• Maibort Petit

Separation of Powers vs Socialist Government

On the United States House of Representatives website's homepage , they explain our Government , "To ensure a separation of powers, the U.S. Federal Government is made up of three branches: legislative, executive and judicial. To ensure the government is effective and citizens’ rights are protected, each branch has its own powers and responsibilities, including working with the other branches."


Article 14 of the Constitution where every one has the right to be treated equally in the eyes of law. This puts a check and balance over the people in position and with power too. This United States amendment made us a true Democracy, where No Man is Above the Law. It ensured equal application of the law to the average citizen of the United States and the president of the country.


map pf seperation of powers
How the US system of Government was designed to protect the people

In this report , it will be demonstrated what happens when systems of separation of powers does not exist and when you have a socialistic government. To a system where there is no accountability. To a system where the people serve the leaders and the Government rules its citizens.


by Maibort Petit


A report presented by expert Douglas Farah and Caitlyn Yates of IBI Consultants, LLC and National Defense University (INSS) presents an in-depth view of the scope achieved by the so-called alliance of Bolivarian states created by Hugo Chávez and maintained by Nicolás Maduro, who together with the FARC has merged into what the Investigators have dubbed

The Bolivarian Joint Criminal Enterprise

or a

consortium of criminal states and non-state actors working in concert with share goals.

The report, which summarizes 5 years of work, notes that the

"joint criminal enterprise has not only taken trillions of dollars from the coffers of the Venezuelan state, but also used PDVSA as a central structure for money laundering and corruption throughout the region."


Farah argues that the criminal portfolio used by the organization has diversified.

He explains that when oil prices fell and PDVSA's production stagnated, such conditions forced "Nicolás Maduro to devote himself more and more to more diverse activities such as cocaine trafficking and illicit gold production" and thanks to those activities and despite PDVSA's decline, the regime continues to function as a criminal operation. The research provides an overview of one of the facets of this company that is defined as a complex, global and frequently state-sponsored entity.


After five years of field research and document collection in 11 countries and open source analysis, the investigation affirms that

the Bolivarian Joint Criminal Enterprise

should be understood as a network of networks

and not isolated activities operating in different Latin American countries.


The report identifies a total of 181 individuals and 176 companies operating in at least 26 countries.

The financial sum of these criminal acts is not known exactly, but a recent investigation by a consortium of Latin American journalists found that Venezuela diverted $28 billion from PDVSA. Farah says his investigations have allowed him to locate at least $10 trillion in Funds Linked to Venezuela that move between 2007 and 2018.


Map of government and corporate corruption
Bolivarian Joint Criminal Enterprise - without check and balances to hold Government accountable

The report argues that the most difficult challenge to the dismantling of the

Bolivarian Joint Criminal Enterprise

is to address the network's diversified criminal portfolio and global reach. Among other aspects, the report examines

"five of the numerous criminal typologies under which the group works, including fake oil sales and loans; the purchase of physical assets; infrastructure megaprojects; illegal gold mining; and transfers between banks."


Experts say that

"despite U.S. economic sanctions, growing international condemnation and a lack of political legitimacy, the Maduro regime has not collapsed and will not do so for a long period of time." He argues that

"measures such as designating PDVSA and its leaders as criminals are significant. Nonetheless, the network's ability to adapt and diversify its criminal portfolio means that money continues to flow into the regime's coffers."


Here is the report on the Bolivarian Joint Criminal Enterprise


In 1998, the people of Venezuela elected Hugo Chávez, starting a regional movement known as the

Bolivarian Revolution.

In an attempt to isolate the United States and promote its political project of

"Socialism for the Twenty-First Century,"

Chávez systematically consolidated the power of the executive arm.


poster for 21st century socialism
The rise of what is called 21st century Socialism in Latin America

At the time, he transformed PDVSA – Venezuela's national oil company – into a regional, multi-billion dollar company, operating in tan tan with allied political leaders, economic elites, and criminal organizations.

