Comandante: Hugo Chavez's Venezuela

by Rory Carroll

  Second, he forged personal bonds at every opportunity, asking privates and generals about their schooling, memorizing their parents’ names, inviting them to play softball. He played the role of teacher, father, commander.

  The comandante had an additional means of keeping the military in line: civilian militias. Specifically, Lina Ron. She was the raspy-voiced, platinum blond leader of a militia that roared around Caracas on motorbikes. Her motto was “With Chávez, everything; without Chávez, bullets.” A medical-school dropout and left-wing radical, Ron wore red lipstick, but the prematurely lined face bespoke a life of struggle. She accused Venezuela’s elite of looting oil wealth and siding with U.S. imperialism. Ron became a celebrity by burning the U.S. flag after the September 11 attacks, saying the Yankees had received a taste of their own medicine. She based her small political party and militia in a three-story house a few blocks north of Miraflores. Hair streaming from helmet, she led her squadron on missions around the city, storming the archbishop’s office, a television station, an opposition party meeting, any institution that opposed the revolution. The members of her squadron made for loud, colorful additions at Chavista parades, revving their bikes in slow procession, an unofficial praetorian guard for the president, following behind on a truck. Ron also championed poor families who petitioned her for help securing state jobs and welfare. Woe betide any official who said no to Ron. Change, she said, came from the street. About half a dozen such militias carved fiefdoms around the city, marking territory with murals, slogans, and sentries. The comandante encouraged them and said, were he to be toppled, “five hundred Lina Rons would appear” and the country would face “chaos, violence, and death.” After her antics generated negative international headlines, he distanced himself, and she died of a heart attack, aged fifty-one, in March 2011. In death he rehabilitated her. “She was a complete revolutionary. Let’s follow her example!” By then he had formed the Bolivarian Militia, a supposedly 120,000-strong volunteer force of students, civil servants, housewives, and pensioners that answered directly to the palace. They marched in ragged formation through Caracas, shouldering rifles and shouting fealty to the comandante. “If I fall, unleash a whirlwind,” he told them. “You know what you would have to do: Simply take all power in Venezuela, absolutely all! Sweep away the bourgeoisie from all political and economic spaces. Deepen the revolution!”

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  Upon losing the referendum a second threat loomed. This was the opposition. Dormant since the 2004 referendum, it suddenly sensed blood in the November 2008 local and regional elections. It swarmed around the comandante, jaws snapping. The sharpest teeth belonged to Leopoldo López. He was mayor of Chacao, the richest district of Caracas. He was young, charismatic, ambitious, and movie star handsome. He was also, as it happened, the great-great-grand nephew of Simón Bolívar. His plan was to become mayor of greater Caracas—polls made him the favorite—and use that as a platform for the 2012 presidential election. Warning lights flashed in the Miraflores situation room. Leopoldo, as everyone called him, was dangerous.

  The comandante batted him out of the water. The comptroller general, a compliant ally, declared the mayor “inhabilitado”—disqualified from seeking public office—over accusations of misusing state funds. The fact he was not formally charged made the case virtually impossible to fight. Around three hundred other politicians were also disqualified, but the main target was Leopoldo.

  The comandante calculated that the disqualifications would split the opposition into its habitual bickering factions. Instead, disciplined by desperation, it rallied around unified candidates and won key states and cities, tearing strips of power from Chávez. Its stand-in for Leopoldo, a balding, bespectacled old-timer called Antonio Ledezma, even won greater Caracas. “Today is a sublime day of hope,” he told cheering supporters. “But there is no time to celebrate. Let us work!” Ledezma was right not to celebrate. The comandante quickly swatted the mayor into irrelevance. Lina Ron’s followers occupied city hall, a handsome colonial-style building on Plaza Bolívar, banishing Ledezma to a cramped, nondescript office several blocks away. They daubed the city hall facade with graffiti, installed themselves in its offices, and loafed around the entrance, unmolested by the police and national guard. Chávez formalized the usurpation with a law creating a “capital district,” a new administrative designation that let a loyalist run Caracas and occupy city hall. Ledezma, stripped of powers and budget, remained mayor in name only. Chávez used a separate law to emasculate other mayors and state governors. A few were threatened with jail. Soon after being elected mayor of Maracaibo, Manuel Rosales, Chávez’s challenger in the 2006 election, was charged with corruption. He fled to Peru in April 2009.

