Venezuelan Government Deepens Investigation of Corruption in State-Owned Food Company

The Venezuelan Attorney General’s Office arrested the general manager and executive director of operations of the state-owned PDVAL food company for their alleged involvement in a food hoarding scandal.

By James Suggett - Venezuelanalysis.com
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A local PDVAL store serves customers (PDVAL)
A local PDVAL store serves customers (PDVAL)

Mérida, June 11th 2010 (Venezuelanalysis.com) – The Venezuelan Attorney General’s Office arrested the general manager and executive director of operations of the state-owned PDVAL food company for their alleged involvement in a food hoarding scandal. Meanwhile, workers marched throughout the week to show their support for the company, which continues to distribute 1,000 tons of food per day at regulated prices.

Attorney General Luisa Ortega said the four investigators who were assigned to the case arrested PDVAL General Manager Ronald Flores and Executive Director of Operations Vileska Betancourt on charges of food hoarding and criminal negligence, which violate the Law for the Defense of People’s Access to Goods and Services and the Law on Corruption.

The investigators searched PDVAL’s headquarters, interrogated President Virginia Mares and other company officials, and obtained arrest warrants for two more company officials this week, Ortega said.

“The investigation continues. New subpoenas, interrogations, searches, and arrest warrants are not out of the picture. This is a meticulous investigation and it is just getting started,” Ortega said in a press conference on Thursday.

Towards the end of May, authorities from the national intelligence agency SEBIN found a total of 2,334 containers of expired food in storage facilities that contracted with PDVAL in the states of Carabobo and Cojedes. On June 3rd, SEBIN officers arrested the former president of the company, Luis Pulido, on charges of food hoarding.

While the investigation is being carried out, Ortega called on company employees and everyday citizens to report to the Attorney General’s Office any irregularities they detect in PDVAL.

One such citizen named Heartfriend Peña told the Venezuelan alternative news agency Aporrea on Thursday that he was fired from his job at the state-owned Vexima company after he reported the existence of 414 containers of unaccounted food in PDVAL storage facilities.

Vexima provides export, import, storage, and distribution services to PDVAL and other state-owned food companies. The company told Peña he was fired for abandoning his post, but Peña said he was on leave and protected by the Social Security law.  

According to Peña, his firing was an act of “political retaliation” by corrupt company officials who represent the right wing, profit-seeking mafia within the state-owned food sector. Aporrea channeled his message to President Hugo Chavez, who has repeatedly declared himself in favor of workers in struggles against the management of both privately and publicly owned companies:

“Mr. President, I continue being Chavista [a Chavez supporter], but this situation that occurred here should be investigated in depth. Even though I won’t be working here I would like the company to be investigated. The management took this initiative against me for having made an accusation, and that means that they have their hands immersed in the case,” Peña pleaded.

Throughout the past week, thousands of workers from PDVAL and Venezuela’s state oil company, PDVSA, which administers PDVAL, held marches in various cities to express their support for government programs that guarantee access to affordable food. 

“PDVSA workers are with the revolution and with Chavez and we will continue moving forward. Things must be put in context. The issue at hand is joining with the people to combat the oligarchy that is in the large industrial sectors of the country,” said Energy and Petroleum Minister Rafael Ramirez during a march with 8,000 oil industry workers.

Henrique Salas Romer, the governor of Carabobo state and a leader of the anti-Chavez opposition, said the PDVAL scandal is a sign of the incompetence of the Chavez government.

“While food rots in a PDVAL storage facility, the national government directs its actions toward looking for a guilty party, when it is the guilty party,” said Salas Romer in public comments. “It is unacceptable that so many tons of essential products are lost when housewives cannot find them in the markets and the prices soar,” he said.

National Assembly Deputy Lisandro Cabello said such critiques coming from the right-wing opposition are hypocritical, because the opposition in team with the nation’s largest private business chamber, Fedecamaras, led a coup d’état in 2002 and a general strike in 2003 that shut down the country’s oil industry and caused massive unemployment, economic contraction, and extreme scarcity of foods and other products.

“Here people had to eat dog food because of Fedecamaras and Consecomercio [National Council of Commerce] and now they want to appear like gentle doves against PDVAL,” said Cabello.

In public comments this week, Minister for Education Hector Navarro said the government “has made a political decision to transform PDVAL’s whole chain of production, from the initial production of foods to the sale to the consumer,” in an effort to eradicate corruption.

“Corruption is an issue of capitalism, bringing these yearnings that induce the human being to be seeking quick profit without moral or ethical restraints,” said Navarro.

PDVAL, which stands for Venezuelan Food Production and Distribution, was founded in 2008 to combat food price inflation at a time when import-dependent Venezuela was suffering from skyrocketing international food prices caused in part by the rise of the transnational biofuels industry.

The company currently distributes essential food such as rice, milk, beans, chicken, flour, and cooking oil at regulated prices in 94 large markets and 2,117 “PDVALitos,” or small, local stores managed in conjunction with communal councils. The company manages a line of 759 transport vehicles, has a workforce of 4,700, and distributes 30,000 tons of food per month.