While Chavez was leading the project he was supported by the political leadership of Cuba, Nicaragua, Bolivia, Ecuador, Suriname and El Salvador.

Over the past twenty years this criminal network grew to encompass several dozen individuals and hundreds of front companies.


Nicolás Maduro warmly welcomed the legacy of this criminal regime in 2013, after Chávez's death. Twenty years after the initiation phase of this political project, that network extends to a global level, from El Salvador to the United States, from Russia to Hong Kong and along several financial tax havens. Even after the United States sanctioned hundreds of individuals and entities on drug trafficking and money laundering charges,

Maduro remains Venezuela's de facto leader.

The results of this criminal regime culminated in a Venezuelan economy that contracted by more than 50% while at least 10.5% of the Venezuelan population lives as refugees.


This increasingly visible crisis imposes enormous costs on regional neighbors. Meanwhile, illicit money laundering undermines the rule of law and democracy, destroys legal economies, strengthens corrupt autocratic regimes, and creates spaces where transnational organized criminal networks thrive. As the dynamics of criminal activities in Venezuela remain unchanged, Maduro is increasingly feeling international and domestic pressure for regime change. This report demonstrates the magnitude of what we call the

Bolivarian Joint Criminal Enterprise.

Here we highlight some of the criminal typologies used by the network and explore the broad impact of these criminal actions. This report compiles the fieldwork carried out over five years in 11 countries and augments this qualitative analysis with the analysis of public sources and open data. Lately we affirm that the Bolivarian Joint Criminal Enterprise is not a single entity, but a network of allied companies, with regional structures and historically linked to individuals operating around the world. Unless the network is attacked from multiple points simultaneously, this alliance will survive and transform into a more dispersed and sophisticated operation.


Introduction


On July 26, 2018, 12 individuals linked to PDVSA were indicted in the Southern District of Florida for conspiracy to launder $1.2 billion, from the company to banks, brokerage houses and real estate investment companies in the United States.

The criminal complaint detailed at least one of the multiple typologies the Venezuelan government uses to move significant sums of money to safe harbor over the past decade. While the denunciation (and its consequent convictions) are important, this case represents only one facet of the way in which funds have been illicitly moved by state structures, since the Bolivarian Revolution was launched after the election of Hugo Chávez. Under Fidel Castro's guidance, Hugo Chávez was elected president of Venezuela in 1998 as a national hero, following the failed coup d'état of 1992. Chávez's Bolivarian project was, from its inception, an effort to create a new economic and political model for Latin America, while simultaneously engaging in a political and economic struggle against U.S. influence. The idea was to create the

"Socialism of the XXI Century",

achieving,

at least spiritually, a political union between Venezuela, Colombia, Panama, Ecuador, Peru and Bolivia.

He designed a popular, anti-corruption and populist platform and envised Venezuela's vast oil wealth as the financial form for this anticipated political end. With oil prices high and great disillusionment with the region's historic elite, Chávez reached the moment to launch his populist movement in the region. To this end, between 2005 and 2010 he successfully managed to support the financing of the presidential campaigns of candidates with a radical, populist and authoritarian mentality.

Those leaders included

Evo Morales (Bolivia),

Rafael Correa (Ecuador),

Mel Zelaya (Honduras),

Daniel Ortega (Nicaragua),

Mauricio Funes — funded by José Luis Merino6 (El Salvador),

and Desi Bouterse (Suriname).

Chávez also maintained strong relations with the leftist government of

Luiz Inácio Lula da Silva in Brasil

and with the radical populist government of

Cristina Fernández de Kirchner in Argentina. It is no coincidence that most of the leaders of Bolivarian countries share stories of struggle in support of the old leftist guerrilla armed forces. While the Bolivarian Revolution institutionally began in 1998, the roots of the movement began decades ago, with the Sandinista National Liberation Front of Nicaragua (FSLN),

the Farabundo Martí National Liberation Front of El Salvador (FMLN),

the Cuban Revolution and the Revolutionary Armed Forces of Colombia (FARC)7.