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  Chávez controlled the armed forces and neutralized opponents but remained vulnerable. Because he was barred from running again, a forbidden question was whispered in the palace. Who would succeed the chief after his term ended in 2012? Ministers and courtiers watched each other like cardinals around an ailing pope, gauging power’s ebb against the tick of the clock. Untended, it would become a weed whose pathogen contaminated the comandante’s authority. In 2008 a murmur spread through El Silencio: Chavismo without Chávez. The only solution was to abolish term limits. The comandante chose his moment. Having subverted the results of the local and regional elections, he promptly announced a new constitutional referendum to abolish term limits. Allies on the National Electoral Council rubber-stamped an early date, February 2009, before the opposition could catch its breath. Chávez plundered the best managers from PDVSA and other state companies to run the campaign and mobilized his own mayors and governors by offering them, this time, the promise of abolishing their own term limits. The “red machine” went into high gear. Honking, cheering cavalcades toured the barrios. Platoons of red shirts distributed free mattresses, fans, fridges, and stoves. They handed out flyers with ten reasons for voting yes. Number one: “Chávez loves us and love is repaid with love.” Number two: “Chávez is incapable of doing us harm.” Chávez won the referendum with 55 percent of the vote. He pumped the air from the palace balcony and vowed to rule until 2030, when he would be seventy-five. The crowd cheered.

  7

  THE DEVIL’S EXCREMENT

  I was at university and dating a very rich girl, the daughter of a banker. She had a BMW when nobody had a BMW. And this Italian friend of mine told me if you’re going to get married for money, you need to have three conditions. The first one: the father must not have a son. Second, he has to be old and weak and tired. If he’s young, he won’t let you in. And finally, he has to be generous. If the three elements fit, you can marry that woman for money. Otherwise, you shouldn’t marry her for money, because you’re not going to get any.” Baldo Sansó leaned back in his seat, smiling at the cunning. “Of course,” he added, “it’s completely cynical. And the likelihood that you’re going to be miserable if you marry for money is enormous. Tsk, a man marrying a woman for money—a miserable life.”

  It was March 2011 in the penthouse office of the headquarters of the state oil company, PDVSA. A realm of black leather sofas and corporate abstract art in a glass tower insulated from the cacophony of the city below. The only sounds were the hiss of sliding doors and the click clack of young secretaries in high heels and tight trousers walking on tiles. It was evening and executives were heading home, all save Sansó, who remained in his office gazing at the panoramic view. As the sky darkened, his own reflection looked back from the window. Lean, black hair swept back over a high forehead, a long nose, alert eyes. He wore a blue Versace suit, purple tie, and pointy black slip-on shoes. A dapper eagle ready to swoop. Few knew what he looked like—Sansó kept his picture out of the papers—but his name was whispered across boardrooms and ministries. He was one of the architects of Chávez’s oil policy, a PDVSA prince associated with huge bond issues, currency swaps, and other high-finance deals. Sansó, fairly or unfairly, was a byword for venality. The opposition included him in it
s list of the ruling elite’s “ten most corrupt.” Even some pro-government sources singled him out as an alleged dark lord of Mammon. He was well aware of his reputation and saw our interview as an opportunity to set the record straight.

  His office was big enough to play volleyball in. On the bed-sized desk sat two BlackBerrys, a lacquered Chinese box of Cross pens, and a framed black-and-white portrait of his blond wife (a college girlfriend whose father, apparently, was not especially well-off) and infant son. A red baseball-style company jacket hung from a hanger. It was difficult to envisage Sansó wearing anything that garish. “I wear it when I attend [pro-government] demonstrations,” he said, smiling. “I enjoy going. There’s so much diversity there. For a guy like me that’s fascinating.” He made it sound like a safari. “If I go to an opposition march, it’s just to see how beautiful the girls are.”

