HomeNewsBrief$350 Billion Lost to Corruption in Venezuela: Expert
BRIEF

$350 Billion Lost to Corruption in Venezuela: Expert

ELITES AND CRIME / 22 MAR 2016 BY VENEZUELA INVESTIGATIVE UNIT EN

An independent specialist says government officials in Venezuela have diverted some $350 billion from state coffers, which if true reveals the extent to which corruption plagues the country.  

Oscar Solorzano, a Peruvian lawyer at the International Center for Asset Recovery of the Basel Institute on Governance, said the $350 billion figure puts Venezuela atop the list of countries that have lost the most amount of money due to corruption, reported El Nacional. The country with the second-highest total, which Solorzano did not identify, has lost $100 billion to corruption, according to El Nacional. 

Freddy Guevara, a National Assembly representative and president of the Comptroller General Office’s permanent committee in the Assembly, announced that he will submit a proposal aimed at recovering the state money that has been diverted into the coffers of corrupt politicians.

“We are in the presence of the most corrupt regime in the Western Hemisphere,” said Guevara, who is also the national coordinator for the opposition party Voluntad Popular. “How does one explain that in a country with a fixed exchange rate, many officials have [bank] accounts in Andorra worth approximately $4 billion, enough to pay off the debt owed from the food sector, which is close to $1.6 billion? The answer is easy: corruption.”

Guevara added that corruption at Venezuela’s state-run oil company PDVSA has cost the government $10 billion.

InSight Crime Analysis

Although it is unclear how Solorzano came up with the $350 billion figure, Venezuela has for years been considered one of the most corrupt countries in Latin America, and even the world. In Transparency International’s 2015 Corruption Perceptions Index, Venezuela ranked 158th of 167 countries worldwide, and was tied with Haiti as the most corrupt in the Americas. 

One of the main sources of corruption in Venezuela is the country’s fixed exchange rates, which thanks to runaway inflation have created a huge gulf between the official currency exchange rates and the black market rate. The limited number of US dollars in Venezuela means importers often have to pay off officials at the country’s currency control agency, known as CADIVI, for the right to trade local currency at the government’s extremely low exchange rates. One Venezuelan businessman told the New York Times last year that importers pay bribes of up to several hundreds of thousands of dollars in order to receive permission to ship in a product from abroad. 

SEE ALSO: Venezuela News and Profiles

The importers  — who frequently wildly inflate the value of their imported products in order to get access to a greater amount of US currency — are then free to either pocket the prized US dollars or trade them on the black market at an enormous mark-up.

In addition to import schemes, high-level politicians and military officials are suspected of being deeply involved in Venezuela’s lucrative cocaine trade. 

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