Decades later, the memories and bonds developed during civil conflicts created a bond of trust between the newly empowered leaders. Chávez's stature in the Bolivarian group derived, in part, from his military experience and militaristic ideology, but more than anything from his complacency in spending trillions of PDVSA's funds in the hemisphere. The alliance of Bolivarian states along with the FARC has merged into what we define as the Bolivarian Joint Criminal Enterprise – or a consortium of criminal states and non-state actors working in concert with shared goals. This joint criminal enterprise has not only taken trillions of dollars from Venezuelan state coffers, but also used PDVSA as a central structure for money laundering and corruption across the region. The criminal portfolio used by those in that movement has continued to diversify, as when oil prices fell and PDVSA's production stagnated.

Such conditions forced new President Nicolas Maduro to increasingly engage in more diverse activities such as cocaine trafficking and illicit gold production, but even with PDVSA's decline, the regime continues to function as a criminal operation. This report provides an overview of one of the facets of this company that is defined as a complex, global and often state-sponsored entity. We base our findings on five years of field research and document collection in 11 countries, as well as open source analysis. We affirm that the Bolivarian Joint Criminal Enterprise should be understood as a network of networks – not isolated activities operating in different Latin American countries. In total we identified 181 individuals and 176 companies operating in at least 26 countries. The financial sum of these criminal acts is not known exactly, but a recent investigation by a consortium of Latin American journalists found that Venezuela diverted $28 billion from PDVSA10 We have located at least $10 billion in Venezuela-linked funds moving between 2007 and 2018. Ultimately, we argue that the most difficult challenge to dismantling the Bolivarian Joint Criminal Enterprise is to address the network's diversified criminal portfolio and global reach. We examined only five of the numerous criminal typologies under which the group works, including fake oil sales and loans; the purchase of physical assets; infrastructure megaprojects; illegal gold mining; and transfers between banks. We also assure that despite U.S. economic sanctions, growing international condemnation, and lack of political legitimacy, the Maduro regime has not collapsed and will not for a long period of time. Measures such as designating PDVSA and its leaders as criminals are significant. Nonetheless, the network's ability to adapt and diversify its criminal portfolio means that money continues to flow into the regime's coffers.


Counterfeit Oil Sales


The fake oil sales schemes are the basis on which the Bolivarian Joint Criminal Enterprise began to operate.

PDVSA is the majority shareholder in several oil subsidiaries in the region, through its PDV Caribe branch. It owns 60% of Petróleos Alba in El Salvador and 51% of Albanisa in Nicaragua.11 PDVSA's control over each company involved in the ALBA consortium makes it possible to move funds through the Venezuelan company to its Central American subsidiaries with ease. Moreover, the sums of money that move through PDV Caribe are important. The author's interviews with individuals close to Petróleos ALBA revealed that the subsidiary received almost no oil from PDVSA between 2010 and 2017, although the Salvadoran subsidiary recorded revenues of approximately $200 million per year — totaling about $1.2 trillion over the decade examined. In Nicaragua, Albanisa obtained more oil from PDVSA, but the Nicaraguan subsidiary received funds that far exceeded imports. In the case of Albanisa, the money provided totaled between $400 million to $600 million or $4 million to $6 trillion of illicit funds over the past decade.12 These funds were managed by a small number of political elites even though each year the funds represented between 16% and 20% of the national budget in Nicaragua and 15% in El Salvador. In spite of everything, the funds never went through a congressional approval process or through any accounting mechanism. To create a corresponding paper trail, both Alba Petróleos and Albanisa established dozens of companies and front companies where they invested heavily, at least in paper – in food production, financial institutions, airlines, study centers, alternative energy projects, land acquisition, gas stations and other activities. All of those companies reported to be operating under the ALBA banner included interconnected corporate boards of directors and rarely met legal requirements regarding financial reporting. In both cases intertwining networks of political party stalwarts, senior government officials, and PDVSA officials run the subsidiary agencies. Although the most notable dynamic is that most of the projects that oil companies claim to finance do not physically exist or produce goods or services. In the case of Alba Petróleos, José Luis Merino (El Salvador's Vice Minister of Foreign Affairs for Investment and Financial Development and former FMLN commander) and other reputable front men, created a series of companies with owners whose names are repeated in some and other structures in Panama. From there, Alba Petróleos and its related companies lent eight Panamanian companies under its control at least $1.1 billion between 2007 and 2017. Those companies at the time moved the money to tax havens in the Caribbean and Europe, including the British Virgin Islands, the Cayman Islands, Belize, Switzerland and Russia. They finally declared that most of the debt was uncopperable. In the case of Nicaragua, Albanisa's funds are not so well mapped out because the Ortega regime systematically refused to complete the required information and allowed only a few trusted people access to financial reports. However, the research website Confidential, and other researchers documented parts of the structure. It used similar methods to create dozens of front companies, including a bank (which will be discussed later in the report), by Albanisa, to hold the funds until the money was moved abroad.