  Sansó had a privileged background. His mother was a former Supreme Court judge whose legal firm represented PDVSA, among other lucrative clients. He had studied in Venezuela, Canada, and the United States. “I consider myself a left-wing guy. At college I was into leftist causes.” Afterward, he worked at a New York law firm, then as a consultant in Rome and Milan for Bain & Company, a Boston-based management consultancy. “These strategic consultancy firms are very competitive, like investment bankers. Working for them in Italy was very tough. There they have this idea of manipulation. They really know how to get you to do things for them. They’re much, much tougher than the Americans. They have knives in their mouths.” Sansó moved back to Caracas in 2003 and joined PDVSA just as Chávez was defeating the oil strike and wresting control from the company’s old guard. “Man, those guys were so arrogant,” said Sansó. “They were convinced they were indispensable. When Chávez fired twenty thousand of them, almost all white-collar, they thought there was no way we could keep the thing together. They thought Chavistas were all stupid, corrupt, black, incompetent. Well, we showed them.”

  Sansó defended Chávez’s energy policy, saying the comandante had helped revive OPEC, sending prices rising even before the Iraq war, and had had the vision to recognize Venezuela’s oil was not just around Lake Maracaibo, in the west, but also in the center of the country along the Orinoco in a smiling arc known as the Faja. The same wilderness that had swallowed gold-seeking conquistadores contained enormous deposits of extra-heavy crude. The black ooze had long been written off as tar, a costly-to-extract type of liquid coal, and the old PDVSA gave foreign oil companies a virtual free hand to develop it. Chávez insisted it was oil, and eventually even the U.S. Geological Survey agreed. The zone contained an estimated 220 billion barrels—making Venezuela’s total reserves vaster than Saudi Arabia’s. Chávez partly nationalized the Faja in 2007, taking majority shares in the operations, an audacious decision that infuriated the foreign oil companies working there. “For that alone Chávez was worth it,” said Sansó. “He was crazy enough to do it. Any reasonable guy wouldn’t have had the guts. He would have said it’s not possible. A century from now Chávez will be remembered and thanked for this, no matter what else happens.”

  The comandante, said Sansó, had also proved shrewd in milking foreign oil companies. Squeeze too hard and they would leave, taking their equipment and checkbooks, too soft and they would dribble just a pittance of revenue to the state. Chávez squeezed so hard some left and sued in international courts, but most stayed and paid higher taxes, royalties, and signing fees, gushing extra billions into the treasury. His enforcer was Rafael Ramírez, a tall, pale man from the Andes, who doubled up as oil minister and head of PDVSA. He was also Sansó’s boss and, having married his sister, family. “I don’t agree with everything my brother-in-law has done here, but he calculated the companies’ greed to perfection. Geology was on our side.”

  It was no secret PDVSA’s politicization and myriad tasks—as funder and administrator of the social missions it operated as a parallel state—had enervated its ability to pump oil and find new wells. By 2010 it had spent an estimated $23 billion on social programs. Analysts said the company was in crisis and produced far fewer than the three million barrels it claimed to pump daily. Sansó admitted there was decay but made a version of the old industry joke that the second-most-profitable business in the world, after a well-run oil company, was a badly run oil company. “Oil is not so complex. There is no other product in the world that costs you $4 and you sell for $100. The margins are ridiculous; it makes it easy. The real art is exploration. Once you’ve found it, you pump it. It’s pretty simple.”

  Up to now Sansó had given a conventional defense of the economic policies that had nourished the revolution for a decade. But as night seeped across Caracas and his headquarters emptied—there were no more footsteps or hissing doors—he edged toward transgression. He was convinced a recent newspaper article in which he said he was misquoted criticizing the government—“they screwed me, completely screwed me”—had shredded his goodwill at the palace and that he was about to be fired. Cast off the ledge. Thus there seemed little to lose from plain speaking.

