Venezuelan Newspaper Owner's Bank Accounts Frozen Amid Criminal Investigation

The owner and editor of one of Venezuela's largest newspapers has stated that a freeze on his personal bank accounts will not affect the paper.

By Ryan Mallett-Outtrim

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Otero has accused the government of attacking “freedom of expression”, but the attorney general says his accounts have been frozen as part of an investigation into possible criminal wrongdoing.  (El Carabobeño)
Otero has accused the government of attacking “freedom of expression”, but the attorney general says his accounts have been frozen as part of an investigation into possible criminal wrongdoing. (El Carabobeño)
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Mérida, 1st August 2013 (Venezuelanalysis.com) – The owner and editor of one of Venezuela's largest newspapers has stated that a freeze on his personal bank accounts will not affect the paper.

“The measure sought by the prosecution is limited to my bank accounts and personal financial instruments. In no way are the daily finances [of the newspaper] affected, although it is clear that the goal is to economically embarrass El Nacional,” Miguel Henrique Otero stated yesterday.

El Nacional is one of Venezuela's most read newspapers. However, under Otero's ownership, the publication was criticised by the former Chavez administration for allegedly biased reporting, and supporting the 2002 coup. In 2007, Otero himself founded the Movimiento 2D, a political movement aligned with the main opposition coalition, the Democratic Unity Roundtable (MUD). El Nacional is celebrating its 70th anniversary this month.

On Saturday, Attorney General Luisa Ortega announced via Twitter that she had requested Otero's accounts be frozen, pending the outcome of a legal dispute between Otero and the former mayor of Caracas, Alfredo Peña.

Peña is suing Otero for allegedly failing to repay a US$3.5 million loan, made in early 2003. Otero's lawyer has stated that the loan never existed, and that it would have been impossible for Peña to be able to afford to make the loan on his mayoral salary.

The decision to freeze Otero's account comes as authorities launch an investigation into the civil lawsuit to determine if the alleged funds could have been obtained by Peña illegally, according to Ortega.

“The facts could be criminal in nature, since we do not know how the public official obtained that amount of money, nor do we know why the defendant owed that amount,” Ortega stated, according to El Nacional.

Peña himself is wanted by Venezuelan authorities under allegations of corruption and embezzlement during his time as mayor, and allegedly supporting the 2002 coup. He fled to the United States in 2004, and is reportedly living in Miami. Peña has previously stated that the charges against him are politically motivated. In February, the former mayor filed the suit against Otero through a proxy in Caracas, Antonio Sierralta, demanding around US$9 million, including the alleged US$3.5 million loan.

Sierralta has urged Otero to “to meet his commercial obligations” to Peña.

On Sunday, via El Nacional's website, Otero described the move by the attorney general as “a new affront on freedom of expression”. He also criticised Ortega for delivering the news via Twitter, stating that he wasn't even aware of the charges prior to the tweet.

Despite the attorney general's concern that the funds could have been illegally obtained, some media groups have also been critical of the move.

Director of Venezuela's National College of Journalists Tinedo Guia has stated the decision to freeze the accounts could be an “attack” on the “opposition media”, according to Associated Press.

The Inter American Press Association (IAPA) also weighed in on Tuesday, asking for “fairer treatment on the part of the national government in its actions against journalists”.

“This form of action could be considered part of the ongoing harassment campaign against the independent news media,” the IAPA stated.

However, this week the media lobby group came under fire from the Venezuelan National Assembly's Media Committee.

“The committee categorically rejects the baseless allegations issued by the IAPA,” said Julio Chavez, head of the parliamentary body. According to Chavez, the case is a private dispute, not an attempt to “impose censorship on the media”.

“It's irresponsible on the part of the IAPA to try to take advantage of a situation of this kind,” Chavez said.

This isn't the first time the IAPA has been criticised by the Venezuelan government since the organisation's then executive secretary Santiago Cantón reportedly backed the 2002 coup. In 2008, Mark Weisbrot from the Washington based Centre for Economic and Policy Research also accused the IAPA of “taking sides in Venezuelan politics, without investigating the facts of the situation”. At the time, Weisbrot argued, “a careful review of the facts indicates that the IAPA is not defending press freedom, but rather taking sides in a partisan struggle, in a politically polarized country”.

Last week, the accounts of Leocenis Garcia, who owns another private newspaper, 6to Poder were also frozen by authorities, after Chavez called for Garcia to be investigated for tax evasion, tax fraud, and money laundering.

Corruption Crackdown Continues

The criminal investigation against Otero was launched as the Venezuelan government continues its nationwide crackdown on corruption.

Last Monday, a former official at the Commission for the Administration of Currency Exchange (CADIVI) was arrested in Yaracuy state for allegedly committing fraud and conspiracy. Prosecutors have alleged that the former official, William Rojas Graterol, may have used more than 30 shell corporations to exchange currency through CADIVI at preferential rates between 2010 and 2013. A shell corporation is primarily used for financial transactions and generally has few significant assets. During the same period, CADIVI was unable to keep up with demand for foreign currency from Venezuelan businesses.

Yesterday, the head of Venezuela's tax service, SENIAT announced that an employee was facing criminal charges, following denunciations of alleged fraud.

“Thanks to the allegations made by the Venezuelan people, we managed to detect another alleged offender, who worked within the SENIAT,” the head of the government body Jose Cabello stated.

The official allegedly demanded payment from SENIAT clients for free services.

“I urge all citizens of the Bolivarian Republic of Venezuela to not be part of such illegalities and remind them that all customs formalities are completely tax free,” Cabello stated.