Systematic Asset Purchases


On August 16, 2018, Raúl Gorrín, a Venezuelan, owner of a news network, was charged with conspiracy to violate the Foreign Corrupt Practices Act, conspiracy to commit money laundering, and money laundering. Gorrín pleaded guilty to all charges. This case served as an example of how this fixed asset scheme serves to launder Venezuelan state funds outside the country and in tax havens or in other countries that are attractive. In the Bolivarian Joint Criminal Enterprise, the final destination of these fixed assets is often the United States.


Raul Gorrin wanted poster
Raúl Gorrín, a Venezuelan, owner of a news network, was charged with conspiracy to violate the Foreign Corrupt Practices Act


In total, 12 conspirators were mentioned in the case of the foreign currency exchange scheme where the Venezuelan bolivar was traded for a fixed dollar, whose price was significantly higher than the official exchange rate. It is estimated that this scheme would have laundered between 1.2 and 2.4 trillion dollars, using the US financial system, over four years. Gorrín's involvement in this scheme totaled approximately US$159 million.20 While this scheme began in 2014, Gorrín's involvement can be traced back to 2008 when he began paying bribes to retain commercial contracts. Thus becoming a reliable partner for corrupt Venezuelan officials, Gorrín paid bribes and laundered funds throughout the past decade through PDVSA's bank accounts, that could operate in dollars without being subject to exchange controls or banking restrictions. The typology of exchange manipulation gave members of the regime access to the scarce existing dollars at a higher preferential rate.

Those involved were then instructed to take the dollars out of Venezuela, often disguised as funds for the payment of imports or as profits from exports. Exchange controls for the ordinary citizen became a necessity as unprecedented inflation made the local currency, the bolivar, worth less each day and the regime was desperate to collect as many dollars as possible (or any currency except bolivars). Most of this money was moved through the United States to Switzerland and from there returned to the United States.

To hide the origin of the funds, Gorrín moved the money

through front companies,

which included acquiring the

Dominican bank Peravia

to hide the origin of the funds.

From there, Gorrín hid the laundered funds through investment in real estate or in the purchase of other securities. The criminal investigation found that among the purchases Gorrín made, he had purchased three jet planes, a yacht, multiple award-winning horses and numerous top brand watches. As the funds were no longer in cash or in some form that could be traced, the laundering scheme was more difficult to detect than if the money had continued to move through banks or traceable financial transactions. As a result of his guilty plea, in November 2018, at least 24 of Gorrín's properties (located in the states of New York and Florida), were seized. The seven condos in New York alone have an estimated value of $40 million. Authorities also seized 17 horses and several luxury vehicles. In this case, as in most examples of this criminal typology, Gorrín was one of the multiple participants, where each one took a part of the total. This continues to serve as a common criminal typology in several member countries of the Bolivarian Joint Criminal Enterprise.