  “Where does Chávez fail?” he asked. A question clearly on his mind. “Dutch disease.” It was a technical term about how revenues from natural resources can strengthen the exchange rate, making it cheaper to import everything rather than grow or manufacture it at home. How a country, in other words, can become a bloated sloth. The phenomenon was named after the Netherlands, whose productivity fell after a gas boom in the 1960s, but would have been better called third-world disease. “I’ve broken my brain trying to solve it here,” said Sansó. The economy, he despaired, had become a parasite. Chávez’s initial pragmatism in fostering private and state enterprise meant Venezuela could have thrived and built a broad-based, sustainable economy. But the 2002 coup and strike changed that.

  “Chávez was radicalized by the private sector’s repeated betrayals . . . He came to understand socialism as political socialism. He started talking about the new man and creating a new society.” He shook his head. “It was a historic opportunity that was wasted. This is all Chávez’s fault. He doesn’t understand economics.” One never heard a senior Chavista so bluntly criticize the comandante. Sansó was just getting warmed up. “It’s a pity no one took twenty minutes to explain macroeconomics to him with a pen and paper. Chávez doesn’t know how to manage. As a manager he’s a disaster. I’m fed up with Chávez . . . I’m not a Chávez fan.” Coming from a member of the revolution’s economic elite, this was heresy.

  The oil prince surged on. Having lambasted incompetence, he plunged headlong into the revolution’s other unspoken taboo. Vice. “There are corrupt people who see opportunities to make a lot of money here,” he said. The tone was acrid. “There are all these people who hate you and yet come here looking for favors.” These were things everyone knew but never said. Sansó was angry now, defiant. “Everyone thinks I’m a crook. A corrupt guy. And yes, I want to make some money. But I don’t need to steal. Before coming here, I was making 200,000 euros. I’m living very well; that’s why I’m not corrupt.”

  Whispers said otherwise. Sansó had been involved with the country’s biggest brokerage firm, Econoinvest, whose offices investigators raided in 2010.

  “A whole mafia. Econoinvest was a den of gangsters,” said Chávez. Its executives were jailed, but Sansó remained untouched. A bigger scandal erupted soon after when it emerged PDVSA gave half a billion dollars from its employees’ pension fund to a former company adviser, Francisco Illarramendi, who ran a fraudulent investment operation from the United States. Venezuelan authorities buried the issue, leaving Sansó and Ramírez untouched. One opposition commentator, noting that both men’s spouses and relatives occupied senior legal and administrative posts in PDVSA, called it the dance of the vampires.

  Sansó pleaded ignorance about the scandals—“I only know what I read in the papers”—but made what sounded like a roundabout apologia for government officials who did steal. “One of Chávez’s biggest mistakes was not understanding in
centives. He’ll want to pay a top guy $15,000 instead of $200,000. Which means you get someone who is either corrupt or inept. Or both.” He pondered the distinction. “The second category is hurting us more than the first.”

  Sansó did not volunteer himself for the first and was emphatic about not belonging to the second. Single-handedly, he said, he had cajoled big corporations into making billion-dollar commitments in the Faja. He had divided up the oil-rich wilderness into blocks and invited rival bids for licenses to drill. Executives from the United States, Brazil, China, Spain, Britain, Russia—all over—took turns tramping into his lair. “I set up screens to make a sort of maze in our offices. We funneled the delegations around to give the impression there were rival bidders for each block. There weren’t. I completely manipulated them. It was incredible.” Sansó jumped up to show different-colored blocks on a wall map. “They paid $2 million each just to meet me. Who else could have done that? This will not sound modest, but I have created more value for Venezuela than anyone else in fifty years.”

  Sansó was preoccupied. Even if he survived his newspaper-inspired trouble with the palace and kept his place in the golden circle, he felt vulnerable. Enemies within and outside the government were circling. He said he had “made provision” for an emergency, implying a foreign bolt-hole, and would flee the moment Chávez fell. “I would have to get out of here. There is such hatred. They’ll come after me. I’m afraid.”

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  One of the revolution’s great ironies was that at the apex of a system of looting and plunder stood arguably its most honest figure, the Monk, Giordani. As planning minister, he constructed the maze of rules and restrictions that let the politically connected make illicit fortunes.