The corruption of democracy in Venezuela: under Pres. Hugo Chavez's regime the last nine years, corruption has reached heights undreamed of by even the greediest of despots, as the people of Venezuela have been fleeced out of billions of dollars.

• Author: Coronel, Gustavo
• Position: Worldview

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HUGO CHAVEZ was elected president of Venezuela in December 1998 on the strength of three main promises: convening a Constituent Assembly to write a new constitution and improve the state, fighting poverty and social exclusion, and eliminating corruption. Nine years later, it has become evident that the Constituent Assembly primarily was a vehicle to destroy all existing political institutions and replace them with a bureaucracy beholden to his wishes. Poverty and social exclusion remain as prominent as before, while the levels of government corruption are higher than ever.

Today, the nation is locked in an intense struggle between the defenders of democracy and a president intent on becoming a dictator for fife. Chavez's latest attempt to push a constitutional reform that would have allowed him unlimited opportunities for reelection was defeated by a margin that official figures put at two points, but independent analysts place at five to 10 points. In negotiating the narrower margin with a National Electoral Council largely under his control, Chavez managed to appear magnanimous in defeat, but he is not a democrat, and he will keep trying to become president for life in any way he can.

Venezuela has been characterized by the persistent presence of political and financial corruption in public administration. In 1813 and, later, in 1824, national hero Simon Bolivar felt it necessary to issue decrees defining corruption as "the violation of the public interest." He established the death penalty for "all public officers guilty of stealing 10 pesos or more," including "those judges who disobey these decrees." In 1875, the finance minister at that time confessed, "Venezuela does not know to whom it owes money and how much. Our books are 20 years behind." One hundred years later, the General Comptroller under Pres. Luis Herrera would describe the state of the country's finances in almost identical terms, as "a system totally out of control."

In the early 20th century, the long dictatorship of Juan Vicente Gomez was plagued by high corruption, but it was limited to the dictator's immediate collaborators. A similar situation prevailed during the military dictatorship of Marcos Perez Jimenez, from 1948-58. This situation of administrative disarray was replaced during the 1960s by a period of high transparency in the management of public wealth at the hands of democratic presidents Romulo Betancourt, Raul Leoni and Rafael Caldera. During these years, Venezuelan democracy became the political model to be imitated in Latin America, comparing favorably with the dictatorships of the left and right that prevailed in those years, and becoming a haven for thousands of Latin American political exiles looking for freedom.

In the mid 1970s, the management of national assets deteriorated significantly, as the country experienced a sudden oil windfall that tripled fiscal income. The ordinary men in charge of the government were exposed to extraordinary temptations. Faced with such fiches, Pres. Carlos Perez established a program called "The Great Venezuela," a tropical version of Mao Tse-Tung's "Great Leap Forward" in China that ended in financial and social disaster. The government poured close to $2,000,-000,000 into industrial projects designed to convert southern Venezuela into another Ruhr. At one point, the country was home to more than 300 state-owned companies, none of which was profitable. As a result of the significant government expenditure and insufficient enforcement of regulations, corruption spun out of control. Up until then, graft had been restricted to the ruling elites, but now many Venezuelans started to participate in the abuse and misuse of public funds. By 1980, the country had fallen into debt to the international banks, victim of the so-called "Dutch disease" that affects Third World petrostates that depend almost solely on hydrocarbon exports for national income.

From 1980 onwards, Venezuelan corruption has remained high. Particularly grave was the administration of Pres. Jaime Lusinchi from 1984-94, which saw some $36,000,000,000 pilfered or stolen mainly through a corrupt exchange control program, according to an estimate by Venezuelan sociologist Ruth Capriles at the Caracas Andres Bello Catholic University. Soaring corruption during the Lusinchi period resulted from several factors, including weak political institutions, lack of administrative controls, too much money circulating in the financial system of the government, and, above all, populist leaders promoting a welfare state in which hard work and social discipline were not encouraged. In 1997, the Caracas-based nongovemment organization Pro Calldad de Vida estimated that some $100,000,000,000 in oil income had been wasted or stolen during the last 25 years.

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