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Newly rich, now under attack

They made their money in Chavez's revolution and seemed untouchable. Now they are in jail.

A man takes a picture with his mobile phone of big samples of Venezuelan notes at Central Bank headquarters in Caracas, Oct. 24, 2007. (Jorge Silva/Reuters)

CARACAS, Venezuela — They made their money by sticking close to Venezuelan President Hugo Chavez. And now they are under attack.

The Venezuelan government has so far apprehended 10 businessmen in a corruption purge. Those arrested once seemed untouchable because of their relationship with Chavez’s revolution.

But then the government was forced to intervene in eight banks after authorities found irregularities in their operations. Those banks represent 8 percent of Venezuela's total deposits. Some had been lending their own executives large sums of money while one owner could not prove where the money had come from to finance the acquisition of four banks.

"A group of irresponsible bankers, of citizens crazed by ambition, started to use the public's money, private and public money in their banks, to commit crimes," Chavez said.

The takeovers ignited fears of a national banking crisis, and put the spotlight on Venezuela’s newly wealthy — known as the “Bolibourgeoisie” or “Boligarchs,” a term coined to refer to their enormous wealth as well as their close association with Chavez’s “Bolivarian revolution.”

“A Bolibourgeois is a man who has become a businessman or magnate through his relations with high officials in the government,” said Teodoro Petkoff, editor of the Venezuelan daily Tal Cual and a former politician, guerrilla and economics minister.

Analysts say the banking purge is a way for Chavez to distance himself from a group of people who had become enormously rich and powerful under his revolution while at the same time allowing him to portray himself as a crusader against corruption.

Those arrested include Ricardo Fernandez Barrueco, known as the “Tsar of Mercal” because he amassed his fortune by selling cornflour and other products to the government’s subsidized food markets. He is worth $1.6 billion, with most of his money stashed abroad, according to government investigations. He gained favor with Chavez after he loaned his fleet of trucks to the government during the nationwide strike of 2003.

Another, Arne Chacon, rose rapidly from being an employee in the government tax office to being president of Banco Real, one of the banks under investigation. He is also the brother of Jesse Chacon, the minister for science and technology and 20-year ally of Chavez, who resigned after hearing of his brother’s arrest.

“I’m very sorry that he is the brother of a minister," Chavez said, "but with this we are showing that here there are no untouchables.”

Jesse Chacon was widely considered Chavez’s No. 3 and held several other positions in the government including interior minister. His resignation has people pondering how deep corruption has penetrated Chavez’s government.

http://www.globalpost.com/dispatch/venezuela/091215/banking-crisis-bolibourgeoisie