Colombia: The Secret Slush Funds

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May 7, 2016: American pressure on Colombia to give in to FARC amnesty demands are not working. Colombian and American intelligence both agree that FARC is still very much in the cocaine business. Amnesty for FARC faces a lot of opposition in the United States because FARC is on the list of recognized terrorist organizations. The current American government prefers to play down this aspect and points out that FARC has not been caught dealing with any international terrorists lately. The problem with amnesty is that most Colombians want FARC leaders punished for decades of kidnappings, theft and murder. To Colombians the Americans opposed to amnesty are taking the side of mass murderers. Right now the FARC peace deal is stalled over the amnesty issue.

Meanwhile FARC is dying. A ceasefire, and the continued success of the security forces in reducing crime means FARC is running out of resources, especially cash. FARC personnel are seen less and less simply because there are fewer of them out there and those that are still in the life don’t want to fight. This has been a growing problem for several years and led to more and more desertions and difficulty in attracting new recruits. All this is great news for most Colombians because more peace means more prosperity. At the same time this cash crunch is one reason FARC continues to serve as “security contractors” for the drug gangs or even run their own drug operations in some parts of the country.

As part of the peace negotiations that have been going on since 2012 FARC agreed in 2014 to get out of the drug business. Since then FARC has made a show of doing that. But the head of the Colombian anti-drug police points out that FARC presence is still being found when drug operations are raided. FARC leaders insist that these are renegade FARC members but the evidence on the ground says otherwise. No wonder most Colombians don’t trust FARC.

The Colombian government and the security forces want peace with both FARC and ELN so they can concentrate with the drug gangs, who are a major source of all crime in the country. The drug gangs have nearly as many members as FARC (6,500) and ELN (1,500). The three largest drug gangs have 3,000 members, many of them former FARC and ELN. The drug gangs are not interested in peace negotiations. For this reason the government recently authorized the military to work with the police in going after the three largest drug gangs. This includes air strikes, something the police appreciate because the drug gangs often operate in large armed groups that sometimes outnumber and outgun the police sent to get them in remote areas.

Another reason not to trust FARC is the growing body of evidence that FARC has put aside billions of dollars inside Colombia and overseas. Who exactly controls this money (and other assets) is unclear. But investigators keep finding more links to senior FARC leaders. It is unclear if this the personal fortunes (which may have been stolen from FARC) of some leaders or a FARC slush fund for political operations the peace deal sees FARC continuing after they give up their weapons. FARC has not built up much trust with the Colombian people and FARC denials about any secret fortunes are convincing many voters.

Venezuela Slides Towards Civil War

While Colombia is all about growing prosperity and ending violence, neighboring Venezuela is having a difficult time dealing with a collapsing economy and rulers who threaten civil war if they are removed. The growing electricity shortages in Venezuela led president Maduro to order government employees to work two day weeks while schools are limited to four days a week. The use of rolling blackouts has gotten worse, because that works where keeping government workers home does not. But people notice those temporary blackouts and don’t like it. Senior government officials are seeking to get president Maduro to resign and allow a more popular and technically competent leftist politician take his place. Maduro refuses, so far, to consider this. A popular effort to use a legal (it’s in the constitution) recall referendum to remove Maduro gathered nine times the number of signatures required but the government seems intent on preventing the recall vote anyway it can. Maduro’s approval rating has fallen to 26 percent, from 33 percent in February. Nearly 70 percent say Maduro should quit before the end of the year. Many of the socialism true-believers are losing patience.

The new opposition Congress wants to remove president Maduro legally and by the end of 2016. Maduro’s current term does not end until 2019 and Maduro wants until then to make things all better. Most voters believe he will only make things worse. The current mess is not the work of Maduro but of his predecessor. In 1999 Venezuelans elected a former army officer (Hugo Chavez) who proposed to solve all existing economic and social problems via radical socialism. This did not work. Chavez died in early 2013 and was succeeded by vice president Nicolás Maduro, a lifelong socialist and former union official who was an early supporter of Chavez. Maduro rigged the 2014 presidential vote to get himself elected and then made it clear he was determined to exploit the Chavez “legend” and do whatever else it took to remain in power. Maduro is as clueless as Chavez about how an economy works and was determined to continue the Chavez policies that have killed economic growth.

