The last barrel
Seldom do we quote extensively from other publications. But this month, I’m going to make an exception and cite some really fine investigative work done by The Wall Street Journal (WSJ). In a story dated Oct. 22, 2015, two of the paper’s staff writers presented an excoriating examination of corruption centered in Venezuelan state firm PDVSA, and the government as a whole.
Central to the story is former PDVSA President Rafael Ramírez, now the Venezuelan ambassador to the U.N., and his cousin, Diego Salazar. As told by the WSJ authors, the allegations that Venezuelan officials (including Ramírez and Salazar) have used PDVSA to steal “billions of dollars from the country through kickbacks and other schemes,” are strong enough to have prompted the U.S. federal government to begin wide-ranging investigations into the firm’s finances. Carried out by several U.S. agencies, the investigations also are looking into whether foreign bank accounts were used for black-market currency scams and drug money laundering.
Under the 52-year-old Ramírez, who headed PDVSA from 2004 to 2014, PDVSA was transformed from a relatively competent NOC into a cash generator for socialist programs that funded “housing, appliances and food for the poor,” said the WSJ. While it may have wooed voters to support the late President Hugo Chávez, this devastating practice stripped the firm of badly needed funds for reinvestment in capital projects and production maintenance.
After taking the PDVSA helm, Ramírez installed the 47-year-old Salazar as a top official in the firm, who soon was negotiating deals with entities from China, Russia and Iran. This came after Chávez’s socialist practices drove out American and European firms from Venezuela’s oil fields.
Both men are alleged to have acquired great wealth through their positions. Stories abound of them soliciting inflated bids from vendors (and pocketing the difference) while indulging in expensive meals and frequent travel on private jets, says the WSJ. This is all the more nauseating, given that Venezuela’s economy, said the International Monetary Fund, will shrink 10% this year, while inflation may reach 190%. The currency, the Bolivar, is collapsing, the country is having trouble paying for food and medicine imports, and industries are stagnating. And let us not forget this year’s stories of toilet paper shortages.
Meanwhile, last March, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a finding that a bank in Andorra was used by corrupt Venezuelan officials to launder $4 billion, including $2 billion “siphoned” from PDVSA. Thus, Andorran and Spanish officials seized control of the bank. In addition, Spanish authorities are investigating Ramírez, Salazar and others for “possible money laundering.”
So, will Ramírez, Salazar and their cronies face charges and prosecution stemming from these investigations and other inquiries by the U.S.? Maybe, maybe not—we’ll have to wait and see what develops.
EPA gets back some of its own treatment. How many of you have noticed a delicious irony in the fact that the U.S. EPA appears to have been scammed by
Volkswagen? In September, the firm admitted selling roughly 11 million diesel-powered vehicles worldwide (model years 2009 to 2015) that were equipped with “defeat devices,” which lowered readings of nitrogen oxide tailpipe emissions during laboratory testing. Thus, the vehicles were cheating EPA and European standards.
Then, on Nov. 3, Volkswagen further revealed that it had understated the level of CO2 emissions and fuel usage in an additional 800,000 cars, of which 98,000 are gasoline-powered. Software in the cars reportedly manipulated the CO2 emissions. Just a day earlier, on Nov. 2, EPA alleged that it had found defeat devices on another 10,000 vehicles with 3.0-liter diesel engines, covering model years 2014 through 2016, and including several Audi and Porsche models. Volkswagen vehemently denied this particular allegation.
A part of me thinks that the EPA deserves to be (apparently) scammed and disrespected by Volkswagen, given how abusive the agency has been to our own industry. After all, this is the same EPA that has thrown one wave of Executive Branch punitive rulemaking after another at E&P firms, all the while bypassing Congress and violating the spirit of the U.S. Constitution.
This is also the same EPA that has teamed up with environmentalists and the Department of the Interior to regulate through “sue-and-settle” lawsuits. In this nasty process, an environmental lobbying group will sue an agency—perhaps the EPA—and the agency then settles the suit, resulting in billions of dollars in new regulations. Costs are not borne by the litigants. Instead, they fall on the states and regulated entities. According to a 2014 study by the National Center for Policy Analysis, the sue-and-settle process saddled the U.S. with $494 billion of additional, final rules by federal agencies between 2009 and 2013. This occurred outside of normal consultations with states and the public comment process. It also worked around the federal Administrative Procedures Act and congressional intent.
In addition, this is the EPA that has the gall to tell everyone else how to implement (under threat of penalties) environmental rules and protections. Yet, an Interior Department investigative report, released on Oct. 22, concludes that “a lack of technical expertise” on the part of EPA and some of its contractors led to a rupture that spilled 3 million gal of toxic water during an abandoned gold mine clean-up. The report said that the Aug. 5 spill into the Animas River near Silverton, Colo., was due to an EPA-contracted project team incorrectly analyzing the status of the mine, thus underestimating the amount of toxic water that had built up inside. The report also blamed EPA directly for the incident.
So, it’s not hard to say, that when it comes to EPA vs. Volkswagen, what’s good for the goose is good for the gander.
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