Maduro turns Venezuela military officers into businessmen to quell discontent

Accompanied by his son Nicolás, Venezuela's President Nicolás Maduro raises a fist as he arrives at a military parade in Caracas on Friday, April 13, 2018.
Accompanied by his son Nicolás, Venezuela's President Nicolás Maduro raises a fist as he arrives at a military parade in Caracas on Friday, April 13, 2018. AP

Worried by signs of dissatisfaction in the barracks, the Nicolás Maduro regime is trying to buy the loyalty of Venezuela's armed forces by increasing their access to loans and other benefits and giving them control of enterprises, according to internal documents and military sources.

The initiative, which builds on a practice started by the late Hugo Chávez, was adopted amid a generalized mistrust between Maduro and the National Bolivarian Armed Forces (NBAF) and a wave of arrests of military officers early this year.

“Maduro encourages, buys the loyalty of the generals and admirals by assigning them jobs and new [social] programs,” said Rocío San Miguel, coordinator of Control Ciudadano, a non-government organization that monitors Venezuela's military.

Among Maduro's latest moves were a budget increase for the NBAF-run social program known as Mision Negro Primero, giving the armed forces the power to run nearly all food distribution programs and establish mixed state-private enterprises.

The goal, according to San Miguel, is to “deepen and increase the military's iron-fisted control over Venezuelan society through the assignment of hard currencies — dollars at preferential exchange rates. It amounts to handing out the country in exchange for their continued support of the government, but specifically giving them the benefits of the preferential exchange rates once received by the boliburgeses” — Venezuelans who grew wealthy through their support for the government.

The need to devote more money for the armed forces comes as uncertainty spreads through the barracks. Seven generals who together commanded 60 percent of the country's troops were arrested in March on conspiracy charges. Meanwhile, the economy has been collapsing, leaving millions of people without food or medicines.

The economic crisis is also affecting the soldiers, and internal documents show the Maduro government has tried to lift morale in the barracks by authorizing the NBAF to establish industrial parks in strategic regions.

Two March 19 orders by the NBAF's Strategic Operational Command directed barracks to provide lists and photos of nearby plots of land that can be used for factories “by the NBAF's industrial sector and military enterprises” and “agricultural production.”

Orders No. 0203 and 204 note that the Strategic Region for Coordinated Defense (SRCD) wanted to receive the materials by March 22.

The commander of the SRCD, Gen. Carlos Pulido Rojas, wrote in order No. 0204 that he wanted digital photographs of the plots from all branches of the armed forces — the army, navy, national guard and militias.

The list of lands available is part of Agenda Ofensiva Carabobo 2018, which also includes military exercises and home searches in areas near Venezuela's borders with Colombia and Brazil and the development of a “military industrial map,” according to another armed forces document marked “confidential.”

The goal, according to the document, is to copy the experiences of two military-owned enterprises that supply war materials to the armed forces — the Compañía Anónima Venezolana de Industrias Militares, known as Cavim, and the Complejo Industrial Tiuna (CIT),

The Tiuna company was established in 2016 in Fuerte Tiuna, the main military base in Caracas, and now has six warehouses that hold a textile company and a water bottling enterprise jointly owned by Cavim and Grupo Atahualpa, owned by an Ecuadorean businessman.

Its lone products so far are Agua Tiuna, military and school uniforms and jackets and caps, even though the decree creating the company says it will manufacture leather goods, home appliances, home and office furniture, medical equipment, schools supplies, toys, kitchen utensils and “publicity and propaganda.”

The latest Maduro decisions were designed to further increase the participation of the armed forces in the economy and politics of a country already highly militarized, experts say.

Maduro increased the participation of military officers in his government in July of 2017 and it now stands even higher than during the Chávez era. Ten of the 30 ministries are in the hands of armed forces officers, and Defense Minister Vladimir Padrino López controls the critical food distribution sector.

Other key government posts in the hands of officers are the Foreign Ministry, headed by National Guard Gen. Néstor Reverol; the National Bolivarian Intelligence Service, headed by Gen. Gustavo González; the Ministry of Agricultural Production and Lands, headed by Wilmer Castro Soteldo; and the Ministry of Electric Energy, headed by Gen. Luis Motta Dominguez.

The problem with Maduro's initiative is that military officers have historically proven to be lousy businessmen, said Edgar Zambrano, president of the Venezuelan legislature's Defense Commission.

What's more, military enterprises are run in total secrecy. The NBAF, for example, refuses to regularly provide the legislature with a list of all armed forces enterprises.

“Those 'enterprises' are a mystery, an impenetrable secret. They do not publish their accounts even though they receive state funds,” said Zambrano. “The government's lone goal, with this idea of a business emporium in the hands of the military, is to maintain the NBAF's dependence on the executive branch.”

The Maduro-controlled Supreme Court in 2016 eliminated the power of the Comptroller General's office to monitor military funds and especially the enterprises under armed forces command.

The NBAF owns companies in the fields of oil extraction, construction, agriculture, insurance, banking and the manufacture of vehicles, tires and clothes.

The non-government organization Transparencia Venezuela reported in 2017 that the government had given the Defense Ministry nearly four times more funds than the justice system.

“No one has seen that budget. It doesn't exist or it's well hidden. Since 2010 we have not known how the resources of the military sector are handled,” said Transparencia director Mercedes De Freitas.

The lack of trust of military officers as administrators or entrepreneurs is well grounded. A De Freitas report notes that from 2000 to 2017 the huge Corporación Venezolana de Guayana, which controls industries from steel mills to mining, has been led by seven officers and three civilians. The results have been negative, with drops in production and companies going bankrupt.

The Venezuelan constitution and the NBAF's own regulations say that the armed forces exist only to defend the country's sovereignty and territory and to assist in a time of crisis, said Zambrano.

Soldiers are not there to run businesses, he added. “Enterprises must be administered by citizens and cannot be an endowment or preserve for the military,” he added.

Lugo-Galicia is a Venezuelan journalist living in the United States. El Nuevo Herald reporter Antonio Maria Delgado contributed to this report