In an effort to maintain control of an increasingly hostile population Maduro turned to police state methods and increasingly desperate measures. He now openly threatens armed resistance to any efforts to remove him from power. Despite efforts to blame others most Venezuelans blame Maduro for the collapse of the electrical generation system. The cause was a combination of mismanagement and corruption that have left electricity production and distribution facilities poorly maintained and collapsing. Oil production was falling (for the same reasons) and sometimes there is no fuel for the power plants. A long drought had reduced hydroelectric sources.

Meanwhile Maduro’s political subordinates and allies grew rich from stealing and dealing. It’s widely known that the family of the late president Chavez became fabulously rich (over $4 billion). There are many ways for people with the right connections to get rich. Bribes from drug gangs keep the cocaine flowing through Venezuelan ports and air fields plus simply stealing much of the money under your control. Maduro has been trying to build a popular militia loyal to him and the ruling party, but the country is running out of money for buying enough loyalty. Attempts to get more loans out of China, a major customer for Venezuelan oil, are now turned away without explanation. The Chinese see where this is going and want to cut their losses. Corruption also leads to foreign suppliers not getting paid, which in turn leads to regular suppliers refusing to ship to Venezuela. This has played a role in the growing food and medicine shortages. Finding new suppliers is not easy once you have a reputation for not paying.

The largest (80 percent) producer of beer has halted production because they cannot get the foreign currency to import essential ingredients. The foreign currency shortage is so bad that the government can’t buy enough special paper for printing more currency. That is needed to deal with the growing inflation. The government is blaming the beer shortage on the owners of the brewery (Polar, the largest privately owned company left in Venezuela) who oppose Maduro and his economic policies. Polar employs 35,000 people and is the largest producer of many food items. Its workers and union leaders tend to oppose Maduro. Most Venezuelans understand that government incompetence and corruption are the main causes of all their economic woes. These are two items the government will not even discuss, much less admit are a problem to be solved.

May 2, 2016: A March 30 agreement to begin peace talks with the ELN has collapsed because Colombian leaders (and popular sentiment) insist that ELN release all hostages and halt attacks on infrastructure (particularly oil, mining and electricity production and distribution) first. While the kidnapping epidemic of the 1990s is now gone ELN still kidnaps for ransom or favors. Police believe ELN is responsible for over 4,500 abductions since 1996. ELN is also unpopular because of its attacks on economic targets, which put people out of work and, for even more Colombians, causes electrical blackouts that can last days or weeks. The March agreement came after months of informal discussions in Venezuela. ELN has always been holding out for a better deal than FARC is getting but the government refused to budge on that. What caused the change of mind was the continuing problems ELN is having in keeping itself going. While FARC reduced its criminal activity during peace talks the ELN continued to stage attacks against economic targets and companies that refuse to pay “revolutionary taxes” (protection money). ELN efforts to use social media to build an illusion of power the leftist rebels did not have and that has failed. The one real growth area for ELN, which they don’t brag about, is the ability to take over areas (and drug operations) long controlled by FARC because the larger leftist rebel group is making peace. Many hardcore (or outlaws at heart) FARC personnel are joining ELN and that is making it possible for ELN to take over FARC operations without a fight. This is a known problem but the government is not going after it in a big way until the FARC peace deal is finalized and there is a better sense of how many FARC members have gone rogue. ELN believes that FARC will get the amnesty they demand and if they do that is something ELN could work with. Then again maybe not. ELN has tried peace talks before (in 2001, 2002, 2004, and 2005) and all failed. This time, however, the government is making progress destroying ELN on the ground and the leftist rebels cannot ignore the fact that they have less and less popular support. Founded in 1964, ELN never came close to overthrowing the government and establishing a communist dictatorship. They eventually morphed into a drug gang pretending to be leftist revolutionaries.

 

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