An object lesson for the businessmen kissing Obama's behind

Purging Loyalists, Chávez Tightens His Inner Circle

By SIMON ROMERO

CARACAS, Venezuela — News travels fast in this city, and rumors even faster. So when a billionaire banker named Ricardo Fernández Barrueco learned that his home had been searched by agents from the feared secret intelligence police, he might have suspected that the rumors of a purge of magnates loyal to President Hugo Chávez were true.
Being one of Venezuela’s richest and most influential men, Mr. Fernández, 44, went to the headquarters of the Disip intelligence police to clear up the matter directly with the agency’s powerful spymaster.
Then a surprising thing happened, especially in a nation that had grown accustomed to the unfettered activities of pro-Chávez tycoons like Mr. Fernández. The self-described socialist revolution of Mr. Chávez notwithstanding, the prominence of these moguls was so well known it inspired a nickname — the Boligarchs — for their fast accumulation of wealth and their ties to the government, which reveres Simón Bolívar, the 19th-century aristocrat who won Venezuela’s freedom from Spain.
But instead of dismissing the matter, the intelligence chief imprisoned Mr. Fernández last year and ordered agents to start detaining other pro-Chávez magnates. Some slipped into hiding abroad and are still being sought. Several others and their associates were arrested and put in cells adjacent to Mr. Fernández’s.
The purge has revealed a power struggle at the highest levels of government, leading to the fall of some of Mr. Chávez’s military comrades and reports of secret dossiers on businessmen compiled here by intelligence agents from Cuba, Venezuela’s top ally.
At a time when Mr. Chávez struggles with public ire over electricity shortages and an economy in recession, the arrests show his ability to nimbly consolidate power while crisis swirls around him. To do so, Mr. Chávez is using tactics like secret-police raids and expropriations of some of his most powerful supporters’ businesses, relying on a dwindling number of military loyalists to carry out his orders.
“We are witnessing the battle between competing mafias who prospered at Chávez’s heel,” said Ismael García, a leftist legislator who broke with the president in 2007. “Chávez still has the cynicism to camouflage his rule in socialist rhetoric, but anyone with a brain sees that his loyalists are in it for just two things: the power and the money.”
Some bankers here apparently acquired too much of both. The rise of a shadowy group of pro-government tycoons had for years been an embarrassment to Mr. Chávez as he was promoting anti-capitalist values. Included in the Bolibourgeoisie (another name for the so-called Bolivarian moneyed class) were men like Arné Chacón, a former navy lieutenant who took part in Mr. Chávez’s failed 1992 coup attempt.
In newspaper photographs back then, Mr. Chacón, like Mr. Chávez, looked like a skinny idealist. But Mr. Chacón amassed a banking fortune, appearing in newspaper photographs here with more girth and a selection of the more than 40 purebred racehorses he owned.
Now Arné Chacón is just another jailed magnate, joining Mr. Fernández and eight other imprisoned bankers and state regulators as investigations into their activities slowly advance. Mr. Chávez himself announced that officials had seized Mr. Chacón’s properties, including his prized horses. The justification for the imprisonment of Mr. Chacón and other tycoons involved accusations of irregularities in bank acquisitions.
Reports by nongovernmental outlets here point to other motives for the crackdown. Teodoro Petkoff Malec, a former Marxist guerrilla and one of Venezuela’s leading intellectuals who now edits Tal Cual, a left-wing opposition newspaper, reported that a dossier prepared by Cuba’s intelligence service might have crystallized the purge.
The intelligence report, Mr. Petkoff said, was delivered to Mr. Chávez by yet another former military officer, Ronald Blanco, now Venezuela’s ambassador in Cuba; he passed it along as a form of retaliation after Mr. Fernández tried to have Mr. Blanco’s brother-in-law ousted from his post as the government’s superintendent of banks, Mr. Petkoff reported.
Mr. Chávez’s government has remained silent about the existence of a Cuban dossier. The president’s information minister, Blanca Eekhout, did not respond to requests for an interview.
But Mr. Chávez has clearly continued the purge, issuing warrants through Interpol for at least nine bankers thought to have fled Venezuela, and seizing 11 of their financial institutions to fold them into a new state banking company under his control. The fallout from the purge continued this month, when Mr. Chávez named a former army captain who took part in his 1992 coup attempt to oversee the seized banks.
Mr. Chávez is also relying more on his Cuban allies to address other issues. This month, he brought in Ramiro Valdés, Cuba’s 77-year-old vice president and a founder of its Soviet-inspired state intelligence apparatus in the 1960s, to advise him on the electricity shortages, an appointment that has further angered Mr. Chávez’s critics here.
None of the fallen Boligarchs have gripped the public fascination here like Mr. Fernández, who was arrested at the start of the purge. “Fernández Barrueco made the fundamental mistake of believing he was powerful,” said Juan Carlos Zapata, an investigate journalist who is writing a book on the Boligarchs. “By taking him out, Chávez sent a message to anyone who aspires to power in Venezuela.”
Mr. Fernández rose from obscurity to put together a web of 270 companies in industries as diverse as tuna-fishing and banking, amassing a fortune of about $1.6 billion by 2005, according to study by the Caracas affiliate of the KPMG accounting firm. He thrived in rural Venezuela, where Mr. Chávez’s dominance goes largely unchallenged, acquiring an interest in a pro-government newspaper in Barinas, a state that is a Chávez family bastion.
Still, Mr. Fernández remained an enigma as his wealth increased. Today, he resides in a military intelligence holding cell.
Other resignations in January from within Mr. Chávez’s ruling cadre followed the bankers’ arrests. Vice President Ramón Carrizalez and Eugenio Vásquez, the minister of public banking, left the government. It remains unclear whether their exit was related to the earlier purge.
Those who remain in Mr. Chávez’s good graces provide a glimpse into the president’s priorities. They include former military officers like Diosdado Cabello, who as chief communications regulator engineered the removal last month of RCTV, a television network critical of Mr. Chávez, from cable channels.
As for those swept out by the purge, Mr. Chávez has made few apologies. “I’m not a judge,” he said on national television referring to the arrest of the magnate, Mr. Fernández. “But I have enough evidence to say that he’s a criminal.”