seized property drug lords in miami
Raul Gorrin has properties in NYC and Miami seized

Illegal Mining


In recent years, the Bolivarian Joint Criminal Enterprise has diversified its operations within illicit gold mining as a way to make a profit and as a way to launder the proceeds of multiple crimes through an unregulated industry. That is, the Company's decision to devote itself to gold is due, at least in part, to the high prices of gold in the international market, the ease with which gold can be moved and converted into cash and the low risk of detecting illegal transactions.

The clearest example of the

illicit gold movement scheme

in relation to this criminal enterprise is

Kaloti Suriname Mint House (KSMH)

which operates near Paramaribo, Suriname.

Opened in 2015, the company maintains a partnership between Suriname and Kaloti Precious Metals of the United Arab Emirates. KSMH operates under the protection of President Desi Bouterse, who is: convicted of drug trafficking, arms supplier for the FARC and an individual who was elected with financial support from Chávez.


Kaloti Suriname Mint House (KSMH)
Kaloti Suriname Mint House (KSMH)

KSMH is a totally irrational and fictitious project, which on paper cost US$ 20 million and is located in the most isolated country in the hemisphere. There is no competitive advantage among gold distributors from gold-producing countries, who ship their gold to Miami or Europe on direct daily trade trips. While Suriname produces about 28 tons of gold per year, the facility has the capacity to refine 60 tons of gold. Several field visits in June 2016 to KSMH, in the town of Wit Santi which is located near the country's international airport, showed that the refinery does not exist. In fact, the building that houses the project shows no commercial activity. Interviews with gold traders in Suriname confirmed the non-existence of the refinery. What makes KSMH so valuable is the ease with which the Bolivarian Joint Criminal Enterprise can export its gold as originating in Suriname, disguising the true origin of the metal and avoiding scrutiny and sanctions. The gold that moves through KSMH is likely legally produced in other Latin American countries and is ideal for locating illicit resource flows and the laundering that accompanies it. In addition, fieldwork conducted by IBI Consultants found that KSMH now also certifies Suriname's gold exports, as well as exports gold that does not exist, certifying exports without moving any gold. In practice then, one can obtain a gold export certificate from Suriname without having to export any gold, creating a mechanism to justify otherwise suspicious cash deposits. As the movement of Bolivarian funds is under scrutiny, for the Maduro regime it is a less regulated way to get cash that would otherwise be blocked by financial sanctions. In 2018 alone, the Venezuelan state sold 73.2 tons of gold in Turkey and the United Arab Emirates, some of it ended up quite far away, in Uganda. Given that the Venezuelan Central Bank's gold reserves grew by 11 tons in 2018, despite the ongoing sell-off, everything suggests that a significant amount of merchandise was illegally obtained by FARC and ELN dissident groups. The sale of illegal gold, diamonds, coltan and other easily distributed goods that are also difficult to trace, are an increasingly growing criminal typology for the Bolivarian Joint Criminal Enterprise.


Fake Infrastructure Projects


The transfer of large sums of state money through non-existent infrastructure projects is an important methodology used by criminal states to launder funds.

The fact that States place funds through these projects and control the agencies investigating those operations,

State oversight and auditing does not exist.

Neither PDVSA nor its Central American subsidiaries could be investigated by tax auditors, law enforcement or financial control entities because they were all under the control of the state, whose leaders allowed operations to move forward and benefited themselves from those activities. As this criminal typology has been perfected over time, it is now one of the most effective strategies and with less risky methodologies used by the Bolivarian Joint Criminal Enterprise. One of the largest of these cases was the signing of an announced program between Albanisa and PDVSA in Nicaragua. In 2007, Presidents Chavez and Ortega laid the cornerstone where Nicaragua was going to build a huge refinery to refine PDVSA's heavy oil. The presidents announced that the project would cost an estimated $6.6 trillion, an absurd and economically irrational sum of money for a project as such, which would also bear the grandiose name of

"The Supreme Dream of Bolivar."

