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  HOME | Venezuela (Click here for more Venezuela news)

Key Chavez Minister Resigns Amid Banking Corruption Fallout

By Jeremy Morgan
Latin American Herald Tribune staff

CARACAS -- President Hugo Chavez lost one of his closest and oldest collaborators as Science and Technology Minister Jesse Chacon submitted his resignation after his brother was arrested in connection with the crisis in which state control has been imposed on six banks.

Arne Chacon was arrested by the state security service, DISIP, after three more banks, Banco Real, Baninvest and Central, were "intervened" by the government, in addition to the four banks -- Canarias, Banpro, Bolívar and Confederado -- that were first taken over on November 20 on orders from Finance Minister Ali Rodriguez Araque. Two stockbroking houses have been raided by Disip and prosecutors since then, one of which is said also to have been put under direct state control.

Brought before a court, Chacon was ordered to be held in custody pending further investigation of his possible involvement in three banks, reports said. Chacon's brother, the minister, said that when he'd heard the news "I called the president and told him that in these conditions I would prefer to resign so that there would be no doubt about our transparency in this investigation."

In his regular weekly radio and television broadcast on Sunday, Chavez referred to the departure of his minister, who had occupied a string of key positions in the government during the last decade. The detention of Arne Chacon demonstrated that "there are no untouchables and that's the first thing that must be understood."

While expressing his regret, Chavez said that he himself had called DISIP and ordered that the first person to be arrested should be Arne Chacon, whom he did not know personally. Jesse Chacon had proferred his resignation on Saturday and it had been accepted. "He will have to leave the government, and this hurts me very much" Chavez said, "but I believe that the decision he's taken is the best. It's a lesson for everybody."

The president then disclosed that this was not the first that the minister's brother had been involved in some way in a brush with the authorities. Six months before, the Agriculture Ministry had taken measures to do with land owned by Arne Chacon, and the president confessed he didn't really understand what was happening. "What is this?" he asked out loud. "What's going on here? This has to be found out."

In an interview late Sunday in which he confirmed having resigned, Chacon had revealed that one of his reasons for doing so was to establish that he himself had had nothing to do with any of the banks in question. His departure from office left the way open for investigations to proceed, he explained.

Attorney General Luisa Ortega Diaz last week petitioned a court for arrest warrants against 10 further people in connection with the banks that were intervened last month. She also sought a court ban on 19 individuals thought to have a connection with the case leaving the country.

Ortega Diaz said she was keeping to herself the identities of the people named in the arrest warrants she had sought. Her reason for this, she explained, was that if she did reveal their names, "they could flee the country, even though we know that some have already done so." An unconfirmed report claimed that a prominent figure at one of the banks was already out of the country.

Ricardo Fernandez Barrueco (a business executive who is said to own majority shareholdings in all of the first four banks intervened), his lawyer and his daughter were all arrested shortly after Finance Minister Ali Rodriguez Araque issued his takeover order. They were held on charges including misuse of funds at DISIP headquarters, though Fernandez Barrueco was reported over the weekend to have been transferred to the headquaters of the Military Intelligence Didrective, DIM.

Prosecutors said they had secured court foreign travel bans against 16 directors at three of the banks. Again, they were not specific about identities.

Ortega Diaz claimed that opponents of the government were trying to create the impression that there was a crisis in the Venezuelan banking system, which she insisted was not the case. "The problem is focused on these banks, where the owners have committed penal offences and these are the facts," she said.

"The fact that there are problems at these entities doesn't signify that the banking system is in crisis," she continued. The state had taken control of the banks to protect depositors, punish those responsible and reassure the population that "our system is secure and the investments and savings are guaranteed," she said.

On Wednesday, customers at Banpro and Canarias were allowed access to their accounts via state-owned Banco de Venezuela. Bolivar and Confederado banks are to be nationalized.

Ortega Diaz claimed that Fernandez Barrueco had used funds deposited at his Bolivar, Banpro and Confederado banks to acquire Banco Canarias. She did not rule out further action against other suspects.

Chavez has also ordered a state takeover of Grupo Bolivar, a conglomerate of food industry companies owned by Fernandez Barrueco.

In the early hours of Monday morning, reports said that a director of Banco Real had been arrested last Saturday and was to be taken to court and charged. Real is said to have been one of the banks to which Arne Chacon was allegedly connected.

Chavez later reiterated his intention that all necessary action would be taken against properties and other assets owned by those involved in the banks, in order to protect the interests of customers and savers. "Here, there are no sacred cows," he declared.


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