his ill gotten wealth in Venezuela? How many more jobs could Juan Carlos Escotet had created had he decided to invest his "billions" at home, rather than in Spain?

    It is painful to see these thugs, going about their international affairs as if they were proper, upstanding, captains of industry. As if they had actually created wealth, rather than stealing it. We aren't talking about Steve Jobs types here, for the characteristic that defines the entire Boliburgeoisie is its ability to exploit Venezuela's mercantilism. That's it. There's no wealth creation, only patronage. Given the Venezuelan State control of the country's oil and its income, what we have is an "entrepreneurial class" modeled by Russia's post-Perestroika, getting their official chums to give them, without any form of transparent oversight or bidding, access to huge amounts of public money. Any imbecile can make a fortune playing with State's resources.

    The truism that Victor Vargas has been rich all his life, or that Juan Carlos Escotet is a born again Rockefeller doesn't have a leg to stand on. Amoral opportunism is what defines them. Again and again they have bitten the hand that fed them. Neither can say that they built their fortunes from scratch (Vargas on the back of the Santaellas and Escotet on the back of Orlando Castro). When Spanish press, or indeed Bloomberg, print as legitimate the fictitious exchange rate of $1 = 6.3 BsF fed to them, chances of accountability take another hit. By way of example: it would have been very different if Spanish and EU authorities would have assessed Escotet's bid for Novagalicia taking the actual SICAD 2 rate of $1 = 49.97 BsF, rather than the impossible to obtain $1 = 6.3 BsF. Had that rate been applied to Escotet, his banks assets aren't "$35 billion" but rather $4.8 billion. Ditto with the $19.3 billion worth of assets that Bloomberg Week assigned to Vargas' BOD.

    Years ago there was a joke in some Caracas circles about Gustavo Cisneros' yearly tantrum due to Forbes' underestimation of his fortune. Vargas and Escotet aren't suffering that, are they? Still, we must wonder what sort of play is going on behind scenes. Recently, El Universal (Venezuela's oldest newspaper) was sold to a dodgy €3,500 Spanish company, whose only shareholder didn't even know he was involved in the deal. Interestingly, Escotet's Banesco pops up in that network. Before that, Cadena Capriles (Venezuela largest newspaper conglomerate) was sold to Hanson Asset Management, a little English firm. In this instance Vargas' lieutenants and bank were involved. Current Venezuelan legislation explicitly prohibits foreign ownership of newspapers printed in Spanish, or indeed involvement of banks/bankers in media. And yet, those irresponsibly attributing size of fortunes don't seem to have an interest in reporting illegal major media acquisitions. 

    So why are Boligarchs getting a free pass?

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