The refinery in the papers received an initial contribution of US$ 32 million in 2008 and an additional US$ 60 million over the following three years. In 2012 and 2013 the program received an additional US$ 341.2 million. Since 2013 the sums dedicated to this project are not well known, but the governments of Venezuela and Nicaragua contributed several tens of millions throughout 2015.

At this point, the paper traces of financing are lost. However, almost half a trillion dollars would have gone through this project and left very few visible results. Multiple visits to the construction site between 2014 and 2016 only revealed an empty field with some storage tanks and a wooden fence, with no other sign of building a refinery except the aforementioned tanks. In reality, the financial criminal chain executed a movement of funds from PDVSA through its subsidiary Albanisa and then redistributed them as payments for work never done and non-existent materials to contracting companies linked to the Ortega and Chávez governments. These shell companies moved the money, now "clean" back under the control of the criminal structures of Nicaragua and Venezuela.


cleaning dirty money
Laundered Money - now clean

While the refinery was one of the largest fictional infrastructure projects we uncovered in our field investigations, it was just one of dozens of similar companies that laundered hundreds of millions of dollars with the support of the Bolivarian Joint Criminal Enterprise. Other projects that were never executed included contracts for oil exploration, which was never realized, the construction of a vaccine production plant that never produced a vaccine, a solar panel production plant that did not produce panels, a water bottling company that did not generate any bottled water, and dozens of other shell companies throughout the region. This continues today to be one of the most frequent types of criminal activities used by the Company.


Bank-to-Bank Transfers


The latest criminal financial typology explored in this report is based on bank-to-bank transfer. The abundance of resources through PDVSA and ALBA forced the Company to adopt solutions only available to States involved in criminal activities. In one case, Nicaragua created its own bank under the protection of the Nicaraguan state. This bank was directly controlled by President Ortega and a group of his closest accomplices in the financial business, who already controlled the Albanisa consortium. In October 2014, the Nicaraguan authorities officially registered

Banco Corporativo (Bancorp)

as a financial institution and gave it the same office used by Albanisa. The bank's formal filing said the institution would specialize in investment management, and local news reported that Albanisa was the owner. However, the bank carried out very few regular operations, opting not to offer current accounts, loans, mortgages and all common activities among banks. However, Bancorp functioned as a depository of a $1.5 trillion fund by Albanisa and its related companies and more than $1 trillion in "other funds." The activities of the new banking institution appeared so unusual that leaders of Nicaragua's banking sector met with officials from the U.S. Embassy in the country to make it clear that they had no relationship with this Bank. Concern increased when Bancorp received a $16 million cash deposit in December 2016 alone. Alarm bells sounded even more when the bank stated that its deposits increased to $340 million in 2017, a 237 percent increase over the previous year, and this despite a lack of customers or clear business activity. One of Bancorp's most significant anomalies was the absence of "correspondent banks" with banks that had access to the U.S. financial system that actually prevents the bank from conducting business in the outside world. Through the field investigation he determined that Bancorp, to find a way to move money out of Nicaragua, had opened an account at the Panamanian branch of an Asian bank with branches in Hong Kong, South Korea and Panama.

Thus funds of the Bolivarian Joint Criminal Enterprise were then transferred from Nicaragua to Bancorp's account with the Asian bank in Panama, to end its journey in the Hong Kong subsidiary.

