National Assembly deputy Jose Guerra spoke today on the economic crisis paralyzing the country, and in particular the hyperinflationary spiral currently in effect in Venezuela.

Guerra, who is an economist and a member of the legislature’s Finance Commission, said that given the inflation rate, the Maduro regime should take at least two immediate measures: pay workers weekly instead of monthly, and double their salaries each month. The measures are meant to mitigate the crisis, Guerra said, rather than solve it.

The Centre for Social Documentation and Analysis at the Venezuelan Teacher’s Federation (CENDAS-FVM), which tracks the cost of the basic family food basket, released its estimate of the measure for June today. According to the organization, a Venezuelan family of five needed to spend Bs. 654,214,674.03 to properly feed itself, an increase of 117.2% from May. The figure means that a Venezuelan family needs to earn 117.7 times the minimum monthly salary to eat properly for one month.

On Monday, the International Monetary Fund revised its inflation estimate for Venezuela, and said that the rate would hit one million percent at the end of this year, an unprecedented figure in the country’s history. Guerra estimated that the actual rate would actually by 1.2 million percent.

On the botched roll out of a new system of currency, Guerra said that he feared that the regime would continue to mishandle the transition to the new bills to the point that Venezuelans would find themselves without any currency system at all. He explained:

… [banks] have not received even a single new bill, and having not received them, ATMs cannot be calibrated; if they cannot be calibrated, they cannot recognize the bills, and if they cannot recognize the bills they cannot dispense them.

The Bolivar Soberano was supposed to launch on June 4, and then on August 4. While the regime has announced that it will not meet the August 4 deadline, it has not yet announced a new date for the roll out.

Guerra also said that, given the state of the Venezuelan economy, it was clear that the regime’s economic model “has failed”, and he lamented the fact that, according to him, the regime is “indecisive, lacking initiative, and does not know what to do” to fix the country’s economic problems.

Opposition Deputy Forced to Hide Family Abroad

On Monday, El Nacional reported that the regime’s political police, the SEBIN, had issued an arrest warrant for the spouse of Jose Manuel Olivares, a prominent opposition politician and member of the National Assembly. The arrest warrant alleged that Olivares’ spouse was involved in illegal transactions involving stolen vehicles.

The newspaper also pointed out that, given his vocal role in calling attention to, among other things, the regime’s unwillingness to deal with the healthcare crisis in the country, the regime has threatened and even arrested Olivares’ relatives in the past in an attempt to force him into silence.

Today, one of Olivares’ colleagues at the Primero Justicia (PJ) party, Juan Requesens, confirmed that he had been forced to send his family abroad for their safety. Requesens made the announcement during a radio interview today, in which he also said that given Olivares’ high profile, going after him directly could be impractical for the regime, and so it has chosen to “go after his wife in an attempt to demoralize him”.

Requesens did not specify where Olivares’ relatives are, or which ones specifically have been forced to flee.

Olivares has played a leading role in ongoing healthcare sector protests that are now in their second month.

AP: U.S. Charges Eight in $1.2 Billion PDVSA Corruption Scheme

The Associated Press (AP) reported this afternoon that United States federal prosecutors have charged eight individuals in connection to a money-laundering scheme involving the state-run PDVSA oil firm. The scheme involved $1.2 billion dollars, and began in 2014 with “bribery and fraud” at PDVSA”.

According to AP, two of the eight charged have already been arrested: a German national resident of Panama named Mathias Kull, and a Colombian national resident of the United States named Gustavo Adolfo Hernandez Frieri. Kull was arrested in Miami, and Hernandez was arrested in Sicily.

A press release issued by the United States Department of Justice claims that the money was embezzled out of PDVSA through “real estate and sophisticated false-investment schemes” in Miami.

The same press release names the following four individuals, all Venezuelans, as also having been charged in connection to the case:

  • Francisco Convit Guruceaga;
  • Jose Vincente Amparan Croquer (a.k.a. “Chente”);
  • Carmelo Urdaneta Aqui;
  • Abraham Eduardo Ortega.

Of the two remaining charged individuals, one is a Portuguese national named Hugo Andre Ramalho Gois, and the other is a Uruguayan national named Marcelo Federio Gutierrez Acosta y Lara.

The press release alleges that the charged individuals are “former PDVSA officials, professional third-party money launderers, and members of the Venezuelan elite”.

According to the Department of Justice:

… the conspiracy in this case allegedly began in December 2014 with a currency exchange scheme that was designed to embezzle around $600 million from PDVSA, obtained through bribery and fraud, and the defendants’ efforts to launder a portion of the proceeds of that scheme.  By May 2015, the conspiracy had allegedly doubled in amount to $1.2 billion embezzled from PDVSA.  PDVSA is Venezuela’s primary source of income and foreign currency (namely, U.S. Dollars and Euros).

Questions/Comments? E-mail me: invenezuelablog@gmail.com

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