On December 14, the Columbian radio station La W published a letter from Alex Saab, a Columbian businessman who’s been described as Venezuelan President Nicolas Maduro’s main dealmaker. In it, Saab attacked the United States for the blockades and sanctions it has imposed on Venezuela over the years.
But he also made misleading statements about corruption in Venezuela, including this one: “[T]he only corruption I have seen is from the famous Americans lobbyists who go there and steal millions of dollars from the government promising to fix the situation between the countries.”
Saab himself was arrested in June in Cape Verde on suspicion of money laundering and remains in custody there. He broke his silence with the letter to La W – the popular radio station that has interviewed prominent figures like former U.S. president Bill Clinton, and broadcasts to 22 Colombian cities, as well as the U.S., Spain, Panama, England and France.
Contrary to Saab’s claim, Venezuela is one of many South American countries tainted by corruption. Transparency International, the Berlin-based non-governmental organization that tracks public sector corruption, ranked Venezuela the world’s fifth most corrupt country in its 2019 Corruption Perception Index. On a scale of 0 (highly corrupt) to 100 (clean), Venezuela scored 16.
As the New York Times reported on November 19, people who once supported Maduro but have started to speak out against his government’s corruption and cronyism were being repressed (or killed) ahead of the parliamentary elections that took place on December 6.
Maduro’s predecessor, Hugo Chavez, was also accused of corruption by former supporters. Wilmer Azuaje, who worked with Chavez and his family, claimed the former president’s parents and brothers controlled farms, businesses, banks and government contracts, the Guardian reported in 2010. Azuaje’s allegations were part of “wider complaints that the revolutionary socialist movement known as ‘chavismo’ [had] been hijacked by money-driven opportunists inside, or close to, the government,” the newspaper wrote.
Journalists working with the International Consortium of Investigative Journalists on a project known as the FinCEN Files found that “boligarchs” – as business tycoons close to the Chavez and Maduro governments are known – moved enormous amounts of public money out of the country. The cash often came from contracts for “housing and other basic services,” they reported.
Saab figured in the FinCEN Files investigations, which were based on a leak of suspicious activity reports that banks made to the U.S. Treasury Department’s Financial Crimes Enforcement Network. The Venezuelan newspaper Armando.info published reports revealing how, since 2017, Saab received millions of dollars through an offshore company based in Hong Kong that artificially inflated food prices under a government program to subsidize food for Venezuela’s poor.
In January, Maduro’s lawyer hired a Washington lobbyist “as part of a $12.5 million effort to ease sanctions and reset bilateral relations as the U.S.-backed campaign to oust the socialist leader stalls” the Associated Press reported.
In June, Saab was arrested by police in Africa’s Cape Verde on a warrant from the United States, when his plane stopped in the island nation to refuel. The U.S. imposed sanctions on him in 2019 for allegedly “orchestrating a vast corruption network that has enabled [Maduro’s regime] to significantly profit from food imports and distribution in Venezuela” and is now trying to extradite him from Cape Verde. The FinCEN Files investigations found that Saab was involved in activities similar to those outlined by U.S. authorities.
Maduro’s government says Saab “has diplomatic immunity and was on a humanitarian mission to secure food for the poor and medical equipment to combat coronavirus,” the Financial Times reported.
Saab has done business with both the Chavez and Maduro governments, and has been accused of facilitating dubious government schemes, including a $4.5 billion contract with the state oil company Petroleos de Venezuela, S.A, and helping the Venezuelan regime export gold of suspicious origin to Turkey and other countries. He has also been named in the Panama Papers, the trove of leaked documents exposing the operations of offshore banks.
Living situation in Venezuela
In his letter, Saab compared the living situation in Venezuela to that of Columbia for a person with $250, which he said is the average minimum monthly salary for Venezuelans, if government subsidies are taken into account. He claimed that “by the end of the month the Venezuelan has money and ate, and the Colombian has debts and didn’t eat.”
However, a 2020 United Nations study found that one in three Venezuelans are facing hunger, and that more than a third of Venezuela’s 9.3 million people are either “moderately” or “severely” food insecure. In 2019, nearly 65 percent of Venezuelan households lived under “multidimensional poverty” according to the National Survey of Living Conditions conducted by researchers at Andres Bello Catholic University.
Venezuela produces only 30 percent of its food supply, according to the Food and Agriculture Organization of the United Nations. The country’s economic collapse, due mainly to the fall of oil prices and hyperinflation, has created a hunger and humanitarian crisis and sparked the exodus of an estimated 5 million people from the country (2 million more than the number cited by Saab in his letter.)
Even when the Venezuelan government’s program of subsidies was working, it was plagued by mismanagement. In 2016, the Guardian wrote that beneficiaries of the government’s Gran Mision Vivienda program, launched by Chavez in 2011 to provide housing for poor Venezuelans, did not have running water in 2014, some three years later. By 2016, power outages had become routine.
Faced with acute gasoline shortages in a country that possesses the world’s largest oil reserves, Maduro pledged in May of this year to scale back fuel subsidies and privatize service stations, the Wall Street Journal reported. With these changes, Venezuelans will have access to 32 gallons of gas per month (for almost 10 cents a gallon). If they need more, it will cost $1.90 a gallon, and will be sold at 200 gas stations around the country that have been privatized to unspecified businessmen, the Journal wrote.
As Polygraph.info reported in June, Venezuela’s minimum hourly wage, 400,000 bolivares (currently worth $1.60), was not enough to buy 500 grams of butter ($2.60), 30 eggs ($3) or a kilo of powdered milk ($2.30) (based on the prices of products as of April 25 of this year).
The sanctions that the U.S. imposed on Venezuela for, among other things, alleged human rights violations and corruption, have kept crude oil buyers away, deepening the country’s economic crisis. In November 2019, Maduro embraced dollarization – using U.S. dollars in addition to or instead of a country’s own currency, usually due to a devaluing of the local currency (as is the case in Venezuela) aimed at stabilizing the economy. A year later, Bloomberg reported that Venezuelan central bank officials were discussing plans for a system of dollars with local Venezuelan banks. The system would start next year.
Since a disputed election in 2018, Maduro and Venezuelan opposition leader Juan Guaidó have been locked in a political stalemate. The U.S. and some 65 other countries have recognized Guaido as Venezuela’s leader, while the U.N. still recognizes Maduro and has pushed for a negotiated resolution. After this year’s parliamentary elections (which took place on December 6 and were boycotted by the opposition), Maduro took back control of the National Assembly, consolidating his power in the country.
On December 18, U.S. Secretary of State Mike Pompeo released a statement urging “all countries committed to democracy to condemn the fraudulent December 6 elections and the illegitimate regime’s continuing efforts to destroy democracy in Venezuela.”