There the funds were laundered and placed in different accounts controlled by Ortega and his allies, so then the money could easily be moved from Hong Kong and transferred electronically to any part of the world, including the United States.


bancorp sanctioned
January 2019 when the United States sanctioned Bancorp

This bank-to-bank transfer mechanism changed in January 2019 when the United States sanctioned Bancorp. In response, President Ortega opted for a bold choice. He promoted a legislative proposal, through the National Assembly of Nicaragua, controlled by Ortega's party, by which the Nicaraguan State bought Bancorp for approximately US $ 23 million and turned it into the National Bank of Nicaragua. The move happened and thus amalgamated Bancorp's funds making it much more difficult to discriminate and identify illicit funds moving in the Nicaraguan banking system.


Human and Economic Impact


The cost of the Bolivarian Joint Criminal Enterprise proved brutal, but at least, to some extent measurable.

In 2018 Venezuela's inflation rate exceeded one million percent and the IMF estimated that this index would exceed 10 million percent by the end of 2019.

In addition, a study conducted in Venezuela in 2017 estimated that the average Venezuelan had lost about 11 kg a year given the shortage of food in the country.

Finally, the Inter-American Commission on Human Rights (IACHR) estimated that only 20% of the necessary medicines were accessible to Venezuelans in 2018.

Systematic shortages of food and medicine are just two types of human rights abuses committed by the Maduro regime. The increase in intensity and amount of sanctions applied by the United States on Venezuelan state-owned companies and individuals associated with them have been blamed by some for this humanitarian crisis.

However, the effects of these actions on the average Venezuelan have been rather marginal.

There are few estimates of the damage the sanctions would have caused to the Venezuelan population, but one estimate determined that between September 2017 and September 2018 the sanctions applied by the United States resulted in approximately $6 trillion in losses for Venezuela. The effects accelerated since January 2019, when the United States announced sanctions against PDVSA. However, S&P Global estimated that these sanctions cut Venezuelan crude production by more than 50% in February, a loss of about $6 million in earnings per day. They are significant, but these losses are marginal when compared to the costs of the regime. Moreover, those profits would have been distributed among the political elite whose support is vital, but not among the Venezuelan people. That said, the theft and mismanagement carried out by the regime brought the economy to its knees, regardless of economic sanctions. One possible way to measure this crisis is through the exodus of refugees and the costs involved in this forced migration. Beginning in 2014, shortly after Maduro's election, an exodus of refugees began leaving Venezuela and heading mainly to regional neighbors. The United Nations High Commissioner for Refugees estimated that by January 2019, at least 3.4 million Venezuelan refugees, or if you like 10.5% of the country's total population (according to 2014 population figures), were living outside the country. This made the Venezuelan refugee crisis the largest forced mass migration in Latin American history and on par with or exceeding the Syrian refugee crisis. Colombia is in numbers the country most affected by the crisis. UNHCR estimated that before the closure of the Colombia-Venezuela border in February 2019, some 5,000 Venezuelans were entering Colombia every day.51 Other countries heavily affected by the refugee flow are Peru and Ecuador. While Venezuela's neighbors to the west receive the most refugees in terms of numbers, some small countries in the hemisphere support a larger proportion compared to their population. Curacao hosts 16,147 (per hundred thousand) Venezuelan refugees, which is about 8 times larger than Colombia. Aruba follows closely behind with 15,200 and the third proportionally most affected country is Guyana. The Venezuelan refugee crisis affects the entire hemisphere and this must be considered when analyzing the cost of this crisis globally. UNHCR is requiring $201,000 in resettlement costs. And the United Nations will require an additional $738,000 in humanitarian aid by 2019. It is reasonable to assume that this humanitarian aid and the resettlement costs associated with the Venezuelan crisis will be at least $1.5 trillion.

Another package of costs associated with this crisis is Venezuela's external debt to foreign countries and international organizations, which must be paid with interest. Already at the beginning of 2019, Venezuela owed China almost US$ 20 billion. They owed the Russian state-owned oil company, Rosneft, approximately $2.3 trillion. Other estimates suggest that Venezuela's total external debt is around $100 trillion. As a result, we estimate that Venezuela's debt totals between $22.3 trillion and $100 trillion. A third category of costs estimates, the funds laundered by the Bolivarian Joint Criminal Enterprise in the amount of US $ 10 billion between 2007 and 2018. This is a low figure compared to the recent report that estimated it at $28 trillion. A person interviewed for this report, who was directly involved in pdvSA's movement of funds, estimated the figure to be close to $43 billion. We estimate between $10 and $43 trillion in state funds that were sent out of Venezuela.


photo of poverty in venezuela
poverty in venezuela

Finally, according to Venezuela's National Assembly (which is in the hands of the opposition) the country's economy shrank by 53% between 2013 and 2019. While it is very possible that the reporting of these losses is somewhat inaccurate, we can approach the

economic losses suffered by Venezuela, based on GDP. In 2013, the Venezuelan economy produced a gross domestic product of US$ 381 trillion. Assuming that the decline in GDP since 2013 has been between 8 and 8.5% per year, Venezuela lost between $411 trillion and $434 trillion in its GDP from 2013 to 2018. This estimate clearly favors the position of the Venezuelan opposition, but serves as an approximation to the losses suffered attentive to the lack of official information. The sum of the costs incurred by the Bolivarian Joint Criminal Enterprise with its consequent economic decline yields figures ranging between 473 and 633 billion dollars since Maduro took over the government in 2013. As a result, the actions of the Venezuelan political elite generated a spiral with secondary and tertiary effects on the Venezuelan population. Estimates of the Venezuelan crisis are simultaneously incomplete and imprecise, but they demonstrate the magnitude of the situation. Moreover, many of the actions and their subsequent results would not have been possible without the assistance of a real network of illicit actors operating around the world.


Conclusions


This report highlights the interconnectivity of the different actors and economic mechanisms that facilitate the survival of this Company, although it is currently somewhat weakened. The Bolivarian Joint Criminal Enterprise is a unique structure, built with the direct participation of the State, acting in a criminal manner and operating through multiple economic spheres and police jurisdictions.

This criminal action is supported by state entities, illicit businesses and organized criminal groups.

The result is a complex criminal operation that undermines the rule of law, democratic governance, and U.S. alliances in the Western Hemisphere. The Bolivarian structure has proven to be resilient and adaptable with multiple redundant capabilities. Operationally, when one facet of this criminal network is pressured, the Bolivarian Joint Criminal Enterprise moves its operations into a new area or finds new allies – often with different strengths and connections – but sharing the Company's common history and goals. Recently, the U.S. government has taken a more comprehensive approach to these criminal actors, and this is yielding significant results. Efforts to funnel funds from PDVSA and the Bolivarian banking structure into the legitimate government of Guaidó and beyond the reach of the Maduro regime are as innovative as they are necessary. But as former Southern Command Commander James Stavridis pointed out,

"it takes a network to fight a network." We believe that the key to combating this network lies in the integration of the authorities and capacities of the entire government of the United States and in the collaboration of our most reliable partners, such as, for example, Colombia, to make it possible to cut the reach of the Bolivarian network. This approach includes combining the resources and authority of the Treasury Department, Department of State, Department of Justice, Department of Homeland Security and Defense, in collaboration with the intelligence community to confront the Company's multiple nodes. Confronting the Bolivarian Joint Criminal Enterprise, however, also requires actions beyond Venezuela while also a more robust and long-term commitment to politically allied nations in the Western Hemisphere.

While the ideological pillars of the Bolivarian Revolution have been largely discredited, it presents an opportunity for the United States to approach the region and address the complexity that this criminal enterprise poses.


Without check and balances and Government officials that have no accountablity , that is a system that can only lead to corruption and leaving its citizens without a voice and without any Freedom. Having one party in power in our country can also lead to such results. For those who do no like the stagnation and the infighting within the United States system, the alternative is not an end result any of us would want.



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